What is operational excellence?

- Most of us have rented cars while on vacation or on a business trip. When you arrive at your destination airport, you go to the rental car facility. The lines are long, but no worries, because you're a gold preferred customer. So you head straight to the marquee board, expecting to find your name and car listed there. Surprise, surprise, your name is nowhere to be found. So now, you have to go into the rental car office, hoping to speak to someone at the gold preferred counter. But that counter is closed for the night. So now, you have to stand in that long line with the regular customers. But wait, your nightmare is not over yet. When you finally get to the counter after that long wait, you are told that they ran out of cars and the only vehicles available are luxury SUVs for a higher rate. What's wrong with this picture? You had a reservation. You're a VIP, a gold preferred customer. But all that went out the window. You had a difficult and bad experience, not better. It took longer and it cost more. Operationally, it was far from excellent. What does it mean to be operationally excellent? In general, what is operation excellence? Simply put, it is better, faster, and cheaper. Better. Better quality of products and services, better processes, and better user experience, and better value. Better in whatever's relevant and important. For example, if safety and reliability are important, then better safety and better reliability. Better means improved performance on metrics in the quality dimension. Quality in its broadest sense. Faster. Faster service, faster response, faster processing, and on-time or faster delivery, if customers prefer. Faster means improved performance on metrics in the time or temporal dimension. Cheaper. Cheaper to operate, cheaper to process, and cheaper for customers. Cheaper means being more efficient in the use of resources and improved performance on metrics in the cost dimension. To achieve operational excellence, organizations needs to have processes that are effective and efficient in delivering value. Processes need to be well-designed, capable, and consistent. Where people perform the work are capable and have the means of knowing what's important, what to do, when to take action, and what actions to take. They have the necessary process authority, responsibility, and accountability. Organizations also need to have the tools and techniques for design, improvement, and control. For example, for design, there's Design for Six Sigma. For improvement, there's Six Sigma and Lean. For control, there's Value Stream or Process Management. In addition, operational excellence means having the mindset and behaviors where everybody wants to and is able to be operationally excellent. The right mindset is embraced and the right behaviors are encouraged by the leadership, enabled by targets and metrics, and encouraged by performance goals, rewards, and recognition. Finally, an organization cannot achieve operational excellence without four things. Enterprise-wide alignment of strategies, priorities, policies, and decisions. This has to be across different functions and up and down all levels of the organization to consistently drive the right behaviors and results. These four elements are essential to achieve operational excellence. To be better, faster, and cheaper. You want to get to the point when everyone in the organization is willing and is able to do well, to be operationally excellent everyday. Everyone is engaged, enabled, and empowered to achieve operational excellence and the desired results for competitive advantage. So the next time you rent a car, hopefully you have a much better experience, receive faster service at a cheaper price, and drive off in a car you reserved.