Operational excellence is often introduced through two familiar names: Lean and Six Sigma. For many organisations, that has been useful. Lean brought focus on waste, flow, and value. Six Sigma brought discipline around variation, data, and process control. Both still matter. They remain important foundations.

But operational excellence is now much broader than either of those methods on their own. McKinsey’s more recent framing of next-generation operational excellence describes it as starting with lean principles, investing in people, and using technology for collaboration. In other words, the modern version is no longer just a toolkit. It is a wider operating philosophy.

Lean and Six Sigma are foundations, not the full model

There is nothing wrong with Lean or Six Sigma. The problem comes when organisations mistake the tools for the whole system.

A company can run Kaizen events, map processes, track defects, and complete DMAIC projects, yet still struggle with weak leadership behaviours, poor cross-functional alignment, digital confusion, slow decisions, and low workforce engagement. In those cases, the organisation may be using improvement tools, but it is not yet operating excellently.

That distinction matters because operational excellence today has to work in a more complex environment than the one in which Lean and Six Sigma first gained prominence. Processes are more digital, more interconnected, and more exposed to changing customer expectations, workforce pressures, cyber risk, and supply-chain disruption. McKinsey argues that high performers now routinely reimagine multiple elements of excellence, not just continuous improvement tools.

Operational excellence now includes people capability

One of the biggest expansions in the idea of operational excellence is the growing emphasis on people.

Older improvement models sometimes treated people mainly as participants in the process or recipients of training. The newer view is broader. People capability is now part of the operating system itself. McKinsey’s next-generation operational excellence explicitly includes investing in people, while the World Economic Forum’s Future of Jobs Report 2025 says analytical thinking remains the top core skill employers want, followed by resilience, flexibility, agility, leadership, and social influence.

That means operational excellence now depends on whether teams can think critically, solve problems well, collaborate across functions, adapt to change, and make good decisions under pressure. A process can be well designed on paper, but if the people inside it are overloaded, unclear, or underdeveloped, performance will still suffer.

So operational excellence is no longer just about better methods. It is also about better thinking and better capability.

It now includes digital and technology-enabled work

Another reason operational excellence is more than Lean and Six Sigma is that technology has changed what good operations look like.

Digital tools, automation, analytics, and AI are now shaping how work gets done. But these tools do not replace operational excellence. They expand it. McKinsey’s 2026 operations work describes a “race to rewire,” where organisations are redesigning end-to-end workflows rather than simply adding digital tools to old processes.

This has major implications. A business can no longer treat operational excellence as a separate activity from digital transformation. The two are increasingly linked. Good operational performance now requires the ability to:

• simplify before automating
• design workflows that work across systems
• use data to support better decisions
• govern technology well
• ensure digital tools actually improve work rather than just adding activity

Lean and Six Sigma still help with some of this, but they do not fully cover it.

It includes cross-functional integration

Traditional improvement work was often carried out within departments or local processes. But many of today’s biggest performance problems sit between functions, not within them.

Delays often happen in handoffs. Quality failures often come from unclear interfaces. Decision bottlenecks often come from fragmented ownership. Customer frustration often reflects poor coordination across teams rather than poor performance in one isolated step.

That is why modern operational excellence has to be more cross-functional. McKinsey’s 2025 operations commentary points to cross-functional collaboration as a major productivity enabler. Operational excellence is no longer only about making one process better inside one team. It is about improving the performance of the wider system.

This is one reason a narrow “Lean equals operational excellence” mindset can become limiting. Lean tools can help expose waste, but cross-functional system design and alignment require something broader.

It includes resilience and adaptability

Another major shift is the growing importance of resilience.

For many years, operational excellence was often associated mainly with efficiency, consistency, and cost improvement. Those goals still matter, but they are no longer enough. The European Commission’s Industry 5.0 framework places resilience, sustainability, and human-centricity at the heart of the future industrial model.

This is important because a process can be highly efficient and still be fragile. It may perform well in normal conditions but fail under disruption. It may be optimised for throughput but weak at recovery. It may reduce labour hours while increasing dependency on brittle systems or narrow expertise.

Operational excellence today must therefore ask broader questions:

• Is the process efficient?
• Is it resilient?
• Can it recover?
• Can people use it effectively?
• Does it still work when conditions change?

That is a bigger agenda than classic Lean or Six Sigma alone.

It includes sustainability and human-centred design

Industry 5.0 also pushes operational excellence beyond traditional efficiency metrics by linking performance to sustainability and worker wellbeing. The European Commission explicitly frames the future of industry around human-centric, sustainable, and resilient production.

This changes how we think about excellence. Waste is no longer only scrap, waiting, overproduction, or defects. It can also include unnecessary energy use, poor usability, excessive complexity, worker frustration, and designs that create avoidable stress or confusion.

A process cannot really be called excellent if it is technically efficient but difficult for people to use, environmentally wasteful, or too brittle to sustain under pressure.

That is why operational excellence is widening. It is becoming more connected to the quality of the overall operating model, not just the efficiency of individual processes.

Leadership matters more than tools

One of the clearest signs that operational excellence is more than Lean and Six Sigma is that leadership behaviour often determines whether any method actually works.

A company can train people in tools and still fail because leaders reward speed over understanding, activity over outcomes, or closure over learning. On the other hand, organisations with strong leadership habits often sustain improvement even when their methods are relatively simple.

Modern operational excellence therefore depends heavily on leadership behaviours such as:

• staying close to the work
• asking better questions
• rewarding honesty
• supporting learning
• thinking cross-functionally
• connecting technology to purpose

These are not Lean tools or Six Sigma tools. They are management behaviours. Yet they are central to sustained excellence.

So what is operational excellence now?

Operational excellence today is best understood as a disciplined way of running an organisation so that it can improve performance continuously across process, people, technology, and decision-making.

Lean and Six Sigma still belong inside that model. They remain valuable. But they are components, not the full definition.

The broader model now includes:

• process improvement
• critical thinking
• workforce capability
• cross-functional collaboration
• digital fluency
• resilience
• human-centred design
• sustainability
• leadership behaviour

That broader view is much closer to what organisations actually need in 2026.

Conclusion

Operational excellence is more than Lean and Six Sigma because modern performance depends on more than process tools. It depends on people, leadership, digital integration, resilience, sustainability, and the ability to improve the whole system rather than just isolated parts of it. McKinsey’s next-generation operational excellence work, the European Commission’s Industry 5.0 agenda, and the World Economic Forum’s 2025 skills outlook all point in the same direction: excellence is becoming broader, more human, and more connected to how organisations really operate.

Lean and Six Sigma still matter. But operational excellence has grown beyond them. The organisations that understand that will be better placed to perform in a world that is more digital, more complex, and more demanding than ever.