 | | |
|
|
|
ON OPERATIONS |
The immediate need for operational excellence |
David Hamilton
|
|
|
|
|
|
|
|
If your business has survived—or even thrived—during three years of historic challenges, you might think that you’re set for whatever comes next. But how can you be sure? Consistently high-performing organizations know that skill matters, in the form of operational excellence. And there are three reasons that this concept, rooted in the foundational principles of lean management, is more important than ever. First, despite recent headlines, attrition remains high, as a new generation seeks more purposeful work. Second, labor productivity has stagnated worldwide even as labor costs rise in many markets. And third, depending on data source, two-thirds of executives are dissatisfied with the return on their investments in technology. So there’s never been a better time to get really good at what your enterprise does—all across your operations.
Operational excellence, as we define it, includes a demonstrated commitment to strategy and purpose, to behaviors aligned to drive that purpose, and to support from tech-enabled operating, management, and organizational systems. Those who truly understand operational excellence think about it as a commitment to action. It’s not a function—it’s a way of working. A way of investing in people. A way of delivering more value to customers. It’s important enough to be among the top priorities of CEOs.
Over the past ten years, we have been developing the Operational Excellence Index, an assessment of operational maturity. It provides benchmarks for organizations to establish baselines and measure improvements over time. We assess performance against four measures: How well is an individual’s work connected to the organization’s overall purpose, strategy, and vision? How well are teams set up to deliver on those aspirations? How well is the institution set up to build the skills of its individuals? And last, are employees continuously improving in their jobs? |
|
|
| |
|
“Those who truly understand operational excellence think about it as a commitment to action. It’s not a function—it’s a way of working. A way of investing in people. A way of delivering more value to customers.” |
|
| |
|
| |
|
|
|
Accelerators are top performers in their industry; they use operational excellence as a foundation to reach their potential. |
|
|
|
|
|
Sustainers focus on preserving their strong operational excellence foundation, with incremental improvement. |
|
|
|
|
|
The Distracted began implementing the principles of operational excellence but have since become sidetracked by competing priorities. |
|
|
|
|
|
The Reluctant have yet to embark on an operational excellence journey and therefore have never established a meaningful level of maturity. |
|
|
| |
|
| |
| | | |
| | | |
|
Sandra Sancier-Sultan on business reinvention |
|
|
|
Disruptions are coming at industries, fast and furious. To meet these challenges, companies have to step away from incrementalism to think bigger and go bolder. |
|
|
| |
|
| | |
This email contains information about McKinsey’s research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy. |
|
You received this email because you subscribed to our McKinsey Quarterly alert list. |
|
|
Copyright © 2022 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007 |
|
|
|
|
