"In the past the man has been first; in the future the system must be first." - Frederick Winslow Taylor
Once you've determined your org's jobs-to-be-done (JTBD), you need to figure out how they'll be integrated to successfully execute your business strategy. This may include things like implementing standard operating procedures, establishing appropriate communication channels and rhythms, or implementing quality control systems.
Just like with your Org Stack, there will be operational tools and processes that your business may never need or may not need until your growth hits a certain level. Being thoughtful about the systems you put in place as a framework to connect, communciate, and execute is how you put together your Ops Stack.
What do we mean by Operations?
"Operations" is probably the second most nebulous term in any business (right behind strategy) in that it means very different things to different people based on their background (industry, size of the company, business model, functional job role). Here we will define Operations as the day-to-day activities that a company undertakes to produce its goods and services and create value for its stakeholders. It includes all the processes and tasks that the organization must execute consistently to function effectively, ranging from product development and production to sales, marketing, customer service, and administrative duties.
Operations revolve around managing your firm's assets including personnel, capital, and technology to transform inputs into outputs - your products or services.
Why it matters:
The Operations of a business can be thought of as the engine of its succes: turning the wheels that drive revenue, profit, and growth. Based on that analogy, it should be pretty clear why your Operations deserve thoughtful design and attention, but here is an enumeration of the why:
Efficiency & Profitability: By optimizing resource usage, reducing waste, and improving productivity, efficient operations can significantly contribute to a company's bottom line. Minimizing costs and maximizing output, period.
Customer Satisfaction: Consistent, high-quality output is crucial to satisfying and retaining customers. What is your first reaction when your internet or power goes out? How does it make you feel about your provider? Effective operations ensure that products or services are delivered on time, in the right quantities, and meet the expected quality standards.
Competitive Advantage: Companies that operate more efficiently can often deliver better value or unique features that set them apart from their competitors. Operational excellence can also lead to better margins for a given market, relieving some of the pricing pressure that may present itself in the form of aggressive competitors or challenging market conditions.
Scalability: Business units and processes should be composable where possible and streamlined everywhere. This makes it easier to grow and scale, enabling your business to respond quickly and effectively to growth opportunities.
The Ops Stack
Operations Design Stack (Ops Stack): An Ops Stack is a comprehensive, integrative framework for the strategic management and execution of business operations. This stack overlays the traditional operational model with modern components such as digital transformation, process automation, and flexible outsourcing strategies to achieve efficiency, scalability, and agility in the rapidly changing business landscape.
Rather than focusing solely on the internal operational processes of each business unit, an Ops Stack considers the bigger organizational picture, incorporating the following elements:
Traditional Operational Processes: These include the foundational business processes that exist within an organization such as procurement, logistics, quality control, etc.
Functional Operational Frameworks: These are tailored operational models for specific business functions like sales, marketing, HR, etc. These functional stacks align with the overall operational framework, ensuring uniformity in strategy execution.
Digital Transformation: This involves the incorporation of digital technologies to transform services or businesses, replacing non-digital or manual processes with digital processes, or replacing older digital technology with newer digital technology.
Process Automation: The use of technology such as AI, machine learning, and Robotic Process Automation (RPA) to automate routine tasks, enabling the workforce to focus on strategic and creative tasks.
Outsourcing and Partnerships: Engaging third-party providers for specialized tasks or functions. This may range from things like manufacturing to customer service to IT support.
Agile Methodologies: Incorporating agile principles for faster, iterative operational cycles that allow for quick pivoting and continuous improvement.
By combining these elements, an Ops Stack provides a business with a robust and flexible operational blueprint. It allows businesses to rapidly adapt to changes, optimize resources, and maintain a competitive edge in the digital age. This modern approach to operations enables a business to anticipate market trends, respond to customer needs, and evolve its operational capabilities effectively.
Operations Management: This is the overarching concept that involves designing, controlling, and managing the production and delivery of goods or services. It ties together all the individual components of the Ops Stack. Each topic we've discussed can be framed as an element of operations management. For example, in the context of human resource management, we can explain how effective HR operations management helps retain talent, enhance productivity, and maintain a healthy workplace culture.
Operations Research: This field involves using advanced analytical methods to help make better decisions. It can be applied to various operational areas to optimize processes and improve outcomes. For example, in supply chain management, operations research might involve using mathematical models or simulations to determine the most cost-effective distribution routes. In customer relationship management, it could involve analyzing customer data to predict buying behaviors and inform sales strategies.