For those that read this Blog regularly, you know how much I keep harping on the importance of business leaders to have a strategic mindset. For Business Leaders not to be stuck dealing just with all those matters that are ‘URGENT & IMPORTANT” but also those matters that are “IMPORTANT but not immediately URGENT”. This however does not mean that operations and achieving operational excellence should be discarded. Absolutely not. Actually there is a strong link between a strategic mindset and the achievement of operational excellence.

In their November 2023 article McKinsey identified the ingredients that are normally found in successful family businesses, as outlined below. As can be seen below, successful family business require having both a long term strategic perspective (mindset) and achieving operational excellence (strategic action).

So what is operational excellence? It can obviously mean many different things to many different people. I think a good start is to first understand what it is not. It’s not a particular set of outcomes or performance numbers or metrics. Those numbers or metrics are often the goal. But what operational excellence looks like is really a consistent way of working. It’s a consistent way of working that delivers on the goals, really activating the entire business organisation to continuously get better every day at achieving that organisation’s purpose. So it’s really a set of culture, behaviours, mindset, and daily practices that is intimately tied to the organisation’s reason for being. The last point is very important. Employees are evermore looking for purpose. They’re looking for more than a job, more than just a wage to pay their bills. Hence the extreme importance for business organisations to base the achievement of operational excellence on the purpose of the same organisation. Many operation managers think that the starting point of achieving operational excellence is by focusing on how and what we do. The starting point is in aligning everyone onto WHY we do what we do and not just what we do and how we do it.

So the starting point is of turning purpose into operational excellence. It is important however to do things well to get the full potential of this. One thing to get right is to ensure that the KPIs and measurables identified for each business section or function are connected to the element of purpose. That way the operational excellence we aim to achieve is fully aligned with the business’s strategic goals.

There is also the element of technology. Technology today is a key tool to help achieve operational excellence. However like any tool, if not used well and appropriately and designed well, it can end up not helping the business organisation achieve its goals as previously forecasted. One of the main reasons for this, is a resistance of technology adoption by team members, as many times they feel they are not the central part of this technology adoption and that they where not allowed to give any contribution towards ensuring that the the technology solution they where presented it, is really integrated with the processes they work with. So when speaking about technological solutions, to help us achieve operational excellence, the very first step is to really understand the present processes used, to document these well and to really understand very very well, what is good in these processes and what can be improved. This process requires someone leading such a project to “go and see” and to work with team members to help start understand from an early point the operational improvements that will need to be achieved by using technology and improving certain processes.

I unfortunately, still see many businesses who have somehow lost their focus with regards operational excellence. On one hand some businesses are caught in the glossiness and excitement of just using new technology for the sake of the technology itself and hence not really making sure that real integration between processes and technology. The second element is dealing with operational excellence in a piecemeal fashion, like a fireman trying to put a fire here and a fire there. The quantum leap in achieving sustainable operational excellence needs a holistic view linked with purpose and strategy.