Coaching Operational Excellence
In addition to coaching leadership and strategy, which were discussed in my previous two blogs, an executive coach needs to understand operations, or how organizations convert human, financial, and material resources into finished products and services. Operations include functional areas such as human resources, technology, manufacturing, and organizational design.
Human resources refers to the recruiting, hiring, training, and retention of the best employees. It also includes compensation, employee relations, and organizational development. Pretty much everything that has to do with people defines the role of human resource management.
A coach must also have an understanding of the technology of operations, including the processes used to produce products and services. While it is not be necessary for a coach to be an expert in technology, it helps to have familiarity with business systems, information technology, and different manufacturing technologies. He or she must also be familiar with product innovation, manufacturing and its support functions, quality control, and project management.
Understanding methodologies of operational efficiency will help coaches when dealing with the challenges of costs and on-time delivery of products and services. This knowledge is vital for the coach if she or he is to be able to help the coachee’s organization remain competitive and cost effective.
Finally, knowledge about the relationship between organizational design and organizational performance will help the coach to guide executives in developing the most effective ways of structuring their organizations. The following case demonstrates the role of an executive coach in helping a CEO to organize his company operations in pursuit of a competitive edge.
Case Study: Operational Effectiveness through Coaching
Mark is an engineer who took over a garage-based business from his father and turned it into a thriving manufacturing company with 270 employees and two state-of-the-art factories. Mark’s major customers are manufacturers and suppliers of automotive vehicles. His success was mostly from patented products that his company designed and developed in-house. Anticipating intense competition from China once his patents expired, Mark was concerned about his costs and his ability to retain business. At the same time, customers wanted Mark’s company to constantly cut its costs, making it difficult to fund innovation and create the next generation of products. Innovation also requires a special environment without the pressures of deadlines and production schedules.
Realizing his future lay in both innovation and cost efficiencies, Mark needed an organizational structure to solve the paradox between the needs for innovation and the efficiencies of low-cost manufacturing. Many coaching sessions were spent exploring options about how to do this. Facing this paradox head on, Mark, with guidance of his coach, came up with a brilliant plan: he created a task force that he called his “Pioneer Team.” This group would have its own budget and report directly to Mark. He knew he had to protect their independence. Their major goal was to develop new products and improve existing ones. He put his most innovative people on this team. A second, smaller team was charged with taking the Pioneer Team designs and creating models and prototypes of its designs. They were also charged with testing these designs using rigorous quality and endurance standards. The remaining operations people were charged with continuing to concentrate on low-cost manufacturing. Their role was to create efficiencies, cut waste, strip unnecessary costs from the operations, and make sure that deliveries met customer expectations.
By separating these three functions, Mark’s company was able to focus on three different processes and protect each from the incompatibilities of the others. He was able to produce low-cost products, test, and innovate. In most organizations, these goals get blended together, losing focus on the unique requirements of each and often failing to do any one of them well. In Mark’s plant operation, his team was able to cut costs in manufacturing processes and materials without sacrificing quality. They also vertically integrated their operation through building a new plant that enabled them to control supplier costs, quality, and on-time delivery. All this was accomplished through an organizational design that protected otherwise incompatible functions from interfering with each other. Mark’s company continues to grow in the highly competitive marketplace of vehicle manufacturing.
The role of coaching in Mark’s case was to help him appreciate how the relationship between organizational design and predictable outcomes affected his company’s ability to meet seemingly incompatible goals. The coach’s understanding of organizational design and its effect on operations helped Mark to solve a problem that otherwise could have threatened his business.