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May 20, 2006

The Performance of Operations Management

Organizations struggling to get a grip on operational performance should remain motivated by the goal of higher performance. But it's not the management of performance that they need to solve; it's the performance of management.

As an activity, management's value lies in its ability to make a significant difference towards achieving the goals of operations. Operations construct support for organizational intents.

But in the bigger picture, there are also various other ways of pursuing the organization's goals. As a form of organizational conduct, when are "operations" needed, anyway?

Operations are distinguished from other forms of construction by their mode and their product. The natural comparison to make against operations is "projects". For example, the mode of a Project is to sequentially develop new assets to conform them to requirements (e.g. an application or a building).

We can also consider "processes". The construction mode of a Process is to sequentially transform existing assets in a way that outputs resources which have been requested (e.g., power from chemicals, or workflow from IT).

But the mode of an Operation is to direct multiple simultaneous functions to cultivate a defined synergy. (Think of it as synchronized energy.) Unlike a project or process, an operation intends to develop important impacts and outcomes by coordinating already developed, ongoing concurrent forces that are independent functions but that, if directed to leverage each other, will generate a collective synergy. Again, the defined synergy is the goal of using an operation.

Appropriately, being an operator -- whether it be driving a vehicle, conducting an orchestra, waging a battle, or whatever -- usually involves multitasking. That is generally familiar territory.

But more to our point, managing an operation is about providing for the means and opportunities to create synergistic coordination.

I.

Where "means" are concerned, we first look at the characteristic key dimensions of management. In the responsibility of management, the idea is that all of the dimensions are to be applied to each one of the the independent forces gathered within an operation, to direct and sustain its coordination with the other forces:

1. Monitoring
2. Analysis
3. Decisions
4. Communications
5. Controls

Normally, the primary goal of management is to be effective , through integrating these five dimensions as a "system" of capabilities.

Organizations like to approach this integration as a "process", in which the group of capabilities run in a closed-loop cycle from capability #1 through #5 and back to #1 again. That process mentality makes things easier to understand, but it may be a mistake. Instead, all five dimensions must continuously be exercised. Why? Because in real life, the opportunities presented to the set of capabilities may be random -- unpredictably multiple, concurrent, and inconsistent. They are never guaranteed the ideal opportunity to execute in the order we might want -- which tells us that at any given time, the output of one capability may not be ready as input for the next.

Consequently, it's hard to know when all capabilities will be productively available to each other. Analogous to a radio signal trying to make it through interference, the moment of successful end-to-end alignment across capabilities can quickly come and go, with a stronger overall evidence at one moment than at another.

Process uncertainty can't be the basis of solving performance uncertainty. Therefore, the essential management effort is not to activate a linear process, but instead to continuously exercise all five dimensions simultaneously, just-in-case -- with persistent vigilance for their moment(s) of alignment.

II.

Along with that persistence, the operations scenario is that all management dimensions are applied to each function of interest in the operation.

In tackling any one function to associate it with another one, each management dimension likely features some capability level that is anchored by some characteristic or preferred method. In each dimension, method is utilized as a type of capability assurance -- yet still not all dimensions contain "comparable" levels of capability at a given time.

Such comparability may be desirable, particularly where it offers more breadth of opportunity (versatility); usually, though, the more important issue is to establish balanced capabilities. Here, balance refers to every capability getting at least enough of what it needs from its interaction or dependency on the others -- to support the corraling of a function towards the targeted synergy.

But just as with the means, variability in coordination opportunities is more the rule than the exception.

Overall, each moment of management in operations features a variety of levels of capability, with each capability facing a different level of opportunity to produce. In the usual scenario, any capability, at whatever level when it faces its target environment, is looking for the complementary input or material that it wants to use and affect, without knowing how much it will find useful. Also, the profile of that moment, as illustrated by the example below, likely differs from a later moment's due to issues such as (but not exclusively) those seen at far right -- and that difference increases the challenge that management faces.

