Business Excellence 5 Steps
“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” - Sun Tzu (Chinese General and Author, b. 500 bc)
Strategy is important but without execution it is no more than a statement of intentions. Building an excellent organization is equally important but can be a waste of energy and resources if not properly directed. It’s the mix of each of these that are the ingredients to a successful organization; success is equal to strategy plus execution. Achieving success can be broken down using five steps, which are simple to understand, but challenging to accomplish.
1. Create a vision of the future. A vision is much more than a statement; it's the guiding light for the whole organization. This is true for a one-person shop as well as a large company. There should be enough clarity so that when the 'plan' is shared, everyone will understand what you're trying to accomplish. When first starting a business, this often takes the form of a business plan. For ongoing organizations, each year the business should create a strategic plan that reiterates the direction for the company and establishes the annual goals.
2. Build a repeatable system and execute well. Designing an organization to deliver customer value and ultimately drive profitability should be embarked upon with an eye towards creating a system that can be duplicated in multiple ways. Some refer to this as a franchise model. Even if there are no aspirations to franchise, the results of this design principle enables more predictable outcomes which keeps customers coming back and creates a community of advocates for your model.
“However beautiful the strategy, you should occasionally look at the results.” - Winston Churchill, (former British Prime Minister, WWII).
3. Instrument for success. You wouldn't want to drive a car without a speedometer or a gas gauge; however, some organizations do just that. The common answer to “how do you measure success” is through financial statements, such as profit and loss statements and a balance sheet. As important as these instruments are, they tend to be historical documents, i.e. they tell you what has happened not what could happen. A more complete model is the balanced scorecard approach (Kaplan/Norton) where financials, customer experience, operational capability, and the performance of organizational assets (such as people and capital) get considered.
4. Build Sustained Improvement. Since the competition doesn't stand still and customers always want better, stronger, faster and cheaper, the business needs to have continuous improvement program. Lean Six Sigma is an excellent framework to use to assure a focus on waste reduction (Lean) resulting in lower costs, higher predictability (Six Sigma) to achieve higher quality, and increased throughput (Theory of Constraints) to maximize profitability.
“When you're that successful, things have a momentum, and at a certain point you can't really tell whether you have created the momentum or it's creating you.” – Annie Lennox, (Musician, Vocalist, b. 1954).
5. Maintain momentum. Starting something is difficult, stopping it is nearly impossible. Think of your childhood merry-go-round and you will immediately identify with the idea of momentum. Maintaining positive momentum is very important for the long-term success of an organization. Some key ways to increase momentum include measuring and showing progress, amplifying the wins, encouraging and leading the team, developing your assets (people) and creating communities to foster expertise, growth and innovation.
“Better and Stronger” will have vastly different definitions for each respective organization. By focusing on the five steps to define the strategy and create a sustainable execution system an organization will achieve its dreams and inspire others to do the same. What are you waiting for? Get started today!
Author: Chris Lindstrom is the CEO of Ceptara, a professional services company that helps organizations achieve excellence. EvCC and Ceptara partner to deliver EvCC's Lean Six Sigma Green Belt Certificate Program.