Operational excellence is achieving the highest standards in a specific area of operations, such as sales or product quality. It requires continuous improvement and identifying strengths and weaknesses to create strategies for improvement. Constant effort and evolution are necessary for maintaining excellence.
Operational excellence is a high level of results that companies and institutions are committed to achieving through constant dedication to improvement. A term with many different definitions, operational excellence basically means meeting or exceeding the highest standards in a particular area of operations, such as beating sales targets, earning rave customer service reviews, or receiving industry awards and recognition for building an superior product. The foundational component of all operational excellence-oriented strategies is the development of a consistent system of enterprise-wide improvement.
Achieving operational excellence essentially means outperforming all other competitors, or at least meeting a pre-established performance goal. As the achievement of each goal creates a newer, higher goal, however, maintaining operational excellence is an ongoing project for any organization. This means that excellence-oriented companies must create systems that enable continuous improvement in order to keep pace with the ever-shifting goals of excellence.
The measurement of excellence can vary depending on the specific area of operations under review. For example, the sales team may define excellence based on the amount of sales made along with customer service ratings, while a factory department may be more concerned with safety, quality control, and efficiency ratings. One of the most crucial parts of creating an operational excellence strategy is determining and defining standards of excellence in each area, in order to give managers, workers and strategists clear goals.
Once goals are defined, the next step in achieving operational excellence often involves identifying strengths and weaknesses, to determine where the business or department is already on the road to excellence. This can be done through performance reviews, independent analysis, market research or using employee input. Finding the weaknesses that prevent the company from achieving excellence allows planners to create strategies to improve performance in poor areas while still maintaining operational strength areas. The implementation of these strategies is closely monitored and measured to ensure that the new plans are working as intended.
An important key to operational excellence is constant effort. Very rarely can a business simply lay out a plan for excellence and then sit back and allow the money and success to flow. Built into the fabric of most improvement plans are mechanisms that allow for a periodic review of procedures, the setting of new goals, and the creation and implementation of new excellence-oriented plans. A good operational excellence plan will allow a company to continue to evolve with the technology and the market, keeping it relevant and allowing it to continue advancing to the top of the field.
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