Those observations point out that there are constraints on both the means and opportunity for coordination -- affecting the ability to associate any one function with another. One kind of response that a manager may have to this challenge is to hunt for a "lowest common denominator environment" or scope that can consistently be addressed adequately by all five dimensions of capability. This approach tends to be one that defines a boundary of a recognized "system" -- but the flaw here is that such systems may be arbitrarily "created" based on whatever scope turns out to be manageable at the time.

The risk is that the resulting system might in effect allow some kind of work to be done well, while missing the mark of what work really needs to be done to drive progress towards satisfaction of the organization's actual need. (Classic examples of this problem are often found in arenas other than operations, including good automation of bad processes, completion of projects that will deliver the well-wrought thing at the wrong time, or even employees who will do things only the way "things have always been done around here"...i.e., the way that they have themselves already mastered.) Overreliance on such arbitrary systems is a serious defect in the organization.

It follows, therefore, that improving systems by raising capability levels, to cover greater scope or more important opportunity, is a worthwhile idea not just for versatility's sake. There is no absolute "best" level of capabilities; but capability should be raised to a point of "good enough" and "sustainable" for the operation's purpose. As we would surmise from the illustration, it makes sense to remedy things like mediocre analysis facing oceans of data, but only enough to give the followup decision-making relevant input that it should in turn utilize more promptly.

Yet, responding to the constraints can be done at a more fundamental level. To smooth out the variability of both means and opportunities, and thereby raise the overall prospects of being immediately effective most of the time, management needs to be a practice that pervades all levels of an organization -- not as a specialized role but as a learned behavior. Thi is what really fosters operations.

It doesn't mean that everyone should have the same tasks and duties -- but instead, that everyone should know what it means to conduct their activities from a "managed" perspective and in a "managed" context. This is not, in fact, about making better systems, but it is about making the success of operations more systemic, with success being good coordination of functions towards the targeted synergy. An example of this is a customer service desk (function) that easily cooperates with accounting (another function) to raise customer satisfaction (operation) during a testy product support call, by quickly determining that a free replacement is affordable. Coordinate functions and save the patient...

III.

In the abstract, we know what synergy refers to: a whole greater than the sum of its parts. But concretely, the "defined synergy" that management achieves with an operation is competency.

Another easy way to observe this overall effect is to consider the common example that getting a better coach can cause the "same" old team to win more than it used to. What happens here?
- Getting a "better coach" is a move that improves (sometimes suddenly!) the performance of management.
- The higher-performance management brings about stronger coordination of the team's functions, from its supporting services and facilities on through to the interaction of the roles of its players.
- The outcome is better execution on demand, with a higher frequency of significant payoff.

In that example, improved management is handily packaged in the person of the experienced coach; but the point is that the dimensions of management are better exercised, which makes the difference.

However, within the global alignment that the management cultivated, success really occurs and persists because each participant generally takes on the perspective of the need for and effect of alignment -- which orients their own individual interest and capability in monitoring, analyzing, deciding, etc. In effect, understanding and supporting the meaning of what they do allows better leveraging of their activities across roles and functions, whether requested or offered.

In light of all the above, some notable alternative strategies for production performance, such as collaboration and self-organizing systems, clearly reflect the emerging recognition of what an "operation" can accomplish in circumstances where other techniques do not or cannot successfully apply. It makes sense to examine them as two instances or flavors of operation -- ones that actually are not even particularly exotic examples, and that share the same interesting key characteristic: a desirable level of competency that arrives outside of the other more usual approaches. We should expect that their success, when pursued deliberately, can be accounted for fairly well in terms of the performance of their management -- as already outlined in this discussion. That is, if the desire is to increase performance, and approaches like collaboraton or other flavors of operation are considered, then it is important to recognize that the performance of management itself is still likely why those approaches can work.

Posted by Malcolm Ryder at May 20, 2006 7:04 AM

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