Operational Excellence remains the elusive goal for countless organizations. The threat of competition and the opportunity of applied automation pressure companies improve their operational performance. Companies performing with excellence in operations tend to incur lower operational costs and have less operational risk. Customer expectations today exceed what was acceptable just a few years ago.

A common approach to these pressures is to institute an "Operational Excellence” (OpEx) program. Unfortunately these investments of time and resources are doomed to fail if key foundational elements are not in place. Even with leadership support, sufficient resources, and an otherwise well-structured program any program will struggle without these key elements.

These foundational elements include:

1) Clear, Articulated Strategy. An organization must know where it is going before it can take the first step. A clear strategy establishes both where and how a company is going to compete. This requires making decisions and accepting the tradeoffs involved. At the most basic level, business must understand their competitive strengths including their key core competencies and how the customer values what the business provides. It must also evaluate the market landscape to determine the attractive segments where the customers value the business’s strengths. The business must determine how it competes, usually either through lowest cost, best product, or best service. These decisions are critical to informing OpEx program execution. Without this clarity, every individual will have varying priorities and take actions that are, at best, misaligned or, worse, counter to the strategy of the whole.

2) Prioritized, Cascaded Metrics. Choosing which metrics to prioritize is an age-old challenge for operational organizations. Each choice can be optimized to the detriment of other performance metrics. Balancing these metrics with other metrics must be done selectively avoid metric overload where ten or fifteen metrics are “critical” by corporate executives but, in reality, only one or two can be realistically managed by operational leaders. Clearly deciding which few metrics should be prioritized and then cascading this expected performance downward through the organization allows managers to prioritize their efforts in a way aligned to the corporate priorities.

3) Supporting Organizational Structure. All OpEx programs require actions by individuals. For a successful program implementation, the organization must be designed to enable OpEx-related actions and staffed appropriately. If changes require the actions of a certain position, those positions must, first, exist in the organization chart, and, second, be staffed. Not having people in the right roles will limit success of any OpEx program implementation. The organizational structure must be designed and staffed appropriately before program rollout.

4) Knowledge of Relevant Tools. Either before or in the early stages of a program rollout, knowledge of basic tools and problem-solving toolkit must be in the organization. Like any other skilled job, if the team is asked to perform work without a good set of tools, the team and broader program will not be successful. Just as asking a mechanic or a dentist to perform their services without tools will not be effective, asking an organization to make changes without a set of tools will be equally ineffective. For a successful program, OpEx tools must be known and available to program users to apply in their specific situations. Employees must have the resources and training to be successful.

5) Effective Communication. Effective OpEx program implementation requires multi-channel communication to reach the entire organization and increase the likelihood of employee engagement. First, there must be communications that reach all levels of the organization. Whether e-mail, town hall meetings, posters in break rooms, or any other form of communication, all employees must know about the program and what they can do as an individual. Communication must also be effective. Employees should know where the organization is heading and why. All employees have a role in any OpEx program and everyone should know what their own role is.

Each of these elements form a piece of the foundation required for a successful OpEx program. Too often one or more of these pieces are missing and limit the success of the program, no matter how well-planned otherwise.

For those planning or implementing OpEx in their organizations, ask yourself:

Is your strategy clear and well-articulated?

Does your organization have a few, key metrics with performance expectations cascaded through the organization?

Does your org structure support the program and is it staffed completely? Is your OpEx toolkit known and available across the organization?

And, does every employee know their role in the program?

OpEx remains a critical element for the success of many organizations. Ensuring a strong foundation will increase the likelihood of a program’s success.