Why Do We Suck at Business Operations?

tl;dr

Because we don’t know what it is.

And I can end the blog post right there because it’s true.

I’m sure everyone with a “Head of Operations” title on LinkedIn will vehemently disagree with me and talk about what they’re doing to transform their companies to more precisely align with the evolving digital world in which we live. Now that sounds rather good, but I’ve seen some very talented BizOps professionals navigate their companies right off a cliff, along with their amazing bag of analytics tricks. Perhaps BizOps made those failures stupidly efficient. Regardless, it’s time to step back and try to figure out what business operations is.

While attending graduate business school, I was thrilled when I enrolled in my first Operations Management (OM) course. It was around the time that I was transitioning from my engineering management position into product management and a marketing role for a Fortune 500 tech company. Having continually experimented with so many operational facets of product design, development, and delivery over the years, I expected the OM course to challenge my thinking while supplying me with a new arsenal of weapons I could use against my competition and help capture a healthy chunk of market share. I quickly realized the OM curriculum wasn’t going to take me along the path I hoped. Instead, I learned about planning and scheduling tactics, quality control techniques, material requirements planning (MRP), enterprise resource planning (ERP), statistical process control (SPC), ISO 9000, etc. Don’t get me wrong: these were all interesting, but were they all the operational elements needed to run a business? No, they were just parts. So, my journey began.

I went to the business operations people in my company and found out that what they were doing was very different. Sure, the manufacturing folks were excited about MRP, but the finance team was thrilled about different operational models pertaining to our sales channels. Getting to the definition of “business operations” was getting confusing. I just wanted to find out what ops was. “The operations executives must know,” I surmised and met with them when I headed out from Boston to our corporate HQ in Silicon Valley. They too viewed operations in an entirely different way, this time looking at which operational metrics to share in the company’s quarterly updates to investors and analysts. I was starting to feel like Charlie Brown in search of the proverbial Christmas tree: everyone had different requirements. I, too, with my own operational models was guilty.

The Balanced Scorecard
The Balanced Scorecard – © Emanuele Giacomella

Over time, I sought wisdom from the upper echelons of thought leadership: Robert Kaplan and David Norton’s The Balanced Scorecard; Michael Hammer and James Champy’s Reengineering the Corporation; Larry Bossidy and Ram Charan’s Execution: The Discipline of Getting Things Done; and many more. With years of research (and much of it applied on the job), I felt as if I were getting a Ph.D. in operations. The more I learned about operations, the more confusing it became, so I began integrating models in an attempt to come up with a more unified and effective way to do operations.

Stochastic Processes
Stochastic Processes – © Bertrand Fougerat

I then reviewed operations research and management science programs in academia and beyond from around the world. I built statistical functions, made product launch simulators, and developed stochastic models for the markets in which I competed. When I applied these operational elements, the results were excellent. Luck? Hardly, because mathematics helps. Repeatable? No yet. A clearer view of operations? I wish.

And my operational obsession didn’t stop there. As I moved up the corporate ladder into the C-Suite, I had access to some rather impressive CEOs, COO, and Board Members, who – not surprisingly – had still more views of operations. Even the fantastic operational consultants we hired had their own approaches and paths to operational excellence.

Today, business operations is now seen as a catalyst to help companies attack markets more effectively, deliver products and services more efficiency, all while keeping customers quite happy. Both big company intrapreneurs and lean startup entrepreneurs are slowly starting to realize that this nebulous thing called operations may be just as critical to their success as what they’re developing. And we’ve even given this new shiny object a new, fresh, retro name: BizOps.

So here’s the deal: business operations is an amalgam of many different interrelated, complex, and evolving components. Figuring out how to build, integrate, and optimize these components requires diverse expertise and an excellent grasp of science, technology, and mathematics. These elements combine to create a litmus test for your “Head of Operations.”

So, why do we suck at business operations? Realistically, we don’t. We’re just not applying it holistically because we don’t understand what business operations is. Solving this is the next business revolution, whether we call it BizOps or something else.

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