{"id":3575,"date":"2018-05-31T07:45:54","date_gmt":"2018-05-31T12:45:54","guid":{"rendered":"http:\/\/flevy.com\/blog\/?p=3575"},"modified":"2018-05-30T11:56:52","modified_gmt":"2018-05-30T16:56:52","slug":"operational-excellence-goals-that-the-organization-can-get-behind","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/operational-excellence-goals-that-the-organization-can-get-behind\/","title":{"rendered":"Operational Excellence Goals That the Organization Can Get Behind"},"content":{"rendered":"<p><em>Editor&#8217;s Note:\u00a0Roger Price is the CEO of\u00a0<a href=\"https:\/\/www.phase5group.com\/\">Phase 5 Group (P5G)<\/a>\u00a0and the visionary behind EON, the world&#8217;s first Operational Excellence management solution.\u00a0P5G is also a partner and author on Flevy. They published a comprehensive guide on\u00a0<a href=\"https:\/\/flevy.com\/browse\/business-document\/operational-excellence-design-process-2539\">Operational Excellence Design Process<\/a>.<\/em><\/p>\n<p style=\"text-align: center;\">* * * *<\/p>\n<p><img decoding=\"async\" class=\"alignright size-medium wp-image-3576\" src=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2018\/05\/pexels-photo-325185-300x200.jpeg\" alt=\"pexels-photo-325185\" width=\"300\" height=\"200\" srcset=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2018\/05\/pexels-photo-325185-300x200.jpeg 300w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2018\/05\/pexels-photo-325185.jpeg 525w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/>Operational Excellence (OpEx) isn\u2019t just a \u201cnice to have,\u201d it\u2019s a core part of how modern organizations remain competitive and cost-effective. At its core, OpEx is the execution of your business strategy with greater consistency and efficiency than the competition. The role of the OpEx team is to facilitate the implementation of the behaviors and work process required to achieve what the business requires to be successful.<\/p>\n<p>That being said, it\u2019s important to establish clear goals for the implementation of OpEx so that the organization can fairly judge whether its investment in OpEx is generating the desired return. Generally speaking, OpEx goals can be divided into three broad categories:<\/p>\n<ul>\n<li><strong>Financial.<\/strong>\u00a0These goals are focused on the monetary aspects of the business\u2014such as reducing costs or improving revenues.<\/li>\n<li><strong>Operational.<\/strong>\u00a0These goals tend to focus on improving productivity or quality so as to differentiate the company from its competitors.<\/li>\n<li><strong>Cultural\/Workforce.<\/strong>\u00a0These goals are designed to improve the workforce\u2019s capabilities, commitment, and discretionary effort.<\/li>\n<\/ul>\n<p>Among each of these categories, it is vital for the business to ensure that individual goals and associated metrics align with the business\u2019 needs and overall strategy\u2014not to mention the OpEx vision, strategy, and resource model.<\/p>\n<p>Here are a few examples of operational excellence goals that your organization can get behind to improve the execution of its overall business strategy:<\/p>\n<h2><strong>Financial Goals<\/strong><\/h2>\n<p>Some key examples of financial OpEx goals include:<\/p>\n<ul>\n<li><strong>Greater Sales.<\/strong>\u00a0Most businesses desire to increase their sales volume in some way. However, the organization can only increase sales volume if it can reliably meet the demand. From an OpEx perspective, this means finding opportunity to release resident capacity in the business that isn\u2019t being utilized because of waste, inefficiency, or lack of capability. In manufacturing, this phenomenon is sometimes referred to as the \u201chidden factory\u201d but it plays out in service-based organizations as well. Unleashing resident capacity is often the key to sustainable sales growth.<\/li>\n<li><strong>Improved Cost Competitiveness.<\/strong>\u00a0The ability to differentiate based on cost is critical to the success of most organizations, but particularly those that operate in mature markets where the customer has many viable alternatives. OpEx can play a huge role in driving cost out of the business.<\/li>\n<li><strong>Improved Cash Position.\u00a0<\/strong>A sometimes overlooked financial benefit from OpEx lies in the amount of capital that can be made available to drive business growth. For example, if the organization is able to avoid or delay a major capital expenditure (e.g., new manufacturing process, patient care facility, service center, etc.) because of improved productivity within its existing assets, that capital is now available to be used in other ways that could be more beneficial to the business. The same is true if the organization is able to increase inventory turns or shorten the cash-to-cash cycle time.