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The Path to Operational Excellence: Part I

To ‘deliver the goods’ for the business, organizations must help develop strong capabilities in Strategy and Leadership – focused on doing the right things, and on Execution – doing things right. In this four-part blog series we will explain the elements of strategy, leadership and execution that are needed to develop and reach Operational Excellence.

A great place to look for growth are the areas where you out-perform the competition. Applying a strategic focus to these areas will give you a significant competitive advantage and a consistent path to growth.

“Operational Excellence” (OE) has in recent times become an ever-increasing component of organization and leadership vocabulary. It can be observed in many forms: as a banner for a broad range of improvement initiatives, in job titles of individuals and departments and in the consulting world where institutes, working groups and practices have been formed around it. Although many organizations invest heavily in the concept of OE, it remains very broad and has no clear definition.

That said, many have tried to define what an organization must do in order to achieve ‘Operational Excellence’ using complex project portfolios and pyramids of initiatives to successfully ‘implement’ and ‘achieve’ OE.

Initiative overload is among the greatest challenge that organizations face today in their quest to achieve a competitive position in global markets and supply chains. With this in mind selection of the focus areas for activities and programs is paramount. The list of alternatives such as: TPM, 5S, SMED, LEAN, Six Sigma, Supply Chain and ABC is almost endless. Each initiative in itself warrants the attention of the whole organization if it is to be successfully implemented. Yet, organizations that are pursuing internal or external acknowledgement of OE often attempt to run parallel implementations of these major initiatives with limited resources and at inflated costs.

Unless clearly articulated in the specific context of an organization’s market and customer strategies, Operational Excellence becomes internally focused and loses sight of how it can be part of market-facing, game-winning strategies for the organization.

The strategic goals of the business must be the drivers that guide the selection of the operational areas and processes that the organization needs help to improve, and to excel in.

At Kepner-Tregoe, we define Operational Excellence as:

“Creating a position of competitive advantage for the organization in its target markets by focusing on the operational activities where it can out-perform competition.”

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The Path to Operational Excellence Part II: Execution
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The Path to Operational Excellence, Part III: High Performance Culture and Focus
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The Path to Operational Excellence, Part IV: Encouraging and Sustaining an OE Culture
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Operational Excellence in Crisis Management

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