Show Me Your Business!

You are an operational leader of an asset intensive organization and a stakeholder asks you to “show me your business” without any further context. What would you say? What would you show?

Put yourself in the position of the facility operational leader when you are asked that very question. What is the first thing that would come into your mind? What would you show? Think about that for a moment before we continue.

I count five likely responses. Your mileage may vary, this assessment is not definitive by any means. I’m very curious what my fellow operational leaders and asset management colleagues would say. I should build a poll for this question.

In no particular order of importance, here are the reasonable responses:

Financial Plan

Follow the money. These are the numbers in both cost and production performance to which our operational leaders are held accountable to deliver. Finance considers itself stewards of the business. The financial management discipline with its accounting practices are, of course, fundamental to the success of any business. Organizations develop their business plans with financial management strategies as the basis for good reason. It makes sense then that operational leaders would turn to their production plans and their operating and capital expenditure budgets as a natural expression of their business.

Organization

It’s all about the people. A leader could point to the organizational design with its business units separated by product, region or technology and its structure defined by a hierarchy of functions, roles and responsibilities with associated personal goals and competencies. Artefacts include the organizational charts and personal performance goals.

Assets

List your assets. Asset intensive companies deliver value to their stakeholders by managing their physical assets throughout their lifecycle. It makes sense then that leaders would hold up their sites, plants, factories and facilities with their equipment as a representation of their business. The scope of assets may include one or more sites or spread out along regional or business unit boundaries. Artefacts may include GIS maps, site plot plans and the asset registry.

Policies & Procedures

Practices set expectations. Many companies have documents governing how they operate their business in terms of the activities of the organization. These documents are comprised of policies, standards or guidelines, business processes and procedures.

Dashboard

What gets measured gets done. Performance dashboards are a common management tool used to measure performance in achieving business objectives. Leaders can point to a dashboard for a representation of their business and how well its functions are performing. The dashboard often take form as a balanced scorecard or a series of leading and lagging metrics in a value map. Comparative performance can be benchmarked on a relative basis within the facility or on an absolute basis against other facilities.

All of the Above?

What if the correct answer is all of the above, at the same time?

What if there was an operating business model that integrated all the important aspects of running an operational business into a single framework?

What if the model provided a visual representation as the lens through which leaders view and actively manage their business in one space?

What if the model enabled business planning from the strategic organizational goals and the deployment of strategies, objectives and plans to earn the desired business results?

What if the model allowed a line of sight for its leaders and practitioners to see how they contribute and leak value to the organization?

What if the model featured the formal documented activities including practices in policy, standards, business processes and procedures and continuous improvement in strategies, objectives and plans?

What if the model provided a basis for a risk management framework to systematically identify and manage operational risks within the organization’s risk tolerance?

What if the model provided the tools to make more, better decisions by the right people, at the right time, with the right information, while understanding its uncertainty and resilience?

What if the model allowed performance management with leading and lagging metrics in a complete value map showing influences from its practices to the lagging business results?

What if the model provided a framework for governance complete with business planning, management review, audit and action tracking workflows?

Say What You Do, Do What You Say, and Prove It

A fully functional operating model should provide a holistic, integrated and transparent means of managing all the important activities of the organization.

At its core, the model needs to express the following:

  1. Say What You Do
  2. Do What You Say
  3. Prove It!

Why is this important? It sets the expectation for operational discipline. It provides the line of sight with the activities of the organization to execute the organizational strategies objectives. It makes sure everyone from top to bottom is pulling in the same direction. It ensures the operational practices are effective and efficient.

One Model to Rule Them All

What does your organization’s management model look like today? Operating organizations have pieces of the puzzle in various states of formality and maturity, but they are often in disparate systems built by different groups for their own needs.

Could the organization benefit from having a single integrated and functional view of the business? If you have to look in more than one place then the answer should be a resounding, “Hell, Yes!”

It is time to build one operational management system model to rule them all!

This is the best way to ensure the assets are achieving their required performance at the lowest sustainable cost with acceptable risk and minimal value leakage.

The technology is capable. This is the one digital transformation every organization with capital-intensive assets should be implementing to manage behaviors and activities to meet their business objectives.

Let’s get started then, shall we?

Scio Asset Management Inc. empowers operational leaders to See. Think. Decide. Act.

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Paul Daoust

Paul Daoust

Thought, Knowledge & Decision Enthusiast in Operational Excellence and Asset Management for Industrials at Scio Asset Management