On Operations – Business and Life

Operations

Operations management is the set of actions that enable designing and controlling the process of production of an output – usually a good or service that has value for others.

If one’s enterprise is a business, the output is the product – durable, consumable, or service the business produces. The price the customer pays is the proxy for the value she derives from the output.

If one’s enterprise is her own life, how she uses one’s time – usually work, family, and leisure, is the product. Whatever the individual gets in return – joy / grief, contentment / discontent, health / disease, wealth / debt is the value the customer – self, family, or society derives from the product.

Everything that the enterprise does to complete and repeat the cycle of production to value is Operations.

Everything the individual does to complete and repeat the cycle of production to value is Life.

The long winded explanation and comparison was to drive home how important Operations is to the enterprise of business and life. And conversely how damaging to business and life it is not to have an operations based world view.

The Golden Circles

The Why – How – What (by Simon Sinek) and the Be – Do – Have (by Robert Collier) paradigms are a good approach to start looking at an enterprise or life from the operational lens.

fullsizeoutput_17a

Misconceptions

A common misconception is that

How is operational, wheareas

Why and What are strategic, and by exclusion, non operational.

And that they are compartmentalized.

This is a misconception because discovering the Why and What itself is operational in nature.

One has to go through a series of experiences, trying different things, consciously or sub consciously gathering data, and validating or ruling out assumptions to find the Why and What.

Any Why and What that is not a product of thoughtful deliberation will not survive the first lack of contact with How.

The other misconception is that as one moves through life and time, her focus must shift from the operational to the strategic.

What changes as one goes through life is what operations or tactics to focus on, NOT whether to focus on operations.

Impact

The How is the bridge between the Why and What. It breathes life into the What and keeps the Why relevant.

Conversely not knowing the How is the chasm between the Why and What, between the Goal and the Result.

Embracing the power of operations – the How, profoundly changes the way an enterprise functions and the way an individual lives her life.

Process take precedence over Goals, Consistency takes precedence over Innovation, Hard nosed diligence take precedence over Brilliance.

Well defined, well communicated, and diligently executed processes create bandwidth for new Goals, Innovation, and Brilliance to emerge at the right places, for the right reasons, at the right time.

Conversely, not exploiting the power of operations condemns an enterprise and individual to a rut of frustration and failure.

Business

In the context of business, a great Sales leader must ask (and help articulate answers to) some of the following in addition to Sales specific questions:

  1. How is the organization structured to deliver a sale (from pitch to delivery)?
  2. How do the current and desirable unit economics work?
  3. How is the work force coached to make the sale?
  4. How does the organization deal with constraints it is faced with currently?
  5. How does the current ROI / ROA tree break up for time, money, and people?

A Finance leader must ask questions related to Sales, product, and engineering cycles in addition to budgets, funding, and book keeping; a Human Resources leader must ask questions related to profitability, process, and business success metrics in addition to culture and compensation.

These questions indicate a genuine curiosity to understand how business works. Only when one understands how things work, can she understand key levers, and then attempt to affect or change them.

A failure to care about these questions results in Type 2 errors – saying yes to a bad fit, staying with a bad employee much longer than tolerable, signing a horrible contract, making a terrible acquisition.

For two main reasons.

  1. The focus is mainly on the What and not on the How. So while the goal is clear, the  How isn’t, and the result is seldom achieved.
  2. The process is unidirectional, doesn’t incorporate feedback, and so the How is not clear. eg – a job interview where the organization and the interviewee focus on the interviewee’s what and how, but not on the organization’s or manager’s; or a contract where the customer feels they got a bad deal mid way through the contract.

She who consistently succeeds in business obsesses over the How. She asks the same question over and over to get to the root cause. She breaks down the problem, the opportunity, and the solution in smaller manageable chunks. She constantly plans, acts, checks, and re-calibrates. She continuously improves process and flow.

Screen Shot 2018-02-08 at 12.47.32 AM

ROA tree of hospitality business (Source: Operations Forensics – Richard Lai)

Life

Now juxtapose this with one’s life.

A great liver of life must ask the following questions in addition to Why and What she wants:

  1. How is her current environment (stakeholders and expectations) structured to enable her to reach her goals.
  2. How do the current and desirable unit economics work
  3. How will she train to reach the current goal and level up to the next
  4. How does she deal with constraints she is currently faced with (time, energy and attention or material, emotional and spiritual)
  5. How does the current ROI / ROA tree break up for any endeavor she undertakes

These questions indicate genuine curiosity to understand how life is lived. Only when we understand how to live, can we understand key levers, and then attempt to affect or change life.

A failure to care about these questions causes Type 2 errors – keeping bad company, undertaking terrible work assignments, buying unnecessary things, and acquiring undesirable liabilities.

For two main reasons.

  1. The focus is mainly on the What and not on the How. So while the goal is clear, the  How isn’t and the result is seldom achieved.
  2. The process is unidirectional, doesn’t incorporate feedback, and so the How is not clear. Focusing on the goal without accepting or learning from feedback that life is providing.

She who has a fulfilling life, is clear about the How. She continuously improves self and surrounding in a manner congruent to her How.

This is why one finds highly fulfilled individuals across all strata, geographies, and races. Fulfillment is a function of how one lives life, not of what one has in it.

Concluding

Operations – the How, is the bridge between the Goal and Result.

Focusing on operations is not a prescription to a rigid, fully structured, start – only – when – you – are -fully -ready approach to business or to life.

Rather, it is an acknowledgement that both at work and in life, we have to constantly keep jumping off cliffs. Building a bridge, packing a parachute, and learning how to grow wings increases the odds of a successful landing, and makes the flight smoother and more enjoyable.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s