In the world of business, operational excellence is more than just a buzzword—it’s a philosophy that drives success. It’s about aligning people, processes and technology to create value, enhance efficiency, foster innovation and build a work environment that encourages collaboration and empowers individuals to reach their full potential.
For the past 20 years, Audie Penn has specialized in operational excellence, a concept he was first introduced to in the 1990s when he worked with a Japanese sensei. His experience opened a pathway for him to build a career in business consultancy, helping companies optimize their operations, implement strategic improvements and achieve growth and success.
Today, Penn is managing partner of Faro Partners, a business consultancy that specializes in empowering companies to unlock the potential of their people and processes. He has used his decades of hands-on experience, collaboration with industry giants and leadership to create Faro’s approach to operational excellence.
Under Penn’s leadership, Faro Partners has organized numerous operational excellence workshops for companies across various industries. The insights from these workshops, along with the company’s work with its business clients, have allowed Faro to develop its own approach to achieving operational excellence, which it calls the 9 Steps to Operational Excellence. Penn says this nine-step method has proven to be highly effective in streamlining processes, optimizing productivity and enhancing overall efficiency for businesses.
A four-system approach
Penn took Faro’s method a step further to create what he calls the four-system approach, which allows him to better identify the key challenges that are slowing down businesses across four areas: strategy, management, performance and leadership.
“The four-system approach serves as a compass, guiding businesses through the intricate interplay between strategy, management, performance and leadership. We developed this transformative methodology to help businesses better grasp the different elements that contribute to operational excellence and help them get to the solutions much faster,” says Penn, who developed the concept even further by building a complete roadmap to enterprise operations excellence. “The roadmap really encapsulates the accumulated learnings over the past several decades of working in the field of operational excellence.”
When helping businesses adopt operational excellence and process improvement, Penn draws attention to the core elements that drive a company’s success: its processes and its people.
“In every task we encounter in our work, there’s a functional element and a relational element,” Penn says. “If we’re not paying attention to both, we’re going to be suboptimal in terms of creating the potential value that we have in front of us.”
The functional element refers to all the work that needs to be done, and the relational element is the interactions between people as they accomplish the work. In the four-system approach, strategy, management and performance are all part of the functional element, while leadership is part of the relational element. Working on a company’s problems from this perspective, Penn explains, allows him to uncover problems that may be easily overlooked using conventional methods.
The most important tool that helps Penn really pin down the key challenges of a company is asking the right questions. “A question I love to ask executives is, what do you want that you don’t have, and what do you have that you don’t want? You would be amazed at how frequently they say, ‘No one has ever asked me that,’” Penn says. “So that is how we start understanding the pain points of a company and developing the strategy.”
Having the right culture is key
Penn now freely talks about the concept and shares his insights in the training Faro Partners organizes for businesses and during interactions with clients because he firmly believes that sharing knowledge and empowering others is not just a professional responsibility but the right thing to do.
“Taiichi Ohno, the renowned Japanese industrial engineer who was one of the pioneers of this philosophy about operational excellence, was completely open and transparent about his production system. Today, I know why. Even if you were to have this roadmap in front of you, the chances of you doing it well, or even understanding it, is very slim,” Penn says. “The reason is they don’t have the right culture. And it doesn’t matter if you’re a Japanese company or an American firm, you have to adopt the right culture because culture is local.”
