Mastering Operational Management: Improve the Discharge Function of Strategy Execution

​Operational Management
Operational management refers to the administration of business practices aimed at ensuring maximum efficiency within an organization. This involves planning, organizing, and supervising processes, and making necessary improvements for higher profitability. Essentially, it's about managing the resources of a company—people, materials, equipment—to produce goods and services as efficiently as possible.

Purpose
The primary purpose of operational management is to transform resources (labor, materials, and technology) into goods and services that can be sold to customers, while also ensuring high quality and cost-effectiveness. Operational management aims to:

1. Improve efficiency and reduce costs.
2. Enhance customer satisfaction by providing high-quality products and services.
3. Optimize resource utilization and minimize waste.
4. Innovate processes and adapt to market changes.

Day-to-Day Management Tasks
Operational managers are tasked with a variety of responsibilities on a daily basis, including:

1. Planning and Scheduling: Creating daily, weekly, or monthly plans to ensure all operations are running smoothly.
2. Resource Allocation: Ensuring that resources (human, financial, and material) are being used efficiently.
3. Quality Control: Overseeing production processes to ensure that products meet the company's quality standards.
4. Inventory Management: Keeping track of inventory levels and making sure that stock is sufficient to meet demand without incurring excess costs.
5. Supply Chain Management: Coordinating with suppliers to ensure timely delivery of materials and services.
6. Performance Monitoring: Keeping an eye on key performance indicators (KPIs) to gauge the efficiency and effectiveness of operations.
7. Problem Solving: Quickly addressing and resolving any issues that arise during the production process.
8. Staff Management: Supervising, training, and motivating employees to ensure high productivity and job satisfaction.

Operational management is a crucial function that keeps the wheels of a business turning, ensuring that everything from production to delivery runs like a well-oiled machine.

Factors Driving Strategy Execution Process
Execution proceeds through a structured and systematic approach that ensures the strategic plans are translated into actionable tasks and achieved effectively. While implementation gaps can drive the need for adjustments during execution, the overall process is driven by several key factors in effective discharge of strategy execution. These factors ensure that the organization's strategic objectives are met through efficient and effective operations. These key factors include:

1. Alignment with Strategic Goals
Operational management must align its activities with the organization's strategic goals. This involves understanding the strategic objectives and ensuring that day-to-day operations contribute to achieving these goals.
2. Resource Allocation
Efficient allocation of resources, including human, financial, and material resources, is crucial. Operational managers must ensure that resources are used effectively to support strategy execution without waste.
3. Process Optimization
Optimizing processes to improve efficiency, reduce costs, and enhance quality is vital. This includes designing, implementing, and continuously improving processes to support the strategic objectives.
4. Performance Measurement
Regular monitoring and measurement of performance against key performance indicators (KPIs) help track progress towards strategic goals. Operational managers use these metrics to make informed decisions and adjustments as needed.
5. Technology Integration
Integrating technology to automate processes, analyze data, and support decision-making is essential. Technology can streamline operations, improve accuracy, and provide insights for better strategy execution.
6. Communication and Coordination
Effective communication and coordination within the organization ensure that all departments and employees are aligned with the strategic objectives. This involves clear communication of goals, expectations, and progress.
7. Risk Management
Identifying, assessing, and mitigating risks that could impact strategy execution is critical. Operational managers must develop contingency plans and ensure compliance with legal and regulatory requirements.
8. Continuous Improvement
A commitment to continuous improvement through methodologies like Lean and Six Sigma helps eliminate waste, improve quality, and enhance efficiency. Operational managers must foster a culture of innovation and learning.
9. Customer Focus
Maintaining a strong focus on customer needs and satisfaction is essential. This involves understanding customer expectations, delivering high-quality products and services, and continuously seeking feedback for improvement.
10. Leadership and Team Management
Effective leadership and team management are crucial for motivating and guiding employees towards strategic objectives. Operational managers must provide clear direction, support, and development opportunities for their teams.

