Introducing Operational Innovation in “your” Operational Excellence strategy...
Operational Excellence and Operational Innovation are two very distinct ways in which organisations are looking to “change” their operational platform. As described very clearly in the April 2004 issue of the Harvard Business review, operational innovation should not be confused with operational improvement or operational excellence.
Operational excellence or improvement refers to achieving high performance via existing modes of operation: ensuring that work is done as it should be to reduce errors, costs, and delays but without fundamentally changing how that work gets accomplished. Operational excellence often focuses on automating existing “efficient” processes.
Operational innovation means coming up with entirely new ways of executing operational activities, e.g. completing customer orders, developing products, providing customer service, or doing any other activity that an enterprise performs. Operational innovation has been key to some of the greatest success stories in business history, including Wal-Mart, Toyota, Zara and Dell. Most of these organisations have radically changed their supply chain organisations, e.g. cross-docking and companion innovations led to lower inventory levels and lower operating costs, which translated into lower prices.
It’s therefore not strange that many Australian, Asian and Global organisations are looking to recruit operational innovation specialists to transition their people, organisation and strategy from Operational Excellence to Operational Innovation.
Based on experience, I have seen that the following key characteristics between Operational Excellence and Operational Innovation:
In the picture below, it shows the mis-alignment between projects that follow the Operational Excellence vs. the Operational Innovation approach…
How do organisations, which currently execute Operational Excellence, transfer adopting Operational Innovation?
Recruit an Operational Innovation specialist or cross-functional Enterprise Transformation expert, instead of a Project Manager,
Introduce collaborative ideation sessions with organisational priority analysis to focus on maximum value-add solutions,
Create cross-functional, collaborative solution teams instead of business and technical functional specialists,
Transition from a traditional As-Is & To-Be design, develop, implementation and testing approach towards a Minimal Viable Solutions development approach with continuous testing and improvement potential assessment,
Introduce sponsor & stakeholder solution involvement instead of sponsor & stakeholder solution update sessions,
Develop progress and performance metrics before solution development.
By introducing these crucial steps, it allows you to introduce operational innovation into your operational excellence strategy and transition towards maximum impact on delivering your organisational goals!
Would you like an organise an investigative session to understand how we’re able to assist you in this transformation from your Operational Excellence strategy towards an Operational Innovation strategy, please contact us…
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