Four steps to gaining—and hanging onto—operational excellence.
While most mid-market executives rate themselves highly on operational effectiveness, many report having difficulty making improvements stick. More than two-thirds of respondents in a recent survey by the National Center for the Middle Market at Ohio State University said that they have difficulty sustaining gains they make in operation. The good news? Research suggests that there are steps that business leaders can take to boost success and increase the staying power of initiatives, such as:
• Manage operations as a four-part system. Operational improvements tend to last longer when they are comprehensive and systematic. Breaking operations into four parts—problem-solving, daily management, strategic alignment and people development—and fine-tuning them both individually and in concert can help ensure better performance.
• Stay close to the front lines. Companies where top managers are visible and engaged on the shop floor generally have a better understanding of customer needs and are able to solve problems faster.
• Identify and employ a formal method. While many mid-size companies rely on informal methods of pursuing continuous improvement, research shows that those who use formal methods, such as Six Sigma, get excellent results. (For more information on formal methods, see tables.)
• Communicate the larger strategy across operations. Widespread understanding of what an organization is trying to achieve is critical to ensuring that people working in operations can do their part to make sure the strategy is successful. They can act on their own initiative and make suggestions to keep costs down.