But, what if you put all the hard work into improving your operational performance, years of effort, blood, sweat and tears, and it is not providing you with a competitive advantage in the market?
One problem I’ve seen with operational excellence is that it can become too inward focused. You become so entrenched with the day to day efforts needed to embed the changes you can lose sight of the changing needs of customers and the subtle shifts in the market. That’s if you considered the needs of your customers before you started.
My theory is that Operational Excellence and lean improvements can become the worst form of waste in any business. Why? Because any Operational Excellence journey that has not been designed to provide you with a competitive advantage in the market will just become a cost.
The number one mistake organisations make with Operational Excellence is making the wrong product or providing the wrong service to perfection.
Understanding your position in the market and where you add value to your customers must be identified before your Operational Excellence journey and here’s how to avoid the trap:
1. Know who your customers and stay close to them. Who are your customers? Which markets are they in? How do you segment them? You can’t beat good old face to face communication with customers to really get to understand their needs. How often are you visiting your customers? How often are your competitors visiting them? There is a great book Piranhas in the Bidet that will provide you with a lot of insights into Key Account Management if you feel this is a gap for you.
2. Understand how you add value and know what you need to do well. What problems are you solving for your customers? What is your value proposition? What customer’s needs are you satisfying? The only way to gain a real strategic advantage in the market is to understand how you add value to you customers and becoming the better than your competitors at it. How do your customers differentiate you from your competitors? Read Value Proposition Design if you would like to develop a better value proposition.
3. Align the whole business with meeting the needs of the customer. Now you know the market and your value proposition into the market you need to get everyone in the business on board and aligned with meeting the needs of the customer. Growing Your Own Heroes takes a practical approach to achieving high levels of employee engagement.
4. Measure performance and act when gaps need to be closed. You need to perform well in the key areas where you are looking to gain competitive advantage. You don’t need to be the best at everything. What are the vital few things that you need to be better than your competitors at to gain competitive advantage? Do your people know what is expected of them? Are you achieving your targets? Where you have gaps are people acting on closing them on a daily basis? Cascading your key business objectives is vital to getting your organisation aligned with your customers. Good visual management and daily management of performance will provide a great framework for building and maintaining momentum. Not sure what to measure. There is a great article on the LNS Research website that will provide you with the 28 manufacturing metrics that actually matter.
Hopefully you found these tips useful. If you have fallen into the trap of becoming too inward focused you now have a few ideas on making the necessary changes.
Want to chat it through with one of the Futurestate Team? Feel free to give us a call on 01204 410062 and we will do what we can to help.