If you're thinking about changing your operations, this is a story is for you
Funny how some of the lessons you learn stay with you for ever isn’t it?
A late friend and mentor of mine, Bob Johnston from Warwick Business School, taught me years ago explained how to take a snapshot of an operation to inform improvement / redesign and I’ve used his method many times over, most recently in assessing the needs of a financial services organisation about to embark on a process excellence journey.
I’m a habitual sharer, so let me tell you a story and although it looks contrived, it really did happen!
The story begins at McDonalds over the usual Big Mac, fries and shake - all super sized as I wasn’t counting calories or questioning ingredients back then.
The reason I was meeting in McDonalds was to understand the impact of volume on the design of an operation. Understanding that high volume requires repeatability, task specialisation, standardised operating procedures and ultimately low unit costs made me appreciate the differences caused by low volume (Multi tasking and skilling, greater breath of knowledge and higher unit costs). Once you understand volume, the choices you make about your operation begin to form a rational series of steps.
Next we took a taxi into the City of London. I guess we could have caught a bus or used the tube, but Bob clearly felt I needed to learn about the second component of operational design - variety of demand. Cabs will pick you up from anywhere and take you anywhere; you can even choose your route if you’re brave enough enough to challenge ‘the knowledge’ - the high degree of flexibility deployed by taxi drivers to understand customer requirements, the working environment (road conditions) and to translate them real time into a practical route is obviously highly flexible. Buses or the tube on the other hand, have fixed routes, defined stops and require little active or reactive knowledge. They operate within constraints. Understanding variety was the second of my learning stops. Whether you respond to customer demand by embracing variety and flexibility or provide a fixed track solution will both inform how you set up your operation and the way it is charged to customers.
Arriving at our destination, we were early for our meeting so we had a walk around some of the shops and banks. Not one to miss a learning opportunity, Bob told me about the third V - visibility. The thing about any operation that is highly visible to its customers is that the customers typically are impatient - intolerant of delays that they believe unnecessary. This implies that customer facing colleagues need to be well skilled, able to deal with emotions and perceptions . Operations (for example digital businesses with remote fulfilment) that are less visible enables focus on different behaviours and skill sets. The degree of visibility is the third driver of operational design.
The point of our visit was to meet with the innovators of systems thinking and my exposure to the fourth V - variation. All through the day, Bob had asked me ‘does that look normal?’ and ‘I wonder if it’s always like this?” . His point, of course, was that we had no way of knowing, after all we had only visited the food outlets, banks and shops once, but for every one of them a definition of normal existed, we just had to look at some key data over time, expressed as a capability chart. Being able to see and understand normal variation was a lightbulb moment for me. It meant I could avoid knee jerk reactions to what predictabiy would happen and understanding work as a ‘system’ meant that I could focus on the purpose of the work, why it mattered to customers and how to drive out non value adding activities. All from understanding that operations contain variation - the knack is to spot what is normal and what might have special causes and investigate.
Simply understanding the four V’s means you will configure your operation effectively, it means you will choose the right type of improvement approach, it informs the numbers and types of people you hire and how you decide on any supporting infrastructure.
Is this just a story? Well the team I last used this approach on, dealt with low volume and high variety, it was transparent to its customers and removing unnecessary variation meant the adoption of ‘one best way’ in most of the stuff we did. As a result of figuring I needed a ‘professional services’ type model, I had great people with both high technical knowledge and customer empathy, our communications approach was led by principles of openness and inclusion and our operation was both highly visible and designed for efficiency to avoid delays for our customers ……