SNw 036 The Tension Between Strategic Executives and Operational Personnel Created by James on 6/18/2013 3:51:34 PM
Recently I was giving a talk to a group of ERP Consultants and Sales Personnel regarding my experiences with regard to ERP
At a point I stressed the importance of Executive involvement and Executive Custody and asserted that the CEO should ALWAYS be the custodian of the ERP
One of the delegates volubly disagreed with me and asserted that Executives did NOT know how the business operated and that the ONLY way to undertake an ERP project was to work with the operational personnel because "they know how we do things round here"
I responded a couple of times to try and show why his position was flawed but he was LOCKED into his paradigm
This triggered me to revisit some thoughts that I had been having over several years relating to the TENSION that exists between the Strategic Executive view of the business and the Tactical Operational view
Subsequently I have encountered a number of situations where this tension is evident so I thought it appropriate to write about it
Note that these comments apply to the tension between the Strategic and Operational views in ALL ELEMENTS OF THE BUSINESS
1. I cannot get the information I need when I need it
I constantly encounter executives who complain that they cannot get the information they need when they need it
The principal factors driving this situation relate to a lack of Executive Custody -- the subject of my Webinar on Friday -- and lack of Strategic Alignment -- to be discussed later in the year
This manifests in Executives leaving mid-level managers and supervisors to specify the configuration of the ERP, which is a FATAL flaw
The consequence of this is that the implementation takes place within operational parameters based on how things are done on the ground -- reality is that the way things are done on the ground seldom reflects the executive view and, in the day to day hurly burly of business, this is NOT a major issue -- things get done BUT they get done WITHOUT a strategic framework so that, when the data is aggregated, it makes NO sense from an Executive perspective without massive massaging -- generally in Excel outside of the ERP
2. "Management do NOT understand how the business runs"
There is a widely held belief amongst operational people that "management do NOT understand the business" and that it is operations that makes the money.
This is a widely held misconception in society generally -- it is the intuitive wisdom of experienced leaders that generates commercially viable business operations -- YES they DO need the operational people to make things work and it IS so that Executives MAY, sometimes, have a bit of a theoretical view
HOWEVER, in my considerable experience of advising executives over more than thirty years I find Executives to be practical, down to earth, know how the business SHOULD run people
In fact, generally, I find that Executives have a BETTER idea of how the business should run than the operational people -- after all most executives WERE operational people once upon a time
The problem arises because of limited communication between the Strategic component and the Operational component and Operational people who "hack it" to get the job done, frequently in a sub-optimal way
I consistently find that, correctly facilitated, Executives have very clear ideas as to what IS required at the operational level subject to harmonization with practical constraints and considerations that they overlook because that is NOT their focus and NOT their responsibility UNTIL they choose to engage at that level in which case my experience consistently indicates a practical and workable outcome
3. The Strategic BIG picture
The Strategic / big / long term picture is abstract, based on intuition and informed gut feel, not obvious, developed by experienced executives with a holistic world view
Operational people are NOT required to operate at this level and are NOT equipped to operate at this level (if they were they would be executives NOT workers)
It takes a VERY different skills set to operate at the strategic level, skills which a very small number of people have, this is why Executives are a scarce resource
A distinct "change of pace" is required for an Executive to drop down back to the Operational level and engage constructively with Operational personnel in THEIR domain -- again, suitable facilitation can be important
There is a need to translate the Strategic requirement into an Operational action plan, a skill which Executives posses to varying degrees -- the absence of this translation capability is where many problems arise
4. The Operational World View
While the Strategic view relates to "doing the right things" (Malcolm McDonald), the Operational view relates to "doing things right" -- the nitty gritty of production cycles, deadlines, standard procedures, etc -- there is LIMITED room for intuition and initiative, the essence of the role is to keep things running smoothly to high standards consistently -- the way we do things round here
Frequently the exact way these things are done is AT ODDS with the Strategic view because there was NEVER any strategic facilitation to tie things together with the result that poorly communicated Strategic decisions and Strategic decisions that are made sub-optimally filter down to Operations with a degree of "broken telephone" such that what the Executive envisaged and what Operations are told to do seldom coincide -- NOT because the Executives do NOT know what to do -- at a headline level they do -- BUT because the message got corrupted
The consequence of this is HIGHLY sub-optimal ERP configurations that get the job done but constantly get in the way of Strategic goals and hamper or prevent Strategic information acquisition
5. BPM is completely IRRELEVANT and very Important
BPM is a buzz word that has almost entirely become disconnected from the underlying concept of "Business Process Mapping", which REALLY means "workflow mapping"
In fact, BPM has, like ERP, developed a life of its own -- I spoke last year at a BPM conference and the speakers spoke about EVERYTHING EXCEPT workflow mapping -- to listen to the speakers Business Process has a breadth of interpretation that embraces everything, just like, for the ERP salesman, ERP embraces every possible system even though the strict interpretation of "Enterprise Resource Planning" occurs in only a SMALL number of ERP installations
Thus, at one level, BPM as a buzz word is, in my view, completely irrelevant -- focus on the fundamental building blocks, Strategy, Strategy Discovery, etc, etc
On the other hand, optimization of workflows, as an OUTPUT of an ERP project, NOT an imput, IS very important
BUT asking Operational staff to participate in "brown paper" exercises to "map processes" is a total waste of time -- processes should be dictated top down on a basis of what will work best for the business
6. Impact on ERP Implementation
This tension between the Strategic view and the Operational view must be effectively managed for a successful ERP implementation or remediation and, in fact, for successful ERP operation
The Strategic Solution Architecture of the system configuration should be developed TOP DOWN starting with the Executive view and cascaded progressively down the organization with progressive elaboration and refinement as it is taken on-board by Operational staff
In this process practical contraints must be taken into account and the standards, policies, practices and methods optimized for the real world of Operations WITHOUT losing the Strategic intent
For example, at the Executive level, it may be decided that there is a need to track mechanic hours per machine
The initial solution may be envisaged as manual time sheets but, in practice, these are NOT well accepted by mechanics and result in unreliable data -- conclusion? Do NOT track mechanic hours AND, "you see the Executives are impractical" BUT there are alternative solutions available using electronic devices which may be practical IF the Executives consider the investment justified -- thus the design now iterates Bottom Up to the Executive suite for refinement of the solution
Implementations should proceed Bottom Up, informed by the strategic framework derived from the Top Down design -- this is the SAME way we build buildings -- Top Down visualization of the final structure followed by Bottom Up construction
7. How Operationally focussed consultants MISS it!
In my experience the vast majority of ERP implementation consultants and, in fact, the vast majority of of Management Consultants generally, are operationally focussed -- doing things right and are committed to helping clients spend considerable sums keeping those consultants busy day in and day out with low value tasks that deliver little or NO lasting benefit
What is called for in any team is at LEAST one strategically adept Strategic Solution Architect who can assist with the conceptualization of the Strategic solution and the translation of that concept into a practical OPERATIONAL solution
The lack of a gray haired Strategic Advisor on an ERP project can cost the business dearly in terms of denying it a long term high value solution
It is vital to take account of these factors in designing and operating ERP solutions and, in fact, any Business Optimization initiative...
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