4 Reasons for Operational Excellence (OpEx) Failure

Operational Excellence (OpEx) finds its origins in the principles of total quality management. Keeping certain aspects in mind can help OpEx deployments succeed. Having a clear vision and purpose for your deployment is most important. Maintain a strong focus on the creation of customer value. In fact, it is recommended to measure the factors that add value to customers and balance these with cost reduction goals.

However, as many as two-thirds of OpEx programs, experts estimate, fail to realize their expectations. There are several possible reasons for the failure of OpEx programs that are enterprise-wide in their scope, which we will consider in this article.

1. Following the Wrong Approach

Following the wrong approach is one of the most important reasons for failing OpEx programs. To be successful, OpEx needs attention to the cross-functional processes. However, many businesses implement the program along departmental lines. While this helps improve the small processes inside the departmental limits, it leaves a lot of monetary resources on the table. The approach does not address the end to end and large processes that can really create a lot of value for the customers.

If people in your business talk more about the methods and tools used rather than the results, this is a telltale sign of a problem with OpEx implementation approach. Ask yourself some questions to figure out if your business is using the right approach to OpEx.

Consider if your program focuses on the large cross-functional process involvement projects. Does the program use steering teams, which can guide and govern large projects? Are there visible recognition programs for the teams that create customer value through process improvement approaches? Furthermore, consider the involvement of the IT team.

2. Lack of Clear Purpose

Simply following in the footsteps of your competitors and initiating an OpEx program because they have chosen to will always create problems.

There should be a clear reason for you to adopt the approach. This should include a strong CTA (Call to Action) and a strong case for change.

3. Misplaced Focus Areas

Most OpEx programs primarily aim to reduce costs and apply tools such as Lean or LSS. Organizations should, apart from cost reduction, also take into consideration the quality of their products and services along with improving the customer experience.

There needs to be a balance between adding customer value and reducing the costs for greater success with implementing an Operational Excellence program. Consider having an up-to-date and concise customer journey model. Also, evaluate the metrics that the business leadership primarily uses.

It is also important to consider the top goal for most of the OpEx programs in your business.

4. Failing to Focus on People

It’s not processes that do actual work, it is people. Organizations that aim to shift their culture should pay more attention to the people. This entails recognition mechanisms to promote cross-department collaboration, change management integration into projects, and cross-training.

It is imperative to have visible recognition programs for the team members who help create customer value through the right process improvement strategies.

Conclusion

Analyze all of the failure points and the patterns that led to them. Examine the assumptions that led to the decisions that were earlier made. You need to brainstorm and consider how such mistakes could be avoided in the future decision-making processes.

It is of critical importance to examine the causes of failure in great detail so that those mistakes can be avoided later. The failures can assume different forms” while some can be potentially disastrous, the others could be life-threatening too.

Most businesses do not realize that their OpEx deployments are destined to fail before they are even initiated. Focusing on the people, using the right strategies, and having a clear purpose in mind will help your business climb the ladder to success.