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Operational Excellence Maturity Model Cheat Sheet by

model     excellence     operational     maturity

Introd­uction

In examining the level of support given (actual, not stated) by the company to the Operat­ional Excellence efforts and the net-be­nefit of impact those involved in the Operat­ional Excellence initia­tives drive to their company, I have concluded that there are three levels of maturity; Logistical (lowest), Tactical (middle), and Strategic (highest). Of course, the Operat­ional Excellence efforts at any given time, and within any given company, will possess charac­ter­istics of all three – it is the level of organi­zation, structure, consis­tency, and orient­ation to the company vision which determines what level of maturity actually exists.

Achieving Operat­ional Excellence

If you want the efforts to evolve from being Logistic or Tactic (Conti­nuous Improv­ement), which is the presen­t-state of most efforts, to becoming Strategic (Opera­tional Excell­ence), you need to align the efforts to the Corporate Vision – become an accelerant of that Corporate Vision. Take the time to learn what that is and to build your allegi­ances (and alliances) towards that.

Start looking at the “big-p­ict­ure”. Don’t look at your shoes, look down the road. Evolve your perspe­ctive from processes, to systems, to organi­zation. Consider the impact of your efforts on the entirety. Seek to create an organi­zation that works at an optimal state where all the efforts are working in a balanced and harmonic manner. Cut across the business silos and create cross-­fun­ctional integr­ations and the related commun­ication and collab­oration protocols.

Work to accele­rating the decisi­on-­making process. Learn to see the opport­unities and threats more quickly and to configure and deploy an effective and thorough response more rapidly and decisi­vely. Here, openness and unders­tanding the capabi­lities and capacity of the resources available (and also the weakne­sses) are of critical import­ance.

Work towards achieving all of this and you will gain a level of Operat­ional Excellence and become the High-P­erf­ormance Organi­zation

Logistical

This is the lowest level of Continuous Improv­ement maturity. It is most likely found in organi­zations that are in the early and unproven stages of their journey, or in organi­zation where the results of previous journeys have been a disapp­oin­tment.
Organized Around Projec­ts; A charac­ter­istic at this level of maturity will be that the efforts are organized around individual projects that are not related. The efforts are largely reactive in that resources are deployed when and where problems manifest themse­lves. If there is any capturing and replic­ation of improv­ement efforts and lessons learned, they are minimal.
Emphasis on Optimizing Proces­ses; As one might expect with an emphasis on projects, the field of view for the efforts is usually linear and the efforts are largely dedicated to elimin­ating variants and increasing the velocity of the throug­hput.
Little Alignment to the Vision of the Company; It is highly likely that the deployment resources have little real knowledge of what the vision (future state) of the company might be and the efforts are not delibe­rately designed around the pursuit of the vision. Instead of being embraced, they are viewed more like “hot-dog vendors” – hustling to convince the passers-by that the hot-dogs they are selling are the best and that they need that hot-dog; that it will be good for them and they will enjoy it.
Incremental Perfor­mance Impact; The benefits realized by the company for the efforts made certainly exist, but they are made step-b­y-step. After all, I have never seen or heard of a Continuous Improv­ement effort that resulted in things worse-off than when they started – normally, the disapp­oin­tment occurs because the benefits realized are not what was expected or promised.
Role Viewed as Cost-C­utt­ing; The opinion held by those in the company of those in the effort is that of “cost-­cut­ting” – the reduction of inventory, waste, even personnel. As a result, those involved in the effort are not embraced by the rank-a­nd-file and, in fact, will most likely result in a stiffening of the resistance against improv­ements. Spies and assassins are never trusted or loved – by anyone.
Priority Level “3”; As your efforts begin to mature and there is more structure, opport­unities for improv­ement which have the above charac­ter­istics should be given a Priority Level of “3”, which is the lowest level. These are the efforts that are completed by the newly assigned or otherwise indoct­rinated resources to hone their newly-­learned skills, or when there are no opport­unities with higher levels.
 

