What Is Operational Excellence?

Operational excellence is a high standard of achievement that businesses and institutions strive to meet through continuous dedication to improvement. A term with many different definitions, operational excellence basically means meeting or exceeding the highest standards in any particular area of operations, such as beating sales goals, getting rave customer service reviews, or receiving industry awards and accolades for creating a superior product. The basic component of all strategies geared toward creating operational excellence is the development of a consistent system of company-wide improvement.

Achieving operational excellence essentially means outperforming all other competitors, or at least meeting a pre-determined performance goal. Since the achievement of each goal creates a newer, higher goal, however, the maintenance of operational excellence is an ongoing project for any organization. This means that companies geared toward excellence must create systems that allow for continuous improvement in order to keep up with the ever-moving goal posts of excellence.

The measurement of excellence may differ depending on the specific area of operations being examined. For instance, the sales team may define excellence by the amount of sales made along with customer service ratings, while a factory floor might be more concerned with safety ratings, quality control, and efficiency. One of the most crucial parts of creating an operational excellence strategy is to determine and define the standards of excellence in each area, in order to give managers, workers, and strategists clear goals.

Once goals are defined, the next step in achieving operational excellence often involves identifying strengths and weaknesses, to determine where the company or department already stands on the path to excellence. This may be done through performance reviews, independent analysis, marketing research, or using employee input. Finding the weaknesses that are keeping a company from excellence allows planners to create strategies to improve performance in poor areas while still maintaining areas of operational strength. The implementation of these strategies is carefully monitored and measured, to make sure new plans are performing as desired.

One important key to operational excellence is consistent efforts. Very rarely can a company simply set out a plan for excellence and then sit back and allow money and success to roll in. Built into the fabric of most improvement plans are mechanisms that allow for periodic re-examination of procedures, the setting of new goals, and the creation and implementation of new plans geared toward excellence. A good operational excellence plan will allow a company to keep evolving with technology and the market, keeping it relevant and allowing it to continue moving toward the top of the field.