Operational excellence has long been a managerial religion, enshrined in programmes from Lean to Six Sigma. Yet a landmark study published in Harvard Business Review by Vijaya Sunder M and Kevin Linderman reveals an uncomfortable truth: adopting the same improvement practices does not produce the same results. Studying four global banks and three healthcare firms, the researchers found the gap between laggards and leaders lay in whether firms had built four cumulative capabilities in sequence. For Ireland, where Enterprise Ireland targets a 3% annual productivity increase, the implications are acute.

The research makes a compelling case that improvement programmes pursued in isolation are a trap. Irish companies that have invested in Lean and Six Sigma have often generated short-term wins without lasting competitive shift. The study argues that only firms building all four capabilities sequentially sustain advantage, challenging whether effort and investment alone suffice. The real question for Irish leaders is not whether their organisations are working hard, but whether they are building the right foundations in order.

The Discover capability, the ability to sense inefficiencies and external signals early, is where many organisations stumble first. High-performing firms combined real-time process monitoring with active scanning of competitor moves, customer expectations, and technology trends. The KPMG and Industry Research and Development Group Innovation Index 2025 found that operational efficiency surged as a priority for Irish companies from 31% to 52% between 2024 and 2025. Yet 64% of respondents cited budgetary constraint as the biggest barrier to innovation, risking a narrowing of the scanning horizon to cost-cutting rather than outward intelligence-gathering.

The Improve and Align capabilities address a persistent failure mode: treating improvement as one-off projects rather than a cumulative learning system connected to strategy. Enterprise Ireland subsidises up to 70% of improvement investment for small firms and has supported over 2,500 micro enterprises through lean programmes, yet starting lean is not the same as embedding it. The Transform capability proved the most differentiating: only firms that built all four capabilities in sequence sustained competitive leadership.

Three actions would help Irish organisations close this gap. Businesses should treat Discover as a dedicated intelligence function, pairing internal process metrics with active scanning of competitor moves and emerging technologies. Improvement programmes must be redesigned as learning systems, with shared knowledge repositories linked to strategic priorities rather than isolated efficiency targets. Senior leaders should invest in formal Transform structures, such as dedicated innovation teams with performance targets tied to future revenue, using Enterprise Ireland’s Operational Excellence offer as a vehicle for sequenced capability investment.

Operational excellence is entering a more demanding era. The research by Linderman and Sunder challenges organisations to think in terms of capability architecture rather than practice adoption alone. For Ireland, where lean investment is active, government support is substantial, and competitive pressure is intensifying across indigenous and multinational firms, the cumulative capabilities model offers a disciplined framework for durable advantage. The firms that lead the next decade, in Ireland and globally, will be those that build each capability deliberately, in sequence, and without skipping steps.

(The views expressed by the writer are his/her own and do not necessarily reflect the views or positions of BusinessRiver.)