In this brief article, I would like to focus on the importance of Operational Excellence and the best set of competitive managerial practices to obtain that.
MBA programs teach the importance of creating and sustaining a distinctive strategic position to do something different in the industry where each firm competes. While doing the right things is crucial, it is not enough to guarantee success. Each company must do things exceptionally well and strive for Operational Excellence to pave the path to a sustainable advantage against competitors.
M. Porter is mostly dedicating his academic life to the focus of better identifying the difference between strategy and operational effectiveness, showing the key influential role of the strategist within a team. However, in my humble opinion, I think that basic and simple managerial competencies are both more important and harder to imitate than Porter depicted. I firmly believe that Operational Excellence is a key complement to the most brilliant strategy to contend success in the competition field because of areas such as data analytics, decision-making process based on evidence rather than guts and company culture based upon collaboration among people. These practices are essential to be successful in industries reigned by uncertainty and volatility.
I have covered several operational roles in my manufacturing organization, from managing factories with more than 7,500 employees to be responsible for the entire global production system of my corporation: now, I am responsible for the performance control of manufacturing in North America. In this journey, the most important lesson I learned is how important basic practices are with pursuing excellence in operations, and how hard it is to implement them well consistently. I believe that the main reasons why management overlooks basic practices are:
• the lack of understanding that better processes are needed,
• the lack of skills to adopt better ways of managing processes,
• the lack of trust that new processes will bring better performances.
These hindrances are difficult to overcome, leading to more hardship in implementing basics. Without building the awareness, competences, and most importantly, the consensus among the leaders, success won’t be achieved on a sustainable form.
In my experience as the leader of a large team, I experienced firsthand how important it is to enhance communication with the people, simplifying complex concepts to make them more comprehensible. Keeping things simple is an important attribute of a leader, but, sometimes it hides dangers that can undermine the effectiveness of management: simple is often correlated to simplistic when, in fact, it is the complete opposite. A profound understanding of the business priority is required to translate it into tactical, operational priorities.