The ABCs of Operational Excellence

This article was reprinted with permission from CDC Synetics’ blog.

Running a business effectively has many advantages. You serve the customers well, keep a healthy bottom line, and foster positive morale in the organization. Companies that are successful in weathering the ups and downs in the competitive marketplace practice the ABCs of operational excellence: alignment, balance and collaboration.

Alignment
Operations is the engine of the business. Goals are realized when execution is carried out in a way that supports the business strategy. This requires careful deliberation of the strategic results and aligning all the actions with laser focus.

A telecommunications company with a goal to provide excellent customer service would set up a customer support team with well trained staff. The customer support team is staffed optimally to answer calls within a certain response time. Staff have access to a complete view of the customer profile to prompt meaningful questions. And every customer support rep is trained regularly to address common customer issues. She also is kept abreast of the latest offerings.

This alignment of operations with business strategy provides relevance and enhances value to the customers.

Balance
An effective operation calls for a balanced and unbiased approach to allocating resources to important activities. You need to consider costs and benefits, prioritize, and filter the irrelevant requests that deviate from the strategic path. Objectivity helps with the balancing act.

Every year, a utility company goes through a planning exercise to review the capital requests for operational improvement initiatives. Its capital funding committee reviews over 30 submissions. The return on investment and the payback period are key considerations. One of the projects submitted doesn’t have a high ROI, but anticipated improvements would prepare the company for future automation. The project would have been rejected if the committee adhered straightly to ROI and the payback period criteria.

Taking a balanced view is not always straightforward, particularly for a large corporation. However, it helps when the culture of the organization fosters the proper mindset around operational excellence.

Collaboration
Cohesive execution adds speed and reduces duplication. As work traverses different functional areas, collaboration is necessary to optimize results. Otherwise, employees become flustered and customers are frustrated.

In many municipalities, homeowners must seek the city’s approval to cut down trees. In the event that a city-owned tree has fallen and caused damage, the process to submit a claim is convoluted. At city hall, several departments are involved in verifying the damage and determining the course of action. A third-party insurance adjuster is involved in assessing the claim.

This situation is a nightmare for the homeowner, as he has to deal with so many people. For the municipality, the handoffs are cumbersome. The case could take weeks, maybe months, to resolve. If the departments could collaborate and develop a streamlined approach that provides a single point of contact for the homeowner, it would eliminate a lot of frustration.

In addition to the collaboration within the business, collaboration with external parties is just as important.

Operational excellence is important for every business. When neglected, even the strongest company can falter.

Founder of CDC Synetics, Richmond, British Columbia, Connie Siu is passionate about building high-performance businesses through strategic clarity and optimal resource utilization. She helps companies achieve lasting results and remarkable competitiveness. With over 25 years of experience, Siu is a frequent speaker at corporate and association events. Her clients include Fortis Inc., Pacific Blue Cross, BC Hydro, Vancouver Coastal Health, and leading companies in telecommunication, transportation, high-tech, education, government, and manufacturing.