Page 71 - Operations Strategy

46 CHAPTER 2 • OPERATiOns PERfORmAnCE

KEy quEsTiOns
● How can operations performance ‘make or break’ the organisation?
● How is operations performance judged at a societal level?
● How is operations performance judged at a strategic level?
● How is operations performance judged at an operational level?
● Do the role and key performance objectives of operations stay constant,
or vary over time?
● Are trade-offs between operations performance objectives inevitable, or
can they be overcome?
● What are the advantages and disadvantages of focused operations?

Operations performance can make or break any organisation

Operations strategy, and the resulting performance that it brings, can either ‘make’
or ‘break’ any business. Not just because the operations function is large and, in
most businesses, represents the bulk of its assets and the majority of its people,
but because the operations function gives the ability to compete by providing the
ability to respond to customers and by developing the capabilities that will keep
it ahead of its competitors in the future. For example, the performance of their
operations functions proved hugely important in the Heathrow T5 and Dubai
T3 launches (see the example box below). It was a basic failure to understand the
importance of operations that (temporarily) damaged British Airways’ reputation.
It was Dubai’s thorough operational preparation that avoided similar problems.
However, assessing the performance of anything at any time is hardly ever straight-
forward. Perceived performance is a function of, amongst other things, who you are
(customer, employee, stockholder etc.), your objectives (often disputed), timescale
(what is judged as good now may not be appropriate next year), measurability (how
you measure trust, relationship, security etc.) and how comprehensive you want to
be (do you really want to measure everything every customer may find important?).
Nor is operations-driven performance improvement always guaranteed. Sometimes
other factors can outweigh operations excellence.

example a tale of two terminals 1
Terminal 5 at London’s Heathrow Airport is now one of the best in the world, with awards for
customer service and efficient operations. But when the terminal first opened it was a disaster,
culminating in two of British Airways’ (BA) most senior executives, its director of operations
and its director of customer services, leaving the company. The opening of the £4.3 bn terminal,

M02 Operations Strategy 62492.indd 46 02/03/2017 13:01