You’ve heard of “strategy” – and you’ve certainly heard of “execution.” But have you ever wondered how an organization figures out exactly what it’s going to do every day to execute on its strategy? Or why so much of that day-to-day seems like it comes straight out of an episode of The Office or a Dilbert cartoon? Or if there’s anything we can do about it?
Your strategy - the problem you’re trying to solve, who you’re solving it for, and why - shapes every decision that happens in your organization. Clarity of what the organization does and does not do, and commitment to that clarity, are required to ensure that the daily activities can be performed well and managed for quality over time.
Your operating model is the set of guidelines and expectations that allow you to monitor and manage day-to-day execution. The operating model defines what processes are needed to get the job done, but not exactly how those processes are performed. It tells you what role in your organization has decision-making power over a process, who is in charge of making sure that process is performed well, and exactly how they will know the process is doing what it should. In short, it’s a map or a plan that lets the organization stay healthy over time.
Service organizations rely on people to follow processes that result in mission fulfillment. These processes are supported by technology and tools that help get the job done. The capacity of an organization is the ability of all people at the organization to execute consistently, and well. These elements — people, processes, technology and tools, and capacity management — make up the operating system.
Early stage organizations are often characterized as “entrepreneurial” and “scrappy” with a “can-do” attitude that tackles every new problem expecting to solve it through pure energy and determination. Organizations that are early stage can face unique challenges in their operations. They should remain aware of the importance of early stage flexibility and autonomy, as well as the ways in which flexibility and autonomy are impacted by operational decisions to standardize.
Maturing organizations have committed to a strategy and are beginning to document their processes. They are characterized by a move toward consistency and measurement. Typically these moves are driven by external forces — a large grant or dramatically increased demand for services — but are sometimes undertaken proactively when leadership believes there will soon be a big change in external forces.
Mature organizations have committed to a strategy, have documented their processes, and are mostly engaged in extending their reach and seeking more efficient, effective ways of getting their work done. They are characterized by a focus on governance and protecting their operational alignment to perpetuate their ability to provide services.
In the third part of this series, we discuss two different definitions of capacity that are tightly inter-related. Strategic capacity is the overall capability of leadership to ensure ongoing health and stability in an organization. Operational capacity is concerned with the finite resources that enable and simultaneously act as constraints on service delivery.
Almost everyone has an instinctive understanding of money as an element of operational capacity, and that instinct isn’t a bad starting point for thinking about budget’s impact on capacity in an organization. Moving toward operational excellence means moving away from constantly focusing on the “right now” and designing and re-visiting operations from an “over time” or “ongoing” mindset, and to use available money more effectively as a resource while planning for its related constraints.