What is Operational Excellence?
My definition of operational excellence is based on the criteria of the Malcolm Baldrige National Quality Award, and how I have seen recipients of the award apply these criteria to make their organizations more sustainable. Operational excellence must be demonstrated by results, not just by words. 45% of the 1,000 points associated with the Baldrige award are results focused. In order to maximize the degree to which these 450 points are attained, an organization must show sustained improvement over time, in all areas of importance, against ‘best in class’ organizations. Operational excellence is therefore demonstrated by results that reflect (1) sustained improvement over time, (2) improvement in all areas of importance (both performance areas and segments within each area), and (3) performance at a level that is at, or superior to, ‘best in class’ organizations. Common areas of importance for a cost center are safety, quality, people, and cost. Profit centers add the revenue generatio
