The triangle is a great example of nature’s perfect creations.
They’re strong - Geometrically, it’s the strongest, most rigid shape, hence its use in engineering.
They’re efficient - There is no wasted line, and most other shapes are combinations of triangles.
They’re even attractive - Humans are actually drawn to symmetry in faces that resemble, you guess it, a triangle!
With all of the applications in nature and engineering, it’s only right that the triangle has a place in business, too. So today we present to you the Operations Triangle.
You see, the operations department of any enterprise has three unique stresses put upon it daily: efficiency, profitability, and accountability. If any one of those areas lags, there’s going to be some major trouble at the workplace.
Not convinced? Think about these examples.
Executives are constantly measuring the efficiency of their operations. Every new hire, every piece of technology, and every training certification is designed to improve efficiency in the department. If it doesn’t, the cost of each of those endeavors will be considered a failure.
Have you ever seen one of those “It’s been XX days since workplace injury” on a production line? Workplace safety is the responsibility of the operations team.
Additionally, have you ever heard of a salesperson being reprimanded for selling too much? Of course not, therefore if there are capacity issues that affect profitability, that is also on the operations department.
With all of those stresses being placed on the business operations unit, it’s imperative that companies are able to balance efficiency, profitability, and accountability. With effective management of each of those issues, organizations can turn challenges into strengths.
The Importance Of Balancing Efficiency, Accountability, And Profitability
The reason a triangle is strong is because each point is interdependent on the others. The Operations Triangle works in the same way—when efficiency, accountability, and profitability are all feeding off one another, it forms a strong, cohesive operations unit.
At first glance, it might appear that profitability is more important than the other two areas, but it’s not. Too much focus on profitability, while neglecting the other efficiency and accountability, will not hold for the long term.
There’s also a myth in operations regarding efficiency. More efficiency is always better, right? According to the theory of constraints, this is objectively false. This is perhaps best demonstrated in a quote from Alex Rogo, the fictional plant manager from Eliyahu M. Goldratt’s The Goal, as he contemplates how to explain to management he needs to slow some machines down intentionally:
The point is, you can’t just focus on a single area of the Operations Triangle and hope for success—each piece works together.
So how do you make sure each area is holding its weight? Measurement and optimization.
Having the right technology allows you to improve efficiency and profitability without sacrificing measures of accountability.
Here are a few quick tips to help get your Operations Triangle off to a balanced, strong start.
Set SMART goals - If you don’t know where you’re going, there is no doubt that you’ll get there. Take an honest assessment of where you’re at and set goals about how you want to move forward.
Set KPIs, capture data, measure - Without measurement, you’ll never know the shape of your Operations Triangle. In each of the three areas, which metrics can you track to tell you the story of your progress? Make sure each metrics ties back into one of your SMART goals.
Install the right technology - Without the right tools, your operations improvement efforts have little chance at success. You’ll need some sort of project management tool like Basecamp to be able to track metrics related to accountability. To increase efficiency, consider a tool like HelloWorks, which allows you to skip the mundane practice of filling out forms, scanning, and creating the appropriate follow up. For profitability, you’ll need a dashboard that displays real-time revenue data.
Reflect on progress - With your goals set and tracking tools in place, you still need to set time to sit down and pore over your data and draw insights. It’s incredible how often this part is skipped. Remember, it takes analysis and action to turn your data into information you can use.
Rework and optimize - There’s a high probability that not everything will work perfectly, and that’s OK. Because you’ve set goals and you’re measuring how you’re trying to reach them, you can adjust your course before the big scary P&L meeting at the end of the quarter.
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