Redefining Operational Excellence

Get ready, because here comes a provocative idea. Everything anyone has ever said about operational excellence is wrong. Until now.

Operational excellence is about driving innovation and managing talent and enhacing customer engagement and ensure strategy aligns with tactics and determining optimal enterprise velocity. But it is not about lean and six sigma and any other methodology that people want to discuss. Operational excellence is a mindset, not a tool. It helps increase profitability, productivity, retention, engagement, empowerment, innovation, and many other things.

Most of the people who write and talk about operational excellence discuss it in the context of manufacturing. Operational excellence becomes synonomous with the Toyota Production System and other systems and methodologies. This view is wrong. It is too narrow, too limiting and not comprehensive enough. It’s easy to say operational excellence is only for manufacturing organizations.

I help clients pursue operational excellence and make tremendous improvements, yet very few of my clients are manufacturers. We need to get away from this narrow view.

I was recently reading Kevin J. Duggan’s book Design for Operational Excellence. In the book, Duggan talks about flow of value to the customer and the processes that the organization follows. He also talks about Lean and Six Sigma, but there was nothing about people and very little about culture. When culture was mentioned, it was only considered after an organization reduces operating costs. What kind of culture would an organization have if their focus was cost-cutting? Not one that many people want to work for.

Operational excellence is not just about developing a better process or eliminating waste or increasing standardization. That only works in very specific environments and for repetitive tasks. Operational excellence is about creating a different culture. A culture focused on adding value and making improvements and optimizing speed. That culture needs to come first, not as an afterthought.

Operational excellence is also about collaboration and partnerships and has to take into account external partners and organizations.

Too many people talk about operational excellence and only focus on what happens inside an organization with it’s flow and it’s processes. The real definition of operational excellence must have an internal and external focus. On employees, on customers, on suppliers and on other business partners. Only then can a company say they have achieved excellence.

Duggan’s book has some good ideas, but a more comprehensive view of operational excellence needs to be taken in order to truly generate breakthrough results for an organization. You can only achieve so much when you focus on standardization and eliminating waste. No company ever cut their way to growth (maybe to survival, but not sustained growth). We need to take the blinders off and broaden our view of operational excellence so organizations can achieve even greater heights.

There is still some good in the world-thankfully

This will be one final shoutout to Disney for the great experience that we had. But after what happened, it goes even further than that.

After walking through our front upon return from our vacation, we realized that we had left some very valuable items on the night table next to the bed in our hotel room. These items were both valuable financially, as well as emotionally. What a horrible, empty feeling realizing that we were helpless in determining whether or not someone had found them or taken them after we left.

We frantically called the hotel and described the valuables and asked if anyone had found them. Luckily, not only had someone found them in our room, but they were honest enough to return them and we found out they were locked up in a safe waiting for the owners to discover they were missing.

As we speak, our valuables are on a plane back home. I could make this a story about business and customer service, but it is really about human nature and the fact there are still good, honest people in the world. The person who found our valuables could have easily taken them and probably would have never been found out, but instead decided to do the right thing. We are grateful to that person. We have their name and will shown our appreciation appropriately.

If you ever get frustrated or down with the world, just remember that there are good people out there, so don’t get too discouraged.

Disney and operational excellence, part 2

Here are some additional reasons how Disney exhibits operational excellence:

  • Each employee is called a “cast member” making everyone a part of the experience.
  • Every cast member is empowered to make decisions in the best interest of the customer. That might mean handing out a sticker or refilling a spilled drink, but they are on the frontlines and don’t appear to be hindered by bureaucracy.
  • They provide something for everyone. There are many adults who come to Disney without children because the experience appeals to everyone.
  • They keep you entertained. Even when you are waiting in line, you don’t feel like you’re waiting in line because of the entertainment that is provided.
  • They create an emotional bond with the customer at every turn. Multiple times per day, customers experience something that they will share with family, friends and colleagues.

