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The Future of Your Business and Operational Excellence featured image

The Future of Your Business and Operational Excellence

2021 brings with it an excellent opportunity to assess your business and look to the future. Does it take a chaotic event for you to realize it is time to make significant changes, to put a set of principles in place to get you organized, reduce your risk and improve your cross-functional management?

Or do you simply take stock and realize now is the time?

Consider the philosophy of operational excellence, which embraces problem-solving and leadership as the means to achieve continuous improvement. This philosophy is not a set of activities to perform. It is a mindset that should be present within you and all of your employees.

Use key concepts of operational excellence to give your company a substantial competitive advantage. It can start with small process improvements that can have an enormous impact. The Harvard Business Review notes that companies with peak operational excellence typically have 25% higher growth and 75% higher productivity than those that do not follow the philosophy.

The secret to operational excellence is that it helps you succeed by impacting key characteristics of behavior within your organization.

Consider these concepts

Workforce: By empowering your employees to solve problems, you create a robust organizational culture. This helps you hire and maintain a staff of team members who are more willing to consider new ideas and feel comfortable bringing new ideas to management.

Strategic: With operational excellence, there is no need for management to get involved in solving low-level problems or micro-managing daily operations. Instead, leaders can spend their time focusing on the big picture – growing the business and fending off threats. The rest of the team can take care of those low-level problems and manage daily operations.

Agile: Operational excellence is flexible and dynamic. As markets change or customer tastes change, you will have a self-correcting mechanism in place to meet customer needs and continue to grow your business.

Growth: Use standardized processes and continually improve them. Optimize every aspect of your operation and implement best practices. With that accomplished, training new staff is easy.

Efficient: Achieve efficient operations using value streams that cut waste. Deliver value to your customers at the best price and with the best quality. This leads to greater profitability.

Three Most Popular Methodologies

There are three principal methodologies businesses tend to use to achieve operational excellence. Training is available for all three. Here is a snapshot:

Six Sigma

Six Sigma uses a set of tools and techniques designed to improve your business processes to achieve better products or services. The goal is to improve the customer experience by identifying and eliminating any variation. More than 50% of Fortune 500 companies use Six Sigma, helping them save more than $427 billion over the past 20 years. A defect is anything that fails to meet customer expectations, and with Six Sigma, no more than 3.4 defects are found for every million opportunities.

Six Sigma has five steps: define, measure, analysis, improvement, and control. Define a problem so you can fix it. Once you determine the problem, create a plan and evaluate your available resources. Measure your available data and assess your current process.

Analyze your measured data to get to the root of the problem. Then look for possible improvements or solutions. Implement the solutions on a small scale to ensure the process remains effective.

Kaizen

Kaizen, in Japanese, means “continuous improvement.” Businesses use it to implement ongoing, positive changes. Its guiding principles are that a good process leads to positive results, teamwork is essential for success, and you can improve any process.

Implement Kaizen to help create a culture of continuous improvement. This leads to employees working together to achieve workplace improvements. When applied consistently, small changes compound and produce significant results. Kaizen does not just encourage small change but real change with the participation of all employees.

This methodology stresses that it is not enough to make a change once and hope it works. It is about continuous improvement. Kaizen can help improve employee productivity, improve customer experience and cut costs.

Lean Manufacturing

This methodology focuses on eliminating waste in a production system. The philosophy is that businesses should focus only on that which adds value. Every process has a bottleneck, and concentrate on that bottleneck is the fastest route to success.

Lean manufacturing focuses on improving the quality of products or services and eliminating anything that does not add value. It identifies seven areas of waste called the “seven deadly wastes.” They include overproduction, waiting, transport, motion, over-processing, inventory, and defects.

Use one of these methodologies to focus on growth and execute the strategies better than your competitors. Ensure employees whether or not all systems are running smoothly and allow team members to adjust for improvement when necessary.

Executional excellence, or the drive to keep improving to have the capacity to pursue innovation and growth, has two primary pillars:

·      An empowered staff with a clear understanding of your goals and plans will come up with ways to fix problems.

·      Systematic operations management that leads to a positive culture focusing on your customers’ needs.

Businesses practicing operational excellence and execution excellence must see the concepts as a culture that imbues everything they do. Manage your company to deliver your products and services at the exact moment your customers desire them, with the smallest effort and at a price the customer wants to pay.

John Kenney has over 45 years' experience in the roofing industry. John started his career by working as a roofing apprentice at a family business in the Northeast to operating multiple Top 100 Roofing Contractors. As Chief Operating Officer, John is intimately familiar with all aspects of roofing production, estimating, and operations. During his tenure in the Industry, John ran business units associated with delivering great workmanship and unparalleled customer service while ensuring strong net profits for his company prior to joining Cotney Consulting Group. If you would like any further information on this or another subject, you can contact John at jkenney@cotneycl.com