MENU Operational Clarity: New Buzzword or Intense Common Sense?
Over my four-decade career – I was hired for my first post-college job in April 1986 – some of the most impactful ideas/techniques that I was introduced to seemed so obvious at first glance that they could easily be dismissed.
That was my reaction to the Balanced Scorecard in the mid-1990s. Of course, our strategic measurements should go beyond financial results! It was not until I took a closer look at the mechanics of executive decision-making that I realized the Scorecard was a breakthrough. I had a similar reaction to Operational Clarity.
What does Operational Clarity mean?
Of course, process documentation and BPM make it clear how to execute day-to-day work, but a closer look reveals how important operational clarity is to achieving all our business objectives. Operational clarity means we can answer these five critical questions:
- Who does what?
- How work should be performed and when/how we can make process exceptions?
- What are our measures of success?
- Who has decision-making authority as work flows across departments?
- How does this process support our business strategy?
Think about the conflicts and inefficiencies that occur when operational clarity is lacking.
1) Who Does What?
When an organization does not have clarity about roles and responsibilities, there are two major operational impacts:
- Bad Handoffs – The “dropped baton” is perhaps the most common cause of lost time and money in operations. It can occur when there is a missing trigger. i.e. One team member does not know that the person upstream has completed the previous task. Even worse, the person doing the first task does not understand the needs of his or her downstream partner. That causes rework, friction and poor morale.
- Turf Wars – Whether we are fighting over control of the task work treating it like a hot potato, the job will not be done well.
2) How Should Work Be Performed?
Have you ever been in organization where five people perform the “same” process three different ways? It is a fairly common occurrence. The work was originally defined with clarity but over time as new customer needs emerged, new managers were promoted, and new employees were hired, the “one true process” evolved to contain many different flavors. At one financial client, Orion opened the box on a seemingly straightforward pension process and found 15 different major variations and exceptions. This added cost, for sure, but also created complexity for both employees and customers.
3) What Are Our Measures of Success?
We’ve all heard the phrase, “He couldn’t see the forest for the trees.” When we don’t understand the purpose of our process and the needs of downstream stakeholders –be they other departments or external customers– work becomes sub-optimized. We think we are doing a great job, but in fact we are undermining performance.
At the first company I worked for, the marketing department typically mailed 22,500 brochures for each event they promoted. One day I asked a marketing colleague why she sent mail to El Paso for an event in Dallas. She told me she needed the addresses in El Paso to meet her target. I told her that El Paso was as far from Texas as North Carolina was from New York City. “Would you mail to North Carolina for an event in Manhattan? Of course not.” I thought my logic was unassailable. Her response: “22,500!” Having the wrong measure of success can lead to a lot of waste, even when team members do their jobs well. Having the right measures of success creates the needed operational clarity.
4) Who Has Decision-Making Authority as the Work Flows Across Departments?
Lack of cross-functional cooperation is one of the greatest barriers to operational clarity. The ultimate goal of any organization is to provide a service of value customer, member, patient or citizen. Almost every professional I know has experienced challenges caused by “operational silos.” Whether that’s a function of bad handoffs or bad metrics as described above or simply an intense focus on functional execution, the result is lack of clarity on how we can best work together to create value.
Some of Orion’s clients have experienced dramatic, long-term success by signing Process Owners or Process Managers for their core cross-functional processes for value chains. Regardless of whether you create this role, operational clarity requires us to have someone responsible for making decisions when the needs of different silos or departments undermine organizational performance.
5) How Does This Process Support Our Business Strategy?
None of the above matters much if our operations don’t support big picture success. Efficient operations will fail if they don’t bolster strategic objectives. Operational clarity goes beyond understanding how to get work done; it includes understanding how our work contributes to making the entire organization successful. Big name companies like Kodak and Blockbuster famously failed despite having effective operations. But even the smallest companies can falter when day-to-day operations do not mirror the shifts in strategy caused by market forces or changes in customer behavior.
A vital component of operational clarity must be “strategic operational clarity.” The Strategy Map is a great tool to help people see how their process or project fits into the big picture.
Conclusion
Operational Clarity may be intense common sense, but it is vital to creating sustainable organizational success. It is also a direct outcome of good process documentation, ongoing process improvement, and effective business process management.
I guess Orion has been in the operational clarity business since 1993!
–Paul King