Operational Excellence Insider: Issue 07

Most business owners I talk to are not lacking ambition. They are not lacking talent. What they are lacking is the operational infrastructure to respond to disruption without losing momentum. According to a 2026 Smartsheet survey of 1,550 operations professionals, only 8% of organizations believe they have achieved operational excellence. Eight percent. That means 92% of businesses are still figuring it out. This issue is about closing that gap, not by adding more tools or more people, but by building the kind of operational resilience that lets your business adapt, absorb disruption, and keep moving forward regardless of what the market throws at you.

There is a pattern I see repeatedly in growing businesses. Things run smoothly until something unexpected happens: a key employee leaves, a major client reduces scope, a vendor fails to deliver, or the market shifts faster than anyone anticipated. And suddenly the business that looked strong on paper is scrambling to keep up.

That is not a bad luck problem. It is a resilience problem.

Operational resilience is the ability of a business to absorb disruption, adapt quickly, and continue delivering results without losing significant ground. It is not the same as efficiency. A business can be highly efficient and completely fragile at the same time. Efficiency optimizes for normal conditions. Resilience prepares for abnormal ones.

According to Smartsheet's 2026 operational excellence report, 63% of operational professionals struggle to balance efficiency with the need to adapt to business changes. Nearly all, 99.6%, say business changes require them to shift priorities, with 46% saying this happens frequently. The businesses that thrive in this environment are not the ones that predicted every disruption. They are the ones that built systems flexible enough to respond to disruptions they did not predict.

Here is how to build that kind of operational resilience in a growing business:

A single point of failure is any person, process, system, or relationship whose absence or breakdown would significantly disrupt your operations. In most growing businesses there are more of these than the founder realizes.

Common single points of failure in $2M-$50M businesses include:

A founder or key leader who is the only person who knows how to do something critical. A single vendor or supplier with no backup. A manual process that only works when one specific person executes it. A client relationship that represents more than 30% of revenue with no contract protection.

Smartsheet's research found that 61% of operational leaders lack full visibility into the work being done across their organization. You cannot protect against what you cannot see.

What to do this week: Map your three most critical operational functions. For each one ask: if the person, system, or relationship that makes this work disappeared tomorrow, what would happen? If the answer is "we would be in serious trouble," you have found a single point of failure that needs immediate attention.

Redundancy is not waste. It is insurance. In aerospace operations, redundancy is not optional; it is engineered into every critical system because the cost of failure is too high to accept. The same logic applies to your business operations, even if the stakes are different.

Redundancy in a growing business looks like:

Cross-training at least two people on every critical process so knowledge is never held by one person alone. Maintaining relationships with backup vendors for your most critical inputs. Documenting every workflow so that any qualified person can execute it without tribal knowledge. Building financial reserves that give you runway to absorb a disruption without making panicked decisions.

What to do this week: Identify your one highest-risk single point of failure from Step 1. Design one redundancy measure for it: a cross-trained backup, a documented process, or a backup vendor relationship. Implement it within thirty days.

You cannot respond to disruption you cannot see coming. Most growing businesses find out about operational problems when a client complains or a deadline is missed. By then the damage is already accumulating.

Smartsheet's 2026 research found that only 28% of operational leaders say they always have access to the right operational data and insights they need to anticipate disruptions and make timely informed decisions. That means 72% of leaders are flying blind on a regular basis.

Real-time operational visibility does not require expensive software. It requires three things: the right metrics tracked consistently, a review rhythm that catches problems early, and a culture where people surface issues before they escalate rather than after.

What to do this week: Choose three leading indicators for your most critical workflow, metrics that signal a problem is developing before it becomes a crisis. Review them every Monday morning. Create a simple one-page dashboard your leadership team can review in fifteen minutes. That fifteen minutes is the difference between catching a problem early and managing a crisis late..

The most fragile businesses are the ones where every significant decision flows through the founder or one senior leader. When that person is unavailable, traveling, or overwhelmed, the business stalls. Every hour of delay in a growing business has a cost.

Operational resilience requires distributed decision-making: clear criteria that allow your team to make good decisions independently, without waiting for approval on every issue that arises.

According to McKinsey's 2026 research, businesses using AI to support operational decision-making can expect a 25 to 55% increase in productivity. But AI-supported decisions still require humans who are empowered to act on them. Technology without decision-making authority produces analysis, not action.

What to do this week: Identify the five decisions that come to you most frequently that your team could make independently with the right criteria. Write down the decision criteria for each one. Share them with your team this week. That single action begins the process of distributing decision-making capacity throughout your organization.

The Bottom Line

Operational resilience is not built in a crisis. It is built in the quiet periods before one arrives. The businesses that will lead in 2026 and beyond are not the ones that worked hardest during disruption. They are the ones that built the systems, the redundancies, and the visibility to keep moving when disruption hit.

Start with one single point of failure. Fix it completely. Then move to the next. That is how resilient businesses are built, one deliberate decision at a time.

Several years ago I worked with a founder who had built exactly the kind of business most entrepreneurs dream about. Strong revenue. A loyal client base. A team of twenty-five who genuinely believed in the mission. From the outside everything looked solid.

Then their largest client, representing nearly forty percent of their revenue, gave them ninety days notice of contract non-renewal.

It was not a performance issue. The client had been acquired and the new parent company had an existing vendor relationship. It was simply business. But the impact on this founder's company was immediate and severe.

Within two weeks three things became painfully clear. First, the operational processes that had been built around serving this one large client were not easily transferable to smaller clients. The workflows, the reporting formats, the delivery cadence; all of it had been customized for one relationship over years. Second, the team's capacity had been structured around this client's volume. Without it they were significantly overstaffed with no immediate pipeline to fill the gap. Third, the founder had no real-time visibility into the financial runway. She had a general sense of the numbers but not the precise picture she needed to make fast, confident decisions under pressure.

None of these were new problems. They had existed for years, hidden by the stability of a large anchor client.

We spent the next sixty days doing three things simultaneously. We documented and standardized the core delivery processes so they could serve multiple client types rather than one specific relationship. We created a simple financial dashboard that gave the founder daily visibility into runway, pipeline, and burn rate. And we identified two senior team members who could take on client relationship responsibilities that had previously sat exclusively with the founder, freeing her to focus entirely on business development during the recovery period.

The business survived. It took twelve months to fully replace the lost revenue but it did replace it with a more diversified client base and a far more resilient operational foundation than it had before the disruption.

The near-miss became the catalyst for building a business that could actually withstand the next one.

That is the real value of operational resilience. It is not just about surviving disruption. It is about coming out the other side stronger and more capable than you were going in.

How resilient are your operations right now?

If you read this issue and found yourself identifying single points of failure, visibility gaps, or decision-making bottlenecks in your own business, the next step is understanding exactly where your biggest risks are before disruption forces you to find out the hard way.

The 30-Day AI Readiness Assessment gives you a structured, systematic way to identify your operational gaps and build a thirty-day plan to address the most critical ones.

In four guided weeks you will:

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See you on June 15th. Until then, build for disruption before disruption builds against you.

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