For far too many leaders, Operational Excellence is merely a nebulous buzzword loosely associated with continuous improvement. For Kevin Duggan, Operational Excellence is a concrete process that helps organizations identify and overcome flow issues standing in the way of success.
Duggan, the founder of The Institute for Operational Excellence and Duggan Associates, wrote three books on the subject of applying advanced lean techniques to achieve Operational Excellence: “Design for Operational Excellence: A Breakthrough Strategy for Business Growth,” “Creating Mixed Model Value Streams,” and “The Office That Grows Your Business—Achieving Operational Excellence in Your Business Processes.”
I had the opportunity to interview Duggan to gain a deeper understanding into how he conceptualizes Operational Excellence and how leaders can guide their organizations towards using it to transform how they achieve their objectives.
Operational Excellence Defined
Duggan defines Operational Excellence as when “each and every employee can see the flow of value to the customer, and fix that flow before it breaks down."℠
His model emphasizes how flow impacts everything from operations to customer experience. He says, “Flow in the office means information always moves forward to the customer in progressive steps, starting with its point of entry into the organization and finishing when the completed work or service is delivered to the customer.”
“Having robust flow in the office also means information doesn’t stagnate, scatter throughout the organization, or move backward in loops to correct errors or supply missing data,” he adds.
In Duggan’s experience, one of the most important aspects of flow is timing: “This means everyone always knows when information will be completed and when it will flow from one process to the next. With each process connected in flow, and with the timing of each flow known, we create a guaranteed turnaround time for the flow of information in the office— receive information by this time and have it out by this time, guaranteed. As the information is processed in flow, there are also designated points at which knowledge is captured and retained for future use.”
Flow is a powerful and fundamental concept in Operational Excellence because it serves as an indication of how the organization is functioning. According to Duggan, “It enables everyone, not just management, to see when flow has stopped or when we are no longer on time to deliver the service provided by the office.”
He urges leaders to create a designed, intentional flow in order to establish a standard. He says, “Normal flow tells us not only the path of the flow and the timing of it, but also the amount of information allowed to be in the system at any one time.”
“By defining normal flow, we also define ‘abnormal’ flow. Abnormal flow is any instance where the flow has deviated from its normal, expected operation,” Duggan explains. “In Operational Excellence, what we do when flow becomes abnormal is critical: we want the employees to fix abnormal flow conditions on their own, without management intervention.”
Visuals for Flow
Once a flow of information is established and there are standards for normal and abnormal flow, it’s important to create visuals that show if the flow is on time. Duggan says, “These could be simple things like flags with green or red pennants (green for normal, red for abnormal) or discs hanging from the ceiling over areas of the office to indicate if the flow of information is on time or behind.”
“We will still use spreadsheets, databases, and other tools to help us process information, but the visuals for flow will show everyone if the information has been completed on time by the end of the processing cycles,” he explains.
He says the power of visuals is that they can signal the need for course correction: “With visual cues signaling normal and abnormal flow in place, we can move into a self‐healing mode throughout the office. Since employees can now determine if the flow is normal or abnormal just by looking at the visual signals, they can fix abnormal flow conditions on their own quickly without management intervention before they negatively impact the customer.”
Overcoming Challenges of Flow in the Office
The process of pursing Operational Excellence is not without hurdles, according to Duggan. “One of the main challenges with creating or sustaining flow in the office is that teams tend to rely on information that is buried in systems that they have to search for and retrieve. In a modern digital workplace, we typically monitor where everything currently is— here’s this information and its status, here’s this information and its status, and so on— then present the status in management meetings.”
He explains that his model equips organizations and teams to move towards proactively managing flow: “In Operational Excellence, we want to know where the information should be, and the way we accomplish this is by designing a flow of information with timing throughout the organization and creating visuals to signal normal and abnormal flow. This ‘unburies’ the information and its status from our digital systems and puts it out in the physical office for everyone to understand, thereby creating employee‐level ownership of the work. Keeping this ownership at the employee-level, not just the management-level, is critical to sustaining the flow created in the office, ensuring customers remain satisfied both now and well into the future.”
Download the Process Improvement Playbook: Overcoming the Hurdles of Manual Processes in the Workplace to learn more.