These factors work together to ensure that operational management can effectively discharge its responsibilities in executing the organization's strategy. By focusing on alignment, resource allocation, process optimization, performance measurement, technology integration, communication, risk management, continuous improvement, customer focus, and leadership, operational managers can drive successful strategy execution.

Implementation Gaps: Role in Driving Execution
Implementation Gaps are deviations or discrepancies that arise during the execution phase. These gaps can be caused by various factors, such as resource constraints, unforeseen challenges, miscommunication, or misalignment between plans and actions. Addressing these gaps is essential to ensure successful execution.

Implementation gaps influence the execution process as follows:

• Identification of Gaps
  • Regular monitoring and evaluation help in identifying any gaps between the planned objectives and the actual performance.
• Assessment of Impact
  • Assessing the impact of these gaps on the overall execution and strategic goals helps prioritize corrective actions.
• Corrective Measures
  • Implementing corrective measures, such as reallocating resources, revising action plans, or improving communication, helps bridge the gaps and realign efforts.
• Continuous Improvement
  • Learning from implementation gaps and continuously improving processes and strategies ensures more effective execution in the future.

Execution proceeds through a systematic approach involving communication, resource allocation, action planning, coordination, monitoring, risk management, and adjustments. While implementation gaps can drive the need for corrective actions, the overall execution process is driven by the need to align efforts with strategic goals and ensure successful outcomes. Addressing implementation gaps effectively is crucial for maintaining alignment and achieving the desired results.

• Processes
• Management Decisions
• Strategy Execution
• Operating Model
• Operational Plan

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Operational Management Processes
The key tasks and processes involved in operational management:

1. Planning and Goal Setting
   • Strategic Planning: Develop long-term plans that align with the organization's strategic goals.
   • Operational Planning: Create detailed plans for day-to-day operations to achieve specific objectives.
   • Setting Objectives: Define clear, measurable goals for the organization.
2. Resource Management
   • Staffing: Recruit, train, and manage employees to ensure they have the necessary skills and motivation.
   • Budgeting: Allocate financial resources to different departments and projects.
   • Inventory Control: Manage inventory levels to ensure the availability of materials without overstocking.
3. Process Management
   • Process Design: Develop and optimize processes to ensure they are efficient and effective.
   • Process Improvement: Continuously identify areas for improvement and implement changes to enhance efficiency.
   • Quality Control: Establish and maintain quality standards to ensure products and services meet customer expectations.
4. Performance Monitoring and Evaluation
   • Tracking KPIs: Monitor key performance indicators to assess progress towards objectives.
   • Performance Reviews: Conduct regular reviews to evaluate the effectiveness of strategies and operations.
   • Feedback Mechanisms: Implement systems to gather input from employees and stakeholders.
5. Communication and Coordination
   • Internal Communication: Ensure clear communication within the organization to align everyone with the goals.
   • Cross-Functional Collaboration: Facilitate collaboration between departments to achieve common objectives.
   • Stakeholder Engagement: Engage with stakeholders to keep them informed and gather their input.
6. Risk Management
   • Risk Assessment: Identify potential risks and develop mitigation plans.
   • Contingency Planning: Prepare for unforeseen challenges with contingency plans.
   • Compliance Management: Ensure operations comply with legal and regulatory requirements.
7. Technology Integration
   • IT Infrastructure: Implement and maintain IT systems to support operations.
   • Data Analytics: Utilize data to inform decision-making and drive improvements.
   • Automation: Integrate automation to streamline processes and increase efficiency.
8. Continuous Improvement
   • Lean and Six Sigma: Apply methodologies to eliminate waste and improve quality.
   • Innovation: Encourage innovative practices to develop new products and processes.
   • Learning and Development: Invest in training programs to enhance employee skills and capabilities.

These tasks and processes are essential for translating strategic plans into actionable steps and achieving organizational goals. Operational managers play a crucial role in coordinating these activities and ensuring smooth execution.



