Production

Production is where everything is converted into the products and services that create value for customers and investors. It is where most organisational activity is focused. Without it everything is just talk and ideas.

Production can feel driven or even chaotic with the many different demands on leaders and teams: emergent issues, interruptions, customer demands and competing priorities. It can be hard to see how it has any logic or order other than the production line or operational procedures that people follow. How it connects to all the other functions an organisation is not always clear.

The temptation for leaders and teams is to put their heads down, keep doing the tasks at hand and hope they keep getting results, now and into the future. They deal with issues as they arise but generally do the same thing over and over. Oil the squeaky wheel and wait for the rest to rust.

This common attitude is what leads to shocks for teams and organisations. Following existing procedures is only part of the responsibilities that go with production. Productive activity has to feed back into the organisation to increase the value, security and revenue of the organisation. It is these responsibilities that lead to better health and safety, customer service and innovation.

The Operational Pie provides a framework to help teams manage these responsibilities in their operational activity. Leaders and teams can use the pie to focus on what's going on and make decisions about priorities and actions.


The Outer Circle

The outer circle of the pie shows the three priorities operations must meet.

Value

Operational activity must increase the value of the organisation. This includes its assets, knowledge, brand, reputation, quality, key relationships and anything that makes the organisation valuable as an entity. Organisations listed on the stock exchange have their value assessed on a daily, minute by minute, basis. But other organisations are evaluated as well, by investors, customers, partners or anyone who might invest in it. If that value is seen to get too low then the organisation is put at risk. At an operational level this means maintenance, customer responsiveness, quality control, efficiency and coordination. There are many frameworks and systems available to help organisations achieve these outcomes.

Revenue

Daily operations must generate revenue for the organisation. This is even true for not-for-profits and government organisations. The effectiveness of their product and service delivery will influence future investments and budgets. Poor products and services in any sector threatens the viability of the organisation. This requires systems and processes such as just-in-time supply chains, sales and schedules, all designed to get your products and services to the customers who need them when they need them.

Security

Operations must increase the security of the organisation. This is more that maintaining value as mentioned above. It is also about safety of its people, customers and neighbours through responsible practices, products and services. It is about protecting the brand and reputation, reducing liabilities, and building strong ethical abilities. Leaders and teams must be aware of predictable surprises and be responsive to emergent issues. Decisions have to be made with an understanding of how it impacts on other parts of the organisation and the consequences now and into the future. Many organisations have been brought low because of the consequences of one part the organisation acting poorly.

The Middle Circle

These operational priorities depend on the functional roles in the middle circle.

Production

Most people in the organisation are engaged in production. The work of producing products and services is the engine that builds value and revenue for the organisation. Here people do their function as defined by the processes and systems they use. People sometimes work here without knowing much about how things work in the rest of the organisation. They focus on their role and technical skills.

Support Roles

Because production roles usually require people to be focused on their tasks they need the support of the so-called back room roles. These are critical to ensure productive activities can continue and secure the organisation's ability to continue performing. These roles are involved in procurement, logistics, human resources, systems maintenance and planning. Without these functions the people in productive roles would not have the resources and processes they need to be productive.

Management

The role of management is to keep the organisation aligned around the activities that will increase its value and ensure its security. It sets the directions and priorities and protects the backs of people so they can keep doing their work. Managers are responsible for making sure people have what they need to do the things that need doing.

The Inner Circle

Inside productive activity are three critical groups. These are the team, innovators and customers. Each has an important role to play if productive activity is to achieve its purpose.

Team

Without the people there is no organisation. Supporting and building their strengths and capabilities is critical. The role of managers and support roles is to ensure the team has what it needs to do its job and serve customers. The role of team members is to cooperate and support each other to get the job done.

Customers

Unless an organisation creates value for customers there is no point to it and no-one will invest in it. The customers give life to the organisation. Productive activity must always focus on meeting customer needs. Those roles that deal with customers have the added responsibility of making sure customer feedback get back to the rest of the organisation. This is critical to enable service improvement and innovation so ongoing value, security and revenue can occur.

Innovators

It is the innovators, from within the organisation or external to it, that help it adapt as a living entity to the changing needs and demands of the world. These are the people who can look at the organisation’s and customers’ experience and find ways to improve it. Potential innovators are sometimes considered deviants so it is important that managers know how to hear them and balance their ideas with the practicalities of production and the organisation’s strategy.

Productive activity varies greatly between organisations and sectors. What happens in a manufacturing workshop looks very different to a retail business. However the same underlying dynamics are in place everywhere.

Here we provide you with small examples of different relationships and dynamics that happen in the productive space. Each example illustrates how adjacent areas on the outer, middle and inner circles can work together.

Innovative Value

Managers find and work with innovators to develop ways to support and improve production, products and services. This increases the value of the organisation and the productivity of people and systems. The innovators might be part of the team or they could be researchers or consultants in another organisation. Sometimes it is the innovator who approaches the manager with ideas for improvement.

