Operational excellence: The new lever for profitability and competitive advantage
Better. Faster. Cheaper. Every organization is grappling with these concepts as economic uncertainty spreads around the globe.Better. Faster. Cheaper. Every organization is grappling with these concepts as economic uncertainty spreads around the globe. Instead of pursuing ambitious expansion plans, many organizations are focusing their efforts on short-term results. They are trying to identify what can be trimmed or eliminated in their operations to protect their profit margin or simply survive in the global marketplace.
But the current economy also offers a unique opportunity for businesses to transform their operations into an instrument of strategic competitive advantage. We observe that leading organizations are redoubling their efforts to find new ways to execute with greater efficiency and effectiveness — to achieve operational excellence without sacrificing the value their customers expect.
In the fall of 2008, prompted by emergent new thinking on business network transformations, innovative management processes and powerful, next-generation technology, Palladium Group embarked on a multistage research project. Our goal: to explore operational excellence with a fresh eye, repositioning the concept within the new context of linking strategy and operations. We initiated this research to show chief operating officers and key senior executives how to respond quickly to the near-term pressure to reduce costs without losing their ability to take advantage of future growth opportunities. As our research confirmed, cost efficiencies are the main source of profitability for companies, while improving the customer experience is the primary source of revenue growth. Certainly, achieving short-term survival is essential. But establishing a foundation for repeating these kinds of operational successes, while preserving the ability to pursue longer-term strategic objectives, is key to sustaining superior operational performance and competitiveness.