Market penetration of Operational Excellence approaches (or Business Excellence) in the huge SMB/SME sector of the economy is less than about 1 percent. It’s time to change that.
We need to change the way we implement operational excellence in Small and Medium Businesses (SMEs). SMEs are NOT just small versions of big businesses. They require a simpler, faster and lower cost way of implementing excellence.
The standard big business approach of engaging a team of consultants to facilitate comprehensive implementation is not financially feasible for most SMBs. Largely as a result, approx. 99% of SMBs are missing out on the benefits of full operational excellence. This represents a severe opportunity cost for any national economy.
Proven Net Benefits facilitated by Operational Excellence consultants
We know that when implemented well, the benefits of implementing business excellence are immense. Documented case studies since the 1950s confirm that net benefits over 5 years add up to at least 22.5% of this year’s Sales. Even in Year 1, ‘quick win’ improvements generate net benefits greater than 1.5% of Sales.
One would think that these massive net benefits would be a major incentive for any SMB to get started.
Widespread CEO Resistance to date
However, in spite of these proven net benefits, SME CEOs frequently cite several reasons for why they are NOT currently pursuing excellence in a holistic, structured manner…
- “I don’t really understand what would be involved”
- “I thought it was more for big companies (like GE, IBM or Toyota)”
- “We can’t afford the substantial consulting assistance required”
- “We don’t have sufficient staff resources (e.g. IT; HR) to help drive the implementation”
The Solution to achieving Business / Operational Excellence
So, what can be done to overcome these perceived major ‘barriers to entry’ for SMBs?
Answer: Develop and market an entirely new way of implementing full business excellence that redresses all the above significant barriers perceived by the CEOs.
Challenging Performance Brief
To be successful, that new way must satisfy all the following stringent performance criteria…
- Be consistent with the proven international frameworks and criteria for operational excellence
- NOT involve prohibitive amounts of external consulting assistance
- NOT need a comprehensive up-front assessment of the business before real implementation starts
- Be well understood and led from the top
- Use simple, common language that everyone can understand
- Generate quick wins
- Do the right things right and in the right sequence
- Provide detailed step-by-step instructions for the entire journey
- Integrate every aspect of the implementation as it proceeds
- Involve all employees
- Ensure accountability for individual and collective critical actions
- Visually track the resultant business impacts every month via the right strategic KPIs plus operational KPIs
- Quantify the net benefits of completed improvement projects
- Be applicable to any SME in any industry
- Be accessible via the Internet at low cost
The good news
Such a simple, integrated and carefully sequenced approach designed exclusively for SMEs is now available. It has been developed by Dr Mark Rehn based on 37 years of management consulting assistance provided to over 1,000 clients implementing various aspects of operational excellence. During that time, he also led the management consultancy (Aptech Australia) commissioned by the Australian Federal Government to develop nation-wide consulting methodologies for both World Competitive Manufacturing and Total Quality Management.
This pragmatic approach to Excellence is the perfect way to build a high performing SME Business.