IMPLEMENTING OPERATIONAL EXCELLENCE IN VUCA ENVIRONMENTS: A STUDY OF THE INSURANCE INDUSTRY IN SOUTH AFRICA

Abstract

Operational Excellence (OE) has been identified as a key strategic enabler for those organizations which are dealing with Volatile, Uncertain, Complex, and Ambiguous (VUCA) environments. This research aims to explore the implementation process, effectiveness, and sustainability of an OE initiative in an organization which has been dealing with severe internal as well as external issues. In this research, a quantitative survey research design has been used to collect data from participants to measure their views on key drivers of OE, involvement of management in OE activities, governance mechanisms for OE, operational outcomes, and sustainability. The findings suggest that technology, information systems, and communication are the key enablers for the success of OE, with more than 40% agreement or strong agreement on their importance. Perceptions about customer ownership, innovation, and continuous improvement received mixed responses, which may be attributed to the difference in opinion among the respondents. Communication and involvement of leaders in the implementation of OE strategies were found to be inconsistent, with major gaps in promoting an OE culture and involving employees/customers in strategy development. In addition, major internal and external barriers to the success of OE were identified, including teamwork, change adaptation, financial risks, and lack of agility in the organizations. Governance, alignment, product quality, delivery, and maintenance received mixed responses, which may indicate uneven improvements in their operation performances. The sustainability of OE has been a cause of concern, with some doubts being raised about the effectiveness of the leadership and the adequacy of the enabling factors. While some respondents have recognized the potential of OE in bringing future improvements in performance, almost the same number of respondents have shown some doubts. The findings of this study have significant implications in that while the basic enabling factors of OE are in place, its proper realization and sustenance are required in a VUCA environment.