Review operations based on performance

It is essential for organisations to continuously assess their performance against established goals and objectives. The process of reviewing operations based on performance involves analysing data, identifying areas for improvement, and making informed recommendations to refine operational plans. By engaging in this iterative process, organisations can enhance efficiency, drive innovation, and align with their strategic vision. In this section, we will delve into the following key aspects of how to:

• Develop recommendations for variation to operational plans
• Present recommendations to the designated persons or groups to gain approval
• Maintain records related to operational performance according to organisational policies and procedures
• Report information on operational performance to management

By systematically addressing these aspects, organisations can foster a culture of continuous improvement, refine their operational strategies, and ultimately achieve sustained success in a competitive business environment.

Developing recommendations for variations to operational plans involves a structured process to identify areas for improvement and propose changes that enhance organisational performance. Here's how to effectively develop these recommendations and the format to use:

Common Methods for Problem-solving

Each of these problem-solving methods discussed below offers a structured approach to tackling challenges and finding effective solutions. Depending on the nature of the problem and the available resources, organisations can choose the most appropriate method or a combination of methods to address issues and drive continuous improvement.

1. Root Cause Analysis
   Method

   Identify the underlying causes of a problem by repeatedly asking "Why?" until the root cause is revealed.

   Example

   In a manufacturing company, there is a recurring issue of products being delivered with defects. By using root cause analysis, it is discovered that the defects are caused by a malfunctioning machine due to inadequate maintenance.

2. SWOT Analysis
   Method

   Evaluate the internal strengths and weaknesses of an organization along with external opportunities and threats to identify strategic areas for improvement.

   Example

   A software company conducts a SWOT analysis to assess its current position. They identify a strength in their talented development team, but a weakness in their outdated software infrastructure that threatens their competitiveness.

3. Brainstorming
   Method

   Gather a diverse group of individuals to generate a wide range of creative ideas and potential solutions.

   Example

   An advertising agency is tasked with developing a new marketing campaign for a client. They conduct a brainstorming session to generate innovative ideas for the campaign's concept and messaging.

4. Fishbone Diagram
   Method

   Visualise the potential causes of a problem using a diagram that branches out from a central issue, helping identify contributing factors.

   Example

   A restaurant experiences a sudden decline in customer satisfaction scores. A fishbone diagram reveals various factors, including slow service, inaccurate orders, and lack of menu variety, contributing to the problem.

5. Pareto Analysis
   Method

   Prioritise problems by identifying the few critical factors that contribute to the majority of the issues.

   Example

   A project manager notices that a majority of project delays are caused by late deliveries of crucial materials. By applying Pareto analysis, they focus efforts on addressing supplier delays to improve project timelines.

6. Decision Matrix Analysis
   Method

   Evaluate and compare multiple options by assigning weights to various criteria and ranking them based on their overall performance.

   Example

   A retail store needs to choose a new point-of-sale system. They create a decision matrix, considering factors like cost, features, customer support, and ease of integration, to objectively select the most suitable option.

7. 5 Whys Technique
   Method

   Identify the root cause of a problem by asking "Why?" five times, delving deeper into the factors contributing to the issue.

   Example

   An online retailer is facing high cart abandonment rates. By applying the 5 Whys technique, they discover that the primary reason is the unexpected shipping costs during the checkout process, prompting customers to abandon their carts.

Presenting recommendations for approval is a crucial step in the process of implementing changes and improvements within an organisation. To ensure that your proposed variations to operational plans are understood, supported, and approved, follow these steps and best practices:

1. Identify the Relevant Audience: Determine who the designated persons or groups are that need to approve the recommendations. This could include senior management, department heads, stakeholders, or a combination of stakeholders.
2. Prepare a Comprehensive Presentation: Create a well-structured presentation that clearly communicates the recommendations, their rationale, benefits, and implementation plan. Ensure the presentation is concise, focused, and tailored to the audience's needs and preferences.
3. Provide Context: Begin by providing context for the recommendations. Explain the current state of affairs, the performance gaps, and the need for variations to achieve better outcomes.
4. Highlight the Benefits: Emphasise the benefits and positive impact of implementing the recommendations. Use data, metrics, and examples to demonstrate potential gains.
5. Address Concerns and Question: Anticipate potential concerns or questions the audience might have. Prepare thoughtful responses to address these concerns and provide reassurance.
6. Present Data and Evidence: Use visuals such as graphs, charts, and tables to present data that supports the recommendations. Visual aids can help convey complex information more effectively.
7. Explain the Action Plan: Provide a clear overview of the proposed action plan, including timelines, milestones, responsible parties, and necessary resources.
8. Emphasise Alignment with Goals: Highlight how the recommended variations align with the organisation's strategic goals and objectives.
9. Use Clear and Persuasive Language: Use clear and persuasive language to convey the importance and urgency of the proposed variations.
10. Request Feedback and Approval: Conclude the presentation by requesting feedback and seeking approval for the proposed recommendations.

Characteristics of a Good Presentation of Recommendations

1. Clear and Concise Messaging: Clearly articulate the recommendations using simple language and avoid unnecessary details to ensure that the message is easily understood.
2. Strong Rationale: Provide a compelling rationale for the recommendations, explaining why they are necessary and how they align with organisational goals.
3. Visual Support: Use visual aids such as charts, graphs, and diagrams to illustrate data, trends, and key points, enhancing audience understanding.
4. Audience-Centric Approach: Tailor the presentation to the audience's interests, concerns, and priorities, making the recommendations relevant and engaging for them.

