Why is the job of an Operations Manager often dreaded? Why is Operations Management complex for many people? Well, the answer is simple, good operations management usually comes down to good decision-making. And quite often, many people just hate making decisions. The job of an operations manager boils down to great decision making.
Decision-making is a skill. It’s a skill that gets better with making more decisions. However, it should also be noted that there’s a science and an art to making decisions. Decision making should always start as a science before it can morph into an art. When it’s art, it becomes something akin to gut feel, to intuition.
Operations management is decision making under uncertainty, when you don’t have all the information. If Uganda Breweries Limited (UBL) is choosing a location for its new brewery. That’s about decision-making, a wrong decision and UBL will find itself struggling for years. Something should drive that decision. We could say, there should be a set of criteria upon which a location will be chosen. There should also be a data element to drive this decision. The locations can also be simulated.
For example, if UBL is choosing between Gulu and Mbale, one must also look at the second-order effects of that decision. For example, where will the water be extracted from in Gulu? What advantage does Mbale give? Does UBL seek to grow more into DRC and South Sudan? Or to enter the regions of Western Kenya? What does Gulu mean for logistics? Is there an identity aspect with locating in Gulu? How is the population growing in both areas?
An Operations Manager will be expected to make such decisions concerning the location of the factory. She will have to make decisions on the size of the capacity, on the products to be produced in that factory. Decisions will also be made on the human resources and the design of the jobs. An Operations Manager wears two hats, first the hat of a designer (designing the operations) and second that of the manager (managing the operations). All these roles are about decision making.
Thus, if there’s one critical skill that every operations manager needs, it’s the skill of decision making, especially decision making under uncertainty.
There are strategies to improving decision making as recommended by Max Bazerman and Don Moore in their book ‘Judgement in Managerial Decision Making’.
Strategy One: Is to use decision analysis tools. These include Expected Monetary Value, ROI and Discounted Cash-flows when analysing investments for example. Using linear models for example, making sense of the data.
Strategy Two: Acquiring expertise. This could mean bringing in the professionals, the experts.
Strategy Three: Debiasing one’s Judgement. Recognizing that our minds are prone to biases such as the over confidence bias and confirmation bias.
Strategy Four: Reasoning analogically
Strategy Five: Taking an outsider view. Zooming in and approaching the problem from different perspectives, wearing different lenses.
Strategy Six: Understanding the biases in others
Strategy Seven: Nudging wiser and more ethical decisions.