The Role of Operational Excellence in Strategy
By David Silverstein
Everything has a half-life—and strategy is no different. The time it takes for competitors to copy you, or if you are lucky enough to have some kind of patent protection, to go around you, is getting shorter and shorter. As the field is leveled over time, as companies and markets mature, the nature of competition always—100 percent of the time—reverts to the question of performance. Operational Excellence is about driving the very best performance possible—and continuously improving it from there.
Even before maturity begins, performance is key. And that’s because when it comes to strategy, performance equals execution. And when it comes to execution, there are two things that matter most: how precisely you execute to your plan and how fast you do it. Said otherwise, it’s all about quality and speed.
How Well Do You Execute Your Plan?
In order to execute strategy effectively, the most successful companies draw from a broad range of tools and methods. The goal is to form an unparalleled capability to drive major transformation, followed by a transition to exceptional day-to-day management of the business, all the while driving continuous improvement and looking forward to the next era of transformation.
How Fast Do You Do It?
Product life expectancy is becoming shorter and shorter. So, too, is the time available to develop the next generation of products or services. In fact the time for everything is getting shorter. But that’s not the story, is it? Shorter is not the problem. Faster is the problem, because faster is what you do, shorter is just the result. And if faster is what you must do, the question is, “How?”
Faster execution demands several things. First, it demands that you don’t waste a lot of time “selling” your strategy to your own workforce. By engaging your staff in the strategy development process, buy-in becomes a natural part of the process. Sure, there will still always be the need to manage change, but it will be significantly less challenging when you drive greater engagement.
Second, faster execution means that you have considered all of the execution challenges while developing your strategy. All too often, strategy is developed by one party and is implemented by another. That just doesn’t make sense. If you don’t have those who must execute strategy at the table when making strategy, how can you ensure it is executable in the first place?
The better your problem solving capability is, the faster your strategy execution.
And finally, the fast—or rapid—execution of strategy demands a highly effective problem solving capability. When strategy is developed, it is well understood that there will be many challenges along the way, each of which constitutes a problem to be solved. The better your problem solving capability is, the faster your strategy execution.
Within each of these elements, Operational Excellence plays a role in ensuring your strategic plan is being executed by the entire organization. Increasing engagement levels, ensuring strategy is executable and then executing successfully—these are all driven by investing in project management skills, Lean and Six Sigma tools, innovation and robust change management. From process and people to time and projects, Operational Excellence guides those activities that need to happen each day to ensure that whatever plan we’ve implemented is both effective and sustainable.
David Silverstein is the CEO and founder of the Lean Methods Group. He is a frequent public speaker and author.