Editor’s note: Glenn Conway is a partner at Visage Solutions. “Managing Risk” is a regular feature on Wednesdays in Local Tech Wire.Let’s face it – business operations is not sexy.
At least not when compared to high-profile activities like M&A negotiations, or IPOs, or talking to the Press, or creating new marketing campaigns. But business operations is where the rubber meets the road. It’s where business success is ultimately determined. Business operations determines profitability, not acquisitions. Operations excellence determines longevity, not IPOs. Operations provides the foundation for marketing, and it provides good stories to tell the press. Outstanding marketing and good press go down the drain with poor perations.
The best-run companies manage to successfully juggle the factors that determine operational success. The also-rans don’t.
So, what determines whether a company has solid operations or not?
Principals for success
There are at least eight principal variables at play in determining world-class operations in today’s world.
1. Customer Focus
2. Outstanding Team
3. Evolutionary Mindset
4. Recognition of Reality
5. Integrated Processes
6. Execution Excellence
7. Focus on Results
8. Feedback and Improvement
The requirement for Customer Focus is self evident. Successful Operations requires attention to what the Customer wants, needs, and is willing to pay for. This doesn’t mean rolling over for the customer but treating the customer right and recognizing that without the customer you have no business. Successful organizations succeed at getting all employees and leaders to treat customers fairly – and succeed at delivering first class products and services.
An Outstanding Team is the byproduct of very good staffing practices, quality training and preparation, open communications, and empowered employees. The best plans and tools are nothing without a good team – but a great team can do well even with poor plans and obsolete equipment. All employees and managers comprising “the team” must be motivated, energized, prepared, encouraged and challenged to do their very best. The most successful organizations know that their people are the foundation of all. They reward their best performers, and they remove employees and managers who fall short.
An “Evolutionary Mindset” implies a predisposition to evolve business processes and to change the business as necessary to stay competitive. This requires staying abreast of industry developments, customer changes, and technology evolution, and consistently challenging and evaluating how the Business operates. It also requires a willingness and commitment to change direction, revise staffing make-up, develop new core competencies, implement superior technologies, etc., in order to grow and survive. Leaders must be willing and able to discharge resources and tools which prove incapable of serving the company going forward.
Recognition of Reality means that all managers and employees are held responsible to address business realities in all their forms. Difficult, contradictory and/or disappointing facts and information are disseminated throughout the organization and dealt with. Unvarnished and frank communications pervade the organization, and all staffmembers are held accountable to see things as they are.
Integrated Processes across functional and department lines are necessary to deliver products and services efficiently. Wasteful and unnecessary business processes and process steps must be ruthlessly weeded out, leaving the simplest and fastest processes which successfully get the job done. Attention must be given to what must be delivered and what must be captured within business processes, and then reducing extraneous steps and byproducts. It also requires optimizing business processes across all affected people and equipment to assure end-to-end time and cost efficiency.
Execution Excellence is all about discipline and consistent attention to details. The best processes and people are wasted if they don’t mind the details and fully deliver what is required. This is perhaps the least “sexy” of the eight fundamentals but is the yardstick for performance. Employees and managers must consistently produce quality products and services on schedule, ruthlessly manage costs and dependencies, avoid taking unacceptable shortcuts, exercise prudence, and cull out deficient products and deliverables.
A Focus On Results holds all managers and staff accountable for what matters, principally the bottom line. By focusing on the endgame (the actual byproducts of the operations process) and insisting on high quality results meeting all required criteria, managers and employees will be incented to streamline steps and/or introduce more efficient tools and mechanisms to achieve the ends faster and better. Measurements and evaluation tools should be structured to confirm the quality and adequacy of the final deliverables, and to emphasize economy of time and cost.
Feedback And Improvement is necessary to assure that managers and staff know what they are doing well, and what they aren’t. It is also required so that the Organization knows what it will take to move forward. There is no status quo. Things improve or they get worse. If your Company is not improving over time then it is degrading over time. Feedback loops and meaningful metrics tell managers and staff what requires adjustment to improve quality and timeliness, and provides insight for making organizational changes to improve profitability and competitiveness.
Achieving excellence
Eight factors for Excellent Operations: attend to all of these, achieve excellence in all eight, and you should have a world-class Operation.
Unfortunately, achieving “O.E.” today doesn’t imply that you will have an outstanding operation next year or the year after. Ongoing “O.E.” requires unrelenting discipline to continually watch what is happening and a commitment to make the necessary decisions and changes to stay ahead of the curve. It involves customer focus – and an acute understanding of what they need and expect.
It requires incenting and motivating people to improve their processes and to reduce steps, people, and cost – even as they are being held accountable for producing high quality deliverables. It requires understanding and communicating downstream business needs and goals – while at the same time staying grounded in today’s reality. In the end it requires a tremendous amount of discipline and leadership. Backing off on any of these factors will allow or encourage inadequate, inefficient, or lessened results.
Visage Solutions are results-focused operation assessment and risk management consultants who offer extensive real-world executive management experience. Visage Solutions offers a suite of services that provide a strategic approach to operations to improve business processes that affect the bottom line. Sarbanes-Oxley related services include OpsAudit• and Compliance Process Improvement Services supporting Sections 301, 302, 404, 406, 409, 802 and 806.
Visage Solutions: www.visagesolutions.com
