Are We Talking About the Same Thing? (40

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You say Process Excellence,
She says Operational
Excellence, I say
Performance Excellence.
Are we talking about the same thing?
October 2013

Copyright Process Operandi Ltd, 2013

1

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Contents
Slide

• Defining Operational Excellence

3

• Defining Process Excellence

15

• Defining Performance Excellence

31

• Are We Talking About The Same Thing?

39

• Best Practice in practice: Four real world definitions

43

• Research Notes and Qualifications

48


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Defining Operational Excellence
“Operational Excellence is an element of organizational
leadership that stresses the application of a variety of
principles, systems, and tools toward the sustainable
improvement of key performance metrics.
Much of this management philosophy is based on
earlier continuous improvement methodologies, such
as Lean Manufacturing, Six Sigma, and Scientific
Management. The focus of Operational Excellence goes
beyond the traditional event-based model of
improvement toward a long-term change in
organizational culture.”

But note the health warning

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“Three paradigms are embedded into the Shingo
model for organization improvement. When these
new paradigms are well understood and acted on,
cultural transformation can be accelerated. They are:
1. There is a clear and strong relationship
between principles, systems, and tools
2. Operational excellence requires focus on both
behaviors and results
3. Business and management systems drive
behavior and must be aligned with correct
principles.”

4

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“Our Operations Excellence service line supports
business transformation through a focus on:
•Definition of integrated operational business
architectures which deliver excellence in cost, time
and quality
•Process design and process improvement of service
delivery processes
•Implementation of transformed operations
•Definition of requirements for enabling information
systems
•Enhancement of continuous improvement and
process management skills.”

5

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“Each and every employee can
see the flow of value to the
customer, and fix that flow
before it breaks down.”SM


6

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“Operational Excellence is based on five objectives:
•Achieve an incident- and injury-free workplace
•Promote a healthy workforce and mitigate significant
workplace health risks
•Identify and mitigate environmental and process
safety risks
•Operate with industry-leading asset integrity and
reliability
•Efficiently use natural resources and assets.”


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“Operational Excellence is when the
efforts throughout the organization are
in a state of alignment for achieving its
strategies and where the corporate
culture is committed to the continuous
and deliberate improvement of company
performance AND the circumstances of
those who work there – to pursue
‘Operational Excellence by Design’SM
and not by coincidence.”


8

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Kevin McManus
14 years Examiner for
Malcolm Baldrige
National Quality Award

“Operational excellence is demonstrated
by results that reflect
(1) sustained improvement over time
(2) improvement in all areas of
importance
(3) performance at a level that is at, or
superior to, ‘best in class’ organizations.”


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“Operational Excellence is the
contemporary, cultural adaptation
of the Toyota way and the Toyota
production system.”


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“A philosophy of the workplace
where problem-solving, teamwork,
and leadership results in the ongoing
improvement in an organization.
The process involves focusing on the
customers' needs, keeping the
employees positive and empowered,
and continually improving the current
activities in the workplace.”


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“Performance that ranks in the top quartile
of companies by efficiency metrics as well
as effectiveness metrics.
Organizations that are both exceptionally
efficient in their resource utilization and
exceptionally effective in delivering business
value are achieving operational excellence.”


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“Operational excellence is about
becoming a more efficient, more
effective organization – about
doing what you do, better.”


13

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So What’s In Operational Excellence?

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Image courtesy
WordItOut.com

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Contents



• Research notes and qualifications

15

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Defining Process Excellence

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16

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“Central to process excellence is the
ability to run successful projects and
to do things as efficiently as possible.
Our courses provide the skills to
effectively eliminate waste, reduce
variability, eradicate errors, and
improve customer service.”


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“Process Excellence is a systematic approach to
quality improvement developed by Johnson &
Johnson to drive business performance. Process
excellence draws from the methodologies of Six
Sigma, Lean Thinking and Design Excellence to
empower your workforce to diminish errors,
reduce expenses, improve customer satisfaction,
increase capacity and productivity and grow
revenue.”


