Operational Excellence Reimagined: People Should Be the Center of Your Operation

Published in

People Company

10 min readSep 20, 2022

There are three components of operational excellence in the digital age.

When three CEOs of General Motors pleaded for public funds in 2008, people didn’t expect that they would be flying private jets. On the verge of bankruptcy, the CEOs still couldn’t let go of their pricey perks.

Things were not the same when the previous legendary CEO Albert. P. Sloan was calling all the shots. It once made profits that were more than had ever been earned by any company anywhere in the world. Most people only know that Sloan prioritizes management efficiency, what they don’t know is that he was a visionary in employee experience.

When he was the CEO, GM’s plant recreation facilities, payments for employees’ suggestions, arrangements for employee training, and provisions for employing handicapped workers — all fell outside the scope of the contract. Besides these, employees also have access to first-rate medical services, fine cafeterias, locker rooms, showers, parking lots, etc. Under Sloan’s guidance, GM learned to prioritize people as an essential factor in its operational process and thrived for three decades, which is why Peter Drucker, the father of management who worked at GM, believed that General Motors’ success was due to its management practices, in particular its people-centric ethos.

GM’s past glory and its people-centric operating strategy still shed light on operational efficiency nowadays. Many of us don’t realize this, but, people’s needs actually weigh more during our current age, when digital tools appear to offer us various one-click-away solutions for improving efficiency. According to Gallup’s 2020 report on employee engagement, companies with a highly engaged workforce have 21% higher profitability. They also have 17% higher productivity than companies with a disengaged workforce. All these findings proved that when setting about improving operational efficiency in the digital era, you should center your solution around people’s needs. Tools only pave the way. Only a shifted mindset can nudge you in the right direction.

Three components of operational efficiency in the digital age

With the significant role people play in efficiency improvement in mind, let’s examine the “how” part. To achieve operational efficiency in the digital era, you need to first acknowledge it is composed of three parts, and then learn to leverage digitization to work towards them.

Streamlined process

Business performance depends on the efficiency of its processes — a streamlined operational process promises better business outcomes. Understanding and streamlining your operational process is the start of long-term business development.

Operational processes are varied. It could be the process of creating a final product, providing post-sales support and customer service, or marketing what you sell. The benefits of streamlining your operational process include: reducing redundancies, ensuring optimal resource utilization, and thus improving efficiency and maximizing profits.

Streamlined means optimized, minimized, and, in the age of hybrid work, digitalized. New customer needs and technological developments keep bringing opportunities and threats for business development simultaneously. Companies that have adapted themselves to rise up to new challenges are prospering and creating everlasting benefits.

McDonald ‘s is one of those that succeeded to adapt. As technology develops and booms, customers are getting used to the instant delivery of food. McDonald’s soon realized a potential gap in customer experience and started innovating to keep up. So they went on building interactive ordering units, an AI drive-through, and a smartphone app to ensure an optimal customer experience every time. For a business to have a sustainable future, some degree of digital transformation must take place. Those who failed to adjust to the changing market and digital tools are doomed to struggle for survival.

Before we move on to how to implement digital tools to optimize your operational process, it should be pointed out that there is a big difference between digitization and digitalization. Digitization means converting something into a digital format. The whole process relates more to information. Examples include digitized handbooks and documents. On the other hand, digitalization means innovating business processes by using digital technologies. Digitization is a one-time action. Digitalization is an ongoing exercise. Here are two efficient process optimization exercises that you could try out.

The first is Robotic Process Automation (RPA). First things first: there aren’t any real robots involved in RPA. Actually, the “robot” stands for a software robot that can be run on a physical or virtual machine. It can automate mundane, repetitive tasks that once required human action — often in a time-consuming fashion. For example, copy-paste tasks, moving files from one place to another, etc. The processes that are suited for RPA should be rule-based, repeated at regular intervals, and ideally have sufficient volume.

RPA can boost efficiency for organizations because it instantly increases the speed at which those repetitive tasks are done, and reduces the likelihood of manual errors. More importantly, it can benefit employees by reducing the amount of drudge work in their daily operations. Humans are not cogs. They are creative creatures. By adopting RPA, you lead people to more value-driven tasks and improve productivity across a wide range — employees, customers, and other stakeholders. In the age of efficiency, operational success is not determined by how much human effort you put in per time unit, but how much you saved, or, let me put it this way, targeted at more significant places.

The second digital tool is process mining. It is a relatively new and innovative technology that can revitalize process management for organizations. Process mining technology is for helping those who are having difficulty locating the worst bottlenecks within the process. You may feel a kind of itchy feeling but don’t know where to scratch. Process mining will tell you exactly where.

Process mining works in the following steps. First, it captures real-time data from key operating processes. Then it creates event logs as a single task is finished. This log makes visible which processes are slowing down the whole operation chain. AI algorithms can detect the root cause of each time lag, which helps analysts narrow down their focus to tackling the real enemy. To sum it up, process mining yields analysis with actionable insights so that pain points can be identified, optimized, and even removed, which leads to improved operational efficiency.

To maintain a competitive edge in the ever-tightening market, you have to evaluate current operational processes and consider how to optimize them through digital transformation. In one word, process optimization is a prerequisite for your success, and digitalization is the quickest way to do so. Digital tools can transform and optimize your daily operation in the most painless way. Automation can liberate your employees and save their energy for more impacting tasks. As for the final product — a streamlined operational process — definitely can boost your productivity, accelerate business growth, and yield a better stakeholder experience.

