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Building Operational Excellence

This is part of my reflections from the OpsInsight Forum in Boston.

Robert Miller presented about the principles and dimensions The Shingo Prize for Operational Excellence uses to assess companies for the award.  Robert explained the important factors for any company that wants to achieve operational excellence.

Companies need to:

  1. Define Excellence
  2. Define Continuous Improvement
  3. Understand Transformation
  4. Tell the Truth

The first two are about setting expectations so people know what is expected of them.  The third is about understanding what your people will be going through.  The last is the most important.  An organization needs to be honest with itself and where it stands.  They can’t sugar coat their situation and they can’t hide it from their employees.

Companies need to bake operational excellence into their culture.  In order to do this, it starts with principles that help define systems that help to build tools to support.  I have recreated the graphic that Robert showed that helps explain why companies fail in building operational excellence into the culture.

Have you seen this to be true?  With lean transformations, I have seen this quite a bit.  Companies start by implementing tools and then later figure out the tools aren’t working because they don’t have the systems in place to support the tools.  Then even later the company realizes they don’t have the same underlying principles that a company implementing lean successfully does.  By this time it may be too late.  The lean implementation may have been thrown out the window.

If the lean implementation does last long enough to realize the principles are needed to lay the foundation then the company has wasted a lot of valuable time.  It is good they got there.  The company could have had larger or better sustaining gains if they built the same direction as they thought about it.

When a company can think and build from left to right, the greater chance of success of embedding operational excellence into their culture.