In every business, there is always at least one area that could be improved. But how exactly does meaningful change take place within an organization?
Sometimes it can occur through a major initiative or total upheaval within the business. But most of the time, change happens in a much less overt way; it happens slowly and more gradually over time. Operational excellence is an example of this type of change.
Operational excellence can simply be described as a philosophy that embraces problem-solving and leadership as the key to continuous improvement.
People are often unsure of how to approach the subject of operational excellence. It is a difficult term to define and most people either find the topic to be too ambiguous or too broad to talk about.
Operational excellence, however, is not a set of activities that you perform. It’s more of a mindset that should be present within you and your employees.
Now, you’re probably thinking, “that sounds nice in theory, but how do I translate this into actionable steps?”
Well, we’re going to explain that in a bit. Before we get into implementing operational excellence, you need to understand how the concept is related to continuous improvement.
Continuous improvement is the ongoing effort to improve an organization’s processes, products, or services. It usually takes place incrementally over time, rather than instantly through some breakthrough innovation.
By pursuing continuous improvement, an organization has a greater likelihood of continuing to maintain and build on these improvements.
However, while continuous improvement is important, it is not enough on its own. As the organization continues to refine its process, product, or service, it needs a way to continue to grow. This is where operational excellence comes in.
Operational excellence is a mindset that embraces certain principles and tools to create sustainable improvement within an organization.
Or to put it more simply, operational excellence is achieved when every member of an organization can see the flow of value to the customer. Seeing it, however, isn’t enough – they should actively try to improve both the value as well as its delivery.
Ultimately, operational excellence is not just about reducing costs or increasing productivity in the workplace. It’s about creating the company culture that will allow you to produce valuable products and services for your customers and achieve long-term sustainable growth.
Operational excellence is a journey that involves applying the right tools to the right processes. When this happens successfully, the ideal work culture is created where employees are provided for in a way that enables them to stay empowered and motivated.
Organizations must continue to work to understand the needs and expectations of their customers. An organization that stops delivering value to the customer is not sustainable over time.
Through operational excellence, an organization can improve its company culture and performance, which leads to long-term sustainable growth.
Businesses should consider looking past the traditional one-time event and move toward a more long-term system for change.
Over the years, numerous methodologies have been introduced to the mainstream business culture as a method of achieving operational excellence.
Lean manufacturing focuses on systematically eliminating waste in a production system.
It teaches that the only thing a business should focus on is that which adds value. Lean also teaches that every process has some sort of bottleneck and that focusing all your improvement efforts on that bottleneck is the quickest path to success.
The key principles of lean manufacturing focus on improving the quality of products and services, eliminating anything that doesn’t add value, and reducing overall costs.Traditional lean manufacturing identifies seven areas of waste which are commonly referred to as the “seven deadly wastes.”
Six Sigma is a set of tools and techniques that are designed to improve business processes which will result in a better product or service. The goal of Six Sigma is to improve the customer experience by identifying and eliminating variation.
Over 50 percent of all Fortune 500 companies have implemented Six Sigma to some degree. It has been shown that Six Sigma has helped Fortune 500 companies save over $427 billion over the past 20 years.
A Six Sigma business will produce no more than 3.4 defects for every million opportunities. A defect is defined as anything that fails to meet the customer’s expectations. It does this primarily by implementing DMAIC.DMAIC is an acronym that stands for define, measure, analysis, improvement, and control. Here is a closer look at each step in this process and how it helps to build Six Sigma businesses:
Kaizen means “continuous improvement” in Japanese, and in business, it is used to implement positive, ongoing changes in the workplace.
The guiding principles of Kaizen are that a good process will lead to positive results, teamwork is crucial to success, and any process can be improved.
Organizations implement kaizen to help them create a culture of continuous improvement. Employees will work together to achieve ongoing workplace improvements.
Kaizen teaches that when applied consistently, small changes will compound over time and produce big results. The methodology does not necessarily encourage only making small changes, though; kaizen focuses on the participation of all employees to effect real change.
Operational excellence is the goal of all organizations striving for continuous improvement. Projects and tools are a useful place to start but on their own, they are not enough to create lasting change.
The functional areas of operational excellence that Momentum identifies for our client engagements include:
The objective is to develop comprehensive and compatible business plans for each operating unit that are solidly grounded in the applicable underlying technology, economics, and markets. Also, to ensure that the business plans:
We will take the senior management in each business through a structured process of:
Providing the expertise and project management will be a Momentum Group senior consultant who has more than 28 years of experience building businesses and business plans across renewable energy, automotive, technology, industrial, and private equity from start-ups to $40B global organizations.