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“Excellence in process improvement means
having the ability to execute on four critical
stages of the journey:
1) Scoping
2) Baselining
3) Testing
4) Continual monitoring.”


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Dr Lee Pollock and Dr Mark Kiemele
August 2012

“We view Process Excellence not as a program or
initiative unto itself, but as a means by which an
organization implements its core strategic plan.
The expectation from successfully implementing
Process Excellence is better products and services
delivered faster and at lower cost. The primary
vehicle by which this is accomplished is through
the use of motivated, properly resourced and
accountable, cross-functional project/study
teams.”

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“Three key factors to bring functional silos
together to advance process excellence:
#1 Customer-centric process culture
#2 Shared goals and metrics
#3 Removing organizational barriers.”


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“Participants will be looking at the
entire process excellence value chain
- from process management, through
process improvement to business
process management (BPM).”


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“What is process excellence?
Essentially, it’s about small incremental
improvements your company can make
in its processes that adds up to a large
amount of savings.”
Big Ideas and Process
Excellence
On InnovationExcellence.com
Simon Hill
July 2013


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“Process Excellence is fully achieved when we:
Discover intent, need, focus and anticipate customer feelings at
each step of their journey
Measure baseline data on process defects and their possible
causes
Marry the customer journey data with process baseline data to
fully illustrate where process problems and causes lie
Improve flaws identified above, selecting solutions and
developing plans that map to the intended customer experience
Implement solutions, prepare your team for change, and manage
and measure the new process.”
Kelly Coppinger
August 2012


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The 10 Keys To Process Excellence
SharedServicesLink.com Conference
September 2013

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Identify metrics to drive improvement
Communicate in the language of the business
Create one way of doing things globally
Align process, deliverables and needs
Ensure cross-silo collaboration
Effective systems
Enabling technology
Process ownership
Continuous improvement culture
Governance


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“BPM is not just a one-time application
development project but about continuous process
improvement. Organizations that have success with
BPM have evolved their BPM initiatives from a
single project to an enterprise-wide program.”

September 2013

26

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“Process excellence can best be defined as
superiority in the execution of business
processes, such as product development,
manufacturing, supply chain management,
and services.
One particular interest lies with the evolution,
adoption and adaptation of lean six sigma
tools and techniques to manufacturing,
distribution and service operations.”


27

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“Process Excellence is achieved when all
activities are in total alignment with the
vision, mission, strategy, values and
objectives of an organisation.
An organisation that has a high level of
Process Excellence is cost efficient, effective
at serving its customers, higher productivity,
superior cycle times, higher process
capability and process throughput.”


28

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“Our Process Excellence practice
is dedicated to building
Operational Excellence for
Business and IT.”


29

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So What’s In Process Excellence?

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Image courtesy
WordItOut.com

30

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Contents




31

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Defining Performance Excellence
“Seven key areas that drive operational
excellence:
1) Leadership
2) Strategic Planning
3) Focus on Customers
4) Measurement, Analysis and Knowledge
Management
5) Workforce Focus
6) Operations Focus
7) Results.”

32

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“An integrated approach to key
management areas:
•Leadership
•Strategic planning
•Customer focus
•Measurement, analysis, and knowledge
management
•Workforce focus
•Operations focus
•Results.”

33

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EFQM Excellence Model 2013

“There are eight Fundamental Concepts of Excellence
1. Adding Value for Customers
2. Creating a Sustainable Future
3. Developing Organisational Capability
4. Harnessing Creativity and Innovation
5. Leading with Vision, Inspiration and Integrity
6. Managing with Agility
7. Succeeding through the Talent of People
8. Sustaining Outstanding Results.”


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“Business Performance Excellence
is achieved when an organization
is generating the maximum level of
profitability possible given the
human, financial, capital, and
other resources it possesses.”


35

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“Performance Excellence refers to an
integrated management approach that
results in:
(1) delivery of ever-improving value to
customers
(2) improvement of overall organizational
effectiveness and capabilities
(3) organizational and personal learning.”