Administrative Flow

Management works with support roles to ensure the flow of resources, good working conditions and effective systems. These provide a stable and secure organisation so people can focus on their efforts to create value. The simplest way to understand the security that support services create for the organisation is to look at what happens if they don’t do their bit. Suddenly everything grinds to a halt.

Effective Decisions

Support roles work with people across the organisation to generate the information and data that management need. They support good decisions that protect the well-being of the organisation and all those associated with it. In a strategically aligned organisation with clear direction, this should lead to better customer service. The outcome of this is a secure organisation with reliable revenue.

Customer Service

Support Roles work with teams engaged in production so the organisation can serve and listen to customers. They make sure systems, customer interface and delivery services function well. They support effective customer engagement, so customers will come to the organisation to satisfy their needs. Production without customers is a liability. Production with customers is what produces the revenue the organisation needs.

Reliable Production

Production goes beyond a series of tasks. It has to focus on getting results for customers. To achieve this it has to do more than rely on quality controls and systems as mentioned in the description. It works with support roles to ensure that the controls and systems themselves are reliable and support the processes needed for effective production. It must also engage innovators, especially those involved in the production processes, to develop better ways to produce results for customers at the right price and quality.

Deviant Innovation

Innovators are sometimes sidelined as deviants, nuisances or dreamers. An innovator is a threat to the status quo. Production teams that don’t understand their role in the larger organisation and their purpose in creating value, security and revenue, can resist innovation to keep what is familiar. It is an important role of management to facilitate a constructive interaction between innovators and those involved in production. On one hand it has to encourage practical options from innovators and on the other it has to guide people through change.

There are, of course, many more nuances to these dynamics. The critical thing that the Operational Pie provides is a straight forward framework that makes sense of the rapid dynamics of operational life. It shows it is not a struggle between stability and chaos but a set of interrelated activities and responsibilities. Different parts of healthy organisations are not at odds, as is often the case in many corporate cultures, but are all part of an integrated system focused on producing value.

Reinforcement actions are events or processes to strengthen your people and organisation. They help people learn and develop effective outcomes for the organisation.

Some actions that can help reinforce productive practices that increase security, value and revenue are:

Business Planning

Business planning is more than allocating tasks and resources. It is about finding the 5% that can change each year to make things better. This requires a focus on how a team can improve its performance, what it has learned and how it can maximise the use of its resources.

Improvement Initiatives

Business planning cannot generate all the improvements possible for an organisation. Workplace improvement projects generate benefits for productivity, safety, stress reduction and silo busting. They can unite the skills and knowledge of different parts and levels of the organisation, using evidence, workshops, inter-team cooperation and improvement planning.

Leadership Development

Leadership development and coaching is an important part of creating and deploying the skills needed to bring together the different parts of production. The Operational Pie framework can help leaders identify where they need to develop skills and strategies for exercising their different responsibilities and workplace functions.

Team Development

Team development done well, and not as a generalised feel good activity, has the potential to combine capability building activities with review and planning for performance improvement. This creates teams that take responsibility for their work and are motivated to get better results for the organisation and its customers.

This exercise provides you with a set of generalised questions to help you explore the different functions and dynamics of the Production space.

Operational Priorities

Value

How can you ensure your activities are adding value to the organisation?

Revenue

What can you do to increase the contribution your activities make to the organisation's revenue?

Security

How can you operate so that your organisation, its people and stakeholders are secure in what they do?

Operational Activities

Production

What can you do to maximise productivity, contributing to the three priorities of value, revenue and security?

Support Roles

How can support roles work closely with production to contribute to the activities that produce the organisation's value?

Management

How will management work with people and innovators to implement better ways to meet operational priorities?

Key Groups

Customers

Where can different roles work together to maximise customer service and ensure they get the value they seek?

Your People

How can you protect and build up your people so they can focus on doing well and creating value?

Innovators

How can you involve the voices that seek change so that effective improvements can be made to your operational practices?

While a great deal is written about different functions of the organisation, such as quality control, HR practice and customer service, there is surprisingly little easily available that integrates it into a seamless whole. The Operational Pie helps fill this gap, giving leaders and teams across organisations a way to understand how they relate to each other and fit around the common purpose of creating value.

The pie does not need to add to the technical content of operations. Whichever element you want to look at, there is a wealth of experience, research and theory readily available, from six-sigma to industrial relations. The pie focuses on the unity of operational practice so people can overcome the false sense of competition between different parts of the organisation. It is an anti-silo tool. It also works to overcome complacency or stagnation in productive practices.

It is important to note that the culture and norms of the organisation, as addressed in the Integration function, can reinforce either poor performance or great performance. It is critical that cultural norms are developed and maintained to reinforce the Operational Pie by supporting a results focus attitude in the organisation and making sure its structures and reward systems align personal values with corporate values.