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Operations Management: It Ain’t What You Do…

...It's the Way That You Do It!

There was this sea battle in ancient times where one side had formulated a clever set of manoeuvres they were sure would outfox the enemy. However, in the heat of battle, they were just too slow at performing their cunning plan. The enemy easily avoided them and counterattacked, eventually winning the battle.

'Before you can steer’, said the enemy commander, ‘you have to be able to row’.

And it’s still true now. Before you can implement clever or innovative strategies (steer), you have to be able to get the basics of business right (row). You have to have the fundamental resources and processes that have built the capability to change course without any loss of effectiveness.

That is what operations management should be about: it’s not just about what you do, but about the way that you do it. Operations management is fundamentally about getting things done: how you make things happen, how you release whatever expertise you have so that your business can create value.

It is through your operations that you serve your customers. It is through your operations that you use your resources to their best advantage. And it is through your operations that you make strategy into reality. It is how you make things real. It is how you navigate the translation from an idea into practice.

There is little that is more frustrating than potentially good business decisions being rendered impotent because of poor operations capabilities.

Much of what makes a successful operation is how it can bring together the strategic and the operational, meaning that all great operations managers need to have multiple personalities. One part needs to focus on the complex detail that characterizes all operations; it needs to have a grasp of what is happening, and what should be happening, almost minute-by-minute at the workplace. The other part needs a more strategic vision. It needs to set the resource and process decisions that make up the bulk of an operations manager’s role. Being able to do both of these things simultaneously is what, at their best, gives operations managers a capability culture.

The idea of a capability culture is fairly straightforward: everything that the operations function does is geared toward building the capabilities that will encourage the business as a whole to reach a sustainable competitive advantage. It means that the operations function can bring something exceptional and distinctive to the business. Exceptional in the sense that its performance is outstanding when compared with competitors or similar operations, and distinctive in that it is willing to be original and innovative in how it achieves this performance.

A capability culture for operations values excellence and originality. A capability culture means that every activity of your operations function is treated as an opportunity to learn, enhance operating knowledge and therefore improve its performance. It means that your operations are always intent on synthesizing new knowledge from its day-to-day experience.

That’s What Gets Results!

But what results? What should you expect from your operations function? If operations managers are really going to have a strategic impact, they should be judged on five types of performance:

  • Cost
  • Revenue
  • Return on capital
  • Risks
  • Building capabilities for the future

Operations’ resources are not simply passive financial elements; they have a learning potential. In fact, in the longer-term most important result that operations can give any business is the ability to learn from its experience and grow that learning into real competitive capabilities.

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