I gave a talk at the Rotman School of Management this morning on redefining operational excellence. We had an interesting discussion about how organizations with different divisions and types of employees could implement a mindset of excellence. Many of the comments were related to different divisions and groups of employees within the same organization not buying into the same vision because they had different customers or different motivations.
Pursuing excellence doesn’t mean that all divisions or employees do things the same way. Excellence is not necessarily about standardization. Here’s what it is about:
- Communicating a desired outcome that the organization wants to achieve (eg. 80% customer retention).
- Setting expectations within each division or group of employees on how each will contribute to achieving that desired outcome.
- Identifying best practices from any of the divisions and determining how to apply them effectively across all the divisions.
- Aligning the tactics being employed by front line people with the desired outcome of the organization.
That is the difference between a mindset and a methodology. With a methodology, you attempt to pick up a process or guideline and move it elsewhere. With a mindset, you first determine what you want to achieve, then you determine the fastest and most effective way to achieve it.
Which way does your organization behave?
One of the greatest opportunities organizations have to increase performance and profit is to improve their adoption of new ideas. If you can maximize the impact of your ideas, then you will be able to achieve better results. There are four levels of adoption you need to master in order to maximize results from your own internal best practices:
- Level 1 – One department. This should be the easiest result to achieve, ensuring that the best practices are replicated across the department where the idea was generated.
- Level 2 – Across multiple departments. At this level, you are able to successfully implement these best practices across multiple departments across the organization and are seeing results from those best practices.
- Level 3 – Across the organization. At this level, you are able to replicate the best practices across the entire organization.
- Level 4 – External appeal. At this level, you are able to commercialize those best practices and sell them to others.
Organizations that make it to Level 3, share these common traits:
- They have common criteria to determine the ideas and practices that will have the greatest impact.
- They formally manage the idea process.
- They encourage productive failure and reward behaviours, not just victories.
- They are able to articulate the value and impact of their best practices.
- They aggressively break down silos to share best practices.
At what level is your organization?