<\/li>\n<\/ul>\n<h2><strong>Operational Goals<\/strong><\/h2>\n<p>Some operational goals that can be tied to your OpEx efforts include:<\/p>\n<ul>\n<li><strong>Improved Safety Performance.<\/strong>\u00a0While many organizations manage the implementation of their workplace safety program separate from OpEx, the reality is that no organization can be truly operationally excellent if it isn\u2019t operating safely. Therefore, any structured effort to improve operations should at a minimum not interject risk into the organization\u2019s efforts to facilitate proper workplace safety. Ideally though, OpEx will reinforce the importance of proper safety practices and contribute to a safer work environment through hazard identification &amp; risk reduction and employee competency development.<\/li>\n<li><strong>Increased Value Stream Productivity.<\/strong>\u00a0A common OpEx goal is to increase the productivity of a given value stream within the organization. The benefits of increased productivity can manifest as increased throughput, improved labor efficiency, or enhanced product\/service flexibility (i.e., the ability to produce a wider array of products or provide a more diverse set of services).<\/li>\n<li><strong>Improved Product\/Service Quality.<\/strong>\u00a0Improving the quality of your organization\u2019s products and services can improve customer retention and brand loyalty metrics. And for certain industries, such as food &amp; beverage or patient care, there are either significant regulatory or customer\/patient consequences associated with sub-par product or service quality that require a persistent focus on continuous improvement.<\/li>\n<\/ul>\n<h2><strong>Cultural and Workforce OpEx Goals<\/strong><\/h2>\n<p>Some core cultural and workforce-oriented goals associated with OpEx may include:<\/p>\n<ul>\n<li><strong>Increased Skills Attainment.<\/strong>\u00a0Knowledgeable employees are more valuable and productive employees. Embedding new skills, such as structured problem solving, leader standard work, and performance coaching,is a common goal for many companies striving to achieve operational excellence.<\/li>\n<li><strong>Increased Employee Involvement in Continuous Improvement Activities.<\/strong>\u00a0Ultimately, the long-term success of any structured OpEx effort is tied to the organization\u2019s ability to drive line ownership and accountability for continuous improvement. For this reason, setting goals for employee involvement in continuous improvement activities might make sense to ensure that the organization is being intentional about driving line that much needed line ownership.<\/li>\n<li><strong>Improved Employee Satisfaction with Their Job and the Organization.<\/strong>\u00a0Job satisfaction can have a significant effect on the productivity of employees in any organization. Employees with high job satisfaction are also more likely to remain with the organization rather than seek new employment opportunities elsewhere. OpEx can facilitate increased employee satisfaction by partnering with them to address the sources of waste and inefficiency that negatively affect their work environment or change the behaviors that create friction within and across work teams.<\/li>\n<\/ul>\n<h2><strong>Aligning OpEx Goals to the Organization\u2019s Strategy<\/strong><\/h2>\n<p>The sample goals listed above are by definition generic in nature, but in order for OpEx to make the most positive impact on your organization, its goals and objectives need to be aligned to the organization\u2019s overall business strategy.<\/p>\n<p>Why?<\/p>\n<p>One reason is that any time an organization seeks to change behaviors, work practices, or mindsets there will always be some resistance to that change. A thoughtful, deliberate, and aligned business approach to introducing the changes needed to meet OpEx goals is needed to minimize change resistance within the organization.<\/p>\n<p>A key way to make sure that OpEx implementation strategies are aligned with your organization\u2019s business strategy is to ask a few basic questions, including:<\/p>\n<ul>\n<li>What is the long-term vision for OpEx within the organization?<\/li>\n<li>How can this vision dovetail with the organization\u2019s business vision\/strategy?<\/li>\n<li>What metrics should be used to measure the impact of OpEx goals on the organization?<\/li>\n<li>Does the resource model and budget for OpEx align with the business\u2019 vision?<\/li>\n<li>How will we\u00a0<a href=\"https:\/\/www.eonsolutions.io\/the-platform\/\" target=\"_blank\" rel=\" noopener\">deploy OpEx into the organization<\/a>?