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“Performance Excellence is maximising
the full potential of your organisation to
achieve your business goals.
It is the sum of satisfying your customer,
having a workforce that is empowered to
complete their work and fully engaged in
the business and delivering your product
or service in the most efficient way.”


37

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So What’s In Performance Excellence?

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Image courtesy
WordItOut.com

38

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Contents




39

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Are We Talking About The Same Thing?

There’s a lot of overlap...

40

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Ends And Means Are Very Similar
strategic
planning

efficiency

agility
aligned
enterprise
satisfied
customers

risk
management

measurement
lean

quality
results

engaged
workforce

continuous
sustainable
improvement

compliance

Ends

knowledge
management

leadership

six sigma
process
management

TQM

Means
41

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Conclusions
• Process and Operational Excellence are effectively interchangeable terms,
especially at the enterprise level.
• Performance Excellence may be seen as slightly different because
it’s largely defined by the Baldrige Award criteria
it’s arguably a bigger scope
but its use is largely confined to the US

• Every organization is unique in its circumstances and possibilities
• Frameworks such as Baldridge, CMMi and EFQM provide useful structured
approaches to the assessment of organizational maturity
• The best improvement strategies seem to be mash-ups, where tools and
process-based approaches are weaved together to support an
organization’s goals and priorities at a particular time on the journey to the
highest levels of maturity

42

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Contents




43

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In the real world - 1

Derek Miers
Forrester Research
PEX Network interview
April 2011

“There is no single method of process
improvement. There’s not a single
integrated technique – it’s a blend of
methods and approaches.
Companies have got to develop the
competence and capability to be able to
add, subtract, and think about improvement
from a wide variety of angles.”


44

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“I don’t use the labels Lean Six Sigma, Lean, and
others. I think the organization that I work for is
often surprised that I seem to have a bunch of
people who can make things happen successfully.
If the organization thinks that that’s a miracle and
don’t understand that we use some tools to
achieve what we do, I really don’t mind as long as
Estelle Clark
they keep work coming our way.
Business Assurance Director, Lloyd’s Register
PEX Network
August 2012
However, I do think that we do need to make sure
that use all the tools that we have learnt. Some of
the quality tools go back many, many generations.
And it’s important to add to them.”

45

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Gregory North
VP Lean Six Sigma, Xerox
PEX Network
August 2012

“Our business model and our offering is in
transformation and as a result everything we
do in the corporation is, in a sense, up for
grabs.
It’s a sweet spot for the area of thinking about
our business from a quality and continuous
improvement standpoint, in that, really,
process is at the center of what we’re doing.
Our work is to help our leadership team and
our employees make that journey successfully."

46

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Vince Pierce
SVP Global Business Transformation, Home Depot
PEX Network
August 2012

“I tend to shy away from locking into
specific methodologies, so I just use the
term process excellence. It
encompasses everything in the space
that’s relevant to drive improvement in
our business. That’s Lean, that’s Six
Sigma, that’s old school TQM – and
more. Trying to distinguish the bits and
pieces on which one is better, to me, is
just not a value-adding discussion.”


47

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Contents




48

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Research notes
• This is absolutely not exhaustive. The most egregious omission is
probably CMMi – but that’s mostly because it transcends all three
‘Excellences’ (further reinforcing the idea that they hugely overlap).
That said, I hope the examples here are balanced and illustrative.

• Scope: to keep it simple, I have ignored at least two other related
terms - Business Excellence and Business Process Excellence – on the
grounds that they are less widely used. I suspect though that they are
also synonymous and that the conclusions would be unchanged by
their inclusion.
All service marks, trade marks and copyright are acknowledged

49

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Resources

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www.ProcessOperandi.com
- business transformation and performance improvement consulting

www.ProcessArtisan.com
- a blog on the emerging craft of process excellence in global enterprises


50

Are We Talking About the Same Thing? (40

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