Which hat are you wearing – the one of operations or development?

I have always wondered why certain managers accept change at some point and at other times resist? Well, it all depends on which hat one is wearing: the one of operations or development.

Imagine, for example, a safety-pin factory that produced 10,000 safety pins per day and it requires an input of per day of (1) 100 meters pin-wire, (2) 10 people, (3) Rs.1,000 as wages and (4) a plant.  Similar example is also a call centre: number of leads, number of tele-callers, amount of salary, and call centre infrastructure.

If one is wearing an operations manager’s hat, one’s role is quite focussed towards what I call as maintenance of status-quo.

  • First, one will maintain the minimum inventory level by ensuring raw material ordering on time, tracking transport, keeping adequate inventory, etc. One will raise alarm when the inventory goes below a certain mark.
  • Second, one will focus on ensuring the plant is maintained well, up and running, thereby minimising downtime. One will raise alarms when downtimes cross a certain threshold.
  • Third, one will focus on ensuring workers are trained adequately, present at work, motivated, etc. One will raise alarms when there is continuous absenteeism or engagement levels are down.
  • Fourth, one will ensure wages and incentives are paid on time. Will raise alarms when that is not the case.
  • Fifth, one will strive to set minimum benchmarks in production, e.g. minimum number of pins to be manufactured and routinely replace employees not meeting the minimum. Or keeping minimum the wastage, slack time, etc. Some minor operational efficiencies may strived for.

An operations focussed manager’s thoughts will be to keep the entire cycle running smoothly without changing the composition of the input and therefore the output.  The emphasis is on processes operating at the optimum level. If one asks an operations manager to increase in production, he will ask for increase in input parameters: more raw material / leads, more plants / call centres, more workers / tele-callers, more wages / salaries, etc. Seldom will he think of doing so without increase in input. Without input increase, he will view calls for production or sales increase as temporary and deliver it through temporary stimuli such as double wages, etc. and revert back to previous levels.

However, a business development manager will think in terms of increase in output without increase in inputs, by challenging the status quo or changing the processes significantly.  Such changes are probably risky, take time to implement – but they do result in permanent shift in productivity. For e.g. a question that a business development manager will ask are

  • Can 10,000 units of safety pins be produced from say 90 meters of wire (instead of 100)? How?
  • Can inventory be reduced to Just-in-time?
  • Can the plant be reorganised to produce more? Different routing? Different machines?
  • Can downtime be reduced by better predictive maintenance?
  • Can production be maintained by reducing the number of workers? Better quality workers but with also reduction in wages?

Developmental hat is unusual fashion for operations intensive managers, especially when they face tight timelines and goals. The man in operations is usually thinking in the short-term, not wanting to upset the “apple-cart”. So when you see a manager resisting change, probably he is wearing an operational hat.

My prescription for a beginner-manager is to wear any one hat at a time.  When the tides in inputs are great, then throttle the operations engines up. When it is the reverse, then open the developmental initiatives in full force. Personally, I think doing both is like changing the wheels of a running bus…difficult but not impossible.

Integrating fairness into Business Models

Undoubtedly, Ola is cheaper! One cant but feel the sanguine happiness with app based cabs after experiencing haggling with rapacious Auto-rickshaws and Yellow-Black taxis. But, Ola’s peak hour fare multipliers leaves us wondering if our karma is catching up? Are we condemned to suffer? Or will a sense of fairness from operators, even if market enforced, will eventually come to the rescue?

I used to pay Rs. 500 for rides back from airport to residence using FastTrack – a taxi-fleet operator – cursing often the fleece. Ola offered rides back home from Airport at about Rs. 200! I switched. So did several others. But recently when I landed at Chennai airport at midnight and ordered a Ola cab, the app asked me to confirm a 1.5x fare multiplier. The reason was ostensibly to motivate more taxis to operate at that hour so that at least I am not stranded. I promptly closed the app and retried. Same message. I closed and took FastTrack at Rs. 500/- instead!

Now, you may think I am quite irrational having paid Rs. 200/- more to FastTrack, when 1.5x times would have been still about Rs. 300? But at that minute I felt being unfairly treated…being taken advantage of…even feeling blackmailed. I am sure several others have felt somewhat similar. Worse – that feeling of having been blackmailed – lingers even today. Such unfair price practices occur in several other areas too: airline tickets, “tatkal fares” of Indian Railways, hotel reservations, etc.

Fairness is a component that needs to built into every business model as a fundamental strategy. Otherwise, consumers will treat business with contempt and at the first available opportunity switch. Consumers may, at times, switch even at his/her expense.

How does one integrate fairness in such business models? One may consider usual pricing for regular consumers. In fact, I think this will be one of the best techniques to increase loyalty base.

Let me know if there are other techniques?