Operational Excellence: 7 essential steps to improve corporate performance

Operational excellence, a lever for competitiveness

Operational excellence is a powerful lever for competitiveness: it uses the company's activities to support its growth. By focusing on customer needs, process optimisation, cost control and the ability of teams to find solutions, it seeks the right balance between the various stakeholders.

It requires continuous monitoring and regular re-evaluation of the company's activities. The seven steps below draw on two well-known approaches: Lean, which comes from the Toyota Production System and aims to eliminate waste, and Six Sigma, developed at Motorola in the 1980s to reduce variability and defects. Our article on the example of Lean management presents their tools in detail.

1. Listen and collect ideas

The first step is to understand the causes of dysfunction in the current organisation. The different stakeholders share their experience of current processes and suggest improvements.

For this step to succeed, every employee must be heard. This listening, which is a sign of respect, encourages people to take part in solving problems in their department. Your employees are the best placed to propose solutions adapted to their field, their problems and their needs. Make them feel fully involved in improving the company's performance.

• Go and see the work where it is done, rather than relying on reports.
• Ask open questions: what slows you down, what do you redo, what do you wait for?
• Write down every suggestion, even those that will not be selected, and say what becomes of it.

2. Conduct a comparative analysis

Benchmarking is one of the levers of operational excellence. It helps identify and validate risks, issues and opportunities for improvement, and leads to the solutions best suited to the organisation.

Comparing indicators with companies in the same sector helps determine which practices to adopt. Comparing with other sectors broadens the view and brings ideas that your competitors may not have. You can also compare your own sites or teams with each other: internal differences are often the easiest to learn from.

Once the analysis is done, validate your findings and recommendations with the teams concerned. Their buy-in will let you make the right changes with confidence.

3. Evaluate and quantify

Evaluating and quantifying the benefits and risks of each change is a step in its own right. Before changing an organisation or a process, estimate the cost, effort and time involved. This assessment lets you prioritise the transformations.

For a complete picture, also quantify the cost and risk of keeping things as they are. A dysfunction that seems tolerable often has a hidden cost: rework, delays, customer complaints, time spent working around the problem.

4. Standardise and simplify

Simplifying and standardising processes is one of the fundamental levers for improving performance. To succeed, take into account the geographical and cultural differences between your teams. After collecting their comments and suggestions, remove all unnecessary operations.

This work is only possible once the costs and risks from the previous step have been assessed. Employees and customers gain time, money and comfort. The company avoids waste and improves its productivity.

A standard is not set in stone: it describes the best known way of working today, and it is meant to be improved, in the spirit of Kaizen.

5. Automate and facilitate

Automating production systems and processes is one of the keys to operational excellence. Because a company's departments are interconnected, it is important to understand how they relate to each other. Simplifying the flow of information improves the work of your teams, makes problems easier to detect and helps solve them faster.

Automation comes after simplification, not before: automating a complicated process only makes the complication faster. Once the process is simplified, reducing the number of manual tasks increases productivity, limits errors and reduces costs. Typical candidates are re-entries between tools, reminders, reporting and the consolidation of indicators.

6. Share and inform

Human action is one of the foundations of these approaches. Every employee is an integral part of the company and must feel involved in organisational changes.

To achieve this, share the latest information on processes, explain upcoming changes clearly and precisely, and check that the messages have been understood. Employees need to know why they must change their methods or adapt to a new working environment. Involving them in the transformation saves time and limits risks. Changes are all the more effective for it.

Clarifying roles also helps: on a shared process, a RACI matrix states who carries out the work, who approves, who is consulted and who is informed.

7. Evaluate and adapt

Improving performance is a continuous process. To achieve operational excellence, indicators must be monitored regularly and performance levers adjusted. Depending on the company, its customers' needs and its operating systems, the right indicator is not always cost reduction: it can be the increase in margin or revenue, lead times or the defect rate.

The results obtained make it possible to adjust operations. Then the cycle starts again: new ideas, new comparisons, new improvements. Good practice in operational excellence comes down to meeting customer needs when they want, at the price they are willing to pay, while improving the company's performance. Reducing costs, systematising processes and encouraging teams to find new solutions are among the most effective Lean techniques.

Turning the 7 steps into a plan

Each step produces decisions: ideas to test, comparisons to make, processes to simplify, information to share. Without follow-up, these decisions stay in meeting notes. To make the approach last:

• give each improvement an owner and a due date;
• gather all actions in a single action plan, visible to everyone involved;
• review progress at regular, short meetings;
• measure the effect of each change on the indicators chosen at step 3.

Our article on the action plan for operational excellence details this organisation, and operational excellence to improve quality shows how it applies to quality.