When we think about operational excellence, our minds often jump straight to efficiency. We find it synonymous with faster processes, reduced costs, and lean systems. However, organizations these days are demonstrating that it’s about much more than that. At its core, operational excellence is a way of working that’s deeply rooted in purpose and powered by people.

That is, operational excellence is more than just efficiency. It’s a mindset, not just a method. According to transformation experts at McKinsey, like Ted Iverson and Ferran Pujol, companies that truly excel operationally are those where employees feel connected to the bigger picture. Workers at every level, from executives to frontline, understand why they do what they do.

A central theme in the McKinsey studies is the power of purpose to directly influence performance. From manufacturing floors to financial institutions, organizations that connect employees with a clear sense of “why” often outperform those that don’t.

Ted Iverson shares examples of frontline workers expressing a deep personal connection to their work, sometimes speaking with the passion of a senior executive. This is the outcome of what happens when people clearly understand how their efforts contribute to the bigger picture. This shared purpose becomes a unifying force encouraging continuous improvement.

For example, one mining company in South America tied its production goals to local community impact. Every ton of copper mined translates into scholarships and better healthcare. So, a simple shift helped frontline workers see how their everyday tasks contributed to something meaningful, and that’s when performance soared.

But purpose alone isn’t enough. For operational excellence to thrive, it needs to be built into the system. That means aligning key performance indicators (KPIs) with the company’s mission. Iverson warns that if KPIs don’t reflect what truly matters, rather, they can actually work against your goals. Instead, performance metrics should reinforce the organization’s values, not just track short-term gains.

One of the most effective ways to make this connection real is through storytelling and customer feedback. When frontline teams hear firsthand how their work positively impacted a client, it brings a sense of pride and ownership that no dashboard ever could. Still, many leaders struggle to cascade this sense of purpose throughout the organization.

Another observation is that while executives often understand the mission, they don’t always translate it into the day-to-day lives of employees. Without that translation, the purpose remains an abstract concept and misses the impact. At the same time, while digital tools and automation are essential for modern operations, experts emphasize that tech should be used to enhance culture, not replace it.

When companies pursue digital transformation without aligning it with their values, they risk creating more confusion than clarity. But when technology is used intentionally to support a shared way of working, it becomes a powerful catalyst for change.

In the end, operational excellence isn’t a box to tick. It’s a journey grounded in purpose, powered by people, and guided by systems that support both. It’s about creating a culture where everyone is invested, empowered, and clear on how their work contributes to something bigger. And that’s when organizations thrive with passion and purpose.