6 Strategies to Define & Build Operations Capability in Your Organisation
Developing your strategic and tactical operations capability is difficult to get right, especially when aligning them closely with your business strategy.
That’s why we’ve created this guide to develop operations capability in your organisation. Let’s look at six strategies you can use to define and build operations capability in your business.
What does operations capability mean?
Operations capabilities are a capability set referring to the combination of knowledge, skills, knowledge, tools, processes and behaviours used by operations professionals to deliver an organisational objective.
These are the capabilities that individuals working in operations departments need to know to make effective and impactful operations decisions. Said capabilities assist in operations management processes, such as logistics and production management.
3 steps to define operations capabilities
You need to understand what your operations department is doing for the business before you can even get started on listing operations capabilities.
Step 1: Define the need
Consider the following:
- The organisation’s mission and values. What is it trying to achieve, what does it to, and why does it exist?
- The purpose of operations in the organisation. For example, is it improving processes, production management, logistics?
- Where you want to grow from here. What value does operations bring to the business, and where do they have room to develop? What operations roles do you currently have, and what will be needed in the future?
At the end of the day, you need to understand your business strategy so that you can align your operations capabilities with desired outcomes. Capability building is much easier when you have a specific goal or destination in mind.
Step 2: Define the purpose
When you define an operations capability, you need to consider its purpose within the context of the organisation and its operational capabilities. There are typically five factors to consider when defining the purpose of a capability.
- Organisational strategy: I.e. How well the capability feeds into achieving business outcomes.
- Market demand: Whether there is a demand for the capability.
- Available resources: Whether your budget, people, or equipment are enough to sustain the capability.
- Existing capabilities: Whether your capability complements or competes with your organisation’s current capabilities.
- Risk: Potential risks that could arise from building the capability, such as negative impacts to the business’s finances or reputation.
Step 3: Define the outcome
Naming your capabilities is really about clearly defining the desired outcome you want. This way, you have both a definition of the capability, and an idea of how it actually functions in practice.
As an example:
- Supply chain management
- Quality control and assurance
- Cost control and budgeting.
If you’re still having trouble defining your capabilities, we’ve done the hard work for you. We’ve built a comprehensive list of operations capabilities here, including descriptions, competency levels, and related capabilities. And, if you want to take a look at adjacent capabilities, we also have a list of strategic capabilities for you to look at, too.
Just remember that when it comes to naming your capabilities, they should be defined in language that aligns with your company’s voice and mission. Don’t be afraid to change up our wording if you need to.
6 strategies for building operations capability
Building and developing operations capability typically involves a six-step process of:
- Gaining buy-in from leadership
- Creating co-ownership between HR and business units
- Understanding capability gaps
- Assessing capability maturity
- Building capability with training
- Regularly tracking progress.
The heavy strategic lifting is in steps one and two, so that you can focus on the niche methods of execution in steps three to five. (Step six is all about maintaining momentum, but we’ll get to that.)
1. Engaging leadership
You don’t necessarily have to convince your business leaders of the need for operations capabilities, but you do need to get their buy-in to make building operations capability a business priority. In other words, what pain points are going to be solved by prioritising the development of operations capability?
You need to frame the need to leadership in terms of the KPIs they care about. They want to see a significant positive effect in process improvement, productivity, and business performance, and it’s your job to make sure it’s clear how building operations capability will address their pain points and increase how efficiently your business performs. So, you’ll want to clarify how investing in operations capabilities helps your workforce:
- Improve operational processes
- Gain greater productivity
- Drive business performance.
The bottom line is that you want to prove the ROI—in this specific case, leadership’s investment—of building operations capability.
2. Create co-ownership between HR and business units
Lasting capability-building doesn’t just happen overnight. To consider your workforce “transformed”, you need to see incremental changes to employee behaviour over time from developing your operations capability. But there’s one issue that can prevent this from happening: Organising effective capability development programs is difficult when your HR and business units are operating in isolation from each other.
