One of the key components of our ‘Prepare your Business for Recession’ programme is tackling the operational functions within your business. In the following blog we will share with you a few insights we share with our clients.
Operations; the power and orchestration of organised systems, processes & people.
One of the first questions I ask business owners & CEO’s at the beginning of our mentoring sessions is whether they are someone who lives and works in “Chaos or Order”.
If they live and work in ‘Chaos’ I always ask whether there is a senior manager i.e. their business partner that creates the ‘Order’ in their business. If not I recommend that they attempt to change their habits if they want to gain one of the strongest tools for business success and growth.
If you were suddenly unable to work how long would it take one of your staff to find an important file without your assistance?
Incrementally how much time does your business waste due to a lack of order & systems? Even with the most basic repetitive actions, behaviours & habits? (See above).
And yes there are lots of contributing factors why businesses succeed but from my experience and observations- businesses with a strong organised and methodical operating system will grow faster with stronger stability and less disruption than those without.
For me the role of operations in a businesses is the glue that keeps everything together and functioning like a Swiss watch. A business with strong operations will have a workforce with less stress, more confidence and certainty compared to a business that works and lives in ‘Chaos’.
‘Your own unique operational strength’
Going back to our module on your ’Business Model’ it is essential that you consider finding ‘Your own unique operational strength’. The answer to this can often be found in new innovation, technology, resources, cultural changes and needs, or an idea based on your own specialised knowledge of your sector & industry.
- Where is there unnecessary waste? In time, resources and mistakes?
- Where could A.I replace basic repetitive tasks?
- What technology are you competitors using to improve efficiencies in time, labour and resources? How can you systematised Recruitment & Training especially?
- What ISO standards do you have in your business
ISO 9001:2015, a standard for general organisational quality management systems (QMS)
ISO 27001:2013, a standard for Information Security Management Systems (ISMS)
ISO 14001:2015, a standard for Environmental Management Systems (EMS)
- What new Software could you implement to automate reports, data, analytics? Compatible and integrated ERP & CRM system?
ERP- Enterprise resource Planning:refers to a type of software that organisations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations.
CRM- Customer Relationship Management:Is a technology used to manage interactions with customers and potential customers. A CRM system helps organisations build customer relationships and streamline processes so they can increase sales, improve customer service, and increase profitability.
Often the easiest common denominator business owners look at when looking at operational efficiencies is by looking at financials. Either in the reduction of materials, production, time or labour costs.
Those who can look beyond conventional thinking and become innovative in how their business operates will reap higher profits, lower operating costs, faster recruitment & training lead times and offer a better offering to any potential investors or buy-outs of our business.
How to make your Business Operations more efficient!
A brilliant example of this is demonstrated by the scene in the movie ‘The Founder’ with Richard & Maurice McDonald as they tirelessly refine the foot print of the McDonalds franchise.
The McDonald brothers had a great understanding of minimising and maximising every incremental component of their business:
- Strategically designing the minimum required business premises by square footage- reducing rental, building & maintenance costs.
- The operational design & layout of their Kitchens which in turn: Reduced and identified the exact amount of employees required per shift to operate at full capacity, controlling man hours and wages.
- Creating a turn-key process for creating a ‘Big Mac burger’ that could be replicated by any McDonlads franchise anywhere in the world and still taste and look the same.
- Creating a business where everything could be incrementally measured- from the time a customer places an order for food to receiving it, the exact costings for creating each meal, the costs for operating a franchise, the expected daily profits plus much much more.
Ultimately the CEO that builds a business with organised systems and processes & people will benefit from one of lives most precious assets ‘TIME’. And afford you increases momentum and speed to achieving your economic goals for growth and expansion as a business.
Operations Management (OM): The administration of business practices to create the highest level of efficiency possible within an organisation.
‘Learn to Measure everything’
To fully execute the power & control of orchestration of organised systems, processes & people you must find a means in your business of measuring everything. Without a means to measure all our resources and efforts we cannot define success or failure, progress or improvement.
It is therefore essential that you try and find efficient ways and means to calculate all increments of time, labour and resources in your business. This is where technology, innovation and A.I can offer businesses in the 21st century opportunities to understand their business metrics in real time.
One individual who demonstrates the importance of Operations Management is W. Edwards Deming. The American statistician W. Edwards Deming has been universally acclaimed as one of the founding fathers of Total Quality Management, if not the founding father. The revolution in Japanese manufacturing management (following WWII) that led to the economic miracle of the 1970’s & 1980’s has been attributed largely to Deming.
Deming’s quality philosophy and outlook was both simple but radical. He asserted that organisations that focused on improving quality would automatically reduce costs while those that focused on reducing cost would automatically reduce quality and actually increase costs as a result.
Deming’s expertise as a Statistician brought a revolutionary approach to business (manufacturing) and demonstrates effectively how attention to small detail and systems has massive consequences on business success.
The Operating system in a business is never ever finished, at its essence it never ceases to change and evolve. For this reason you should consistently search for new solutions to improve efficiency in your business through the use of New Technology, innovations, AI, Software, new skills etc.
Better productivity comes from the organised person who finds new ways and solutions of reducing wasted resources and unnecessary repetition.
If one of your customers had to visit you unannounced would your workplace convey the workplace of a Professional, a Great Crafts person or Master ? With an office of impeccable order or a workshop of materials & tools carefully and strategically organised? Or the contrary?
‘Time the new gold.’
Remember the greatest benefit a good operating system will give you is the currency of Time. Unfortunately time only has a 24 hr shelf life which we cannot buy any more of at the end of the day or store away for a rainy day. Some of us spend it aimlessly without thought or intention. Others grasp it so tight that we forget how to embrace and enjoy it, before long Time will become the new gold.
The business owner that lives in ‘Order’ and has an organised mind values this commodity, focusing on investing it rather than spending it, knowing that we must act now as this minute, hour or day will not come again.