Operational management –
Two types of surprises
In my opinion, there are two different types of surprises in management:
We see one of these as a challenge and are happy to take on this task, while the other is the consequence of a lack of focus on results in the operational management of our area of responsibility – whether we are managing an entire company, a management department, a division or a department, regardless of whether it is sales, production, customer service, IT or something else.
The kind of surprises that we are responsible for in management and that we see as a challenge are difficulties and problems, for example when, contrary to expectations, the material does not meet the requirements, the customer does not accept the new service as planned, the market reacts differently than anticipated or the roll-out of a project does not succeed as planned.
These more or less unpredictable surprises are what make it so exciting for us in management. What is less enjoyable and, as will be shown, mostly unnecessary, are the recurring difficulties in day-to-day business.
Regardless of the type and size of our area of responsibility, we know how we measure the status quo and how we determine success or failure. These parameters typically relate to aspects such as
- Turnover
- Profitability (product, customer, etc.)
- Productivity
- Throughput times
- Scrap rates
- Customer satisfaction
- Processing times
- Employee satisfaction
- Complaint rates
- New customer sales
- Existing customer development
- etc.
These or other indicators serve to show us where we currently stand in our area of responsibility. Broken down, they also form the basis of the management dialogs that we conduct on a daily, weekly or monthly basis with our direct reports or that an advisory board or supervisory board uses to determine the current position of the company on a quarterly basis.
These figures are often provided with target values and are therefore also the basis for evaluating success or failure. The past provides historical values, and there may also be one or two suitable benchmark values that show how good or bad the operational performance is at any given time.
If one of these variables falls behind or falls short of expectations, we take countermeasures or additional measures. This is operational management.
The way in which we take countermeasures to get out of the red again and the measures we take to reach or even exceed the target value are based on our experience. That is what we are paid money for in management.
We know what to do when service processing is declining and we know how to talk to sales staff to get sales back into the green zone.
Depending on the performance pressure, we remain calm, think calmly, take the few right measures and are effective.
Once everything is in the green, we can devote ourselves to what is our core task in management: thinking about where we need to go next, what the strategy looks like and how we can implement it skillfully.
We usually don’t have time for this because we have too much on our plate operationally. There is always operational pressure on all fronts.
However, the reason for this is not the operational challenges, the “surprises” of the first kind, the challenges that we love. Rather, it is the recurring scenarios in the surprises of the second kind:
A result variable does not develop as planned for us or our employees or falls out of line. We then immediately start rummaging around in our box of experience, discussing, thinking and possibly coming up with the right approaches.
If the pressure increases (see Fig. 1), for example because there is a loss of customers, sales are declining and customer satisfaction leaves a lot to be desired, then the need is great. Even if nobody wants to admit it, we and our employees quickly find ourselves in “a lot helps a lot” mode. We are more open than ever to all kinds of experiences and suggestions, collect all the approaches that come to mind, structure them and finally explain that all of this has top priority. We pull out all the stops to be in a good position again in the next reporting period, or the one after that at the latest. It is no different at the next management level up.
To want to create something out of passion or desire or out of the need to avoid negative emotions such as guilt or shame, to get oneself and one’s organization properly fired up, to think, structure, plan and do is absolutely human behaviour (see also Secrets of EXECUTION, Vol. 11: “Emotions in Management”).
Incidentally, the number of key performance indicators (KPIs) that we use to evaluate situations increases steadily over time due to the “surprises” that we and others experience. Experience accumulates and reporting structures expand.
The first step to counteracting this is to admit that operational management is usually not really steering. Instead, driven by events and triggered by our KPIs, we run after reality full of actionism and desperately try to keep up with it. Until next time – the groundhog greets us daily.
Progress