Watch

To find out more about how to give a great presentation, watch the video below from Practical Psychology:

Maintaining records related to operational performance is essential for tracking progress, analysing trends, and ensuring compliance with organisational policies. Here's a 5-step process to effectively manage records while considering key considerations:

1. Identify Relevant Data
   • Determine what data and information need to be recorded based on the organization's objectives, key performance indicators (KPIs), and operational processes.
   • Ensure that the data collected aligns with the specific metrics and measurements used to assess operational performance.
2. Follow the Established Recordkeeping System
   • Follow the naming convention for records as described in the relevant policy and procedures.
3. Regular Data Entry
   • Implement a regular schedule for data entry into the recordkeeping system.
   • Ensure that data entry processes adhere to standardised formats and guidelines.
4. Data Validation and Quality Assurance
   • Establish validation procedures to ensure the accuracy and integrity of recorded data.
   • Conduct regular audits or checks to identify any discrepancies or errors.
   • Address any data quality issues promptly and implement corrective actions.
5. Backup Retention
   • Follow the data backup system to prevent loss of records due to technical failures or data breaches.
   • Follow the relevant procedure for archiving or disposing of records once they have reached the end of their retention period.

Key Considerations when maintaining records related to operational performance

• Data Security and Privacy: Ensure that sensitive operational data is stored securely and access is limited to authorized personnel. Comply with data protection regulations to safeguard privacy.
• Documentation: Maintain clear documentation of the recordkeeping process, including guidelines for data entry, validation procedures, and backup protocols.
• User Training: Provide training to individuals responsible for data entry to ensure they understand the importance of accurate and consistent recordkeeping.
• Consistency: Ensure that the data entered is consistent across different periods to allow for meaningful comparisons and trend analysis.
• Data Accessibility: Design the recordkeeping system to be user-friendly and accessible to relevant stakeholders. Consider providing dashboards or reports for easy visualisation of performance trends.
• Regular Review: Periodically review the data collected to identify patterns, anomalies, and areas for improvement. Use this information to adjust strategies and operational plans.
• Compliance: Ensure that the recordkeeping process aligns with industry standards, regulatory requirements, and internal policies.
• Continuous Improvement: Seek feedback from users about the recordkeeping process and make improvements based on their suggestions.

Maintaining accurate and well-organized records supports effective decision-making, accountability, and the ability to track progress toward organizational goals.

There are several types of reports commonly used to report operational performance to management. These reports provide insights into various aspects of the organisation's activities, allowing management to make informed decisions. Some of the common reports used for reporting to management include:

Management Dashboards

These are visual displays of key performance indicators (KPIs) and metrics on a single screen. Dashboards provide a real-time snapshot of operational performance and allow managers to quickly identify trends and areas that require attention.

Monthly Performance Reports

Monthly reports provide a comprehensive overview of the organisation's performance over the past month. They include analysis of KPIs, comparisons to targets, and explanations of achievements and challenges.

Quarterly Business Reviews (QBRs)

QBRs are comprehensive reports that cover the organisation's performance, financial results, market trends, competitive analysis, and strategic goals. These reports are often presented during meetings with senior management.

Annual Reports

Annual reports provide a detailed summary of the organisation's performance over the course of a year. They typically include financial statements, operational achievements, challenges, and future outlook.

Trend Analysis Reports

Trend analysis reports highlight historical performance trends over a specified period. These reports help management understand how various factors impact performance over time.

Variance Reports

Variance reports compare actual performance to planned targets or benchmarks. They identify significant deviations and provide explanations for the variations.

Operational Efficiency Reports

These reports focus on efficiency metrics, such as productivity, utilisation, and process efficiency. They help management identify opportunities to streamline operations.

Customer Satisfaction Reports

Customer satisfaction reports provide insights into customer feedback, complaints, and overall satisfaction levels. They guide management in enhancing customer experiences.

Employee Performance Reports

These reports assess employee performance based on individual goals, targets, and key responsibilities. They help management make decisions related to workforce optimisation.

Project Status Reports

Project status reports provide updates on ongoing projects, including progress, milestones achieved, issues, and risks. They help management ensure projects are on track and aligned with organisational goals.

These reports serve as valuable tools for communicating operational performance to management, enabling data-driven decision-making, and facilitating strategic planning and improvements. The type of report used depends on the specific information management needs to make informed choices about the organisation's direction and actions.

Developing a Variance Report for an Operational Plan: Process and Example

A variance report compares the actual performance of an operational plan against the planned targets or benchmarks. It highlights the differences (variances) between the planned and actual results and provides explanations for these variations. Here's how to develop a variance report, along with an example from a gym:

1. Identify Metrics and Targets: Determine the key performance metrics (KPIs) that were set as targets in the operational plan. These could include membership sign-ups, revenue, class attendance, etc.
2. Gather Actual Data: Collect the actual data related to each metric during the specified reporting period. This could involve pulling data from attendance records, sales reports, financial statements, and other relevant sources.
3. Calculate Variances: Calculate the variance for each metric by subtracting the actual value from the planned target. Positive variances indicate performance exceeded expectations, while negative variances indicate performance fell short.
4. Analyse the Variances: For each variance, analyse the factors that contributed to the difference between planned and actual performance. Identify any external influences, operational issues, or changes in customer behavior that could explain the variance.
5. Provide Explanations: Develop explanations for each significant variance. These explanations should be specific, concise, and based on data analysis. Address both positive and negative variances.
6. Actionable Recommendations: Based on the analysis, provide actionable recommendations to address negative variances and capitalize on positive ones. These recommendations should guide future decision-making.
7. Communicate Insights: Prepare a narrative that communicates the key insights from the variance report. Explain the implications of the variances on the gym's operations and strategies.

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