Business operations, in the simplest terms, encompass all essential elements that define the way a company conducts its business. At the core of operations, focused oversight into the costs involved in bringing the business’s offering to market is key. But the focus of effective operations management within a business stretches far beyond mere cost tracking or financial management.
Payroll, one of the primary drivers of overall cost, is a common target for operational focus. However, there’s a lot more to payroll management than just numbers on a spreadsheet. Far from being a cost in a cell that can simply be reduced at will to cut overall costs and amplify profit margins, payroll represents one of the business’s most valuable assets: its employees.
Operations is about how an organization supports the work of the people it tasks with delivering revenue around a strategic focus. The alignment between an organization’s people and the organization’s aims can either be a source of competitive advantage or disadvantage, largely hinging on the working environment built from the organization's strategy and the operating structure that supports it.
Consequently, the recruitment and retention of strong and committed talent isn't solely the responsibility of recruiting and human resource procedures and strategies. Beyond these formalities, the day-to-day experiences of employees significantly impact these areas of talent management.
This starts with operational accountability in management. Clear communication of employees roles and responsibilities is central to keeping employees motivated, productive, and dedicated to the organization. Furthermore, beyond communication of responsibility, operations should be concerned with how teams are supported by their managers to efficiently execute these duties, receive constructive feedback on their performance, and cultivate their skills.
Overseeing these forms of employee interactions necessitates operating platforms and processes designed, monitored and evolved by operations. All these elements need to be designed and intertwined to deliver the best possible results for the organization overall.
Unfortunately, proactively establishing and supporting strong operations of this type is often overlooked, particularly in start-ups and small businesses. Frequently, these companies adopt a 'survival mode' mentality that is primarily focused on immediate revenue generation.
This approach creates a reactive organization, poised to seize any immediate opportunity for revenue.
(Some mid-size and larger “client service” businesses, including many marketing and advertising agencies, have remained reactive as they’ve grown - betting on a business model of providing whatever someone with a budget to spend is seeking. Resultantly, they’ve intentionally decided to put their staff through all the pitfalls of such a business model within a large enterprise structure, and have to try to address the significant turnover issues with drinks in the office and the occasional “culture-building” exercise. But they are a special case.)
Reactive start-ups and small enterprises typically believe they don't have control over HOW products are delivered or revenue generated, resulting in perpetual alterations in strategy and approach to justify grasping at every available opportunity.
While this approach may secure short-term revenue, it catalyzes a significant challenge in building a long-lasting and impactful product or service. The persistent alterations in the organization's offerings can blur responsibilities and impede the development of core skills within roles. However, taking a reactive approach to their market is not a natural law of start-ups and small businesses, or an inescapable fate.
By adopting a proactive approach towards their operations, start-ups and small businesses (and maybe even some brave agencies) can witness significant improvements. Commitment to this proactive approach requires three things:
A commitment to long-term strategy at a leadership level, with operational and financial commitment of resources to what will distinguish the substance of the business's offering, and avoidance of continual diversion of resources to short-term aims (perhaps with the frequent justification “just one more time and then we’ll focus”.)
The day-to-day protection of product or service development activity; meaning the establishment of a clear foundation for the product or service, a well-planned roadmap for the evolution in value to market from these products and services, and deliberate and experienced project management and staff management (to get the right people in the right places doing the right things).
Scope management. Reactive organizations will often allow the people who are paying them to change the definition of what they’re paying for on the fly. They feel desperately reliant on whoever will pay them, so they will allow agreed terms in scopes of work - be they hours, activities, staff assignments, prices or engagement durations - to be changed at the whim and will of the client. Obviously, this has the impact of reducing the overall value of an engagement (usually by giving away more work over more for the same money). But when a customer is allowed to define the product and the ways of working for the organization, the instability in “what we’re working on” and even “how we do it” can also have very negative effects on staff satisfaction.
A concentrated approach to operational management in start-ups and small businesses affords more than just effective cost supervision. It enables the deliberate construction and oversight of work procedures supporting long-term business objectives. Moreover, it increases the prospect of satisfied and productive workers dedicated to achieving the company's mission.