Operational Innovation: Going beyond Operational Excellence to Touch New Heights
Improving operational efficiency has been a constant quest for enterprises in their attempt to cut costs for staying competitive in the market. This practice, known as operational excellence, has served businesses across various sectors well until now. However, the traditional approach to bettering operations is no longer enough to survive and thrive in today’s global marketplace. To gain an edge over the competition, an enterprise needs to do much more. The rapidly evolving business world of today requires a company to go beyond operational excellence and apply the new powerful weapon available to them: operational innovation.
Operational Excellence vs. Operational Innovation
Operational excellence entails enhancing performance by reforming the existing processes and procedures for reducing errors and eliminating wasteful steps. This process delivers results, but the gains are limited. There is a limit to how much a process or procedure can be improved.
The procedures and processes must change fundamentally to break free of such limitations. A company must re-imagine the entire way the work is carried out, and that is where operational innovation delivers. Operational innovation drives change at the core of how the work is accomplished within an organization. Unlike operational excellence, which is single-faceted, operational innovation impacts how a company functions in its entirety. It requires strategic adjustments in the very structure of the enterprise, which requires changes in management strategies to adjust to a newer way of doing things.
The Step-by-Step Approach to Operational Innovation
Operational innovation is an immensely powerful tool that can deliver exceptional results. However, a company may find it difficult to implement systemic changes. Proper guidance coupled with coordination among the diverse organization levels can help to overcome the challenge of accomplishing such changes. Developing a clear step-by-step approach can make this transition easier and smoother as well as maximize the benefits. The five-step approach to operational innovation includes:
1. Envisioning the Impossible: Overturning the established habits set by tradition can be a daunting task. To break out of the constraints of conventional wisdom, one must set seemingly impossible targets. Envisioning the impossible generates the top-level brainstorming required to rise above incremental improvements and effect outstanding transformation.
2. Looking Over and Above Your Industry: Looking for answers within the benchmarks of your industry will only deliver more of the same. Observing the seemingly different industries and finding a way to adopt the strategies that have worked for them will provide you with an advantage over your competitors by enabling operational innovation in areas that have been overlooked by others.
3. Eliminating the Assumed Constraints: The existing methodologies within an organization, and even across the industry, are based on certain assumptions that place constraints on what can or cannot be changed. Operational innovation requires identifying and eliminating these assumptions to pave the way for new breakthroughs. The shift in the thought frameworks will help generate unique ideas that lead to true excellence.
4. Adopting a Critical Need Attitude in Normal Times: A company finds it easy to think out of the box and bring about unprecedented changes in critical times when its survival depends on it. During times of stability, though, making such changes becomes a huge struggle. Maintaining the attitude of urgency even during a steady phase and evaluating the key drivers that make innovation easy during instability will lead to groundbreaking solutions.
5. Rethinking the Critical Elements of Work: The final step toward operational innovation involves the insights gained through implementing the four steps above and applying it to rethink the methods of completing the critical elements of work. This requires a thorough analysis of the entire workflow: when, where, and what is done by whom for the end result. Only a thorough understanding of these dimensions can enable you to re-imagine a creative solution for the transition to a leading-edge operational solution.
Sustaining Continued Advancement
Dealing with opposition from the higher-ups in the hierarchy who want to play it safe and overcoming the difficulties in the way of implementation are the next steps on this journey. Operational innovation is a change that perpetuates multiple further changes. It is a step toward evolving to a whole new level where an enterprise finds itself in a position to generate additional changes and continued advancements. Adopting this culture can turn an enterprise into a frontrunner that keeps changing the rules while the competition tries to catch up.