How to Create an Operations Plan
When asked if an Operations Plan is a “good idea,” 99.9% of business owners nod their head yes. When asked if they have one, 90% of business owners shake their head no.
An Operations Plan seems overwhelming and simply too much work, but it’s not if you do it right. Below is a simple 9-step plan to begin work (and eventually finish) your Ops Plan.
Step 1: Give up on creating a 1000 page document
No one reads anymore, so why create your own version of War and Peace.
Step 2: Buy a video camera
Video is the simplest method to create systems and the most effective way for employees to learn.
Step 3: Wait for something to go wrong
Many businesspeople say, “I don’t know where to start the systemization.” Don’t worry; simply start fixing problems as they arise.
Step 4: When mistakes happen, ask “Is there ANYTHING the company could have done to make the mistake less likely to happen?” Don’t just assume mistakes are caused by “stupid employees.”
There is almost always something that can be done to make mistakes never happen. Don’t play the Blame Game; it’s the enemy of systemization. Instead, assume the employee is trying their best and is reasonably intelligent. Ask yourself, “Why would a smart, caring employee do this and what could we do to help them avoid the mistake in the future?”
When you stop blaming employees for mistakes and blame the systems, or lack of them, solutions will present themselves.
Step 5: Create a mini-system to mitigate the problem in the future.
For instance, a general manager of a symphony was overworked. He felt he had to work 9-5 on the office and then stay until midnight for the performances. When asked why he needed to be on site for the performances, he said, “What if someone wants a refund? If they are a $20,000 per year benefactor it is a different answer than if they are a one-time visitor from out of town.” He had struggled with his staff alienating large contributors or giving refunds when they shouldn’t.
As he complained about the problem for a few more minutes, he effectively outlined the refund procedure in a verbal flowchart. We simply drew the flowchart based on his explanation and had the foundation of a refund system which all customer service reps could follow.
In this case, a decision flowchart is the mini-system. In other cases it may be a short video show and tell or a pictogram.
Step 6: Give up on perfection. 97% is good enough.
Most systems can solve 97% of problems. However, many businesspeople focus on the 3% where the system does not work perfectly. This 3% imperfection becomes the reason systems are never created.
A system that works 97% of the time without your efforts is much better than a system that works 100% of the time but can’t work without you.
Step 7: Learn to love the “head tip”
Many operational issues occur because knowledge is trapped in one persons head. Worse yet, strong performers don’t really know how they do things; it’s just natural. Videotaping them doing a task/function and having them “talk out loud” explaining what’s going through their mind (head tip), can be invaluable.
Step 8: Rinse and repeat
No one sits down and writes a 1000 page Operations Plan; it’s too daunting. Instead, capitalize on small mini-systems created at opportune moments that solve immediate business problems. Not only will the problem be solved permanently, but you will be creating an operational system as you go.
Step 9: Stay consistent
Despite rumors to the contrary, an Operations Plan is not a Herculean task. Simply seizing opportunities as they arise is all that’s needed. If you can resist the temptation to fix the problem today and move onto the next emergency, your Operations Plan will create itself.
If you are interested in learning more about Operations Planning, join our webinar at bit.ly/ops-plan
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I recently appeared on the Sage Advisors radio program discussing the differences between business models and business plans. Below you can find the replay link as well as the promo copy for the interview.
My Guest, Jim Muehlhausen JD has enjoyed the privilege of working with hundreds of business leaders, from both big and small companies, on an intimate level. These business leaders have shared their hopes and dreams, successes and failures, and the inner workings of their business with him.
Through the course of all those interactions he came to discover there wasn’t necessarily a correlation between education, intelligence, or hard work and success of the business. He found many successful business owners who were quite lazy. He found high school dropouts who created highly successful businesses. He also found intelligent, well-educated, and hard-working business leaders who failed to translate these qualities into business success.
He asked himself, “If these traits aren’t the foundation of business success, what is?” The answer is the business model. Education, intelligence, and hard work are all applied to a business model. Applying these qualities to a weak or failing business model is like throwing good money after bad in the stock market.
This SageAdvisers™ Teleseminar is a powerful introduction of what is a Business Model and why it’s important! By understanding the business model concept — and how it differs from a business plan — will give you the best chance at success. Our goal is to focus on this vital area so you realize that the strength of your business model is what’s sitting at the very core of your business’s success. This will be very informative and I hope eye-opening too!
Like most entrepreneurs, Jim Muehlhausen has an eclectic background, ranging from CPA to franchisee, attorney, business owner, consultant, franchisor, public speaker, university professor, and author (Business Models for Dummies and The 51 Fatal Business Errors And How To Avoid Them) along with contributing articles to many publications such as Inc.,The Small Business Report, Entrepreneur, BusinessWeek, etc.
In 2009, he founded the Business Model Institute which is devoted to the innovation and study of business models.
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Guest post by Robert Kramers Most people do not like change, not really. Humans are creatures of habit, and whilst they like the excitement that change can bring, they are averse to the apprehension and the uncertainty that comes with it. We only truly enjoy change when the change we’ve made becomes the norm, when the initial fear fades and we realize that not only are things going to continue to be okay, but they will be so in a new and exciting environment. Change is great for the individual and the business. Change helps you to adapt, it helps you to step away from the stagnant and to take a giant leap into the exhilarating rush of the unknown. To succeed in business, companies need to change. It doesn’t matter if you’ve been in business for a hundred years or for ten, change is always just around the corner. Things move fast, technology takes over and we learn newer, quicker and more efficient ways of doing things, and if you don’t build your business around these new ways then your competitors will and they will move ahead of you in the process. Here are 5 checkpoints you need to consider for any major business change to ensure best results:
Planning and Review
As they say, failing to plan is like planning to fail. Some tips for effective planning:
- Review where your business excels and where business focus should be.
