THE TWO GLOBAL EYES CONCEPT
Many companies pursuing operational improvement have the resources and capacity to reach their goals but fall short because their focus is local rather than global or holistic. They tend to examine single elements of their business in isolation, or they fail to adequately take into account the external environment (i.e. overall markets, industries, government regulations, and other areas outside of the business over which they have little control).
The Two Global Eyes concept is an operational improvement approach that simultaneously addresses the organization’s position in the outside world, the internal aspects of the company, and how the operational components (Process, Management Operating System, Behaviour) can work together.
There are 3 perspectives that must be maintained throughout an operational improvement intervention:
Purpose (Why does the company exist?): Keeping one eye on Operations and one eye on Purpose and making sure the two stay aligned.
Strategy (What are the company’s strengths and how can they be deployed?): Keeping one eye on the internal situation (i.e. the things it can control directly e.g. its resources, processes, proprietary knowledge) and one eye on external conditions (i.e. those things over which it has little control e.g. the market, competition, legislation) to ensure that the company’s product and service offerings meet market expectations.
Operations (How can the organization optimize its resources, improve production, better manage its processes and get the most out of its people?): Viewing Process, Management Operating System and Behaviour holistically to integrate Operations and optimize efficiency and effectiveness.
The TWO GLOBAL EYES approach ensures that the big picture kept in view and that the company’s potential is not diminished by an imbalance of key elements.
Operational improvement projects should be planned from the top-down—by starting with the corporate purpose and subordinating all operational goals and strategies to it. Before any intervention, the answer to the question, “Why does the organization exist?”, must be fully understood. Existing and potential operational capabilities are important only in so far as they generate value for clients and customers.
Attainment of Purpose is the overarching objective and reason for the organization’s existence. It is the first thing the organization seeks to achieve and it comes before secondary goals such as functional objectives.
Sometimes Purpose comprises multiple components that are not clear to all stakeholders. This often happens when externally-focussed objectives, such as strategic or humanitarian goals, are combined with financial goals. For example, a mining company in a remote area will naturally want to mine the ore at low cost, sell it at the best price and maximize profit. However, the company might also want to improve the local community through the provision of infrastructure, services, and jobs, in which case it might be willing to forfeit some profit for the betterment of the community. Instead of maximizing profit, the company optimizes the overall goal by trading off profit against the betterment of the community.
Effective organizations make decisions (both high-level strategic decisions and low-level operator decisions) with one eye on Purpose and one eye on Operations. When they continually measure of attainment of Purpose, their objectives stay on track
Strategy connects Purpose and Operations. It is the decisions the company makes in order to achieve its purpose and compete in the market place.
A strategy is about continually looking at the company’s operating model, assessing its processes, and thinking about how the company’s work should be done. Strategic success depends on the company’s ability to deploy its resources in a manner that is valued by its customers.
Purpose does not change often, but the external world changes all the time. The best companies know how to use their strengths and overcome their weaknesses to capitalize on outside opportunities and to counter threats. They are agile and adapt quickly and decisively to change. Their ability to do so is reflected by their strategies and is embedded in their operational components.
There are 3 operational components:
· Management Operating System
Operations consist of 2 simultaneous flows of activities—Process and the Management Operating System (MOS).
Process is the execution of Operations. It generates the company’s products and services. It is usually a linear flow with a beginning (where resources are inputted) and an end (where tangible outputs are delivered). Inputs are not only limited to direct production resources such as plant and equipment, materials, and production labour, but include upstream inputs from support departments such as Sales & Marketing, Engineering, HR, Logistics, and other departments that provide the prerequisites for production.
The MOS is the way Process is managed—it is the Drawing Board-to-Scoreboard cycle of Operations. On the one hand, it is about predictability and minimizing disruption, reducing the complexity of information, faster lower-level decision making, and lower risk. On the other hand, it is about finding opportunities, challenging the status quo, and making changes. The MOS is the means to control and at the same time the mechanism to pursue ongoing improvement.
The company’s employees are a key part of Operations. People contribute to operational success in 2 distinct ways. First, they supply the hard skills that are inputted into the Process that produces the company’s products and services. Second, employees have soft skills, which include interpersonal and communication skills and behavioral attributes such as personality, attitude, adaptability, and work ethic. Unlike hard skills, soft skills impact operations in an intangible, qualitative way and comprise the third component of Operations, Behaviour, which is the basis for corporate culture.
Process and the MOS are designed with the company Purpose in mind and with the flexibility appropriate to the industry in which the company operates. The MOS regulates Behaviour—the system contains reports that measure KPIs which focus on key success factors and motivates employees to strive for Purpose. By keeping Purpose top of mind, employees are most likely to align their actions with the company’s objectives. Behaviour is the glue that holds Operations together and when employees work towards the same goals, the value of the processes and systems are magnified. It determines how employees learn and the extent to which they are able and willing to create opportunities for themselves and the company to perform.