Top Ten Strategic Decision-Making Tools for Operational Excellence: Leadership and Organizational Development Executive Guide Series

By Shruti Bhat

About the book:

 

Top Ten Strategic Decision-Making Tools for Operational Excellence book is your Go-To Reference Guide to increase Operational Excellence at your workplace.

The top ten tools described in this book are popular for strategic decision-making. However, they also offer another significant advantage, and that is- Operational Excellence gets multiplied manyfold when these tools are applied to various business processes in an organization. And this book tells you exactly how to do that!

 

Not many companies have explored this benefit. But as a successful Operational Excellence and Continuous Improvement Consultant, I'm using these tools for over two decades, so can say that they work super!

 

This book describes the top ten strategic decision-making tools for improving operational excellence and how to use them right. Also presented are several illustrations and examples from different industry sectors to elaborate and explain the concepts.

 

So as a decisionmaker, executive or a business-owner, you would like to take your organization on the growth mode, improve business resilience and operating efficiency, increase revenue and profit, then this book is for you!

 

About the author: Shruti Bhat PhD, MBA, CLSSBB

Dr. Shruti Bhat is a global leader in operational excellence, business transformation, innovation management and continuous improvement. She is a true Thought Leader with numerous industry awards, patents, publications and successful projects to her credit. She has a Ph.D (Tech) in Pharmaceutics, MBA and is a Certified Lean Six Sigma Black Belt and Kaizen coach. She is the Chief Operations Officer at Innoworks Inc., a Canadian Research & Management Consulting Co.

• Language: English
• Publisher: Shifting Paradigms, Canada
• Release date: May 31, 2022
• ISBN: 9781988663296

Book preview

Introduction

Extent of Operational Excellence in a business is directly related to the decisions taken by those running that business. Therefore, taking strategic decisions assumes profound significance.

Once you take a decision, the universe conspires to make it happen.      - Ralph Waldo Emerson.

Taking great decisions is a vital component for a smooth-running, growing organization. Organizational decisions can be broadly classified into three categories-

Category 1- Big infrequent decisions.

Category 2- Daily decisions.

Category 3- Small but very significant decisions.

Processes and sub-processes impacted by these three decision categories determine Operational Excellence of a company.

The first decision category comprises of decisions that have a big impact on the company’s topline and bottom-line. They are usually infrequent in occurrence. Few examples of category 1 decisions are- Decisions for strategic goal setting, mergers and acquisitions, joint ventures, CEO (and top management) hiring, governance policies, diversification, business expansions etc. Decisions in this category have a direct impact on the company’s profitability, perhaps even its existence!

The second category comprises of daily decisions. Decisions in this category may be further sub-divided as departmental decisions and cross-departmental decisions. Overall, decisions in this category are routine decisions taken for running the business effectively.

The third category of decisions are small (in comparison to category 1) yet highly significant decisions. They have a direct impact on the organization’s productivity. Decisions involving realty, machinery purchases, vendor selection, contracts, logistics, recruitments, training, employee engagement, audit readiness, operations management etc. are few examples of category 3 decisions.

How fast a decision is made that is, the speed of decision-making and how good is the decision, meaning its effectiveness and quality determine a business’s efficiency, profitability, and resilience. Hence, decision-making is a tough call even for veteran business leaders.

Fast, effective and quality decision-making, hence, requires efficient and accurate decision-making tools.

There are over forty decision-making tools in existence. But in this book, I have presented top ten proven decision-making tools that are extremely beneficial to take category 1, 2 and 3 types of decisions. As a successful Continuous Improvement and Operational Excellence consultant, I am using these decision tools for over two decades, so can say- they work super!

The forthcoming chapters will give an overview of each decision-making tool and how to use it right…

So, with out further ado, let’s get started with Tool 1: SWOT Analysis.

Top ten strategic decision-making tools for operational excellence and how to use them right

SWOT Analysis

What is SWOT analysis and what is its role in improving Operational Excellence? Let’s take a look …

Strengths Weakness Opportunities Threats- SWOT is a time-tested and effective decision-making tool. This tool originated between 1960- 1970s and is being used ever since by both large and small companies, globally.

The SWOT analysis guides decisionmakers towards more successful strategies and away from less-effective ones.

In order to make the most of the tool, organizations must apply it correctly, at the right tier in the organization and product line. Also, SWOT analysis must be combined with other strategy planning tools to get best returns.

For example, a start-up consultancy firm wants to find out whether it can expand to other geographies. To begin with, it can conduct a SWOT analysis, identifying its strengths and weaknesses, advantages and disadvantages, along with identifying potential opportunities it might benefit from and the threats/ challenges it must overcome in order to succeed. The firm can then conduct a Forced Field analysis (another strategic decision-making tool coming up later in this book), evaluate findings from both SWOT and Forced Field analysis and then take a final call.

Strategic decisions must be based on SWOT findings. The SWOT matrix is a useful tool to review regularly. SWOT analysis will help you identify your business's strengths and weaknesses so that you can decide which ones to work upon to improve your business. In addition to helping decisionmaker’s arrive at best possible decisions, SWOT analysis tool is a great facilitator to improve productivity and performance of your business.

By using SWOT analysis, organizations can assess its strengths, weaknesses, opportunities, and threats and determine which strategies can maximize the company’s performance. In many cases, the SWOT results can be applied to the entire organization, or to a particular product line. A business can use SWOT to determine which of these factors are the biggest contributors to its success and how to take advantage of them.

Tip: When you use SWOT analysis, do keep in mind the limitations of this tool. For instance, it does not account for the weight differences between strengths and weaknesses.

Another important use for SWOT analysis is during business strategy meetings. The analysis can guide discussion on the company's strengths, weaknesses, opportunities, and risks. By analyzing the SWOT analysis results with the group, ideas will flow. Once the analysis is done, it can be used to develop a strategic planning template. If the SWOT analysis is used to review multiple business goals, it can help CEOs decided what is best for the company. Combined with Prioritization Matrix (another decision-making tool, coming up later in this book), SWOT analysis guides decisionmakers to determine optimal strategy for their business.

When using SWOT analysis, you should carefully consider the strengths and weaknesses of your business and identify the opportunities and threats you face. Ideally, your business will take advantage of opportunities and overcome weaknesses. A business that is unable to solve problems in its ‘weaknesses’ will be out of luck… It can also be used to identify threats in a business. But as with any other type of analysis, you must use it wisely to maximize your business's potential.

When conducting SWOT analysis, focus on the current business objectives and the future strategic goals. Make sure that everyone on the SWOT team is comfortable with the process. Keep the SWOT analysis simple. If possible, take notes and record your ideas so that you can refer to them later. Also, keep minutes of your SWOT sessions so you can revisit whatever was discussed. This way, you can not only save valuable information but also use the meeting notes to create meeting agendas in future.

How to conduct SWOT analysis?

A SWOT analysis worksheet requires you to list items under four key elements, each one representing a specific SWOT element. The first column should list your ‘Strengths’, followed by your ‘Weaknesses’. The third column