Business Operations

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Operations

  • Having worked as head of information systems for an auto parts manufacturing company, I addressed operations (engineering, part procurement, shop floor manufacturing, inventory control and delivery) many times, so understand these processes fairly well.
  • World class processes exist for all of these.
  • These areas are usually responsible for a lot of cost in companies that have them, so it is important that they work efficiently and are closely measured.
  • MRP (Material Requirements Planning) is used by all efficient manufacturing and warehouse/distributions companies world-wide. MRP calculations allow companies to order or make just enough product to meet demand, in the most cost efficient order size and at the most effective time, at minimum cost. Trying to achieve this balancing act in one's head or on the back of an envelope just doesn't work.
  • While MRP systems can be more expensive than QuickBooks, many of these principles can be applied to small business without a lot of difficulty.

What I do...

  • I begin by developing ASIS process charts for the one or more processes being studied (See Process Analysis and Design)
  • If the owner or manager has objectives defined, I analyze the ASIS processes with these in mind. Otherwise I look for inefficiencies.
  • Since cost, time and quality are the critical factors in Operations, I will seek out measures for each of these.
  • Studying ‘world class' processes and methods for the area being studied is next.
  • As I collect opportunities for improvement, I prioritize and integrate them into an improvement program.
  • Then I look for solutions for each. Sometimes this can be improved process, better controls, redesign of the warehouse or shop floor, new or improved equipment or infrastructure, training, computer systems, etc.
  • Costs to implement each solution are determined
  • Now I am ready to develop one or more business cases (cost/benefit analysis) to present to management. It should show quantified benefit, cost and time to implement.
  • With a decision to proceed, I apply the steps found in Organize, Plan and Manage Projects to achieve the improvement.
  • Finally, I continue to measure the area affected by the improvement to ensure the change achieved the benefits noted in the business case.

Human Resources (HR)

  • Selecting and managing people are the most important tasks of any business owner or manager.
  • With rare exceptions, people are the most important asset of a business, yet too often it is assumed that anyone can manage people well.
  • Locked up in employees is the greatest potential of competitive advantage and excellence for the business, but it is seldom unlocked.
  • After numerous supervisory, management and HR training classes, plus 30+ years of managing people, I have learned some things that work well in this area.

What I do...

Recruitment and Hiring
  • I have found that to properly recruit and hire, one must spend some time to define, in writing, two things. Trying to merge them into one doesn't work well.
    1. A position description - this informs the candidate what the job comprises (duties, responsibilities, expectations, reporting relationship, etc.)
    2. Position requirements - this describes the education, skills and experience that the employer is looking for in the candidate.
  • After interviewing the person in the organization wishing to recruit and hire, I proceed to write the position description and position requirements.
  • If the method of advertising the job is via the newspaper or a job web site, I prepare a concise ad that combines some of the features of the position description and the requirements.
  • From there, I contact newspapers, recruiters, or job web sites to post the job opening.
  • To properly evaluate responses, one should compare apples to apples. I define several dimensions that the responses should be measured by. Each should carry an importance weight.
  • As responses arrive, I review them against the measures and assign a score to each dimension.
  • When ready to begin the culling process, I create a decision table of candidates that shows their weighted score on each dimension. This offers input into decisions on whom to interview.
  • For the interview process, I utilize a predefined list of points to cover in the interview, trying to avoid questions that can be answered with a yes or no response. In this way, one learns more about the candidate.
Performance Reviews
  • Performance reviews is perhaps the best tool around to manage employees and align their behavior and job performance to business direction. Yet I am always amazed at how seldom this tool is used, or how often it is avoided.
  • To implement it, I begin with a process map that visually describes the process.
  • A presentation follows for the managers involved to illustrate how it works and what the critical success factors are.
  • It begins with position descriptions. If they don't exist, I write them.
  • Forms are introduced to support the process
  • I assist managers with the definition of 5-7 meaningful objectives that can be measured. Some will relate to job duties, while others can address personal improvement, organizational alignment or problems.
  • A presentation to employees to acquaint them with the process will prepare them to participate, plus help them recognize the importance that management places on job performance.
  • Finally, I monitor and coach the process along the way...
    • Objective setting meeting
    • Periodic performance reviews and recording of results
    • Modifications of objectives as needed
    • Introduction of performance improvement process, if needed.
    • Year-end reviews
    • Performance quantification schemes and translation to merit raises and bonus.
    • Starting the process again for the next period
Personal Improvement Plans
  • The performance review process can easily transition into training and self improvement plans, by person or by groups of employees.
  • By reviewing needs coming out of the performance review process, a training plan can be developed, planned and executed that addresses a broad range of needs for groups of employees or just one.
  • Seeking out the best methods of training and then organizing it, follows.
Incentive Design
  • Pay or benefit incentives can be very powerful tools to influence employee alignment with company goals. Where they exist, they too often don't achieve the desired alignment.
  • Being innovative and analytical gives me the ability to design incentives, supported by data that align incentives to company goals.
  • Design leads to implementation, including the development of the data, the rollout and the continuation.

Sales

In this area, I apply three of my strengths,

  1. data analysis to identify sales opportunities
  2. project management to plan, implement and track progress on sales initiatives
  3. dashboards to track progress

What I do...

  • Utilizing all sales data available, I seek to identify customer or product segments that are performing well (to leverage further) or are underperforming.
  • Suggestions are made on possible sales initiatives to address opportunities
  • Once the business owner or sales manager decides upon areas to focus on and types of initiatives to employ, I create a project-based work breakdown structure (everything it will take to pull it off successfully). From this I design a project plan to achieve the sales initiative.
  • If needed, I participate in the execution of the sales initiatives.
  • Finally, I create the necessary metrics needed to track progress and ultimate success of each initiative.

Office and Computer Systems

  • It appears customary for small businesses to acquire computers and software only to underutilize their full potential. Maybe it is a result of focus on strengths or an aversion to technology. I try to fill this gap by helping the business to leverage the technology they already have and add to it where additional capabilities are needed.
  • Sometimes underutilization is due to the lack of training for employees, often on basic PC skills.
  • Then there is the problem of dealing with technology vendors, who will attempt to sell what they have instead of what the business needs.
  • Finally, many small businesses fail to take precautionary steps that can result from some kind of natural or technological disaster.

What I do...

  • From years of experience in computers and software, I can coach and teach employees on practically any software they are using. Examples include Windows, MS Office (Word, Excel, PowerPoint, Access and Outlook), QuickBooks, etc. Even if I am not familiar with a specific software, I know how they work, so I learn fast in order to coach others.
  • I also compare capabilities the business needs to functionality of the software they already are having. If features are not being used, or being used ineffectively, I prepare a remedial program of training and coaching to bring these capabilities into reality.
  • Where needed functionality does not exist, I develop a requirements document before I go shopping for system packages or add-ons that would provide it. With these in hand, I research and contact suppliers as necessary doing much of the filtering work before making a recommendation to management.
  • I utilize years of experience in the information technology field to work through the process of requirements, request for proposals, proposal evaluation, negotiation planning, negotiation and contracting.
  • I look into the need for software and hardware upgrades and work up organization plans to transition the organization to them.
  • In the area of disaster/recovery, I begin by analyzing how important data and capabilities are backed up and taken off-site. Should a disaster/recovery plan not be in place, I develop one. Such a plan should be comprehensive, well thought through and easy to understand, since a rapid recovery of the business will depend upon it. The plan includes assignment of responsibilities, regular backup procedures, dissemination to staff and periodic testing.