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Last month, we discussed the many reasons to improve your business’s operations, including smoother operations, higher profit margins, and a better price point if you decide to sell the business. This month, let’s take a look at a few ideas for improving your operations. These ideas are taken from a webinar I recently co-presented, which you can view in the Resources section of the website. While there are countless types of improvements that might benefit your particular business, these are a good set to consider if you’ve been a hands-on owner for a while and are ready to make some changes. 

Documenting management processes

Process documentation can be incredibly useful…or it can take up a lot of time with little impact. When assessing a client’s business operations, I often see that the everyday staff work is already documented in checklists or other formats that are practical for training a new employee, especially in positions where there’s high turnover. What is often missing is any documentation of how the business is managed. Management positions may turn over less frequently, thus there may be less need for training documentation. Also, each manager may develop their own methods for managing their area, and may adjust their approach regularly as conditions change.

Because of these factors, I recommend starting by documenting management processes at a conceptual level for each major area, rather than creating detailed step-by-step instructions. This is a good way to document a wide variety of processes, fairly quickly. A new manager, or someone who’s covering when a manager is out sick, should be able to use this type of documentation to understand the concept of what they need to do and what potential issues to look out for. For example, a new store manager needs to know there’s a store alarm, and that the code changes monthly, and who shares the new code each month, and how much time they have to shut off the alarm before the police are called. They probably could figure out how to enter the code into the alarm without a step-by-step instruction sheet, if it’s a standard type; or their trainer could show them once and they’d get it. Don’t forget to document some of the key management processes you handle as the owner, too.

Functional org chart & resource planning

An org chart is typically a hierarchy of names, with job titles and/or functions written below each name. I like to do a chart of job functions, organized by major operational area, and then add the name of the person (or people) currently responsible for each function. Once you lay out this “functional org chart,” you’ll be able to see whether you have the right people doing the right functions, and you can consider how moving functions to other people will improve or worsen the situation. It’s also handy for identifying gaps where no one person is really responsible for a function; and it can help when adding new positions, to plan out which functions the new person should handle and how the other functions might be redistributed once the new person is in place.

Delegating information-gathering and analysis while retaining decision authority and control

Although it can be hard for the owner and managers of a company to delegate to subordinates, the positive impact on the company is significant. Delegating strengthens the company, reduces risk, increases employee engagement, and develops the next generation of leaders for your company. However, leaders often worry that if they delegate authority, the subordinate may make a bad decision with a big negative impact. 

One way to minimize the risk is to split the responsibility up. Delegate the initial work, which often involves steps like gathering information and interpreting what that information means. Ask the delegee to present their work: how the gathered the information, how they interpreted it, and what decision they would make. Then offer suggestions and explanations if you would have done it differently. This is a learning experience for the delegee and for you – you learn whether you can trust the delegee’s approach and decision-making skills, even as you’re helping them learn how to look at the bigger picture and consider risks and benefits.  If you can also stay open to new approaches, then you might decide to go with some of the delegee’s suggestions, even if it’s not the way you would have done it yourself; consider the merit of the idea for the benefit of the company, rather than assuming you have the one right answer.

Summary

As mentioned in our prior blog post, operational improvements can have a big positive impact on your business’s productivity, staff engagement, and bottom line. It can be tricky to decide which improvements are the right priority for your situation. If you’d like to run some ideas by me for feedback, schedule a free consultation.