It is not uncommon that our clients will grow at a meteoric rate, which unfortunately is the perfect environment to lose the founders’ culture of individual dedication, innovation, and commitment and regress to that of a large, less innovative, and less personally rewarding company in which to work. We believe that it is critical for the company to put the right mechanisms in place to assure a sustainable culture of trust and devotion.
The approach is built on discussions with the company’s leadership and within Momentum, and around the cultural framework the client wishes to develop.
The approach is made of five main phases/elements:
We will work closely together with your leadership and management staff to customize and create a winning HR strategy that works and is easily understood. We will partner with your company to focus on all stages of the Employee Life Cycle, Attraction, Recruitment, Onboarding, Development, Performance Management, Succession Planning, Retention, and Separation. The success of an organization also depends on proper organizational planning and a robust HR technology solution to facilitate all major business processes. This will be combined with a consistent compensation policy across the businesses.
Attracting the right talent is critical to any company’s growth strategy; this includes structuring Human Resources systems that position the employer of choice as a values-driven company which empowers its employees. The candidate experience will be key in creating the employer brand as a great place to work. Further, we will work closely in advising on the ideal compensation and benefits mix to ensure it is competitive and in line with your long-term growth strategy.
We will create a compensation strategy to define employee pay and benefits and develop the competitive salary ranges by benchmarking similar jobs in the industry. Each salary range will be thoughtfully created to match the job description and responsibility level of each role. We will work with your leadership to determine the split between salary and benefits and other incentives in defining the total compensation package.
Upon the creation of the salary ranges, we will perform routine salary audits to ensure salary ranges remain competitive. We will incorporate legal requirements to ensure your company is following state and federal laws.
The recruitment process will be developed with identified recruitment partners to provide an unbiased review of the candidate experience, training of hiring managers with compliant interview questions and techniques, as well as the creation of accurate job descriptions. These processes will be established to ensure consistency and compliance with local state laws.
A seamless candidate experience that focuses on ease of application and response time should not be underestimated. We will work with recruitment partners to create easy-to-use scorecards based on each job to provide meaningful data to facilitate improvement in hiring results over time.
Most companies put employees at a disadvantage at the beginning of their employment by limiting what parts of the company a certain position is exposed to. We believe it is critical that every entering employee is presented with the same critical information so that everyone achieves a baseline understanding of the entire company, its culture, its mission, and the critical role they play in the company’s success. During a thorough onboarding process, each employee will be exposed to the key elements of your company through topics such as Corporate Overview, goal and mission, organization structure; and key Human Resource components such as policies and procedures, company handbook, benefits, and much more.
Momentum will assist in creating this new employee orientation and onboarding program to ensure that new hires learn the attitudes, skills and behaviors key to their future success and your company. It is critical for managers to be ready to support this task. Through coaching managers and management teams on the expectations of the new hire process, we will work together to create realistic job previews and to make certain that the employee is supported at every step. Inevitably, managers who understand your company’s vision (and how we are going to get there) can convey this message more effectively to their teams.
It is simply not enough for employees to know what their existing job function is and how to perform it. World-class organizations support their employees by consistently encouraging professional development, identifying their key strengths and areas of development, and providing them with a future career growth path.
A well-structured Performance Management Plan is critical in ensuring management and employee teams are meeting corporate objectives. The Performance Management Plan will be the foundation of creating an environment in which employees are recognized, rewarded, and acknowledged for positive behaviors that contribute to the creation of a great company.
We will work with leadership to help set clear expectations for new hires, training them in managing performance and how to express appreciation to employees for a job well done. Managers will be trained on clear communication strategies to set achievable expectations and how to motivate employees and encourage them to take initiative. Managers will be held accountable for ensuring that their teams are performing and will be supported in building these skills.
In addition, we will work with your company’s leadership to identify which Performance Management software will fit best and will lead to organizational success.
The intention of the succession plan is to create a process and guide on how high- potential employees are identified and promoted into critical roles. Succession planning is crucial in achieving targeted growth by anticipating and preparing for current and future needs.
We will work to identify key positions in the company and what constitutes successful performance for each of these roles (i.e. What skills are needed to successfully lead a team, what does being a good communicator look like, etc.) From there, we will help to create a consistent and transparent process to identify exemplary internal employees. We will also create management training tools and coaching through the transition process.
Momentum will work with executive stakeholders to create an internal succession-planning team. This team will help to maintain the integrity of the process and the unbiased selection of high-performing employees based on previously identified competencies (i.e. the required knowledge and skills to excel in the role).
Lastly, we will translate the succession plan into action by creating specified timelines, expectations, and accountability for the members of the succession planning team to ensure it is fluid and proactively monitored to anticipate future changes.
