Operational Excellence: Finding the Right Formula for High Performance

Operational excellence can help companies position themselves for growth and high performance.

During the global downturn, many businesses cut costs and boosted efficiencies to survive. Now they face a question that involves far more than just survival: how to use the money liberated by cost-cutting and efficiency strategies to fuel new growth. Those that pursue operational excellence—making savvy choices about operating structure as well as about execution—will be best positioned for future success.

During the recent recession, companies tended to focus on extracting the most business value from their capabilities and assets. While this approach did produce benefits, there was an opportunity to seek a larger prize.

Operational excellence generates competitive strength as well as the cost and cash benefits often associated with well-managed companies. It is not about doing the same things better, but derives from the way a business is structured and how the work is executed to leverage what the company does best. In addition, it is a journey not a destination: decisions about structure and execution must be continually revisited to develop the leanness and flexibility needed to achieve high performance in a changing business environment.

Accenture’s experience shows that operationally excellent companies iteratively apply a disciplined three-step approach that enables them to continually hone their competitive edge:

• They understand their competitive essence—the one area or process in which they must perform better than anyone else in their industry to profit from discontinuities and deliver a distinctive value proposition to their customers.
  
  
• They define their operational excellence strategy, determining the right blend of structural and executional changes they must make to deploy and sustain their competitive essence.
  
  
• They choose the right change journey to implement the structural and executional moves they want to make. There are three types of change journey: continuous improvement, targeted interventions and transformational program.

To help companies get started on what is a challenging journey, Accenture has developed a comprehensive, survey-based, online diagnostic tool that is convenient to use and easy to access.

The diagnostic factors are not just where your organization is in terms of the economic cycle but what the underlying foundation is for its operational excellence performance over time. It identifies the market discontinuities that threaten to reshape your industry’s landscape and helps your organization capture its competitive essence in terms of its market focus and positioning, distinctive capabilities and performance anatomy.

The tool generates a set of information-rich outputs, including graphic representations of the opportunities presented by the market discontinuities in your industry and the sizes of those opportunities.

Perhaps most valuable, these outputs start to reveal the structure/execution formula that could best enable you to exploit the most promising opportunities facing your firm.