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System of Management Decisions for Strategy Implementation
This system involves a series of interconnected management decisions that guide the effective implementation of the business strategy and operating model. The goal is to translate strategic plans into actionable steps, ensure efficient resource utilization, and achieve the desired outcomes. Here are the key components of this system:
1. Action Planning:

• Description: Translating strategic goals into specific, actionable steps and defining timelines, responsibilities, and resource requirements.
• Management Decisions:
  • Setting detailed action plans.
  • Allocating resources and assigning tasks.
  • Monitoring progress and adjusting plans as needed.

2. Resource Allocation:

• Description: Distributing financial, human, and technological resources to support the execution of strategic initiatives.
• Management Decisions:
  • Identifying resource needs.
  • Ensuring efficient allocation and utilization.
  • Tracking resource usage and optimizing allocations.

3. Performance Management:

• Description: Setting performance targets, measuring progress, and providing feedback to ensure strategic initiatives are on track.
• Management Decisions:
  • Establishing performance metrics and targets.
  • Implementing performance management systems.
  • Motivating teams and monitoring performance.

4. Change Management:

• Description: Managing organizational changes required to implement strategic initiatives, including communication, training, and addressing resistance.
• Management Decisions:
  • Developing change management strategies.
  • Structuring change processes and allocating resources.
  • Communicating changes and inspiring employees.

5. Risk Management:

• Description: Identifying, assessing, and mitigating risks that could impact the execution of strategic initiatives.
• Management Decisions:
  • Identifying potential risks.
  • Developing mitigation plans.
  • Monitoring risk factors and implementing measures.

6. Communication Management:

• Description: Ensuring effective communication of strategic goals, progress, and changes to all stakeholders.
• Management Decisions:
  • Developing communication strategies and plans.
  • Establishing communication channels and protocols.
  • Leading communication efforts and ensuring clarity.

7. Quality Management:

• Description: Ensuring that products or services meet specified quality standards. This includes quality planning, quality assurance, quality control, and continuous improvement.
• Management Decisions:
  • Setting quality objectives and standards.
  • Implementing quality management systems.
  • Inspecting and testing products/services.

8. Supply Chain Management:

• Description: Managing the flow of goods, information, and finances from suppliers to the final customer. This process involves procurement, logistics, inventory management, and supplier relationships.
• Management Decisions:
  • Developing supply chain strategies and plans.
  • Coordinating activities across the supply chain.
  • Monitoring supply chain performance.

9. Process Improvement:

• Description: Continuously analyzing and improving operational processes to enhance efficiency, reduce costs, and increase customer satisfaction.
• Management Decisions:
  • Setting process improvement goals.
  • Allocating resources for improvement initiatives.
  • Measuring and implementing improvements.

10. Maintenance Management:

• Description: Ensuring that equipment and facilities are in good working condition to support operational activities. This includes preventive maintenance, repairs, and equipment replacement.
• Management Decisions:
  • Scheduling maintenance activities.
  • Assigning maintenance tasks and resources.
  • Monitoring equipment performance.

11. Customer Service Management:

• Description: Providing excellent customer service to enhance customer satisfaction and loyalty. This includes handling customer inquiries, resolving issues, and ensuring timely delivery of products/services.
• Management Decisions:
  • Setting customer service standards and goals.
  • Establishing customer service systems and processes.
  • Monitoring customer service performance.

These operational management processes integrate the core management functions of planning, organizing, leading/directing, and controlling to ensure effective strategy implementation. By coordinating these processes, organizations can achieve their strategic goals and drive sustained growth and competitive advantage.

Operational Management Decisions: System of Management Decisions
Viewing day-to-day operational management decisions as a system of management decisions involves understanding how various decisions interact and contribute to executing the business strategy. 

1. Strategic Alignment
   
   • Strategic Planning: Translating the high-level strategic goals into actionable operational plans.
     
   • Goal Setting: Defining specific, measurable objectives that align with the overall strategy.
     
2. Resource Allocation
   
   • Budgeting: Allocating financial resources to various departments and projects based on strategic priorities.
     
   • Staffing: Hiring, training, and managing personnel to ensure the right skills are in place to execute the strategy.
     
   • Material Management: Managing inventory levels to ensure availability of necessary materials without overstocking.
     