A very important capability in a successful organization is retention. We understand that keeping top employees engaged and committed will be critical to continued growth and success. We will help to ensure that key employees do not slip through the cracks during the radical growth phase and that they are both happy and challenged in their roles within the team. Our key strengths lie in building and fostering great relationships with the team, filling in training gaps where they exist, and providing specialist experience in growth and expansion.
The final stage of the employee lifecycle is the employee separation stage. This would be the toughest part of HR, but inevitable when it comes to resignations and needed terminations for any large organization. We will work with your company to handle these meetings appropriately to avoid litigation and not set a wrong precedent. We will work to train management on best practices to ensure the protection and continuity of business processes.
It is critical that the separation process is just as strategic as the onboarding process, and that the management team is trained to handle these situations as amicably and professionally as possible. We will further work with management to properly track the data surrounding employee separations to avoid any potential roadblocks or costly lawsuits.
Momentum and our clients collaborate closely with the business planning and culture teams to understand the growth and strategic initiatives of the organization. This will lead us to develop organizational structures, compensation, and benefits systems and other incentive packages that ensure the long-term sustainability and future growth of your organization. Particularly about the organizational structures, we will address the needs of a diverse portfolio of companies to ensure consistency and transferability. As job roles and the workforce are being defined, various organizational plans will be outlined and defined based on the organizational vision.
Your organization will be presented with various payroll run options (in-house vs. outsourced) based on the company’s growth strategy. Momentum will identify the benefits and risks of both payroll options and guide our client in this vital business decision.
Momentum will set up a robust HR Management System (HRMS) which will be part of the overall Technology roadmap. We have deep and wide expertise in sourcing and implementing HR systems such as SAP, Ceridian Dayforce, and ADP Workforce Now.
Momentum, together with the client, will develop strong business processes which will be enabled and reflected within the HRMS. Adopting a strong HR technology strategy from the start will allow your company to reduce inefficient administrative work, increase employee efficiency, provide key metrics to leadership, and provide clean data for audit and reporting purposes.
As processes are being developed and implemented, Momentum will perform a comprehensive requirement gathering session, followed by a fit-gap analysis to choose the right system. Momentum guides our clients in making the right decision for the organization and outlines any risks that may be present.
Once the HR system is chosen and implemented, Momentum will also create interfaces from the HRMS to the other modules within the ERP (Finance, Logistics, CRM, etc.) and create an integrated solution. HR Technology is as important as other technologies and must not be overlooked in the planning and building of the organization.
We will create an integrated public relations platform for your company that will encompass all corporate communications including government, media, and community relations. To ensure the necessary clarity and impact of messaging, unified communication across these functions is vital, especially when leveraging and working with existing local relationships that can navigate at the city, county and state levels (if applicable). Given the breadth of the organization and its expected future operations, speaking with one national/global voice is of critical importance.
A solid education plan and execution are critical to the recruitment, knowledge transfer, and development of valued employees. Momentum Consulting Group will plan, develop, and administer an educational plan in a combined effort with our clients' subject matter experts that will ensure all of your employees are fully proficient in conducting their core functions as well as setting employees up for upward mobility within the company.
To complete the following important tasks, Momentum Consulting Group must be a partner from the beginning to help plan and prepare appropriate content for every location, city, and job function.
Below outlines key components of the educational plan that Momentum Consulting Group will provide:
To prepare employees for their core duties, Momentum Consulting Group will work with our clients' SMEs to create paths based on their specific organizational needs. Through a systematic and repeatable process, employees will be provided an education path that allows them to overachieve in their roles. Job Function Education can occur through a variety of means including live classroom training, webinar, role plays, assessments to gauge understanding of materials, hands-on, etc.
Education cannot stop once an employee has completed their specific job function training. It is important to create a culture of ongoing education opportunities to create lifetime employees. Momentum Consulting Group will create ongoing opportunities for employees that will provide refresher training as well as skill sets for upward mobility.
As our clients engage vendors and affiliates, Momentum Consulting Group will create and, at times, deliver training to ensure all outside partners have the critical information to work hand in hand with our clients.
To comply with various regulatory, IT, and HR compliance needs, Momentum Consulting will help identify and administer appropriate training to ensure our client establishes and reinforces a strong governance environment.
To create lifetime employees, it is important to identify those key associates that demonstrate leadership potential and passion to pursue additional opportunities within the company. Through an identification program and utilization of various certification tools (DISC, Harrison, Myers- Briggs Type Indicator, etc.), Momentum Consulting Group can create a High Potential Program to provide paths for our client’s employees to grow into lifetime employees.