Article written by Bob van de Kuilen, originally published in 2008 with NZ Management Magazine.
Having trouble turning your strategic vision into strategic results, into profits? You may want to look at the managers in your business. Are they selected and trained for operational competency? Do they have the support and the authority to get the job done? Great operational managers make execution look easy – so easy in fact that one can easily make the mistake of thinking it is easy -- and that leads to disastrous consequences.
Managing operations isn’t sexy - and that’s too bad. A strategic vision without excellent management is like a race car without a transmission; no matter how powerful the engine, it goes no farther than it can be pushed. Still, it is much easier to sell executives products dealing with innovation, strategy, entrepreneurship – and, of course, leadership -- than it is to raise interest in the science and art of getting people in complex groups to achieve a common goal. Our students, too, prefer to study the glamour of leading despite the likelihood that their future will be one of managing operations. Our schools compound this problem by teaching marginally useful subjects such as economics and business law, while barely addressing the complexities of managing people.
Let us be clear, managing operations is not the same as “operations management.” The latter term has developed from engineering and Scientific Management. It’s contributions include topics such as queuing theory, and statistical process control. It contributes to our understanding of how to effectively implement technical systems. Managing operations is about connecting business strategy to business success through effective human systems.
Peter Drucker has famously defined management as, “the art of getting things done through other people”. Anyone who has been a manager can appreciate the almost mystical complexity of those last three words, “through other people”. For people in groups, organising is an unnatural act. Without a great deal of explicit guidance, any group of six people that is given a task will tend to proceed in six different directions. Good faith alone will not change this. Training in one’s technical role will, if anything, exacerbate the problem by giving different participants different lenses through which to view the problem and formulate desired solutions. Commitment to success simply means people will be more impassioned about the ways they are acting at cross purposes. The essential contribution of the operational manager is to coordinate technical systems, values, and skills with strategic goals to achieve the unnatural result of coordinated behaviour among participants. In other words, management is fundamentally behavioural.
Leadership and strategy, of course, are important. They are, however, more like the salt in a pot of soup. A little is sufficient; more spoils the outcome. Management is the broth, the medium of business activity.
So, what does it mean to “manage operations”? Drucker appreciated that this is the central question determining success. Sun Tsu notes that even a bad strategy pursued with enough commitment can often lead to success. What then leads to commitment and to being able to mobilise that commitment effectively? Inevitably, this points toward the need to competently deal with people’s values, perceptions and feelings. It may be more satisfying to deal with the relatively well structured problems of policy and logistics. It may be more fun to imagine oneself as a conquering general, leading and strategizing. The question though, is not what is gratifying, but what is effective. And that is being able to influence behaviour.
Effective operational managers, then, pay attention to people. They spend time understanding what their people do and, more importantly, why. They set stable and predictable patterns in the organisation that eliminate ambiguity and noise. And they make things clear. They spend time with staff checking whether the actions reinforce strategy and time with senior management making sure strategy emerges from operational capabilities – human capabilities. They make sure strategic goals are understood and accepted. It requires constant clarification of straightforward and honest messages. Above all, it requires managers to deal in the murky waters of human behaviour.
And that’s the key point - management ultimately is a behavioural endeavour. With all the talk about techniques and fads, it all comes down to that fundamental point. Some may argue that is obvious, but the evidence in organisations in our experience would suggest otherwise. Perhaps one reason for this misperception is that when good operational managers are done with their work, it isn’t apparent that there was anything that needed to be done in the first place; it looks easy. This is the curse of the operational manager; if you don’t perform it results in problems, but excellence does not result in recognition of success.
From a distance, it is easier to credit success to strategic vision, leadership quality or technical systems. These all play a critical part in business success, but without people management, the organization is a race car without a transmission.
The failure to appreciate what good operational managers do may also create a dangerous cycle in organisations - where the importance of execution over time is neglected, regarded as a mere afterthought - and then eventually rediscovered again. When operational managers are either removed or leave out of frustration of senior managers’ inability to both recognise and support them, the organisations they worked in begin to slowly descend into operational chaos. Areas that once looked straightforward increasingly become riddled with problems – starting with little ones, but spiralling and compounding into serious and chronic behavioural ones. That then often leads to senior managers having to take drastic action, like restructures and lay-offs. Many of these cases could have been easily avoided had the focus on good operational management been there at the outset.
