Operations departments typically have responsibility for delivering on a company's promises to their customers. To ensure that those promises are delivered efficiently and effectively, it’s essential that CEO's can assess how well operations management is delivered. And for that to be achieved, a CEO will benefit from a deep and detailed insight into the operational health of the organisation.
Gaining clarity around operational health and effectiveness is even more important if you need to deliver rapid change and reduce cost. Combining these two objectives can be a recipe for disaster if the Operations Management is not at full health. By considering the following three key areas, you will obtain an early indication of areas where improvements can be made:
1. Healthy operations start with a clear understanding of the customer’s requirements and company vision. Can you answer the following questions?
Vision
- Do you know what the customers’ needs are - supported by up to date evidence and not
anecdotal views from the past? - What is your overarching vision for the business, how does it align with the customer’s needs and how do the Operations teams currently deliver against this?
- Have you defined what your operational goals are, aligning them to Integrated Business Planning?
- Is there clarity on how you measure the outcomes?
Staying on the right track
- How are the inputs aligned to a Business Balanced Score Card?
- What arrangements exist to assess if you’re on course to achieve your objectives? Are
interdependencies compared or are objectives by function only? - Is real-time data in place to alert you when you’re off track?
- Is it understood where inputs will show a worsening result before the improvement is seen?
Planning ahead
- Is a clear understanding available of your current position and the reality of why?
- Are you aware of corrective actions open to you and do the required skills exist in the business?
- Do you know how today's actions will impact on tomorrow?
For many leaders, clarity of vision is not the problem - it's not even understanding how they can transform their vision into reality. For most CEO’s the real problem is a lack of information and insight, which severely limits their decision-making capability. And it's the lack of transparency of information that impairs their ability to lead.
The most important question to consider is do you have the right data to make effective decisions and secure the future of your organisation?
“Nothing stops an organization faster than people who believe that the way you worked yesterday is the best way to work tomorrow.”
2. Ineffective data reporting and analysis is common to many organisations in the financial services sector. How accurately does your operations management information reflect the operational reality?
- Accuracy: is your data accurate? What data is available and what is the source?
- Completeness: does it miss key information - is it selective?
- Understandable: is it difficult to penetrate or interpret?
- Usability: do you find it difficult to make practical use of your data?
- Relevance: is your data an internal metric rather than customer outcome centric?
Having correct, well-defined, transparent and usable data will improve your ability to make intelligent and informed operational decisions.
“A key to achieving success is to assemble a strong and stable management team.”
3. Are your front line managers trained in operations management routines?
Although efficient front-line managers are a key driver of operational performance, in many organisations a great deal of management time is spent firefighting, form filling and constructing MI reporting. Centralising control is an option that may reduce workload, but it can also lessen a manager's sense of involvement and create a sense of disengagement. The optimum arrangement is a management approach that achieves two objectives:
- Providing front line managers with significant decision-making responsibility and a degree of control.
- Relieving them of many day-to-day reactive tasks that shift the focus away from optimising operational performance.
The first step to gaining tighter control of your operations is to understand how much you really know about them. Try asking yourself these questions:
- Are managers able to improve operational activities systematically - is an established methodology in place?
- Is there sufficient clarity on the way we manage and lead in this area?
- Do your managers have formal procedures for capacity planning?
- Does a central database exist for collation and reporting of management information?
- Have tools been made available to support operational collaboration to achieve optimal efficiency?
- Do tools allow your managers to forecast, plan and anticipate problems before they happen?
Not answering a definitive “yes” to any of the above suggests that you would benefit from gaining a deeper understanding of the health of your operation. And one solution is a DHP diagnostic or a site visit, both of which provide a quick and effective option to obtain that deeper understanding. Obtaining a diagnostic helps to raise awareness of areas that could be improved by uncovering operational health issues, identifying opportunities to reduce waste, eliminating costs and raising operational efficiency. If CEO's possess such information, they are then able to develop clear plans for changing and improving the operation.
