Both operational excellence (OpEx) and lean feature heavily in strategy conversations, focusing on continuous improvement of internal efficiency and processes. They are distinct methodologies, with lean forming part of opex, and are most commonly used for lower-level (for example, departmental or business process) initiatives rather than broader strategy, but both share the same goal of maximizing value for the customer. However, there is often a disconnect between OpEx and lean projects and how they relate to an organization’s overarching strategy.
OpEx aims to improve business performance through creating competitive advantage. This is through analyzing current processes, with specific organizational goals in mind, to improve their effectiveness and highlight missed opportunities to create value. Lean can be used as part of OpEx initiatives, but focuses more specifically on maximizing value while minimizing waste.
These projects often become classed as low priority when planning out organizational strategy, rather than being viewed as vehicles to help you achieve your goals. Understanding (and making) the connection between lean, OpEx, and strategic priorities can help you perform both simultaneously to create a culture where not only are you working on improvement-based projects, but also advancing your organization in the direction you need.
When designing organizational strategy, OpEx and lean projects can occasionally become misaligned with the desired goal. This is because they typically focus on a specific area to improve instead of organizational performance as a whole. Without tying these projects to specific strategic objectives, there is a risk that teams invest time in improving or optimizing processes that will have little effect on strategic performance.
Continuous improvement efforts are usually time-bound, taking place throughout a set period or cycle, and are not tied to strategic metrics for success. This means that, when planning or executing strategy, these efforts are seen as project-specific and their contributions not considered part of the bigger picture. There is also the chance that other departments in the organization aren’t aware of ongoing lean and OpEx projects, creating communication siloes that cause teams to essentially work against each other as they’re lacking strategic alignment.
Aligning lean and OpEx projects to broader strategic initiatives will allow you to build a strategy infrastructure within your organization. Including these specific projects in the strategy planning phase will ensure that all projects contribute to long-term goals, rather than being treated as isolated improvement activities.
Demonstrating the link between daily operations and strategic efforts, or outcomes, always begins with clarity. This entails illustrating the importance of what your organization is trying to achieve and why those goals are currently a priority.
Once you have achieved clarity on the direction of the organization, and the core purpose of the strategy, you can begin turning these goals into specific activities that make sense within lean and OpEx contexts. For example, for goals such as ‘reduce physical waste’, this would be broken down into smaller operational key performance indicators (KPIs) that are directly influenced by OpEx and lean efforts, to become ‘reduce cost by 10%’.
Defining specific improvements and relating them to the core strategy based on how they deliver value or progress will enable teams to be more autonomous in their decision-making, as they will understand which tasks contribute to the desired outcome and can apply appropriate focus.
Structured planning is a critical component of organizational alignment, ensuring that everyone involved understands the ultimate goal and how you will achieve it. When planning your strategy, it’s important you make a note of any current in-flight OpEx and lean projects, and any that are planned for the future. Including these projects in your planning phase means they will either be aligned to the overarching strategy, or simply acknowledged so they can continue without affecting other initiatives.
Following planning, once you have a comprehensive list of current and future projects, you will need to begin assigning their priority within your strategy. When allocating priority, remember that not all projects will definitely be included in your broader strategy. You will need to have a clear system and reason for which projects are the most important, linking them back to your core goals, as this will help to increase buy-in from others involved in strategy execution. Integrating lean and OpEx projects into your plans can also help with cascading your strategy across the business by involving those who usually have a narrow area of focus, removing cross-functional communication siloes. Prioritization also supports effective resource allocation and enables others to work autonomously while still contributing to strategic goals.
Throughout strategy planning and execution, particularly when including your lean and OpEx projects, you must consider ongoing alignment. This is a dynamic process, ensuring that there is a consistent and shared understanding of how activities link to your long-term goals. Building “alignment checks” into your strategy progress reviews will support in keeping initiatives focused and on track.
Using feedback loops in your strategy reviews will give you additional insight into current and expected performance, allowing you to optimize efforts where necessary and (potentially) adjust project priorities. If there are new lean or OpEx projects that weren’t previously noted, you will also have some oversight on how these may impact the overarching strategy, particularly in terms of resources.
Connecting lean and OpEx projects to your strategic goals isn’t about creating more work, but rather building a broader understanding of how any improvement initiatives positively contribute to your vision. Instead of only existing as specific, isolated efforts, they should be viewed as integral components of your strategy.
Making the connection between strategy and lean and OpEx projects requires open lines of communication that remove siloes and encourage cross-functional collaboration. When there is a clear link between micro- and macro-level projects, teams will have a better understanding of how their individual efforts support your organization’s success, improving motivation and buy-in among employees. This ensures that, despite perhaps not working closely together, those involved will all be striving towards the same shared goal. Incorporating structured planning, prioritization, and regular alignment reviews throughout the strategy process will maintain focus on what’s important, building a culture where designated continuous improvement projects support strategy at every level.