Operat­ional Maturity Model

Tactical

Organized Around Business Silos; As the Continuous Improv­ement efforts become more mature, the efforts will begin to become more structured and organized, becoming initia­tives. These efforts will look at the value-­str­eam-map within business silos that are within the organi­zation such as; produc­tion, logistics, sales, etc.… Accord­ingly, the efforts will become less reactive and more proactive.
Emphasis on Optimizing Systems; Instead of focusing the efforts on individual processes, those involved in the efforts will begin to consider the vast number of processes that constitute a system within the business silo and the efforts will begin to examine the impact of improv­ements throughout the entire value-­stream.
Increasing Alignment to the Vision of the Company; Even if it is not completely conscious and delibe­rate, at the tactical level of maturity, there is growing awareness of the desired future state of the company by the Continuous Improv­ement deployment profes­sionals and the efforts become increa­singly aligned with this vision.
Growing Perfor­mance Impact; The magnitude of the benefits realized by the company when the improv­ement goals are placed on optimized and balanced systems (a collection of related and integrated processes) over individual processes are expected to signif­icantly greater than optimizing processes alone.
Role Viewed as Efficiency Experts; The perception (and the reality) of those involved in a Continuous Improv­ement effort that has achieved a Tactical level of maturity become increa­singly viewed as value-­cre­ators and not just cost-c­utters (as is the case at the Logistical level).
Priority Level “2”; Opport­unities that possess the above charac­ter­istics should be assigned a Priority Level of “2”, which is the middle­-level. As the Continuous Improv­ement capability matures within an organi­zation – and along with it, greater confidence – the emphasis will be on seeking opport­unities to address more complex business systems. This will be the goal of those efforts maturing from the Tactical to the Logist­ical, and will also be used extens­ively in the support of those efforts which have matured to the Strategic level.

Strategic

Organized Around the Organi­zat­ion; When the efforts have evolved to the point where they are structured around the organi­zation as a whole, the entire value-­chain – from the vendor’s vendor to the customer’s customer (even if not all involved are immedi­ately involved or touched) – then the efforts can be properly reclas­sified and referred to as Operat­ional Excellence rather than Continuous Improv­ement. The basis of this premise is that an organi­zation (and its value-­chain) operates through a variety of systems across business silos, and systems are comprised of processes.
Emphasis on Building Progra­ms; The efforts of an Operat­ional Excellence initiative that has matured to the Strategic level is dedicated to creating a culture of excellence in an engineered manner; that is to say deliberate and guided by planning. When they build capacity and capability by investing in their people, they are doing it in a manner that was designed to build an Operat­ional Excellence program – letting the demand create the pull for talent­-bu­ilding and for what purpose (as opposed to just building talent inventory that will sit idly on the shelf waiting for a purpose).
Aligned to the Vision of the Company; The Operat­ional Excellence program is first and foremost dedicated to the accele­ration of the realiz­ation of the company’s vision – that is its primary mandate. Cutting costs and increasing effici­encies throughout the organi­zation will be a by-product of the efforts, but they are not the principal motiva­tion.
Maximum Perfor­mance Impact; By “organ­izing the team around the mission” and having those missions aligned with the company’s vision and dedicated to the accele­rated achiev­ement of that vision, benefit to the company (both top-line and bottom­-line) will be as good as it can be. At this level of maturity, the emphasis is no longer confined to Cost of Goods Sold (COGS) and General and Admini­str­ative Expense (G&A), but also placed on Revenue and the effective use of assets (speci­fic­ally; capital, plant, and equipm­ent). At the highest level of Strategic Maturity (and in addition to accele­rated vision realiz­ation), the company will also be able to more readily recognize and respond to opport­unities or threats that might be presented in a rapid and decisive manner.
Role Viewed as Value Creato­rs; When the Operat­ional Excellence efforts have matured to a level where they become a primary driver of the company’s strategy, those involved in the Operat­ional Excellence program will no longer have to seek recogn­ition and support from the executive leadership – the executive leadership will seek them out. At this point, Operat­ional Excellence has evolved to fulfilling a key role in Strategy Execution and become instru­mental in the company becoming the “High Perfor­mance Organi­zat­ion”.
Priority Level “1”; The opport­unities that exist to accelerate the realiz­ation of the company’s strategy (and also the threats that might be inhibi­tors) are assigned a Priority Level of “1” – the highest priority. And the company and its resources should naturally behave as one would expect for Priority-1 situations and circum­stances – do them first.

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