If you ever want to see what operational excellence looks like, go and visit your nearest Disney theme park.

They have a clear strategy and their tactics are aligned with that strategy.

They are constantly innovating and making improvements.

They engage with customers in various ways and create unique experiences.

They hire the best people, train them vigourously and treat them well so that they want to stay.

Why Disney has the best customer service?

There is a reason why Disney is considered a magical place. They make the customer experience unique and one-of-a-kind. Here are just a few things they do to make your trip to Disney memorable:

  • When you arrive at the hotel, you are announced at the security booth, so when you arrive at the front door of the hotel, they are expecting you.
  • The first person to greet you says “Welcome home.”
  • We were checked in before we even walked into the front lobby of the hotel. A concierge greets you in front of the hotel with an iPad and gets you all settled in. We checked in while inloading the car. We were in our room within ten minutes of arriving.
  • Every employee is smiling at you and wishing you a “magical day.”
  • The experiences are unique. My daughter was in a play with various of her favourite princesses. She was able to dress up and be a part of the experience, not just watch it.
  • They create a separate “magical” world. You feel like you are in another place the minute you drive through the park gates. Everything around you is Disney…the names, the signs, the people. When you leave the Disney property you really feel like you are moving from fantasy to reality.
  • And we have only been here for half a day so far. I can’t even imagine what will happen the rest of the weekend. But I will be sure to let you know.

No wonder 70% of all Disney customers come back, it is an experience that you can’t get anywhere else.

Why call centres will always fail to achieve strong results

Most call centres have numerous metrics in place to supposedly show success. However, most of those metrics show that activities are being performed, but not that results have been achieved.

Let’s pick one: call time. This measures the amount of time a customer service representative is on the phone with a customer to resolve their issue. Most organizations use this metric to encourage reps to get off the phone as quickly as possible so that they can take more calls. This makes no sense because it doesn’t take into account whether or not the issue was resolved. What if that customer then has to call back three more times to get their issue resolved? This metric encourages low quality because the focus is on speed, not on resolution of the issue or satisfaction of the customer.

Who cares if a rep gets off the phone quickly if the customer’s issue is not resolved?

Why not focus on other metrics that encourage progress and resolution and happy customers? Try these on for size:

  • Percentage of customer issues resolved on the first call and to the satisfaction of the customer
  • Reduced volume of customer service calls
  • Faster resolution of customer service issues

These metrics would indicate the achievement of a result, not just the peformance of an activity. Organizations need to focus on their optimal speed, not just moving faster. Sometimes that means slowing down and it always means measuring results, not activities.

The Five Keys to Profitable Growth

In the current healthcare environment, there are plenty of opportunities available. Companies just need to know how to take advantage of them. As shown in the visual below, any profitable growth strategy should encompass five components.

Keys to Profitable Growth

Generate great opportunities

Contrary to popular belief, relationships with customers are now more important than ever in the healthcare industry. Companies must understand what their customers need and build stronger partnerships with them.

Determine the best opportunities

Not all customers are good customers. Organizations must implement a process for evaluating the best and most profitable opportunities based on a set of criteria such as growth potential, strength of relationship, appropriate fit with offered solutions, and so on.

Provide the right solutions

Many organizations offer one-size-fits-all solutions and methodologies to their customers. Successful organizations develop custom solutions based on market needs and their organizational strengths.

Maximize usage

When your organization is not the incumbent supplier, you have to make your products and services as attractive as possible to potential customers. Help customers make the switch by providing support in the areas where it is most needed.

Maximize retention

When you create a customer experience that cannot be matched you make it difficult for customers to leave. Ask your current customers why they stay with you and build on those strengths.

As you can see from the diagram above, this profitable growth strategy is a cycle. It should never stop. As you acquire new customers, you should follow the same strategy you do with existing customers.

If you implement a growth strategy with these five components, you will see profits grow and relationships flourish.