A recent survey by PEX Network asked professionals to rate how successful their operational excellence programs were on a scale of 1 - 10. The good news is success is trending up with the results indicating that, on average, current operational excellence programs are rated 6.1 out of 10.
There’s no “official” scorecard to assess how well a company is doing on their Operational Excellence (OE) journey, but the PEX survey provides indicators that respondents use to measure their company’s success. Coined in the report as the three main pillars to drive sustainable change, they are as follows.
Identified as the most critical pillar of success with almost 8% of respondents citing leadership as a key to transformation. This makes a lot of sense for a change such as OE since it impacts the entire company. It’s tough to move the needle on any effort without leadership driving it forward.
2. Process Improvement
There’s no real surprise here since OE is all about efficiency and improvement. Continuous improvement can’t be attained without changing business processes to reduce costs and improve efficiency.
3. Employee Engagement
This third key pillar is one that can be the toughest to crack for companies who are embracing a long term change strategy. Employees move in and out of engagement during their tenure with a company, but any initiative won’t be successful without the people who are responsible for carrying it out being on board.
How Can Your Company Make Sure It’s Taking The Right Steps Toward Success?
A good look at the top ten key challenges identified in the report can help your progress. Keeping these issues in mind and proactively addressing them as you move forward will help you keep the momentum going.
1. Securing & Maintaining Executive Buy-In
Securing executive and leadership buy-in isn’t necessarily the toughest issue, but maintaining it for a long term program can be a real stumbling block. Ensuring the program gets the right exposure in terms of business results can help keep it top of mind.
2. Linking process improvement with top level business strategy
Process improvement is most often tackled at the operations level, and is typically out of sight from the top levels of the company. Ensuring there are clear ties to the strategic business approach from the start, and measuring progress along the way will help establish its value to the organization.
3. Overcoming too much short-term focus
OE is a long term program that may take years to see real payback to the company. Reporting on improvements in the short-term can help as long as they’re tied to a long-term company objective.
4. Lack of alignment between business and IT departments
It’s critical that business units and IT are partners in this effort. That can be accomplished with more open communication, changes in responsibility, or rearrangement of staff.
5. Overcoming resistance
Resistance will always be an ongoing issue. Just recognizing that is half the battle. Continuous communication about where the company is heading and how employees will contribute to success can help break down barriers.
6. Sustaining change
People fall back to familiar ways of doing things very easily. It’s important to put mechanisms in place to ensure the change is sustained. That could be accomplished through observations, interviews, or audits that focus on the change effort.
7. Deploying new technologies
New technology has a long life cycle from initiation to full implementation. Often it can take years to be fully deployed. Understanding that and developing stop gap measures, such as low code development platforms as an interim option, can help you continue your progress.
8. Cost / budget limitations
Costs and budgets will always be a factor. The key is identifying the priorities to enable what needs to be done in the short term to make progress, then refocusing as your company moves forward. It’s important to remember that process improvement will yield cost savings and improve efficiency which should free up funds to alleviate limitations.
9. Ensuring a customer-centric focus throughout the business
Sometimes it’s tough for employees without direct customer contact to recognize how they impact the customer. Identifying the value chain in your business and helping each employee understand where they contribute can shift their thinking.
10. Skills shortage
As more and more companies embrace OE and the idea of continuous process improvement, the demand will put a strain on supply. Your company can adopt methods to internally train / cross-train staff to resolve this issue.