Operational Excellence 2.0: Your Way to Sustain Business Growth and Continuity Too?

Nature takes care of its own Operational Excellence processes: Systems Thinking!

AT Kearney has performed a survey on Operational Excellence under European CEO's. A remarkable number of the CEO's did not know what Operational Excellence is, or how to achieve it. Further, many failures were reported on Operational Excellence projects. AT Kearney analyzed the results, and invented a new methodology: The Theory of Everything in Operations. Hans Lodder agrees with the analysis, and recommends the Systems Thinking methodology instead as a better and simpler way to focus on Operational Excellence 2.0: Sustaining business growth and continuity!

Look at this anemone! The nature has its own Operational Excellence processes: Systems Thinking! Let us reuse those, and adapt them to our needs.

AT Kearney recently reported on a survey under European CEO's: Achieving operational excellence through interoperability and improved business functions. The results of this survey are impressive. To give you some examples of the findings:

  • Growth is much lower than expected, because the increased complexity outweighed the projected benefits.
  • Companies cannot cope with unexpected volatility in demand, in the price of raw materials, and in currencies.
  • Disconnecting operations strategy from operational execution makes companies vulnerable.
  • BPR projects have failed.
  • Heavier investments in IT have failed.
  • Improvement of discrete functions has proved unsuccessful.
  • Silo mentality, like team members who focus only on their own functions or business units, is killing.

According to the survey common barriers for improving Operational Excellence are:

  • Distant geographies and diverse cultures.
  • Incompatible product lines and inconsistent processes.
  • Complex operating systems and varying design systems.

Other survey findings are:

  • No corporate synergy: Improvement projects are isolated, and the responsibility lay with the heads of individual units.
  • No top management commitment: Top management's priority was revenue growth from business units and cost savings from functions.
  • No shared corporate values: Uncertainty as to what Operational Excellence is, and how to achieve it.

After careful analysis AT Kearney has designed a new methodology: The theory of everything in operations. This method solves the reported Operational Excellence issues by the introduction of 7 dimensions, and manage them in a consistent way. The dimensions of their methodology are:

  1. Operations strategy
  2. Business systems
  3. Relationship management
  4. Implementation management
  5. Performance management
  6. Information and knowledge management
  7. Culture and people development

The good thing of the AT Kearney approach is the integration of several important viewpoints in 1 methodology. I wonder though if a new methodology is necessary. In my view the proven Systems Thinking approach provides you all the tools you need to be prepared for Operational Excellence 2.0. Systems Thinking can also help you to facilitate sustaining business growth and continuity.

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