What Is Operational Excellence and How Do You Embrace It?

What do Amazon and Toyota have in common?

Both companies are at the top of their industry. Toyota currently sits at a net worth of $236 billion, and Amazon is worth an astounding $1 trillion.

What is operational excellence exactly, and how did it help these 2 companies grow? For Amazon, it’s their dynamic business model, and the ability to manage sourcing and distribution on such a wide scale. For Toyota, it’s their effective production system that focuses on using lean manufacturing principles.

If having a company that’s worth billions of dollars sounds enticing to you, then you’re ready to embark on a journey of excellence. Read on to learn exactly what operational excellence is and how you can put it to work for you.

What Is Operational Excellence?

What is operational excellence? To understand how operational excellence works, it helps to think of a river. The river represents a flow of value going towards your customers.

If your company provides a service, the flow of value begins from the moment a customer tries to look you up online. If the customer can successfully find and use your website, they are receiving from the flow of value.

However, if your site is confusing, you could lose a potential customer. The customer will be more likely to go to your competition if their web page is more user-friendly.

Everyone Plays a Part

Operational excellence only works when every single employee can see the flow of value to the customer. The next step is empowering each employee to be able to fix the flow on their own whenever they see a breakdown.

Whatever industry you’re working in, the idea here is to make life as easy and enjoyable for each of your customers. Is there something stopping your customers from enjoying their experience? If so, employees should be able to assess the situation to identify the problem.

Respect for Everyone

Everyone and we mean everyone, has worth and potential and deserves respect. Having and demonstrating respect is crucial for operational excellence to work. This means you need to have respect for every one of your customers, no matter how much or how little they spend.

You’ll also need to have respect for every one of your employees. Every employee should feel valued, no matter how large or small their role is.

A great way to demonstrate respect for your employees is by keeping them in the loop. When you’re making necessary improvements to their department, as for their advice.

When you allow employees to participate in decisions, you’ll be engaging them in a new way. Engaged employees create a culture of responsibility and purpose.

Instead of letting problems go unaddressed, the unengaged employee will want to help. Seeing themselves as a part of the team, they will be more motivated to notify you when they see an issue is rising.

Humble Leaders

When you lead with humility, you’re able to admit your shortcomings. Your company’s leaders should be willing to admit when somethings not working. Humble leaders also help highlight areas that are working but could be better.

Next, leaders also must be willing to get feedback from employees. A good leader will seek out input from every department. They will also listen to the feedback they receive.

After hearing everyone’s opinion, the leader can learn from the information they’re given. Employees need to see that their leader values their feedback. When this happens, they will feel empowered to give the best feedback and ideas.

Soon, employees will feel more comfortable with changes. Rather than feeling like the improvements are a reflection of failure, they’ll see them as an opportunity to grow.

Pursue Perfection

True perfection is an unattainable goal. However, even though your company can never truly be perfect, that doesn’t mean you shouldn’t strive to be.

Shooting for the stars, and pursuing perfection, will motivate your employees to do their very best. A company that strives to be the best, will never stop trying.

The very fact that you cannot obtain perfection, it makes it the perfect goal to work for. Your company will always have to adjust and change to keep up with the times as you climb your way to the top of your industry.

Inspire your employees by giving them an unlimited opportunity to improve. Soon, you’ll find that some of your best thinkers begin proposing ideas that offer long-term solutions. Since perfection will be the main goal, employees will want to find resolutions that can stand the test of time.

Process Focus Thinking

When something goes wrong to get your company, what’s the first thing that happens? If you’re like most organizations, the very first thing that will take place is the blame game.

When things don’t work correctly, it’s natural for employees to want to blame other people. However, when your company focuses on operational excellence, you’ll change the focus.

Operational excellence helps you turn the attention towards the flow of value. Instead of placing blame on people, employees will scrutinize the process.

You’ll be able to use intelligent operations, to fix the error, and save time for your company. After all, even your best players can’t consistently produce good results if they’re dealing with a bad process.

Maintain the Flow

Remember earlier we mentioned how there is a river of value flowing to your customer. As your employees learn to focus on the process, the be able to identify what it is that’s interrupting the flow.

After a thorough assessment of what part of the process the error took place in you, you can make the necessary adjustments to get the results you want. We are especially excited about the idea of focusing on the process, instead of playing the blame game, because it helps retain employees. 

All for One

Now you know the answer to the question of what is operational excellence. As you begin to implement the different principles, your company and organization will be like the Three Musketeers. Every employee will have all for one and one for all approach to every task they take part in.

When everyone is working together, the skies the limit as to what your organization can achieve. For more ways to help your business get ahead, check out the other articles we have here.