3. Process Management
   
   • Process Design: Developing efficient processes that support strategic objectives.
     
   • Process Improvement: Continuously identifying areas for improvement and implementing changes to enhance efficiency.
     
   • Quality Assurance: Ensuring processes and products meet quality standards.
     
4. Performance Monitoring
   
   • KPI Tracking: Monitoring key performance indicators to assess progress towards strategic goals.
     
   • Performance Reviews: Conducting regular reviews to evaluate the effectiveness of operations and strategies.
     
   • Feedback Collection: Implementing systems to gather input from employees and stakeholders to inform decision-making.
     
5. Communication and Coordination
   
   • Internal Communication: Ensuring clear and consistent communication within the organization to align everyone with the strategic objectives.
     
   • Cross-Functional Collaboration: Facilitating collaboration between different departments to achieve common goals.
     
   • Stakeholder Engagement: Keeping stakeholders informed and engaged throughout the execution process.
     
6. Risk Management
   
   • Risk Identification: Identifying potential risks that could impact strategy execution.
     
   • Mitigation Planning: Developing plans to mitigate identified risks.
     
   • Compliance Management: Ensuring all operations comply with legal and regulatory requirements.
     
7. Technology Integration
   
   • IT Infrastructure: Implementing and maintaining IT systems that support operational processes.
     
   • Data Analytics: Using data to inform decision-making and drive improvements.
     
   • Automation: Integrating automation to streamline processes and increase efficiency.
     
8. Continuous Improvement
   
   • Lean and Six Sigma: Applying methodologies like Lean and Six Sigma to eliminate waste and improve quality.
     
   • Innovation: Encouraging innovative practices to develop new products, services, and processes.
     
   • Learning and Development: Investing in ongoing training programs to enhance employee skills and capabilities.
     

Each of these decision areas interacts in a dynamic system, where decisions in one area can impact and inform decisions in others. This interconnected system ensures that all aspects of the organization are aligned with the strategic goals and working together to achieve them.

Operational Management: Executing Business Strategy
Once the implementation phase is complete, operational management takes over the responsibility of executing the strategy on a day-to-day basis. This involves using the operating model (the tools and processes established during implementation) to ensure that the organization's activities are aligned with the strategic objectives. Operational managers are responsible for overseeing the efficient use of resources, monitoring performance, and making adjustments as needed to stay on course.

Execution Tasks and Processes
Operational management tasks and processes are critical in ensuring that a company's strategy is executed effectively. 

1. Planning and Goal Setting
   • Operational Plans: Develop detailed plans outlining the steps needed to achieve strategic objectives.
   • Setting KPIs: Establish key performance indicators (KPIs) to monitor progress and measure success.
   • Resource Allocation: Determine the allocation of resources (human, financial, and material) necessary to execute the strategy.
2. Resource Management
   • Staffing: Hire, train, and manage personnel to ensure they have the skills and motivation to execute the strategy.
   • Budgeting: Manage budgets to ensure that financial resources are used effectively and align with strategic goals.
   • Inventory Management: Monitor and control inventory levels to ensure sufficient materials without overstocking.
3. Process Management
   • Process Design: Design and optimize processes to ensure they are efficient and effective.
   • Process Improvement: Continuously identify areas for process improvement and implement changes to enhance efficiency.
   • Quality Control: Implement quality assurance processes to maintain high standards and reduce defects.
4. Performance Monitoring and Evaluation
   • Tracking KPIs: Monitor key performance indicators to assess progress towards strategic goals.
   • Performance Reviews: Conduct regular performance reviews to evaluate the effectiveness of strategies and operations.
   • Feedback Mechanisms: Establish feedback mechanisms to gather input from employees and stakeholders.
5. Communication and Coordination
   • Internal Communication: Ensure clear and consistent communication within the organization to align everyone with the strategic objectives.
   • Cross-Functional Collaboration: Foster collaboration between different departments to ensure cohesive strategy execution.
   • Stakeholder Engagement: Engage with stakeholders to keep them informed and gather their input.
6. Risk Management
   • Risk Assessment: Identify potential risks that could impact strategy execution and develop mitigation plans.
   • Contingency Planning: Create contingency plans to address unforeseen challenges and ensure business continuity.
   • Compliance Management: Ensure that all operations comply with legal and regulatory requirements.
7. Technology Integration
   • IT Infrastructure: Implement and maintain IT infrastructure to support operational processes.
   • Data Analytics: Utilize data analytics to make informed decisions and drive strategy execution.
   • Automation: Leverage automation to streamline processes and improve efficiency.
8. Continuous Improvement
   • Lean and Six Sigma: Apply lean and Six Sigma methodologies to eliminate waste and improve quality.
   • Innovation: Encourage innovation to develop new products, services, and processes that align with strategic goals.
   • Learning and Development: Invest in ongoing training and development programs for employees to enhance their skills and capabilities.

