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What Is Operational Excellence?
Contributed by Frank Adler on January 15, 2015 in Operations & Supply Chain
Perfection is ...
Based on Treacy’s and Wiersema’s findings, market leaders will not pursue a diffused
business strategy across two or even ...
Second, Operational Excellence organizations are able to translate strategic or operational
objectives and initiatives int...
continuously strive to increase the engagement and empowerment of their employees
through strong values, guiding principle...
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What Is Operational Excellence?

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Original article from the Flevy business blog can be found here:
http://flevy.com/blog/what-is-operational-excellence/

Perfection is not attainable, but if we chase perfection we can catch excellence. – Vince Lombardi
In “ The Discipline of Market Leaders – Choose your Customers, Narrow your Focus, Dominate your Market, ” Michael Treacy and Fred Wiersema describe three distinct value propositions or disciplines an organization can choose to compete in their market or industry– Operational Excellence , Product Leadership , and Customer Intimacy .
Market leaders choose to excel in delivering extraordinary levels of one of these three value propositions, while maintaining competitive standards in the other disciplines.
Based on Treacy’s and Wiersema’s findings, market leaders will not pursue a diffused business strategy across two or even all three disciplines, but will continually focus on their organizational design, processes, technology, and competencies to improve the one particular value discipline that they want to provide to their Customers better than anyone else.
Organizations pursuing an Operational Excellence differentiation strategy are able to deliver a combination of quality, price, and ease of purchase and service that no other organization in their market or industry can match.
Achieving Operational Excellence requires the successful implementation of a Business Execution System that effectively and seamlessly integrates the following four building blocks: Strategy Deployment , Performance Management , Process Excellence , and High Performance Work Teams .
First, Operational Excellence organizations follow a well defined Strategy and Operational Planning & Deployment Process that ensures collaboration and alignment among the different parts of the organization and effectively links strategic and operational objectives, initiatives and execution. Strategy Mapping and Hoshin Planning provide this systematic and collaborative planning, execution, and review process.

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What Is Operational Excellence?

  1. 1. What Is Operational Excellence? Contributed by Frank Adler on January 15, 2015 in Operations & Supply Chain Perfection is not attainable, but if we chase perfection we can catch excellence. – Vince Lombardi In “ The Discipline of Market Leaders – Choose your Customers, Narrow your Focus, Dominate your Market, ” Michael Treacy and Fred Wiersema describe three distinct value propositions or disciplines an organization can choose to compete in their market or industry– Operational Excellence , Product Leadership , and Customer Intimacy . Market leaders choose to excel in delivering extraordinary levels of one of these three value propositions, while maintaining competitive standards in the other disciplines.
  2. 2. Based on Treacy’s and Wiersema’s findings, market leaders will not pursue a diffused business strategy across two or even all three disciplines, but will continually focus on their organizational design, processes, technology, and competencies to improve the one particular value discipline that they want to provide to their Customers better than anyone else. Organizations pursuing an Operational Excellence differentiation strategy are able to deliver a combination of quality, price, and ease of purchase and service that no other organization in their market or industry can match. Achieving Operational Excellence requires the successful implementation of a Business Execution System that effectively and seamlessly integrates the following four building blocks: Strategy Deployment , Performance Management , Process Excellence , and High Performance Work Teams . First, Operational Excellence organizations follow a well defined Strategy and Operational Planning & Deployment Process that ensures collaboration and alignment among the different parts of the organization and effectively links strategic and operational objectives, initiatives and execution. Strategy Mapping and Hoshin Planning provide this systematic and collaborative planning, execution, and review process.
  3. 3. Second, Operational Excellence organizations are able to translate strategic or operational objectives and initiatives into measurable success indicators and ensure alignment among the different levels and parts of the organization. The Balanced Scorecard Methodology provides a Performance Management framework to ensure alignment of an organization towards common objectives and goals. Third, Operational Excellence organizations are process-centered organizations that have well designed, efficient, and effective management, value chain, and support processes to deliver best-in-class products and services consistently. Process Excellence concepts, methods and tools, including Six Sigma Methodology, Lean Management Methodology, 8D Problem Solving Process, and Business Process Improvement, are core competences and utilized at all levels of the organization. You can learn more about Operational Excellence from the author’s training guides available on Flevy , including a free-of-charge presentation, An Introduction to Operational Excellence . Fourth, Operational Excellence can only be achieved and sustained with the right attitude, the right mindset, and the right competencies. Operational Excellence organizations
  4. 4. continuously strive to increase the engagement and empowerment of their employees through strong values, guiding principles, leadership development, coaching, and continuous competence development. About Frank Adler Frank Adler co-founded Operational Excellence Consulting (OEC) in 2009 to follow his passion for Operational Excellence and to be able to work with individuals and organizations that share this passion. He has over 20 years of international executive leadership experience in General Management, multi-site Operations & Supply Chain Management, Quality & Customer Support Management, and Operational Excellence & Lean Six Sigma. View more of OEC's materials on Flevy here , including training guides and free downloads.
  5. 5. Flevy (www.flevy.com) is the marketplace for premium documents. These documents can range from Business Frameworks to Financial Models to PowerPoint Templates. Flevy was founded under the principle that companies waste a lot of time and money recreating the same foundational businessdocuments. Our vision is for Flevy to become a comprehensive knowledge base of business documents. All rganizations, from startups to large enterprises, can use Flevy— whether it's to jumpstart projects, to find reference or comparison materials, or just to learn. Contact Us Please contact us with any questions you may haveabout our company. • General Inquiries support@flevy.com • Media/PR press@flevy.com • Billing billing@flevy.com

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