- Goal set clearly so that you can measure success throughout the process of implementation.
- Determine where “old ways” may hinder the output for change.
- Assess current intellectual property rights and where issues may arise with the new model.
- Ensure you are collecively (businesswide) onboard with objective goals as this will be your main driving force behind adapting to the change.
Concentrate on what matters – your customers
Times are constantly changing and people want different things now to what they did several years ago. These changes can be big and obvious, but they can also be very subtle and hard to foresee. If, however, you are in tune with your business and your customers then you will see the trends coming and can adapt accordingly. Your customers should be at the front of the line when it comes to making decisions around how the business will continue to provide effective services and products. Some ideas to help:
- Client feedback on where business can improve
- Research non-bias reviews of your business / product
- Execute incentive for customers (new and old) to share thoughts through a survey.
Make sure plans stick
Change is great, but if those changes don’t stick then you’ll probably create more problems than it was worth. Making sure that the change is well executed and well planned and not rushed can help with ensuring sustainable progress toward the common goal, without having to re-visit the drawing board.
Simple steps help with ensuring tasks and milestones are executed effectively and properly. On the contrary, overcomplicating processes can lead to the feeling that there is too much to do and nowhere to turn, resulting in.
Adapt your surroundings
Most business-wide re-modeling projects involve changes to business processes, employment structures and the way people work together. Keeping peer collaboration at the heart of your ultimate solution can be a good way to ensure productivity is maintained. The newest technology firms don’t work in stuffy and cramped offices like they did a couple of decades ago. Google and SAS are renowned for giving their workers some creative freedom, for catering for their needs and not focusing entirely on output. That doesn’t mean that by creating a more open and fun working environment you’ll be lowering your output, in fact the opposite is true. A happy worker is a good worker.
The old and the new, which one do you think your workers would prefer?
This is vital for any business. A business that understands and communicates with its customers is one well on its way to success, and the same applies to a business that maintains a healthy and talkative environment with employees, one where everyone feels that they can play a part and are entitled to their opinions. Communication with all areas of the business throughout organizational change can be one of the best assets for determining pain points along the way. Keep this at the forefront!
I saw the van below in a parking lot and it struck me as a shockingly narrow and unusual niche. This stands in stark contrast to many businesses who want to be all things to all people. They sport slogans like, “For all your… needs.”
Common sense and human psychology dictate that you cannot be good at many things and most people or companies can only be great at one thing. Saying “all things” implicitly states you are great at nothing.
By overly, repeat…overly, narrowing your niche, you offer the customer the opportunity to perceive you as an expert at that. This is not an easy task in an economic environment where nearly every category is overcrowded.
So here’s today’s challenge: how can you tighten your offering to instantly communicate you are an expert because no one else claims to be an expert?
Here are some examples:
- General web developer continued to develop websites but focused on the niche area of usability
- Paving contractor focused on more profitable specialty of bridges
- Alarm company stopped chasing low-margin new construction market and focused on historic renovations
- General bakery focused on the white-hot area of cupcakes
- Landscape contractor focused on yard curbing
- IT body shop focused solely on Ruby on Rails developers and doubled sales
There are many more examples of how companies grew sales by contracting their focus. Here’s the secret: customers will still buy offerings outside your focus area. The landscape contractor still sold mulch. The bakery re-expanded offerings to include cookies. The alarm company still cherry-picked new construction work.
Are you willing to take the plunge and narrow your offering? What success stories can you tell?
Customer feedback may be worth more than you think
Our organization was engaged in a debate regarding customer and prospect preferences and behaviors. After a bit too much of, “I’m right, you are wrong,” someone wisely suggested surveying prospects to ask their preferences.
We created a short 14 question business owner survey and offered the proprietary results as “payment” for taking the time. This collective output would be valuable to an owner to compare their daily activities and preferences with like-minded peers.
As the results trickled in, we tried to find a way to speed up the collection process to hit our goal of 1000 business owners surveyed. Our marketing director noticed that Surveymonkey offers to find survey takers for you. She proceeded to the audience selection webpage and then saw the screen below.
Wow, $22.25 per survey taker! This changed our paradigm a bit. Here’s what was buzzing around our conference room:
- It’s not unreasonable to charge $22.25 for a survey response, but boy oh boy does it add up quickly.
- The input and collaboration we receive from our prospects and customers is a more valuable asset than we thought.
- We need to do a better job proactively seeking input from customers, customer service reps, and salespeople that have increased visibility into customer trends.
- The customer data we already possess has value and should not just sit on the shelf. Who can we co-mine this data with? What partners could benefit from our data? Could we trade our data with partners who have complimentary data?
- We should constantly collect data rather than sporadically chase it when a specific need arises.
Most companies are not unlike ours and can benefit greatly from prospect and customer insights. Hopefully the information in this post will spur you to better understand your prospects and mine the gold you already have.
Do you feel you are maximizing your customer/prospect data? What can you do better?
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