Meeting the Challenge of Excellence – Chapter 1, Operational Excellence

Posted April 17th, 2007

Operational Excellence

A number of companies use the term “operational excellence.” That term generates 410,000 hits on the Internet. Industries and services using that term include pipeline, oil, nuclear, chemical, military, furniture, software, pharmaceuticals, food, travel, education, and government agencies. Some of the pipeline or related companies that use the term “operational excellence” and how they use the term are listed below:

• Alyeska Pipeline Service Company-“Operational excellence: safety, people, system integrity, reputation, and efficiency.”

• BP -“Now our strategy is being driven further, by a belief that everything we do can – and should – be done better. Our people put this principle of operational excellence to work every day throughout BP.”

• Chevron- “Operational excellence simply means safe, reliable and environmentally sound operations. In its simplest terms, this means not defeating yourself… So operational excellence is all about the areas that we can control.”

• Colonial Pipeline Company – “Our vision is operational excellence; our goal is spill-free, error-free operations.”

• ConocoPhillips Chemical- “Operational excellence: running safely and reliably — is a key factor to profitability in bottom-of-the-cycle market conditions.”

• Dominion Energy – “operational excellence: reliability, flexibility, efficiency”

• Enbridge, Inc.-“Operational excellence includes cost efficiency, safety and reliability, environmental integrity, innovation in project structuring and effective stakeholder relations. It also involves organizational effectiveness and smooth integration of newly acquired assets.”

• ExxonMobil- “ExxonMobil’s ongoing commitment to safety, health and environmental excellence are guiding principles that ensure the highest standards of operational excellence.”

• Kinder Morgan Energy Partners, LP-“Operational Excellence: Kinder Morgan prides itself in operating efficiently. We strive to be the most efficient and cost-conscious operator of assets in the energy business.”

• Lyondell Chemical-“Operational Excellence is built upon five key elements: Safety, Environmental Protection, Reliability, Quality, Efficiency.”

• Williams Field Services-“The goal is defined by the Williams philosophy of Operational Excellence – zero injuries, zero accidents, zero releases.”

These examples, all found on the Internet in 2005 and 2006, provide evidence that the term “operational excellence” is widely used by pipeline and related companies. In addition, meetings and conferences for pipeline and other energy companies have been organized around the theme of “operational excellence.” Though the companies’ uses of the term are clearly similar, the differences are also clear. Even if your company does not use the term, what is your definition of operational excellence?

A number of consulting companies advertise they can help your business achieve operational excellence. Pretend you are an operational excellence consultant who is looking around your workplace for signs of “operational excellence”. For five years, I was the Operational Excellence Manager for a pipeline company. As I went to different locations, I looked for order, cleanliness, professionalism in dress and communication. I also looked and listened for written, visual, and oral representations of operational excellence. These observations provided a starting point for an assessment of Operational Excellence. These signs represent what your organization believes, espouses, and practices about operational excellence.

Look around your workplace. What signs and symbols can you find? What do you see? What are your observations? What messages do you send? What messages do you receive? What do they say about your organization? How do they relate to your job responsibilities?

Perhaps you found statements about your company vision, mission, values, strategies, and goals that indicate your company’s desire to achieve excellence. I hope the operating, maintenance, administrative, and storage areas are clean and in order. I hope you and your company look, think, and act professionally. When a company achieves clarity in these areas, linkages and alignment are built between the functions in the organization. Employees know how their job responsibilities and those of other jobs contribute to operational excellence. All the people in the organization know and can describe what excellence looks like. If someone said, “I am a visual learner, draw me a picture of ‘operational excellence,’” what would you draw? If someone asked, “Where do you fit in this picture of operational excellence,” what would you say? A third reason to be excellent is when your organization has clearly communicated that operational excellence is the expectation. What value does your organization place on operational excellence? Has your organization clearly communicated that expectation? If the communication is not clear, what expectations are being communicated? How can you help clarify that excellence is the expectation? Each of us can play a significant role in communicating why excellence matters.

This entry was posted on Tuesday, April 17th, 2007 at 8:06 pm and is filed under Excellence Book.