8 Keys to Achieving Operational Excellence in Construction

Operational excellence (OPX) is a fluid concept in today’s business landscape. However, no matter how it’s depicted, operational excellence is a necessity for construction companies mapping out their plans to tackle the challenges — and embrace the benefits — that AI and technology are bringing to the industry.

This article explores the fundamental principles that companies are applying in their journey to achieve OPX. It begins with understanding current operations and setting clear expectations of what, exactly, excellence means to the company.

Venturing Into OPX

What is OPX? The answer is, “It depends.” That answer might not seem satisfying, but the most important element of OPX is applying it to the unique needs and goals of each company.

In short, OPX is the science and art of figuring out how to effect change within any and all processes to accomplish a business’s goals. Forward-thinking, proactive companies are disrupting their organizational structures and making investments to get there, but the process requires deep understanding, methodical strategy and even taking a few risks.

Based on companies that are making steps in this direction and seeing some success, operational excellence incorporates the following eight elements.

1. Chart a course.

OPX changes mindsets enterprise-wide from a fixed orientation on current and legacy processes into growth mindsets. The decision is made to strive for operational excellence, and multiple people within the enterprise begin identifying the things that the company is trying to accomplish.

2. Share responsibility.

OPX is holistic, so ideally, it flows from the minds of a multidisciplinary, cross-functional team dedicated to distilling the company’s vision and devising the technical means of accomplishing it. They should be willing to modify or bend any particular process needed to reach OPX goals.  

Often, these are people in middle management, given the responsibility of executing the executive team’s vision in a way that solves entrenched problems in the field. They might be project executives, construction management software administrators, estimators or anyone else tasked with transforming obsolete processes into streamlined digital versions of themselves — but with an eye on overarching business goals.

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3. Orient toward change.

OPX succeeds in companies built to change. Their leaders establish goals — even the pie-in-the-sky ones — and management and directors set them to key performance indicators (KPIs).

This middle layer of people sets targets to aim for and states the steps they will take to contribute to reaching the goal. It might be as simple as collecting benchmark data to assess the current status of a process that can be meaningful to OPX.

These team members establish action plans based on thorough knowledge of how processes are currently working — and not working — according to the people who are using them day after day.

4. Think beyond IT.

 It can be tempting to see OPX as purely a technical issue and, therefore, assign it to IT, but that would be shortsighted. IT does the vital work of keeping servers running and software connected, but it’s not the place for strategic movement.

5. Pursue adoptable platforms.

Change happens when people wearing the boots on the ground are willing and able to put new techniques and standard operating procedures to use.

User acceptance emerges from an OPX team committed to individualized deployment, setting expectations around the use of the tool, explaining the whys and making sure it functions as promised.

6. Analyze company data.

Data delivers insights that are integral to OPX. If a new tool is successfully adopted, the data will reveal whether the change is moving the company closer to corporate goals. And if it is working, is it advancing overall operational excellence, compared to pre-change days?

7. Leverage lean principles.

Smart business practices abound that can apply to achieving operational excellence. Because goals are often finance-related, lean principles — which focus on extracting maximum profit through collaboration and minimizing waste — can be a tool for achieving financial KPIs within the OPX strategy.

8. Validate for compliance.

Just because someone thinks up a solution doesn’t mean that people will comply.

For example, if KPI is about measuring a project’s success through pass or fail rates, but only 30 of the expected 100 units of information are entered, that’s a compliance issue. Why is it happening? It’s back to change management and delivering solutions that take away headaches for the people deploying them.

Operating at the Highest Level

Understanding OPX requires a deep dive into company goals, processes, structures and people. As technology reshapes the construction industry, the most compelling thing is getting started — taking the first steps toward applying technology to the goals designed to assure a company’s continued relevance, standing and prosperity in a dynamic and changing business environment.

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