Operational Excellence: Choosing the Path that Works for You

However, many executives believe that the current situation creates a real opportunity to outperform competitors by improving their companies’ operational performance. Accenture outlines the path toward operational excellence and ultimately high performance. 

Disrupted by the forces of globalization and now slammed by the economic downturn, many companies are struggling with how best to become more operationally efficient. While the challenges are clear, it is by no means obvious which solutions will deliver the best results.

Many responses range from suboptimal to completely ineffective, the product of the immense pressures on management teams facing nonstop assault by industry and economic discontinuities and eager to make decisions promptly. However, poor decisions can no longer be tolerated as the business environment continues to change dramatically.

The current downturn is one major factor, but so are the long-term pressures of the emerging multi-polar world, characterized by multiple centers of economic activity and power. Executives need to know not only where they are taking their organizations but how they will make their journey.

The first step is to choose the appropriate change journey carefully.

Accenture’s most recent conversations with more than 30 chief operating officers suggests that many are coming round to the view that downturns offer an opportunity to improve business performance, take market share and change competitive position. Operational excellence, Accenture believes, is the most important competitive differentiator in these times and thus a vital strategy for achieving these goals.

While most discussions of operational excellence tend to focus on performance drivers developed and refined in industrial sectors (such as simplification and standardization), less emphasis is often placed on the important task of attending to how the business is organized. However, rethinking the operating models necessary to execute well are as important.

Accenture advises business leaders to simplify the journey options into these categories:

• Continuous improvement. This change journey usually involves a large number of small initiatives that are dispersed across the organization in order to build an ongoing change capability.
  
  
• Targeted intervention. In this type of journey, an organization decides to make big changes to its operating model, but choose to do it a piece at a time, often with the goal of eliminating the risk in the change initiative.
  
  
• Transformation program. Here, the journey involves change on a grand scale, almost always with complete reinvention of the operating model and big shifts in the organization’s structure to sync up with the business strategy.
  
  

Selecting the journey most appropriate to a particular company remains crucial. Companies that successfully reach higher planes of operational excellence work through three key steps:

• Assessing the operating models they will need.
• Being realistic about which is the right journey.
• Improving the odds of executing well.