The field of operations encompasses everything from a business idea to a satisfied customer. It includes all activities related to the product or service being offered by a company - from design to the production process, logistics and after-sales service. Its role is crucial, as it is responsible not only for the quality of the service provided, but also for most of the company's costs. In fact, it is estimated that 90 percent of a company's staff works in operations.
Thus, it is no surprise that many companies look to differentiate themselves through good operations management, which allows them to be more efficient and more competitive in the customer's eyes. But how can this be achieved?
In the book The New Operational Culture: The Case of the Theatre Industry, IESE's Beatriz Muñoz-Seca and Josep Riverola propose "a drastic change" toward a "new operations culture based on talent."
Their book features interviews with the management of Madrid's Royal Theater company and reflections on theater experiences, in order to analyze the current corporate reality. The book's final chapter includes a self-evaluation questionnaire designed to help readers analyze their own management style from the perspective of the new operations culture being proposed, based on a list of 20 basic rules for moving toward this new culture.
The New Operations Culture
A company's operations culture is the set of rules and values that determines how its members act and relate to one another until the service is delivered to the customer. Using the Royal Theater as an example, the authors demonstrate that the new operations culture should not be based on what a top-flight manager does, but rather on what he or she gets everyone else to do. In short, it's about making things happen.
In the authors' opinion, the organization's "brainpower" must be given freedom - that is, room to operate. It's about implementing the maxim, "Don't bring me problems - bring me solutions." It is a management style based on three criteria: efficiency, attractiveness and unity. The book explains how to change the operations culture by incorporating these three elements. Getting this change to happen is not a choice, say the authors, but rather a necessity for any company looking to remain competitive and survive in an international setting.
To have an operations management that allows the firm to be competitive worldwide, the authors propose something called problem-driven management (PDM), which places problem-solving at the heart of operations management. This model, which the authors developed extensively in their previous book Problem Driven Management (Palgrave 2004), represents a drastic shift from the classic approach. It entails fully exploiting talent management, and thus includes line managers, as they are the ones who can bring the service to excellence. Implementing this new approach requires three complementary levels of action, which make up the so-called "golden triad."
Efficiency. The company's level of productivity increases if there is an efficient operational structure and if the operations department can adapt to the company's mission. Thus, the first step toward achieving efficiency is to define that mission, in operational terms, steering clear of empty language. The process of defining the mission will bring forth the company's "promise" - i.e., what effectively happens when a customer contacts the company's operations unit to request a desired service. In order to be meaningful, the promise must be transmitted companywide.
Attractiveness. This is the degree of employee satisfaction toward the organization. It depends on what they get from the organization and is thus tied directly to the individual learning process. This process is at the heart of the PDM philosophy, which argues that adults learn by solving problems - so long as those problems entail a reasonable challenge, because if not, the individual can become frustrated as opposed to learning something.
One of the keys to attractiveness is innovation, which, in turn, is the major source of problems, without which, of course, learning is impossible. Innovation is defined as "doing things, whether new or old, in a different way." A company cannot be attractive if it does not produce innovations.
However, given that it is impossible to come up with brilliant ideas on a daily basis, the authors explain that the objective needs to be, "We're not looking for a million-euro improvement, but rather a thousand improvements worth a thousand euros each." With that mindset, all employees are encouraged to propose ideas, and everyone has the opportunity to make progress. This learning process translates into benefits for both the individual and the company.
Unity. The third line of action is about achieving unity, getting the organization's members to identify with its objectives. The goal is for the worker to identify completely with the company's priorities and values, as this is the only way an organization can see all of its talent emerge.
If the employees feel that their individual contributions are beneficial to a common goal, then they will understand the impact of their actions on the service being delivered. Thus, each will be aware of their individual role in achieving success and will place the interests of the group above their own individual ones. To achieve such unity, it is vital to have a management style that is not seen as giving orders, but rather serving and supporting others.