This is why operational competency is not the same as “being nice.” Motivating people is not (merely) about stroking them or paying lip service to people being “our most important asset.” It is not even (merely) about raising salaries, increasing benefits or improving working conditions. Competency in people management involves the ability to build consensus and commitment by understanding what needs to be done regarding the differing values, perceptions and beliefs of those involved. It involves knowing how to build trust and embody respect. It is grounded in communication, which is about far more than the use of words. It also involves relating the needs and abilities of the organization’s people to the capabilities of the organization’s technical systems in a way that results in such systems supporting people’s efforts. Sometimes, effective operational managers are “nice”; sometimes they are not, but neither being nice nor being a stern taskmaster is any indicator of whether a manager is being effective.
For example, we once consulted with a client operating in a highly specialised, technology-intense environment. They were recognised around the world in their field. After some basic analysis, however, we found a significant opportunity for improving production which, once corrected, resulted in roughly a million dollars of additional annual revenue without an increase in operating costs. That’s an annuity of a million dollars a year added to the bottom line. On the surface, the problem was simply a technical issue related to instrument calibration. How could a team of outsiders whose expertise is not technological identify such a basic technical problem? Surely the engineers should have discovered the error?
The problem was not one of technical competency – it was behavioural. Certain behavioural dynamics in the business had stopped people from asking the right questions and looking for the right answers. The business was stuck in a pattern of behaviour that made the technical deficiencies invisible. Correspondingly, it was behavioural changes as a result of the consulting engagement that made the problem visible. Once seen, the problem was easily corrected. This is a type of problem we have seen again and again, even in Fortune 500 companies. Clearly, a technical response to this problem cannot be effective, since the technical solution was readily available, yet it was not being implemented. The critical difference that produced this million-dollar-a-year annuity was changed behaviour.
As management consultants, academics and business owners, we have had the privilege of working with diverse companies across the world, from Fortune 500 to small enterprises. All are engaged in an ongoing quest to be more successful. As participants in this quest, we have experienced how difficult it is for senior managers (who have sometimes been ourselves), to accept that there is no silver bullet, no simple “organising idea” that produces success. Success comes painstakingly from the everyday graft of execution and that is only achieved by excelling at managing operations and people. This advice is sometimes a difficult pill to swallow and often means managers must change the fundamental levers that they have used and step out of their comfort zones. It means shifting the focus away from “flavour of the month” solutions that only deliver empty catch phrases and trendy management words. One of the famous 14 points created by W. Edwards Deming, the father of TQM, was “eliminate slogans.” Deming was aware that long term operational success is driven by tirelessly working toward getting the rudiments of operational management right.
In the last decade, there has been increasing discussion in the U.S. about the need for understanding leadership in a less “supe. Among other things, the new type of leader understands that there is less value in the heroic gesture than there is in the low-profile work of eliminating mistakes and incremental improvement. There is less need to “motivate” workers in the old carrot-and-stick sense and more need to “align,” “coordinate” and “enable” the motivations and abilities workers are bringing with them into the workplace. There is less value to the grand strategy and more to nurturing cumulative innovations. In the post-heroic organization of the knowledge economy, leadership is not so much the property of a high-ranking person, it is more a quality networked throughout the organization’s work culture. Such leadership depends integrally on the behaviourally-competent operational manager, the “transmission” linking the engine of strategic vision with the drive wheels of operational success.
Consider the example of Enron. This organisation rewarded the idea generators and deal makers instead of the operational managers who were left run those often flawed and risk-laden schemes. One of the key lessons we can learn from a company like Enron is that one should never separate the abstract from the concrete, the strategic from the operational. Unfortunately, there are organisations where operational managers will rarely feature on senior management teams. When this happens, sadly there is no appreciation of what it means to execute effectively. And long term, those organisations start to suffer until they realise just how valuable operational managers are.