The ABCs of Operational Excellence

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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 practise the ABCs of operational excellence, which are 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.

For a telecommunication company which has a goal to provide excellent customer service, it 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. Training of every customer support rep is done regularly to address common customer issues and she is kept abreast of the latest offerings.

The 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 allocate resources to important activities. You need to consider costs and benefits, prioritize, and filter the irrelevant requests that deviate you 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. The Capital Funding Committee reviews over 30 submissions. The return on investment (ROI) 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 across the different functional areas, collaboration is necessary in order to optimize results. Otherwise, employees become flustered and the 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 the City Hall, Legal, Parks and Public Works are involved in verifying the damage and determining the course of action. A third-party insurance adjuster is involved in assessing the claim. It is a nightmare for the homeowner as he needs to deal with so many people. For the municipality, the handoffs are cumbersome. The case could take weeks, may be months, to resolve. If the different 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 are just as important.

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

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