5 Execution drivers of operational competitive advantage

In a business environment where competition is fierce, profit margins are razor-thin and product issues become headline news, having a solid strategy is important but how will you execute is the real key to success. Yes, you are competing against other external players in the marketplace, but the source of your competitive advantage comes from within.

Every company has their own unique ‘secret recipe’ for bringing together the resources at their disposal – combining them through business processes to create products and services that customers value.  This secret recipe defines the company’s operational culture, establishes its performance potential and creates competitive advantages that enable the company to win and retain business. The company will seek to improve this recipe through change and continuous improvement – trying to achieve a state of operational excellence where their competitive advantage is maximized.

It is important to acknowledge that operational excellence isn’t a destination and something you can achieve one day, celebrate and move on to something else.  Operational excellence is a path, a journey and an asperation that your company must forever strive towards but will never fully achieve. Similar to a world-class chef cooking a memorable meal for diners, operational excellence comes partly from the quality of the recipe but also has a lot to do with how well your company executes through operations.

Here are 5 execution drivers that you can use to improve your operational competitive advantage

  1. Business processes: Workflows and processes enable your company to achieve consistency and repeatability in your operations.  Well defined business processes integrate the activities of employees and machinery and create predictability in outcomes.
  2. Asset productivity: The operations of most modern businesses have a strong dependency on manufacturing equipment, technology and other physical assets.  These assets are often costly to acquire and maintain, so maximizing the value created from them is important. Every minute that an asset is idle or under-utilized is value potential lost – so optimizing asset productivity is critical.
  3. Human capabilities:  Notice that this item doesn’t say “human capacity” – you should think of your employees (and other people involved in your operations) as creating value through their knowledge, experience and skills.  Your company’s human resources have the ability to amplify the potential of all other parts of your operations through their ideas and critical thinking abilities.
  4. Quality: Customers judge the value of your products and services (and compare them to alternatives) not just based on features, but based on the quality your company produces.  Product/service quality is one of the most directly addressable drivers of operational competitive advantage through improving processes, machinery, data, human resources, etc.
  5. Safety: While it may seem that safety and working conditions are simply internal environmental concerns related to human resources, increasingly they are becoming market concerns for socially conscious customers and regulatory agencies.  Many government organizations (and companies that do business with them) are required to certify safety and working conditions throughout their supply chains.

These execution drivers work together support your company’s holistic journey towards operational excellence. While internal performance benefits and cost savings potential may seem alluring on their own, it is the external impacts on customer perception in the marketplace where long-term competitive advantage is realized.

Improving on execution performance is one of the many steps on your company’s operational excellence journey. To learn more about your company’s road ahead and pick up more tips for achieving competitive advantage through operations, download “The Path to Operational Excellence” paper from the expert coaches at Kepner-Tregoe. The business environment may be fiercely competitive – but with focused effort (and little guidance along the way) success can be within reach.

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