“Operational Excellence isn’t built on technology, it’s built on intentional design. When the foundation is weak, no amount of digital transformation can prevent the cracks from spreading.”
In 2025, businesses are facing a hidden operational crisis stemming from the pandemic. Despite technological investments, true Operational Excellence remains elusive because organisations haven’t properly rebuilt their operational foundations. This article explores the decline in Operational Excellence, its causes, and how business leaders can reverse this trend for sustainable growth.
The Pandemic’s Hidden Legacy
When COVID-19 swept across the globe, businesses scrambled to maintain continuity as their carefully constructed operational frameworks crumbled overnight. Now, in 2025, several years after the acute phase of the pandemic, a troubling trend has become apparent: Operational Excellence has significantly declined across industries, yet it’s barely discussed in boardrooms focused on revenue recovery.
The evidence is stark: Total factor productivity fell by up to 6% during 2020-2021, and many organisations have failed to recover these operational losses. To put this in perspective, this represents three times the productivity drop seen during the 2008 financial crisis and would typically erase several years of operational progress. This wasn’t merely a temporary disruption, it exposed fundamental weaknesses in how businesses structure their operations, weaknesses that continue to undermine performance today.
What if the operational models we’re clinging to were designed for a world that no longer exists?
This question confronted me when working with a financial wellbeing company that was looking to better understand their customers. Like many organisations, they had the components for success, talented account managers, established processes, and modern systems, yet these elements weren’t working in harmony.
Their challenge wasn’t unique. There’s a dangerous misconception pervading business leadership today: that the technology investments made during the pandemic have “fixed” operational challenges, or that Operational Excellence naturally emerges when you combine talented teams, established processes, and modern systems.
“The pandemic didn’t break operational models; it merely revealed which ones were already broken. In our rush to ‘return to normal,’ we’re rebuilding on the same fault lines.”
The reality is far different. Few organisations have actually re-mapped how their business operates following the pandemic disruption. Leaders assume their operations are functioning effectively because they’ve implemented new technologies and hybrid work policies, but MIT research reveals that simply assembling these components doesn’t guarantee operational success.
Perhaps most tellingly, a McKinsey and Harvard Business School study found that organisations with agile operational models before COVID-19 significantly outperformed their peers, while those lacking operational resilience continue to struggle with profitability even years after the initial crisis.
The Foundation That’s Crumbling Beneath Us
Think of Operational Excellence as the foundation of a building. When it’s solid, you don’t notice it, everything above simply works. When it weakens, tiny cracks appear throughout the structure long before catastrophic failure.
The consequences of this operational decline extend far beyond inefficiency:
- Supply chains remain vulnerable, as evidenced by the semiconductor shortage that saw order lead times balloon from 30 to 50 days and freight costs multiply 7-8 times
- Employee engagement has suffered, with fragmented operations making it harder for talent to deliver their best work
- Customer experiences have deteriorated as operational disconnects create friction points
- Partner ecosystems are underperforming due to inadequate operational integration
The financial impact is equally concerning. Former Cisco CEO John Chambers’ prediction that 50% of Fortune 500 companies might not exist in 10 years if they fail to innovate and optimise Operational Excellence seems increasingly prophetic.
“In a world where everyone has access to the same technology, Operational Excellence becomes the true differentiator. It’s not what tools you have, but how seamlessly they work together to create experiences your competitors can’t match.”
3 Warning Signs Your Operational Excellence is Declining
- Increasing customer effort. When customers must work harder to do business with you, it signals operational breakdowns
- Rising internal friction. When employees spend more time navigating processes than delivering value
- Declining partner engagement. When your ecosystem partners begin limiting their integration with your business
Is Your C-Suite Missing Something Critical?
Here’s a provocative question: Does your company have a Chief Operational Excellence Officer (COEO)? If not, why not?
“Every business function has operations running through it, yet few businesses have operations represented in the C-suite. The Chief Operational Excellence Officer isn’t a luxury, it’s the missing link between strategy and execution.”
The greatest concern I see today is businesses without any C-Suite representation in operations when operations run through every part of the business. While we have Chief Financial Officers, Chief Marketing Officers, and now Chief Technology Officers, the function that ties all these areas together, operations, is often left without executive representation.
This leadership gap at the highest level explains why Operational Excellence continues to decline despite its critical importance to business success.
Short-Term Thinking in a Long-Term Crisis
Today’s business leaders face tremendous pressure from investors and shareholders to deliver immediate returns, especially after pandemic-related losses. This pressure often leads to cost-cutting measures, particularly workforce reductions, rather than the operational investments needed for sustainable growth.
“Cost-cutting creates the illusion of operational efficiency, but often destroys Operational Excellence. One saves money today; the other creates value tomorrow.”
This creates a dangerous paradox: when conducting business transformation, organisations actually need more resources temporarily, not fewer, to maintain business as usual while implementing changes. The competing priorities of short-term financial results and long-term Operational Excellence create a tension that many businesses are resolving by sacrificing the latter.
Leadership: The Missing Ingredient
The most critical factor in Operational Excellence isn’t found in technology investments or process documentation, it’s leadership at every level of the organisation, along with alignment among all stakeholders with financial interests in the business.
