Those old enough to remember the three-day week of the 1970s will also perhaps remember the strikes and chaos so evident in the beleaguered car industry of the time. With weak management and over-powerful unions, the car manufacturers got into an appalling state, producing cars of astonishingly poor quality. It was not uncommon for cars to roll off the end of the production line without, for example, head-lights or other major parts. A majority of cars had to be fixed post-production in the QA process. This was, of course, massively inefficient and led ultimately to the collapse of the UK-owned car industry.
Over the subsequent 40 years the UK car industry has quietly rebuilt itself under foreign ownership. The strikes of the 1970s are long forgotten and James May’s recent TV series inside the BMW Mini plant near Oxford showed a smart, productive environment focussed on operational excellence and efficiency.
So what has changed in those intervening 40 years? One of the major changes was the introduction of policies like “Kaizen”. This is a policy developed post-war in Japan and is the practice of continuous improvement in an organisation. It involves every employee in the effort to find ways of improving the product or the processes used in production. The organisation is geared around the expectation that everyone from the cleaner to the CEO must be contributing ideas towards efficiencies, quality improvements, cleanliness and organisation. A key tenet of this policy is that there are no negative consequences for people making suggestions and it is common to pay bonuses for ideas that are taken up.
When you are developing a strategy like this it is worthwhile understanding the bigger picture of what you are trying to achieve compared to your competitors. Understanding your focus will help you to shape the strategy but it will also subsequently help to shape the marketing message that accompanies it. Kaizen is, of course, all to do with operational excellence – winning over the competition by getting super-efficient at making and delivering your product or service. If you are chasing operational excellence, then the product doesn’t have to be particularly different or unique, but you win hands down because you are so good at making it well and delivering it to the customer quickly and efficiently.
Amazon is another shining example of this. It has reformed the way we shop by producing a sophisticated online sales tool and faster delivery than its competitors ever dreamt of. It is uncompromising in chasing operational excellence in every corner of what it does, and we respond to that by flocking there in our droves to buy everything you can possibly imagine.
Is operational excellence in your strategy? And if it is – are you uncompromising in your pursuit of it? And do you encourage everyone in your organisation to participate?
If you are interested in learning more about strategic themes like operational excellence, then you may be interested in our Strategic Thinking and Decision Making course.
