We’re currently finalizing the design of a quantative project that will allow us to discern how good banks and insurance companies are, from an operational perspective, at responding to internal and external customer demands, as well as the impact that responsiveness (or operational agility) has on key success measures such as unit costs, operating margins and revenue growth.  The big argument on the team is whether in a Financial Services environment, Operations can have ANY impact on revenue growth through an avenue other than service fulfillment.  I say yes – not only CAN Operations impact revenue, they MUST enable revenue growth in order guarantee organizational success and protect efficiency gains.  Some of my colleagues say nay, that is not Operations’ job, leave that up to the revenue folks.  Let me tell you why I think they are wrong, and ask you to settle the argument for us.

In a service organization, Operations’ role can be very hard to define.  Let’s start with the fact that very few people outside of an Operations environment know what Operations is or does.  If anyone asks, I usually provide the simplistic explanation that Operations is the place where a customer’s request gets fulfilled, but not only does that not do it justice, in modern times that’s often not even true.  Many requests are now fulfilled directly at the point of interaction, and I like to believe that Operations’ job goes beyond the simple act of turning applications and checks into widgets.

Operations fulfills two functions – a tactical, back-office processing function and a strategic business support function – but ultimately we are a SUPPORT function.  If the company agenda calls for revenue growth, then our job is to support revenue growth while keeping an eye on efficiency.  We are the custodians of the firm’s processes and, along with our IT brethren, the guardians of the firm’s execution capabilities.  The problem is that most people remember function number one and forget about function number two… and I don’t blame them.  Most goals, metrics and dashboards still revolve around how many widgets we can crank out, how fast and how cheap.  However, some of the data and knowledge we’ve amassed in the last few years, using methodologies like Voice of the Customer, for instance, could really help Product and Marketing design the most profitable products and powerful communication campaigns.  Manufacturing methodologies, like Lean and Six Sigma, could help Sales refocus their resources on the most likely sales targets.

So is it that we as a function CAN’T contribute to revenue generation, or that we don’t do it because we currently don’t have an incentive to do it?  I’ll leave it up to you to help me prove my colleagues wrong!