Operations vs Stategic Planning
Putting focus on business operations can be the difference between operating a profitable business and one that is teetering in the ‘red.’ Some confuse ‘operations’ with ‘strategic planning.’ Where strategic planning involves the steps taken to establish goals, actions needed, timelines, and the delegation of work; operations focuses on the people that will execute the work. As a small business operations consultant, MJ Ross, has real world small business operations consultant experience ready to share with you today that can be the difference between you achiveing your goals or sucumbing to small business burnout.
Operations may begin with creating an organizational chart which establishes the ranking and position of each role in the business hierarchy. Having that clarity helps establish and remind employees of their chain of command and responsibilities. An organizational chart quite literally gives an organization structure.
By studying the organizational chart and the outlined roles and responsibilities, business owners and leaders can improve the efficiency of their companies by identifying those roles and responsibilities that can be accomplished (sometimes better accomplished) by contractors or others outside the organization. For example this list may include:
- IT support
- office cleaning
- virtual assistants
- social media experts.
Detailed job descriptions along with the identified responsibilities for each role, help to shape and really spell out the qualifications necessary for an associate to be and feel successful. The job description, if outlined well, can identify the boundaries in which an associate (contractor or employee) will need to operate within and to thrive within. This keeps folks focused on their duties and not straying into someone else’s lane. A great job description, and a greatly matched candidate can help those in your business meet their expectation. They can’t meet the expectations if they don’t know what they are.
Job descriptions are important to review if additional tasks are required so those tasks can be added to the most appropriate position, or creation of a brand new one. Of course, those with changed tasks will needed updated job descriptions so they are clear on their responsibilities.
Policies and Procedures
Policies are another area of importance in operations. Everyone must read, review and sign off on business policies as part of employment. Contractors and temporary employees also need to review company policies.
They must also be reviewed by all employees and signatures provided for any changes and/or amendments to those policies. Policies must be enforced consistently and throughout the business to avoid legal action by employees during or after leaving the company.
For example, your policy states that hourly employees may not work overtime without prior written approval by their supervisor. Work may not have been completed in the designated time so an employee who might need or want extra money in their paychecks stays over to complete their duties. Once an employee is allowed to do that and gets paid overtime, it is easy for others to take advantage and do the same. Later you could have an issue about employees wanting overtime pay when it was not approved. A policy is no good if it is not clearly defined and enforced across the business.
Hiring, training, documentation, coaching and firing all have their place and policies which may need expertise from human resources professionals to make sure that everything is being done correctly and legally.
Procedures are critical to efficiency and keeping costs under control. One person doing a task the way they may think best, may be very different than someone else doing the same task, leading to very inconsistent and inefficient work. It’s important to bring in best practices and take the time to create not only procedures in detail, but also the appropriate documentation to ensure quality control. All employees or contractors need to be trained for that position and duties, so no matter who does the task it is done the same, consistent, way every time.
When looking at operations it is important to review costs, inventory, production, supply chain, areas of waste, and identify preventive tasks as well that can be done to lengthen the time equipment or products work correctly. Identifying the need to replace an asset in a certain timeframe, such as within six months or a year, allows the time for budgeting and research to be done to identify the best, most efficient and cost-effective replacement. The alternative is having an emergency and having to pay a much higher price for an asset of less quality.
It is almost universally true that small businesses have incomplete records of business and financial transactions. Unfortunately, this is an area that is always reviewed to establish the ‘value’ of the company. Whether you are selling your business, or getting a loan to advance your business, a history of the ‘business’ is necessary to review. Having a partial inventory or records for just one year will not help you get your business to the place where you can borrow money or sell it. It is important to set up and keep complete records as part of operations. Usually three years of complete, accurate records and financials are needed for loans or purchases.
Identifying potential disasters such as floods, fire, tornado, earthquakes, hurricanes or critical machine breakdowns ahead of time and defining what all employees or contractors are to do if one of them happens will help reduce chaos. New kinds of disasters, such as pandemics, are more difficult to plan for.
Where do we go from here?
Some of our value as a small business operations consultant is that it is easier for an outsider to identify areas of need as well as strengths, while everyone is able to keep to their regular duties and tasks. It is important to celebrate when areas of strength or of incremental improvement are identified. Goals will never be completed if you don’t have a starting place and statistics. Consistent, incremental change is usually better for your team than trying to take drastic measures to achieve unrealistic goals in a short amount of time. It is also a more sustainable change for your business.
Please contact us by message, call us at 918-261-8951 or schedule a consultation directly with MJ Ross to discuss small business operations consultant questions about operations or our other areas of expertise.