Any business, whether a nonprofit or a for-profit business can be broken into four interconnected functional areas.
- Governance/Advisory Board – strategic decision making
- Management – implementation of strategic decision making
- Back of office – making it seamless for others to do their job
- Customers – marketing, advertising, sales, customer service, service delivery, progam or product design – essentially ensuring money keeps rolling in
Each of these functional areas cannot be successful without collaboration with each other. Each of these functional areas is overseen by a senior executive and individual managers.
Operations is not a function, it is a senior management role. The aim is to have someone with responsibility for understanding the bigger picture. You might ask, doesn’t this role fall to the CEO? In smaller organisations or businesses, that is likely to be the case. As a business grows and the distance between the CEO and all the moving parts increases, someone unencumbered by the CEO’s role may be needed to have that knowledge and understanding.
In some industries the title of operations manager is given to the person overseeing manufacturing or warehousing or something similar. I believe this is a mistake. These are functions that require a functional manager. The real benefit of an operations managers comes from having someone able to gather and understand all the connections.
How can you build effective operations within your business? Here are 5 key things you can do.
- Don’t add the responsibility onto the finance, admin or HR manager. They have their own role to play. A dedicated and effective operations manager will have an ‘helicopter’ viewpoint of all the moving parts and relationships. This person then provides unbiased and critical strategic guidance to the management group.
- Give the operations manager room to roam, to build relationships with all other managers and staff. This is critical to understanding inter-connectivity and relationships and busting open silos.
- Have the operations manager lead cross-functional projects. He or she is a neutral person. The operation managers only vision is to create a seamless, effective organisation. They don’t have a patch to protect.
- Remember the operations manager is not a free agent, ensure he or she has goals and KPI’s that effectiveness and value can be measured against.
- Have the operations manager report directly to the CEO, this ensures any messages are not filtered by other senior executives.
Ideally the operations manager would not have line management responsibilities, however finances often dictate that the operations managers has direct responsibility for back of office. This is not a bad thing, however the risk is that the day to day minutiae of the back office may impact upon the capacity of the operations manager to focus upon the strategic outcomes and impact.
Why have a dedicated operations manager? The main reason is because you want to grow your business. A growing business needs their CEO to be freed from the business as usual stuff and to focus upon building relationships that ensure growth. An operations manager enables the CEO to divest non essential tasks and activities. Secondly, the CEO of a growing business needs access to good quality information and feedback as to what is happening inside the business. Thirdly a growing business needs someone to ‘join the dots’.
An effective operations manager will build relationships across all functions, will have an overall understanding of all the connections, will be key to identifying barriers within your organisation and barriers that impact upon customers and will be able to bring people together to work upon solutions to problems.
Here is the equation –
>I = >E (where I=information and E=effectiveness), therefore
>E = <C = >$ (where C = costs and $=revenue/profits)
If you are looking at your organisation and saying to yourself, something isn’t right, then consider contacting a health check to identify the pain points. This will lead to a discussion on key actions and an action plan. For more info email John