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Why is operational management important?

by | 14 Aug, 2018 | Process

Operational management is important because any organisation that can’t meet the needs of its customers long-term is doomed to failure. Boosting the efficiency, effectiveness and profitability of your business, operational management is all about ensuring your processes are working right.

Great operational management requires consistent processes

Rolls Royce. The ultimate luxury car and a name that companies the world over use to describe their products/services as being ‘the best’.

When Sir Henry Royce and Charles Rolls founded their luxury motor car company in 1906, their guiding principle was: “Take the best that exists and make it better.” The only way to achieve this excellence in operational management is process.

The cars take two months to build, involving pain-staking processes that are followed to the nth degree, to ensure quality and consistency across the range.

For example, crafting the wood trim for one car can take 30 days, because the veneer is matched throughout the vehicle to ensure symmetry. Furthermore, Rolls Royce keeps copies of the veneer in its archive, and numbers and tracks each donor tree in case anything needs replacing in the future.

The ‘Starlight’ headliner, which mimics the alignment of the stars that shone in the sky over Goodwood on New Year, 2003 when the factory opened, requires 1,300 individual fiber-optic strands to be inserted and tested – a process that takes 10 hours.

And a documentary showcasing the creation of its Celestial Phantom followed an artisan undertake the extraordinary feat of hand-setting 446 diamonds into the car’s interior serves. It was rejected because some of the diamonds has been set a fraction of a millimeter too proud.

Rolls Royce is consistently the best because it’s driven by process. Visit the factory and you won’t find a spec of oil on the floor. The tools to piece the master vehicles together are counted out and counted back in – just as a surgeon would do on the operating table. Every process is followed every time, and that’s what makes the brand transcend beyond cars.

The cost of getting operational management wrong

The Global Association of Risk Professionals says operational risk is the “loss resulting from inadequate or failed processes, people and systems, or from external events”. The risks could be due to a number of causes, such as IT disruption, data compromise, theft and fraud.

Operational managers are responsible for the day-to-day organising and coordinating of your services and resources, while anticipating and resolving any product/service delivery issues. This means it’s easy to get ‘stuck in the weeds’, continuing to do things the way they’ve always been done, rather than seeking to improve.

In “The state of process management in UK SMEs“, it shows that 88% of senior managers waste two-fifths of their week managing process. Just imagine…what could you achieve if every week someone gave you back two days?


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