Some thoughts on defining and pursuing Operational Excellence we often use as a precursor to programs of work

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A brief look at :
•How do you define OE
•Why is it different
•Why does it sometimes fail
•What makes it work
•A move to the right
•The vital role of leaders & leadership
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Some Thoughts on Operational Excellence
Presented by Steve Mitchinson
Director, BBB Advisory Pty Ltd

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What is Operational Excellence
Operational Excellence means attaining a position
of advantage in the execution of business
processes
It is typically characterised by:
• Customer experience levels exceeding industry standards
• Sustained higher financial returns for Shareholder/Stakeholder
• Higher levels of staff engagement
• Total organisational commitment to continual improvement

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Defining Operational Excellence in Your Business
Lets discuss these examples or aspirational statements:
• Extraordinary execution
• Swift dependable service
• Driving costs down aggressively
• Guaranteed low price and/or hassle free transactions
• Executing service one way and one way only
“Operationally excellent companies deliver a combination of quality, price and ease of purchase
that no one else in their markets can match. They are not product or service innovators, nor do
they cultivate one-to-one relationships with their customers. They execute extraordinarily well,
and their proposition to customers is guaranteed low price and/or hassle-free service.”
The Discipline of Market Leaders
Treacy & Wiersema

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Why do so many “programmes” fail
• Corporate definition must be more than a platitude
– Not another mission statement on a wall or bland statement like we will improve quality, We
will support innovation
– Example: Global Industry Player (no more) - thanks for the chocolates..& BOHIKA
• Must have clearly defined , measurable objectives that everyone understands, owns
an d most importantly can control
– Goals must be owned and accepted
– Example -Energy Utility - Who made those up (or How did they make these up)...
• Clear leadership and direction is evident at all levels
– There must be consequences
– Example: DOT - He will give in like the rest if we push back
• Programs are discrete and timed
– Successful programs do not have an end point and are sustainable through this
new "culture"
– Example – Peak Performance*
*Peak Performance – Business Lessons from the Worlds Top Sports Organisations; Clive Gibson, Mike Pratt, Kevin Roberts, Ed Weymes,
Harper Collins

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What makes Operational Excellence Different
Whilst OE has its origins in other business methodologies such as Quality, Six Sigma
and Lean, in my view there are several significant advantages in the move to
successful OE programmes I have experienced or contributed to previously.
• Previous methodologies were anchored in what we often refer to as left brain or
rational thinking whereas research is increasingly telling us that more social or
right brain thinking is required in order to deliver balanced and effective outcomes
• Too many of the foregoing approaches do not allow for or tolerate mistakes and it
was the structure and "control from above" they required that prevented many
programs from meeting the hype - they are typically manufacturing based
• OE accepts that we may make mistakes, but we will have the structure to learn
from them the first time!
• OE supports (depends upon) empowerment and frontline decision making,
accepting that good process design can allow that
• OE places a larger responsibility on staff and empowered leaders to drive the
programs

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Operational Excellence doesn’t just happen
It requires a sustained effort
Attaining Operational Excellence requires:
• A set of disciplines & sustained effort to transform into habit
• Improved contributions to business performance by all staff which is only
achievable through improved engagement – “discretionary effort”
• Reduced operational errors
• Enhanced operational efficiencies
• Increased customer satisfaction
• Optimised margins or profitability
Operational Excellence requires an approach to performance improvement
focused on new ways of:
– Thinking
– Managing
– Measuring

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Where is your thinking anchored
What are you going to do about it?
EFFICICENCY
FINANCIALS
TECHNOLOGY
PAST TRENDS
PERFORMANCE
MEASUREMENTS
GOALS-OBJECTIVES
TRAINING
DEVELOPMENT
TEAMS
RELATIONSHIPS
COMMUNITY
RELATIONS
CUSTOMER
RELATIONS
COMMUNICATIONS
CULTURE – VALUES
RECOGNITION
COMPETITION
ENVIRONMENT
FUTURE TRENDS
NEW CONCEPTS
NATIONAL/WORLD
ISSUES
VISION-PURPOSE
LONG TERM
STRATEGY
METHODS
REGULATIONS
QUALITY –
PERFECTION
RISK REDUCTION
RESOURCES
CONTROL
TIMING
POLICY
R
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K
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P
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Approaches to Strategy
Based on the widely acclaimed “Whole Brain Thinking” programmes developed by Ned Herrmann & Herrmann International
Steve Mitchinson is an acclaimed WBT Facilitator

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What makes us mad, frustrates us, annoys us?
Mess, slobs, people not putting things back (exactly)
where they found them
People who are not punctual
People who don’t meet commitments
People who don’t explain
People only see the wood for the trees
Glass half empty folks
People who only the (their) parts-not the whole
Resistance to change, people who are not
enthusiastic about new ideas
Benchmarking – that is following not leading
People who quote wrong dates, wrong numbers,
who pluck numbers out of the air
People who mix up megabytes and kilobytes
People who pretend to express knowledge they
don’t have
People who think the cloud is a weather condition
Insensitive people
People who are only interested in the answers
(facts) – not feelings or the processes
People who are uncaring or unresponsive

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Stages of OE success
Where are you?
Where the enterprise sits on this continuum is no longer measured by consensus around the board or executive
table - it is now determined by your customers and employees

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The Shingo Prize
Beyond the Baldridge Awards, it is all about the Shingo......
The Shingo model of operational excellence states that successful organisational
transformation only occurs when leaders understand and take personal responsibility for
architecting a deep and abiding culture of continuous improvement.
The Shingo Prize which recognises success in Operational Excellence has identified
ten key principles its award winners display:
1. Respect every individual
2. Lead with humility
3. Seek perfection
4. Assure quality at the source
5. Flow and pull value
6. Embrace Scientific Thinking
7. Focus on process
8. Think systemically
9. Create constancy of purpose
10. Create value for the customer
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The Critical role of leaders
What do leaders need to contribute
• Unified understanding and support of the organisational intent
• Living and breathing the enterprises organisational values -
making them real - without exception
• Inspiring teams to want to achieve and test new boundaries
• Engaging Staff in Change
• Creating “meaningful work”
• Managing Staff Expectations and Engagement - staff don't leave
organisations, they leave their leaders
• Effective communication methods
• Maintaining the rage
My question to leaders is always “Are you on the right bus?

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Importance of Organisational Alignment
The major risk of success is where culture does not support the vision.
Leaders lead culture, therefore only leaders can change it!

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What is Operational Excellence
Lets remind ourselves
Operational Excellence means attaining a position
of advantage in the execution of business
processes
Values, Behaviours, Expectations and Rituals define the Culture and
sustain the Community
Vision without action is simply daydreaming, Action without vision is just
a nightmare
By: Ken Everett, Ken Everett International
Ponder this discussion:
"CFO asks CEO: "What happens if we invest in developing our people
& then they leave us?"
CEO: 'What happens if we don't, and they stay?""

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Thank you
For further information: E: steve.mitchinson@bbbadvisory.com.au or M: +61403001100

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