In my last post, I detailed the pitfalls of doing nothing in terms of operations. Time after time, I’ve observed owners opting to “do nothing” when they had to make a big decision. Considering all the variables associated with the operations of your business, the fear of making a call is very understandable. So what can you do to get off the dime and make a call?
I tapped the insights of our operations guru Ed Klaczak to analyze what you should consider in terms of being proactive from an operations perspective. His number one recommendation: “Put in meaningful, first-level metrics.”
Why do you need metrics? As Ed says, “I don’t know any pilot that flies a plane ‘blind’ without the right equipment and the proper settings.” Just as flying a plane relies on critical data and interpretation of that data, running your company is no different. Here are some key areas to consider:
Find a way to normalize your operational data as a percentage of your sales revenue. You need to tie in your operation to your sales revenue. Establish a relationship between operational expenses such as costs, quality and deliveries. Try and automate this data, so you can see it on a regular basis.
Prioritize, with your customers coming first. You’re going to gather a large pool of data, so where do you begin? Always start with the data that impacts the customer most.
For example, if you see that you’ve got repeated complaints about your deliveries, you should focus all your efforts on delivery. It’s not going to matter how fast or cost-effectively you print labels if your delivery logistics are a mess.
The customer may not always be right, but they most definitely come first.
Focus on two critical costs. Nothing impacts your operation more than your labor costs and your operational costs. Yet many owners don’t sufficiently analyze both of these areas.
Do you know how much material is on hand? How much overtime you’re paying out? How much inventory is obsolete on your shelves? These are all critical questions that must be answered.
I can understand why owners prefer to “do nothing” instead of tackling these issues. At first glance, the task seems daunting. How do you track processes? Do you need software? How much of the organization should be involved?
To avoid being overwhelmed, I would start small. Focus on the one or two issues that most dramatically impact your customer. Establish data points that are important (on-time tracking, customer complaints, for example) and then log those results. You might have to do it by hand, but just start doing it. That’s what’s important.
Doing something, no matter how small the effort, is much better than doing nothing at all. After all, novels aren’t written all at once. They’re written one page at a time, one word at a time. The key is to maintain a sustained effort. Do it over time, and you just might produce a masterpiece of your own.