What is Operational Excellence?

Executing a business strategy more effectively and consistently than the competition is called Operational Excellence. Ideally, every employee can see the flow of value to the customer and fix it when the flow is interrupted.

We are often asked if continuous improvement and operational excellence are the same. They are not, but they are closely related. Continuous improvement involves constantly improving your business operations to reduce waste, cut costs, improve quality, and maximize human potential. It focuses on making each existing process perfect. Operational excellence goes further. It involves setting the organization up for growth by understanding what the market wants and creating an uninterrupted value stream that continuously feeds the need.

A high-reliability organization (HRO) is an organization that is successful in avoiding catastrophes despite a high level of risk and complexity. Specific examples are air traffic control systems, nuclear power plants, naval aircraft carriers, and hospitals. In each of these cases, even a minor mistake can lead to catastrophic results.

Nonetheless, adverse outcomes in these types of organizations are very unusual. How can that be?

Fortunately, we don’t have to guess the answer. Thanks to researchers Karl Weick and Kathleen Sutcliffe and the case studies they created, we know precisely which attitudes have taken root in these “High-Reliability Organizations.” The good news is that your organization doesn’t need to deal with life-or-death risk to apply the principles that create an environment where error-free operations are the norm.

Are you struggling to drive a continuous improvement culture in your organization?

Do you need to revive a CI culture that has lost momentum? 

If you’re like so many others, it can be difficult to know which questions to ask, and where to start.

Jeff Roussel, chief revenue officer of KaiNexus and a true continuous improvement leader and believer, recently joined Allison Greco, founder of Continuous Improvement International, to talk about how you can build a continuous improvement culture. To watch a full recap, click here.

The world was first introduced to kaizen's philosophy and practice in 1986 with Masaaki Imai's book, Kaizen, The Key to Japan's Competitive Success. Today, it still holds up as an excellent read for anyone interested in finding ways to make their organization more successful at achieving continuous improvement. 

While kaizen concepts are straightforward, volumes have been written about how organizations build the improvement mindset into operations and culture. Our goal with this post is to give you the basic framework of kaizen and hopefully leave you excited about exploring the ways you might begin to transform your organization into one that consistently exhibits operational excellence.

There are a host of methodologies that businesses use to bring structure to the process of identifying and acting upon opportunities for improvement. You may be familiar with Six Sigma, Kaizen, Lean, Toyota Production System, and others. Although these methodologies differ, the heart of each of them is the continuous improvement model. 

The continuous improvement model reflects the idea that organizations should undertake incremental improvements to services, products, and processes. It is guided by a few core principles:

Empathy is the ability to understand someone else’s feelings. It is a prerequisite for compassion. In 2021, compassion is in more demand than ever.

While empathy might not come up very often in business discussions, the importance of empathy in the workplace is backed up by data. The Businessolver State of Empathy in the Workplace study found:

• 82% of employees would consider leaving their job for a more empathetic employer.
• 78% of employees would work longer hours for an empathetic employer.

When the COVID-19 pandemic first struck the US at scale in March of 2020, many organizations scrambled to transition to a remote work model. For most, the initial goal was to maintain operations while keeping employees safe. Very few people at the time anticipated the duration of the need for stay-at-home orders and widespread social distancing. 

Now that we are into 2021, vaccine distribution has been started, but the end is not yet in sight. The need for distancing and masks will likely continue well into the summer and possibly beyond.

The news for business is not all bad, however. While remote work certainly presents obstacles, there are benefits as well. Some employers have found that they can attract talented workers by hiring the best, not necessarily the closest. Many employees enjoy the increased flexibility of remote work and the environmental consequences of no commute. Employers who embrace the remote work model or a hybrid model can cut down the costs of office space.

Across the world, healthcare leaders are increasingly striving to embed the principles of operational excellence and continuous improvement in their organizations. Empowering clinical and operational staff to deliver safe, high-quality, reliable care can significantly change results.

Achieving continuous improvement requires a systematic, sustainable approach to enhancing the quality of care and patients' health outcomes. Establishing a culture of constant improvement is not a quick fix but a journey that never ends. It requires ongoing commitment, investment, and persistence.

Here is the prerequisite for excellence.

I don't think I'm going out on a limb when I say that I believe we are all glad to have 2020 in the rearview mirror. While life isn't going back to normal any time soon, there is hope on the horizon. The COIVD-19 vaccine rollout is on the way, and our healthcare professionals have made great strides in treatment for the disease. 

Last year at about this time, we laid out some suggested continuous improvement resolutions for 2020. If the pandemic thwarted your plans and best intentions, give yourself a pass. No one knew what unprecedented challenges would arise.

But this is an excellent time to begin again. Even knowing that COVID-related disruptions will continue, it is still a healthy exercise to think about what your team can accomplish for continuous improvement in 2021. You'll have to consider your unique priorities, but we do have some suggestions for goals that will help your organization achieve excellence in the coming year.

In some organizations, the leaders who are good at putting out fires are considered the best managers. But what if, instead of putting out fires, leaders had the luxury to spend time on fire prevention? What if, when the rare flame was spotted, every leader was skilled in identifying and correcting the root cause? These conditions are possible with an approach called Leader Standard Work.