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operational excellence

What is Operational Excellence?

Jim Gillham

What does operational excellence mean to you? And how does it differ from operations?

I have often heard the question: What are operations? What benefits do operations add and what value do they bring to a business?

According to Jaime Johnson, operational excellence is:

“The philosophy that embraces problem-solving and leadership as the key to continuous improvement.”

Operational excellence is generally executed by an operational director or manager and their team of dedicated resources. Johnson says that operational excellence is a “…mindset that embraces certain principles and tools to create sustainable improvement within an organisation.”

Operations vs Operational excellence

Operations produce products, manage quality, and continuously improve and create service. This is generally executed through internal operational staff on a day-to-day basis within the organisation.

Operational excellence is the ability to continuously improve and grow a business at the same rate whilst minimizing risk. This is done through identifying deficiencies, forecasting, and having a strategic plan to provide to the operational team, in order to deliver and execute successfully.

Operational excellence is big picture thinking, whereas operations is the day-to-day running of a business to ensure a smooth process.

The 10 core principles of operational excellence are:

1. Respect Every Individual

2. Lead with Humility

3. Seek Perfection

4. Embrace Scientific Thinking

5. Focus on the Process

6. Assure Quality at the Source

7. Flow and Pull Value

8. Think Systematically

9. Create Constancy of Purpose

10. Create Value for the Customer

Through operational excellence, an organisation can improve its company culture and performance, which leads to long term sustainable growth.

This is the key to growing and sustaining a successful business, no matter what the scale.

Stay tuned as my next article will discuss staffing and its importance and value within an organisation.

Jim Gillham