Execution tasks and processes are integral to ensuring that the strategy is translated into actionable steps and that the organization moves towards its strategic goals efficiently. Operational managers play a vital role in coordinating these activities and making necessary adjustments to stay on track.

Operating Model
An operating model is a comprehensive framework that outlines how an organization operates to deliver value to its customers and achieve its strategic objectives. It encompasses the structure, processes, and systems that enable the organization to execute its business strategy effectively. The operating model defines how resources are organized and utilized, how work is performed, and how the organization responds to internal and external factors.
Components of an Operating Model

1. Processes: The set of activities and workflows that produce goods or services.
2. Structure: The organizational design, including roles, responsibilities, and reporting lines.
3. Systems: The technologies and tools that support operations.
4. People: The skills, competencies, and behaviors of the workforce.
5. Metrics: The performance indicators used to measure success and guide decision-making.
6. Governance: The policies, procedures, and controls that ensure compliance and alignment with strategic objectives.

Operating Model: A System of Operational Management Decisions
​The operating model can be viewed as a system of interconnected operational management decisions that enable the organization to execute its strategy. Here’s how each component involves key management decisions:
1. Processes:

• Description: Defining and optimizing the set of activities and workflows to produce goods or services.
• Operational Decisions:
  • Identifying core processes and sub-processes.
  • Streamlining workflows to improve efficiency.
  • Implementing process improvements and automation.

2. Structure:

• Description: Designing the organizational structure, including roles, responsibilities, and reporting lines.
• Operational Decisions:
  • Defining organizational hierarchy and reporting relationships.
  • Assigning roles and responsibilities to teams and individuals.
  • Restructuring the organization as needed to support strategic initiatives.

3. Systems:

• Description: Implementing technologies and tools that support operational activities.
• Operational Decisions:
  • Selecting and deploying technology solutions.
  • Integrating systems to ensure seamless data flow.
  • Maintaining and upgrading systems to support evolving needs.

4. People:

• Description: Managing the workforce’s skills, competencies, and behaviors.
• Operational Decisions:
  • Recruiting and hiring the right talent.
  • Providing training and development opportunities.
  • Fostering a positive organizational culture and employee engagement.

5. Metrics:

• Description: Establishing performance indicators to measure success and guide decision-making.
• Operational Decisions:
  • Setting key performance indicators (KPIs) aligned with strategic goals.
  • Tracking and analyzing performance data.
  • Using metrics to inform operational adjustments and improvements.

6. Governance:

• Description: Establishing policies, procedures, and controls to ensure compliance and alignment with strategic objectives.
• Operational Decisions:
  • Developing and enforcing operational policies and procedures.
  • Implementing risk management and compliance measures.
  • Conducting audits and reviews to ensure adherence to standards.

These components of the operating model are interdependent and support each other to create a cohesive system of operational management decisions. By integrating planning, organizing, leading/directing, and controlling, the operating model enables the organization to execute its strategy effectively and deliver value to its customers.