<\/li>\n<li>What are the key behaviors and mindsets that need to change in the leadership team to sustain the work moving forward?<\/li>\n<\/ul>\n<p>By answering these key questions, you can start adjusting your operational excellence implementation strategy to align it with your business\u2019 current situation and future goals\u2014helping you know \u201cwhere you are\u201d and get to where you need to be.<\/p>\n<h2><strong>Implementing OpEx to Drive Goal Achievement<\/strong><\/h2>\n<p>Once you align your organization\u2019s OpEx goals and objectives to the business strategy, it\u2019s time to start the implementation process. However, there are some \u201cevergreen\u201d barriers to implementation that need to be overcome. The most important barrier to OpEx implementation is making sure that everyone can understand and follow the steps necessary to achieve OpEx implementation.<\/p>\n<p>To overcome this barrier, you need to translate the critical concepts and tools of OpEx into a practical and logical sequence of activities that can be understood and implemented by others in the organization. In other words, you need to provide a set of easy-to-understand instructions and tools that others can use to manage their work and meet expectations\u2014this is something that EON refers to as\u00a0<a href=\"https:\/\/www.eonsolutions.io\/playbooks\" target=\"_blank\" rel=\" noopener\">a playbook<\/a>.<\/p>\n<p>Playbooks are fully-developed models\u2014consisting of a series of implementation toolkits that fully address a specific OpEx-related topic\u2014that OpEx teams and leaders in an organization can use to better manage their work.<\/p>\n<p>Some key aspects of EON\u2019s ready-made playbooks include:<\/p>\n<ol>\n<li>Simple self-assessment questions;<\/li>\n<li>Easy-to-read practical descriptions of roles and goals; and<\/li>\n<li>Tools, templates, training modules, and other resources related to the OpEx topic.<\/li>\n<\/ol>\n<p>These playbooks provide practical guidance that helps teams implement important concepts, methods, and tools of OpEx so they can work side by side with your operational excellence team.<\/p>\n<p>If you need help implementing or managing your organization\u2019s OpEx goals,\u00a0<a href=\"https:\/\/www.eonsolutions.io\/contact-us\/\" target=\"_blank\" rel=\" noopener\">contact EON today<\/a>! Our OpEx platform is designed from the ground up to help you manage all aspects of your operational excellence implementation so you can:<\/p>\n<ul>\n<li>Deploy strategic objectives;<\/li>\n<li>Conduct project portfolio and lifecycle management;<\/li>\n<li>Implement standard business processes;<\/li>\n<li>Measure performance; and<\/li>\n<li>Track improvement.<\/li>\n<\/ul>\n<p>This is all accomplished on a platform that is vastly simpler and more efficient than attempting to manage OpEx through Excel or PowerPoint. With hundreds of assessment criteria on a platform that creates visibility and drives accountability, EON is the perfect solution to your OpEx management needs!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Editor&#8217;s Note:\u00a0Roger Price is the CEO of\u00a0Phase 5 Group (P5G)\u00a0and the visionary behind EON, the world&#8217;s first Operational Excellence management solution.\u00a0P5G is also a partner and author on Flevy. They published a comprehensive guide on\u00a0Operational Excellence Design Process. * * * * Operational Excellence (OpEx) isn\u2019t just a \u201cnice to have,\u201d it\u2019s a core part&hellip;&nbsp;<a href=\"https:\/\/flevy.com\/blog\/operational-excellence-goals-that-the-organization-can-get-behind\/\" rel=\"bookmark\"><span class=\"screen-reader-text\">Operational Excellence Goals That the Organization Can Get Behind<\/span><\/a><\/p>\n","protected":false},"author":108,"featured_media":3576,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[82],"tags":[328],"class_list":["post-3575","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-operations","tag-operational-excellence"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/3575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/108"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=3575"}],"version-history":[{"count":3,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/3575\/revisions"}],"predecessor-version":[{"id":3579,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/3575\/revisions\/3579"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/3576"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=3575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=3575"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=3575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}