Integrated collaboration

For many companies, there are two isolated flows in operation. The first one is process-based, which includes production planning, order management, inventory management, logistics management, replenishment, etc. This kind of process is built on systems of record and has existed since the beginning of the operation of the business. The other one is communication-based, and it centers around contextual exchanges. Examples may be in-app messages, email threads, group chats, and intranet. These belong to the system of engagement. Communication-based flow only rose in popularity after the internet was born and technology made it a necessity.

The pandemic forced us to adapt to new ways of collaborating and rethink how to maintain an efficient workforce. It also drives us to examine current workflow and seek out new ways of optimizing them. During the check-up, we are forced to see how much friction exists in our daily operation and how it is hindering business growth, or, survival.

For most companies, the two operational flows are parallel. For example, employees conduct process-based flow in systems of record like supply chain management, and, in need of collaboration, they have to switch to emails, group chats, and other kinds of communication tools. This jumping between is exactly why the two flows need to be combined and shaped into an organic whole.

Process-based flow and communication-based flow need to join forces because of the following facts. Firstly, a large part of the friction comes from the separation of the two flows. When conducting daily operations with suppliers, employees have to waste huge amounts of time and energy switching between apps and going back and forth to confirm details of certain products. Research shows that more than half (56%) of app users report that switching between apps makes it harder to get essential work done. And 68% say they spend at least 30 minutes a day switching between apps.

Apart from creating extra friction, two isolated flows can cause impairment of product quality and customer experience. Significant details of target product features or service requirements could be neglected or lost during the time-consuming communicative detours, which end in low-quality outcomes and a negative customer experience that leaves a long-term negative impact.

Last but not least, having two separate flows could also hamper your performance in a data-driven business world, as it is impossible for you to generate contextualized data on your back end. With two isolated flows, all the communicative information won’t be able to be automatically associated with the structured data generated from the process-based flow. Also, digital tools like RPA and process mining are only viable when there is structured data for software or machines to analyze and learn from. If there is no pattern or rules, automation will not be possible.

If we combine the two flows together, it could change the meaning-loaded exchanges from siloed data to structured one, because they will be tied to each link of the operating process. This way, software, and machines could have a chance to try finding a pattern and learn. With time and effort, it is highly possible for them to locate which part of the communication can be automated. Also, by analyzing which operation links cost the biggest amount of communication time, machines can even locate more pain points to optimize.

The key is to integrate them into one place. We need to embed contextual-exchanges-based collaboration in the operating process. Ideally, employees can view, send, and reply to meaning-loaded messages on the same page where they place orders, confirm delivery, and go through other business processes. There should only be one app. Communication should happen simultaneously within the workflow-based process. The two flows should be intertwined and work as a dynamic whole.

Overall speaking, reshaping the two separate flows can remove friction, and save time and costs, thus boosting productivity. It can also offer a chance for machines and algorithms to analyze originally siloed information and develop patterns. Finally, it will create a smooth experience and engage stakeholders, which leads us to the next component.

Enabled people

Enabled people are the most significant success factor for operational efficiency. To use a simple analogy, if operational efficiency is an automobile, then, a streamlined operational process is the steering wheel, integrated collaboration is the engine, and enabled people are the fuel upon which it runs. According to Gallup’s research, engagement is a big performance indicator. Increased employee engagement can contribute to reduced safety-related incidents and quality defects, as well as increased productivity and profitability.

People refer to stakeholders. To truly enable them, we should first empower them with the right tools, systems, and resources that not only allow them to participate and prosper but also ensure a seamless experience. For instance, an all-in-one touch point for daily operations and a platform that integrate all needs.

Personalized task-based operation tools are also a big booster for efficiency across teams. Using a cookie cutter approach to design tools for employee engagement is done and dusted. Each employee represents a unique business need, and they are bound to have different expectations for a smooth operating process. Today, technological innovations are making it possible to gather and analyze the data you need to form the bedrock for personalization. In the age of digital competition, only organizations that found ways to personalize the experience for every employee can ensure maximum productivity and robust performance. It is fair to say, personalization is the future of empowerment.

To engage employees and customers alike, a workplace community should also be created. It makes a huge difference in overall job satisfaction. More importantly, employees who feel connected to their workplace community will bring the best version of themselves to work, which means a high increase in overall productivity. They will try their best to solve problems and get things done. Feeling safe and valued, they will even voluntarily find ways to report issues and optimize everything. According to statistics from Forbes, “Highly engaged teams show 21% greater profitability while disengaged employees cost U.S. companies up to $550 billion per year.”

Having a fun, open, inclusive workplace culture is equally important. Professionals seldom expect to find friends in the workplace. However, if they manage to find one, it will boost their sense of belonging and productivity to a large degree. Gallup’s 30 years of employee engagement research reveals that friendship in the workspace fuels greater performance. Gallup explains, “Friendships can take on a powerful dynamic in which casual, friendly banter turns into innovative discussions about how the team or organization can thrive.”

To sum up, enabled stakeholder is an essential part of an efficiently running operating dynamic. Leveraging personalization to equip them with the right tools is a great start. Building a workplace community that fosters a sense of belonging, friendship, and strong connections will give you an extra edge to survive in cut-throat competition.

People-centered ecosystem for operation

From what has been discussed, we now understand that operational efficiency is a four-ring structure. At the center are your stakeholders, empowered and engaged. Moving on comes to a community built to connect all stakeholders and form the core strength and fuel for the operational process. Next is your optimized business process and integrated collaboration flow, which contribute to a great stakeholder experience. The outermost layer is your ultimate goal and the final product — operational excellence.

Looking back, GM was the top gun in its industry for half a century, until the subsequent leaders started to pursue their own perks and drop the ball on prioritizing its employees, suppliers, and customers. Achieving operational excellence is never easy. It requires long-term commitment and constant efforts to experiment and evolve. However, done right, it will help you survive and thrive for a really long time.

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