“The greatest operational risk facing businesses today isn’t disruption, it’s leadership that sees operations as a cost centre rather than the beating heart of customer and employee experience.”
This leadership gap is particularly apparent in how businesses are approaching artificial intelligence. According to the 2024 Global State of Process Excellence survey, 35% of organisations plan to deploy AI in operations, yet most lack the operational leadership framework to effectively integrate these powerful tools.
I’ve observed that AI amplifies existing operational patterns, it makes good operations better and poor operations worse. Without strong operational leadership to validate outputs and build trust in AI-enhanced processes, these investments will fall short of their potential.
The Speed Misconception
There’s a widespread belief that the remarkable speed of AI is how businesses should be operating. However, this overlooks the complex tapestry of building blocks and factors that must be aligned to achieve such efficiency.
“The most sophisticated technology stack is worthless without an operational blueprint that puts human experience at its centre. Excellence isn’t automated, it’s orchestrated.”
Operational Excellence requires strategic vision, targeted investment, and skilled implementation. It’s not something that materialises simply because you’ve purchased the latest technology. It’s a deliberate cultivation of people, processes, and systems working in harmony, guided by intentional leadership.
The Three Dimensions of Operational Excellence
True Operational Excellence creates ease of doing business across three crucial dimensions:
1. For Employees: When operations are streamlined, employees can focus on their core expertise rather than fighting against processes. This isn’t merely about efficiency, it’s about enabling your talent to deliver exceptional results without unnecessary friction.
2. For Customers: When internal operations are seamless, customers feel it through faster response times, more consistent service, and the sense that they’re dealing with a unified organisation rather than disconnected departments.
“True Operational Excellence creates the same feeling as perfect service, it becomes invisible. Your customers, employees, and partners shouldn’t have to think about your operations; they should simply experience the ease of doing business with you.”
3. For Partners: Partners are extensions of your business. When your operations are convoluted, these complications multiply across partner relationships, limiting growth potential. Streamlined operations enable partner ecosystems to thrive, creating exponential rather than incremental growth.
The Path Forward
Business leaders face a critical choice: continue focusing narrowly on revenue recovery while Operational Excellence deteriorates, or recognise that sustainable growth requires rebuilding operational foundations.
The organisations that will thrive in the post-pandemic landscape are those that:
- Take stock and assess operational health. Before rushing to solutions, understand your current operational state
- Think big but start small. Use process mining to identify critical operational bottlenecks
- Foster cross-departmental collaboration. Break down the silos exposed during the pandemic
- Invest in operational leadership. Recognise that excellence requires alignment from the C-suite to the frontline
- Leverage AI thoughtfully. Use AI as an amplifier of human operational leadership, not a replacement
- Balance short-term demands with long-term investments. Create space for transformation while maintaining business continuity
A Real-World Transformation
Let me share how a focused operational approach transformed one organisation:
A financial wellbeing company was looking to better understand their customers but had no formal feedback mechanisms in place. After we showcased our Operational Excellence Blueprint, they recognised the need to prioritise customer and partner feedback to align with their business goals.
By implementing a structured feedback framework that included a comprehensive question bank, cloud-based call recording and transcription, and standardised account management processes, they achieved:
- 100% real-time feedback collection across key customer satisfaction metrics
- Enhanced customer insights through structured feedback mechanisms
- Streamlined account management with consistent service delivery
- Significant efficiency gains by reducing manual data entry
- Improved client relationships and retention through proactive issue resolution
This transformation wasn’t about adding technology, it was about reimagining how their operations could work in harmony to deliver exceptional value.
Crafting Tomorrow, Today (CTT)
At 236 Works, we’ve developed the Operational Excellence Blueprint specifically to address this operational decline. Our approach isn’t about quick fixes, it’s about creating a strategic architecture unique to each business and their journey, built on three key pillars: Business Value, Business Architecture, and Technical Architecture.
Every business I encounter today is struggling with competing factors: the pressure to grow revenue, cut costs, and innovate faster than competitors, all while battling FOMO (Fear Of Missing Out) on the latest trends. This challenging environment makes it difficult for leaders to maintain operational focus and strategic direction.
I invite business leaders to pause and take stock. Ask yourself: Is your business in good operational health? If you’re unsure how to assess that, consider bringing in experts to help evaluate your current state. Then draw a line, regroup as a team, and build your business back up on new foundations for the next phase of growth for your employees, customers, partners, and suppliers.
This isn’t just about efficiency, it’s about creating the operational foundation that enables sustainable growth, exceptional customer experiences, and a workplace where talent can thrive.
The pandemic forced businesses to change how they operate. Now, intentional Operational Excellence will determine which ones lead in the years ahead.
References
- MIT Press: “The Impact of Covid-19 on Productivity” (2025)
- BPM Institute: “Operational Excellence and VSaaS: Digital Transformation” (2025)
- ARC Advisory: “Operational Excellence (OpX) Achieved by Companies” (2023)
- PEX Network: “AI in Operational Excellence” (2025)
- Whatfix: “The Path to Operational Excellence” (2025)
- PMC: “Unifying Efforts to Rebound Operational Excellence” (2021)
What is the state of Operational Excellence in your organisation? If your foundations took a knock and were never properly rebuilt, an Operational Health Check is the place to start. To talk it through, get in touch.