In "The Discipline of Market Leaders - Choose your Customers, Narrow your Focus, Dominate your Market", Michael Treacy and Fred Wiersema describe three distinct value propositions or disciplines an organization can choose to compete in their market or industry - Operational Excellence, Product Leadership, and Customer Intimacy.
Market leaders choose to excel in delivering extraordinary levels of one of these three value propositions, while maintaining competitive standards in the other disciplines.
Based on Treacy's and Wiersema's findings, market leaders will not pursue a diffused business strategy across two or even all three disciplines, but will continually focus on their organizational design, processes, technology and competencies to improve the one particular value discipline that they want to provide to their Customers better than anyone else.
Organizations pursuing an Operational Excellence differentiation strategy are able to deliver a combination of quality, price, and ease of purchase and service that no other organization in their market or industry can match.
Achieving Operational Excellence requires the successful implementation of a Business Execution System that effectively and seamlessly integrates the following four building blocks: Strategy Deployment, Performance Management, Process Excellence, and High Performance Work Teams.
First, Operational Excellence organizations follow a well defined Strategy and Operational Planning & Deployment Process that ensures collaboration and alignment among the different parts of the organization and effectively links strategic and operational objectives, initiatives and execution. Strategy Mapping and Hoshin Planning provide this systematic and collaborative planning, execution, and review process.
Second, Operational Excellence organizations are able to translate strategic or operational objectives and initiatives into measurable success indicators and ensure alignment among the different levels and parts of the organization.
The Balanced Scorecard Methodology provides a Performance Management framework to ensure alignment of an organization towards common objectives and goals.
Third, Operational Excellence organizations are process-centered organizations that have well designed, efficient, and effective management, value chain, and support processes to deliver best-in-class products and services consistently.
Process Excellence concepts, methods and tools, including Six Sigma Methodology, Lean Management Methodology, 8D Problem Solving Process, and Business Process Improvement, are core competences and utilized at all levels of the organization.
Fourth, Operational Excellence can only be achieved and sustained with the right attitude, the right mindset, and the right competencies. Operational Excellence organizations continuously strive to increase the engagement and empowerment of their employees through strong values, guiding principles, leadership development, coaching, and continuous competence development.
"The House of Operational Excellence" provides a high-level framework for an integrated Business Execution System for Operational Excellence organizations.
Experience. Passion. Results.