The 80/20 Of Business Operations.
Business operations today are finding administrative and non-productive work is growing. With more compliance, red tape, forms and portals to fill out.
A story that illustrates this point is of a general manager of a meatworks. Enjoying his retirement, after a long successful career in his role, he receives an urgent call from the current general manager.
The current manager said they were losing money and needed his help and offered the retired manager a consultancy position to help steer the business back on course. The retired man declined the offer and instead called for a staff meeting the following morning, claiming he could solve the situation by the end of the meeting. The current manager was surprised at this but called everyone in the meatworks to the courtyard for the meeting. The retired manager observed the workers and turned to the current manager and said, “Everyone who is holding a knife can stay, you need to cull the rest.”
The point of the story is the business was those that were doing the work were the ones keeping the business alive. The heart of the story is who is holding the knife at the cutting edge of customer relationships in your business?
Before we start each day, we consider what will generate the most value in our business, for us and for our clients. We have a time limit on the non-productive, let’s call it “Admin work”, our priority remains to be our client requests.
While I’m not advocating noncompliance, taking time to pause and review if those tasks or actions are really needed, is a good start. As businesses grow, they often suffer from an increase in the non-productive or “Busy work”. Applying the 80/20 rule in your business operations regardless of size is simple using a six-step process.
While this is part of a more informed consulting process called “Strategic Value Chain” we have
created a streamlined version below. Note when you have multiple businesses in your group and/or a head office apply on a per business operations and then on a group basis.
Roles & Responsibilities: Classify staff roles and financials including your own into three columns with the amount of time and money spent in hours each week or month, using the headings.
Primary: Value generating such as client sales, services and customer interaction,
getting new business.
Support: preparation for primary value, such as stock management, processing or
preparation for the above.
Other: Anything else that does fall into primary or support roles including critical services i.e.
Review: the numbers in time and cost and ask yourself honestly, do you need it? Can you streamline? Is it a “once-off” or recurring expense?
Update your spreadsheet with the changes you would make. Develop a transformation action plan with deadlines. Review and repeat after 6 months.