# 🧮 The Operations Formula: Complete Guide ## The Formula **Customer WANT − Company HAVE × Environment = Strategic Trade-off** ## What Each Part Means ### Customer WANT (The Dream) - What customers desire in a perfect world - Usually: everything, instantly, customized, free - Always exceeds what's possible ### Company HAVE (The Reality) - Current capabilities and resources - Built over time with investment - Always limited ### The Gap (WANT − HAVE) - The painful distance between desire and capability - Every company has gaps - The question is: which gaps matter? ### Environment (The Multiplier ×) - External factors that amplify certain gaps - Makes some gaps critical, others ignorable - Examples: competition, regulations, technology shifts ### Strategic Trade-off (The Result =) - The forced choice about what to sacrifice - Must pick 2-3 TQFP dimensions to win - Accept losing on the others ## Why It's Multiplication (×) Not Addition (+) **Without Environment**: "We're slower" → Minor issue **With Environment**: "We're slower AND every 7 seconds costs 3% market share" → Company-killing issue Environment doesn't just add pressure. It MULTIPLIES the consequences of gaps. ## Real Examples ### McDonald's - **GAP**: Can't customize and maintain 90-second service - **ENVIRONMENT**: Urban density, time = market share - **RESULT**: Chose speed, sacrificed flexibility ### JetBlue Deicing - **GAP**: 8 trucks for average day, storms need 160 - **ENVIRONMENT**: Boston winters, FAA rules - **RESULT**: Chose cost efficiency, accepted storm delays ### Zara - **GAP**: Can't have instant fashion and durability - **ENVIRONMENT**: Instagram fashion cycles - **RESULT**: Chose speed, sacrificed quality ## The Universal Truth Every successful operation: 1. Honestly assesses gaps 2. Understands environmental pressures 3. Makes clear trade-offs 4. Aligns capabilities with choices Every failed operation: 1. Denies gaps exist 2. Ignores environment 3. Tries to be everything 4. Dies by compromise ## Your Action Steps 1. **List what customers WANT** (be honest about the impossible) 2. **Inventory what you HAVE** (be realistic about limitations) 3. **Identify the GAPS** (what can't you deliver?) 4. **Analyze ENVIRONMENT** (what makes certain gaps critical?) 5. **Choose your TRADE-OFFS** (what will you sacrifice to win?) Remember: Excellence isn't about having no gaps. It's about choosing the right gaps for your context.