In 1976, Dr. Albert Yu and Dr. David Chung founded Umtech, a company that developed and manufactured the first personal computer to be sold in department stores — VideoBrain. However, for a variety of reasons, the consumer market wasn’t ready, and three years later, the company was assimilated into the structure of its biggest investor.
In 1976, another computer company was also founded: Apple Computer Company, the brainchild of Steve Jobs, Steve Wozniak and Ronald Wayne. Despite a challenging start in a market with strong competitors such as Microsoft and IBM, the company — then named Apple Computer Inc. — went public at $22 per share on December 12, 1980. Its IPO generated more capital than any other since that of Ford Motor Company in 1956.
The rest, as they say, is history. Apple went on to become the first public company to be worth an astounding $1 trillion in August 2018.
There are undoubtedly many reasons why two companies that sold similar products met with such contrasting fates. The examples illustrate how of the literally thousands of companies that are started each year, the majority eventually either fail or are acquired by bigger, more powerful competitors. Only a handful survive — and even fewer go on to achieve a track record of long-term growth.
So why is this?
One contributing factor might be that not every company has the drive for process improvement that’s needed for sustained business expansion. According to recent research, process excellence is an actual and sustainable foundation for long-term business success. In fact, when it comes to high-level metrics such as growth, productivity, longevity and profitability, companies that have strong managerial processes have been proven to perform significantly better.
What stands in the way of achieving process excellence?
Achieving process excellence is much easier said than done. There are two common obstacles — and both originate from within the organization itself. First, there’s often an overly optimistic perception of existing management processes, resulting in a failure to acknowledge issues. And second, there may be an overly pessimistic view of the investment required to improve processes, as well as of the returns that investment would yield.
Unfortunately, sooner or later, this type of complacency and inability to see the lack of effectiveness of existing processes are bound to place any company at a disadvantage to those competitors that do focus on process excellence. And that might be precisely where the leaders of high-performing companies differentiate themselves — they recognize that aspiring to process excellence by focusing on effective process management is a key component of sustainable business success.
Achieving process excellence
Achieving process excellence is crucial to the sustainability and growth of business. So how do you go about achieving it?
First of all, it’s important that the leadership team commits to process excellence. When the CEO and the rest of the C-suite emphasize the importance of continuously optimizing internal processes, they lead by example — and the rest of the organization will follow.
In addition, before embarking on your process excellence journey, it’s helpful to evaluate your company’s current beliefs and practices around process. Think about the following:
- How clear is your leadership’s commitment to process excellence, and are your employees on board with this objective?
- How do your employees perceive your processes? And what do your clients or customers think about how you operate? Do you encourage — and incorporate — feedback?
- Does your operational capability hinge on certain key players? What provisions are there in place in case one of those individuals is no longer available?
- In the past, have you been able to respond effectively to external pressures? What were the processes used in those instances? Could or should they be improved upon?
- How are any changes to processes designed, implemented and communicated organization-wide?
- What process excellence tools, capabilities and incentives for teams do you invest in?
Answering these questions objectively and comprehensively will allow you to attain comprehensive insights about the importance of process excellence within your company culture. This in turn will form the foundation for any adjustments you need to make.
Finally, you should commit to strong managerial processes. This means making sure that your leadership team’s commitment to operational excellence is clear, both in words and in actions.
As a part of this endeavor, establish a governance structure to make process excellence part of the company culture. Empower process owners throughout the organization to drive process excellence within their scope of operations. Investigate investment in a centralized process knowledge platform, so everyone in the company has access to process documentation and can participate in an ongoing conversation about process improvement.
The continuous drive for process excellence is a critical competitive advantage
If process excellence is critical to sustainable business success, then it’s important to understand that excellence is a variable metric. Internal and external pressures change continuously— so you should never be satisfied with the status quo. Instead teams should be encouraged to constantly re-evaluate your processes to see where they can be improved to better meet your business needs.
As Tom Peters, an American writer on business management practices, said: “Excellent firms don’t believe in excellence — only in constant improvement and constant change.” It’s this agility that will enable your organization to be more productive and innovative — and ultimately, achieve long-term growth and competitive advantage.