It's not hard to find statistics about the number of businesses that fail in the first five years. Just ask a banker for a new business loan; he will recite the reasons for failure from memory. It's a bit more difficult to find out how many businesses plateau at sales and profit levels below their potential -- the self-induced victims of poorly designed or inconsistently executed operational systems. An undefined operational strategy can be very costly. The longer it describes your operating style, the longer the odds of survival for your business.
Creating and maintaining disciplined business systems may not be your idea of a good time, but if growing your business and delivering on your competitive advantage are some of your goals, it's time to buckle down. Just as you won't lose weight without eating right and exercising, you won't grow your business profitably without effective systems in place to create and deliver value to the customer.
So how do you begin to transform your company into an efficient, well-managed entity? Make a list of the processes that are most important to the success of your business and then look to improve and systemize them:
Emergency Backup and Lay Groundwork for
For each process, ask the person who does the work to document step by step how he does it so that someone else can read and understand it. If you're told that it's too complicated to write down, then you know for sure you're doing the right thing. Even rocket science is documented. If multiple people perform the process and they execute it differently, be sure to note it. Test the documentation by having someone else try to execute the steps.
Identify and Implement Best Practices
The person creating the documentation had to think about how he does his job to complete the assignment. It's hard to improve something without thinking about it. Now is the time to ask, process by process, "How do you know if you are doing a good job?" Here you develop a common understanding of what success looks like for a process. Operations are supposed to deliver your competitive advantage to the market. How do employees know if their work is generating the result that it should? Acceptable quality must be clearly defined and understood for each process.
Once the goal is clear, it is easier to examine the process to determine the best method for accomplishing it. It is important to reach an agreement that, based on current knowledge, there is one best way and that once identified, it will be the best practice that everyone will follow until a new and better way is found. Think about that. Without that agreement, if two employees do the same job and they each do it their own way, an improvement idea is really just a third option, which both can ignore as they choose.
Many prefer to believe that the best way for me may well be different from the best way for you. The reality is that all those "personal preferences" we think are meaningless are really sources of variation to the process. Variations to the process in turn reduce the predictability of the process output. Your customers want you to be totally predictable in your flexibility, giving them exactly what they want when they want it. The more variable your processes, the less predictable the output. What and when become iffy.
It may seem that employee creativity is squelched when each job must be performed the same by everyone, according to best practices. Au contraire. Because process performance is now visible, employee creativity is easily channeled into continuous improvement. The idea of any employee can be evaluated against the goals, and if shown to be beneficial, will become the new best practice followed by everyone. Control over your team's work with the knowledge that your good ideas get implemented -- positive motivation for many workers.
Employees will look to management to fix systemic problems that interfere with the ability to follow best practices -- a reasonable expectation. Employees will look to management to keep them informed if business objectives or process goals change -- again a reasonable expectation. This kind of joint accountability is a refreshing relationship built on mutual respect with common goals.
Great employees can overpower bad and average systems to do a reasonable job. Average employees can do great things with good systems. Put your employees in a position to reliably and repeatedly deliver your competitive advantage to your market, and larger numbers to both your top and bottom lines.