8 Signs You Need to Improve Your Company’s Operational Effectiveness

January 05, 2016

8 Signs You Need to Improve Your Company’s Operational Effectiveness

4 Minute Read

From lagging profits to declining innovation: learn how improving operational effectiveness can help you overcome key business challenges while boosting your bottom line.

Gordon Chan
Gordon Chan, CPA, CA, CFE, CRMA
Regional Managing Partner, Financial Advisory Services

In today’s hyper competitive business world, it’s all about boosting your bottom line while staying ahead of the competition. For decades, businesses have focused on identifying cost reductions and making significant cuts to keep a healthy bottom line, in part to combat core expense increases like salaries and raw materials. But businesses that only focus on cuts are quickly falling behind. It’s not enough to have less; it’s about doing more with less.

That’s the crux of operational effectiveness (OE). When your organization’s OE is optimized, you’ll not only see positive revenue impacts. OE can also help you manage costs, mitigate risks, strengthen innovation and increase performance. The result? A more nimble organization that surges past the competition while still being attractive to employees, customers and other key stakeholders. If you’ve never heard of OE or considered its benefits for your organization, now is the time to take a closer look at developing a plan. If you’re uncertain as to whether you need to consider OE, we’ve identified eight signs your company is ripe for investing in OE.

Your business is growing rapidly, adding facilities or expanding operations

As a business scales up, it can be difficult to maintain the nimbleness that helped you become successful. OE helps ensure consistency, identifies deficiencies and productivity risks, and ensures everyone is on the same page.

A new acquisition requires integration

When you merge in a new group of people, they have an ‘old’ way of doing things. OE provides a formal outline for how things should be done, but it’s also key to check in with your new team members to see if they have any ideas to improve your existing OE policies.

Operations require restructuring

Sizing up? Merging roles? Adjusting production schedules? When you are undergoing a significant operational shift, it’s important to revisit your OE guidelines to ensure you aren’t missing anything.

Profits are declining

When you find you can’t make any more cuts but your profits are still trending downward, it’s time to look at ways to improve existing processes and operations.

Innovation is lagging

In a business world where new innovations and companies are appearing literally overnight, you can’t expect to do the same thing and produce the same results for an extended period of time. Fostering a culture of innovation is critical to your long-term business success.

Customer expectations cannot be met

No matter how excellent your product or service is, if you can’t provide what customers want in a timely manner, they won’t stick around for long. OE identifies bottlenecks and customer service risks to ensure you’re delivering what clients need, when they need it.

Inventory is accumulating

Auto makers around the world previously struggled with an influx of inventory – but using the principles of OE, many of them now make cars ‘on demand’. There are OE lessons to be learned from this sector to ensure you’re not outpacing your demand or in turn, overspending. The company  needs to be prepared for sale.

Thinking of selling your business?

No one wants to purchase a ‘dinosaur’. Implementing OE measures can make you more appealing to buyers – and ensure you get the best price possible. If one or more of the above factors apply to your current business, it’s time to start looking at ways to improve your OE. To learn more about OE, contact Gordon Chan, CPA, CA, CFE, CRMA, Enterprise Risk Services National Leader, at 403.537.8429 or [email protected].


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