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Operational Excellence and Innovation

Operational Excellence and Innovation

There are two great causes of organizational death: poor execution and lack of innovation.  They both rely on change management skills but different ones.  Knowing the situation that you’re in and which set of change skills should be used can help keep your organization alive.

Operational Excellence

The lack of operational excellence is a friction that slows down organizational progress and can eventually threaten to stall an organization and ultimately bring it crashing down.  The goal of operational excellence is taking the edge off the rough edges.  It’s following Michael Gerber’s advice in The E-Myth to systematize everything.  It’s finding the most efficient execution of any process, then ruthlessly revising it.  It’s leveraging Deming’s Plan-Do-Study-Act cycle for that continuous process of improvement.  Ultimately, organizations that can create operational excellence have more resources to invest and can therefore often accelerate quicker than their competitors.

Change managers and change agents in organizations with strong operational excellence execute the system and then evaluate its effectiveness, having made after-action reviews routine.  Despite Emerson’s concern for “foolish consistency,” they seek for wise consistency and therefore efficiency.  Change in an organization that’s seeking operational efficiency is instilling the desire for continuous gradual change and the impetus to avoid stagnation.

When moving operational excellence forward, change managers need to execute themselves well, including their communications and their after-action reviews.  A lack of solid, consistent, and comprehensive communication creates the kind of confusion that leads to organizational friction and inefficiencies.

After-action reviews are often overlooked, because people are on to the next thing, whether that’s being reassigned operational responsibilities or launching the next change.  When the opportunity to capture the learning that happened during the project is lost, it prevents further improvement and ultimately the ability to continuously improve the operational excellence.

Innovation

We live in a world of disruption and change.  Even the most efficiently run taxicab operation can’t complete with the market forces of Lyft and Uber.  The best run hotel chains in the world find themselves monitoring VRBO and Airbnb as they erode the number of customers and therefore profits.  Even the most amazing incandescent light company would find itself struggling as consumers have started demanding LED lights.

Innovative change is necessarily disruptive, and disruptive change is scary for everyone.  The disruption necessarily changes the status quo, which threatens our ability to predict our future – and that’s scary.  When working with innovative changes inside an organization – including those changes created by merger and acquisition as well as those of a radical rethinking of the business or a part of the business – the key is less about creating motivation and more about managing fear, concern, and doubt.

Tools like effective communication help alleviate the fears of those who are prone to playing at the professional level of worst-case scenarios.  Reassurance and reinforcement become required of anyone in the spot of innovative and disruptive change.  However, the key skills of the innovative change manager are their ability to facilitate difficult conversations and their ability to create agility.

Facilitating conversations isn’t easy when people have different values and perspectives.  However, this is exactly the kind of situation that The Difference explains has the most potential.  But it is also a recipe for conflict that the skilled change manager must carefully navigate to reach understanding – if not complete agreement.  Strong facilitation skills create safe spaces and opens everyone to the idea that they can express their experiences and their beliefs to the group.  The result is often unexpected ways of working that no one could have predicted.

People often confuse a lack of structure with chaos.  Controlling projects is seen as the way towards success.  The truth is that we can’t have all the answers when we start.  Successful change managers help the organization with which decisions need to be made irreversible and where their options need to be kept open while possible.

Together

Change managers who can bring all these skills together – and more – can help their organizations deliver on the promise of change, whether it is incremental or innovative.

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