When thinking about operational maturity, people tend to lean heavily on the IT side of the business. They look at the organization’s technical tools and processes and make quick assumptions that if these aspects are running smoothly, the business is in good shape.
But that’s simply not the case.
Looking at operational maturity with such a one-sided view is a surefire way to neglect other crucial components of the business that are required for growth and value creation within the enterprise.
Why does this matter?
For starters, the very livelihood of a business is determined by its level of operational maturity. It’s no secret that operationally mature companies have an easier time discovering new streams of revenue and growth. As Accenture notes, “Maturity progress increases efficiency and profits: Organizations that were one maturity level higher between 2017 and 2020 were, on average, 7.6% more efficient (lower operating expenses per dollar of revenue) and 2.3 percentage points more profitable (EBITDA as a percentage of revenues).”
So, how do you know if you’re on the right path? Here are five things that operationally mature businesses have in common.
They understand that digital transformation is about more than technology
Operationally mature companies approach digital transformation (DX) as a holistic strategy. Many businesses have made the mistake of rushing into new technology adoption as the primary driver of their DX “plan.” While DX often involves incorporating or updating new systems and processes, this is not its primary purpose. An effective DX journey begins with a thoughtful strategy that’s designed to rapidly evolve with a constantly changing market.
They eliminate tribal knowledge
As part of the overarching DX strategy, operationally mature companies work to eliminate tribal knowledge by creating processes that are independent of people. This process typically involves knowledge transfer through technology and improved information sharing. Another crucial step in eliminating tribal knowledge is to identify skills gaps, and work to fill those roles through employee training and strategic hires. An operational partner can help pinpoint the areas in need of improvement.
They’re quick to identify and remediate performance issues
According to Gartner, the average company experiences an operational performance issue three or four times a year. No matter where these issues stem from, they always require corrective action, and the speed of that action is crucial to containing the financial impact.
The same research shows that while 89% of companies can identify issues before they hit the financials, just 19% can remediate issues in a timely manner. And if that weren’t bad enough, the average organization spends 34% more time than it should remediating a performance issue, which can have grave outcomes for the business in terms of lost profit.
They’re more productive
When an organization can quickly remediate issues, it leaves time for bigger and better things. Instead of scrambling to fix what’s broken, team members are now free to focus on meaningful work. This often opens up several new avenues for focus, as leaders have more time for strategy and can tackle a new geographic market or product/service for an existing or adjacent market.
They know when to bring in partners
When there are still lingering performance issues, working with a capable partner can help reduce or eliminate these pain points. With the right operational partner, business leaders can more readily create enterprise value through the application of an extended ecosystem.
Here are a few crucial things an experienced partner can help with:
- Mentorship, coaching, and strategy
- Marketing, digital design, and development
- Objective customer experience
- Supply chain and operational performance improvement
- Administrative tasks such as bookkeeping, accounting, payroll, and IT
- Guidance on organizational design, structure, and governance
- Serving as a board member
Once all processes come together to function holistically, that’s when operational maturity reaches its peak. Organizations that take this aligned approach will continue to see success, while their less mature counterparts scramble to catch up.