Example:
Consider a manufacturing company implementing a new operating model to enhance production efficiency:

• Processes: The company optimizes its production workflows by implementing lean manufacturing techniques.
• Structure: The organization redesigns its structure to create cross-functional teams focused on continuous improvement.
• Systems: New manufacturing execution systems (MES) are implemented to monitor and control production processes in real-time.
• People: Employees receive training in lean methodologies and are empowered to suggest process improvements.
• Metrics: KPIs such as production cycle time, defect rates, and overall equipment effectiveness (OEE) are established to measure performance.
• Governance: Policies and procedures are developed to ensure consistent application of lean principles and compliance with quality standards.

By aligning these components, the manufacturing company can effectively execute its strategy, improve operational efficiency, and deliver high-quality products to its customers.
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Operational Plan: Airport Barbershop Example
Outline an operational plan for an airport barbershop, ensuring that it encompasses all essential aspects to ensure smooth and efficient operations.

1. Objectives

• Provide high-quality grooming services to travelers.
• Minimize wait times and ensure quick service.
• Maintain high customer satisfaction and repeat business.
• Ensure efficient use of resources and staff.

2. Services Offered

• Haircuts
• Beard trims
• Shaves
• Quick touch-ups
• Grooming product sales

3. Staffing

• Manager: 1 (Full-time)
  • Responsibilities: Oversee operations, staff scheduling, inventory management, customer service, and performance monitoring.
• Barbers: 4-6 (Full-time and part-time)
  • Responsibilities: Provide grooming services, maintain cleanliness, engage with customers.
• Receptionist: 1-2 (Full-time or part-time)
  • Responsibilities: Handle appointments, customer check-in, payments, and product sales.

4. Hours of Operation

• Open daily from 7:00 AM to 9:00 PM to accommodate travelers with varying flight schedules.

5. Customer Flow Management

• Appointment Scheduling: Use appointment software for both walk-ins and pre-booked appointments.
• Check-In Process: Ensure a smooth check-in process to minimize wait times.
• Queue Management: Implement a digital queue management system to keep track of customer wait times and manage the flow.

6. Inventory Management

• Products and Supplies: Maintain optimal levels of grooming products and supplies. Regularly review inventory to avoid shortages and overstocking.
• Vendors: Establish relationships with reliable vendors for regular supply replenishment.

7. Technology and Infrastructure

• Appointment Software: Implement software for booking and managing appointments.
• POS System: Use a point-of-sale (POS) system for payment processing and sales tracking.
• Inventory Management System: Track products and supplies.
• Customer Feedback System: Collect and analyze customer feedback for continuous improvement.

8. Quality Control

• Training: Provide regular training for staff on grooming techniques and customer service.
• Standard Operating Procedures (SOPs): Develop and enforce SOPs to maintain consistent service quality.
• Customer Feedback: Collect feedback through surveys and online reviews to address any issues promptly.

9. Marketing and Customer Engagement

• Promotions: Offer promotions and discounts, especially for frequent travelers.
• Loyalty Program: Implement a loyalty program to encourage repeat business.
• Airport Channels: Utilize airport advertising channels (e.g., digital displays, flyers) to attract customers.

10. Performance Monitoring

• KPIs:
  • Customer satisfaction ratings
  • Average service time per customer
  • Revenue per service
  • Repeat customer rate
• Performance Reviews: Conduct monthly performance reviews and staff evaluations.

11. Risk Management

• Health and Safety: Ensure compliance with health and safety regulations.
• Staffing Contingency: Have a backup plan for staffing shortages (e.g., cross-training staff).
• Supply Chain: Develop contingency plans for supply chain disruptions.

12. Continuous Improvement

• Lean and Six Sigma: Apply Lean and Six Sigma methodologies to improve service efficiency.
• Innovation: Stay updated with industry trends and introduce new services or products accordingly.
• Training and Development: Invest in ongoing training programs to enhance staff skills and knowledge.

This operational plan ensures that the airport barbershop operates efficiently, meets customer needs, and achieves strategic objectives. By focusing on staffing, customer flow management, inventory management, technology, quality control, marketing, performance monitoring, risk management, and continuous improvement, the barbershop can deliver a premium experience to travelers.