You need to foster a relationship of co-ownership between your HR department and the various business units of your organisation. You can’t just silo the responsibility of L&D with any one department—leaving it up to individual business units can divorce L&D from organisational strategy, and leaving it up to HR alone might mean L&D initiatives lag behind the changing needs of each business unit. In other words, a shared ownership between HR and operations business units allows for a more cohesive and strategically-aligned approach to building your organisation’s strategic and tactical operations capability.
3. Understanding operations capability gaps
What is a capability gap, exactly? It’s when there’s a discrepancy between the capabilities you currently have and the capabilities you need in future to deliver on your business strategy.
The first step to understanding operations capability gaps? Ensuring your capabilities are fully integrated with your business needs and strategy. This way, when you find capability gaps and address them, you know that you’re directly addressing issues that will lead to improved business performance.
You can assess the operations capability gap in your organisation with a few different assessments:
- Self-assessments
- Manager assessments
- Subject matter expert assessments.
Most capabilities come in varying levels of competency to help measure the proficiency or maturity of a capability:
- Beginner
- Intermediate
- Advanced.
While you can just use one type of assessment and call it a day, we don’t recommend it if you’re looking for a holistic picture of operations capability. For one thing, people aren’t always the best judges of their own skills and competency. So, go for a combination of all three assessment types to gain a clearer idea of which areas individuals are strong in, and which areas need work.
4. Assessing operations capability maturity
This involves building a checklist of important operations capabilities and rating employees’ level of proficiency in each. The scale will be similar to the one above, with the lower end of the scale indicating a low proficiency and the higher end indicating an operations capability you may be more competent in. The idea is that you get a sense of where your operations capability stands, and which of them may need to be developed further.
A good way to think of this is as making a diagnosis. By “diagnosing” which of your organisation’s operations capabilities are weak, you can create a treatment plan to improve them.
5. Methods to build operations capability
At this point, you should:
- Understand your operations capability gaps
- Understand the level of capability maturity you currently have.
Building operations capability in your organisation is about developing effective L&D efforts to improve competency. Simple, right? Well, remember that you want to create change that sticks over time. So how can you do this?
- Consider a performance learning management system (PLMS). They can be loaded up with all the necessary, strategically-aligned courses and content to ensure operations capability development in one easily accessible location. This means content can be returned to and repeated to reinforce learning materials and ensure knowledge retention.
- On-the-job training enables learning in the moment, and the potential for real-time feedback to correct bad processes, instead reinforcing the good ones.
- Develop institutionalised learning, or capability academies, where individuals can share knowledge and best practices in developing operations capability.
6. Tracking progress
This is the part where you actually evaluate how well the entire L&D process has gone, from your capability gap assessment to your training design and effectiveness. So, you need to re-assess your competencies and maturity in your operations capability. Remember that you want to facilitate organisational transformation, but that transformation can only exist if it is long-lasting change in the behaviours of individuals.
Ideally, your operations capabilities will be more mature than before you started development, in accordance with your “treatment plan” from before. This is something you want to test regularly, because again, you want long-lasting change. Timing matters here. Re-assessing once immediately after concluding L&D efforts isn’t going to prove anything, because without those newly developed capabilities being put to frequent use, knowledge will be lost over time.
Instead, you can re-assess with:
- A training needs analysis, to see what training is still required
- Training evaluations or surveys, to get an idea of how training was received by employees
- Your training ROI, which reveals how well performance and KPIs have been met since training occurred.
Evaluate constantly to understand the true extent of your progress. And this means even after you’ve achieved your goal, because the industry and its standards are changing all the time. You need to make sure that your current level of operations capability is enough to keep you competitive in the market.
Key takeaways
Operations capability are an important aspect of your business functions, tied to your business performance and strategy. Considering operations can cover everything from quality assurance and process management to operational innovation, all of which affect the continued operational performance of your business, it goes without saying that you need to make sure you’re being proactive about their development.
The most strategic approach to developing operations capability involves six steps:
- Gaining buy-in from leadership
- Creating co-ownership between HR and business units
- Understanding capability gaps
- Assessing capability maturity
- Building capability with training
- Regularly tracking progress.
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