Thursday, March 7, 2013

Getting Your Business Organized, by Robert Spitz, Management Success!

Robert Spitz
Snr VP Business Dev
Management Success!

“I'm too busy to get organized!”

I'm sure it was originally said in jest, but that's exactly what goes on in too many small businesses. The owner / manager is extremely good at what he or she does, but the idea of stopping long enough to organize the business seems impossible.

The result is management gets overwhelmed trying to get the machine (the business) to produce anything profitably. Too many times the real problem is the person responsible for running the business doesn't know how to organize. Here are some tips on how to tackle this problem.

Let's first look at what organization means: Organization is the action of lining things up in a logical sequence to get something done, and done efficiently; in other words, getting it done in the most economical manner without wasted time or motion. Management means controlling some activity so that activity can operate smoothly and productively.

Management's job is to ensure the products of the company are being produced profitably. When we look at this explanation, it's easy to see why management can have a very difficult time. It's hard to manage an area and get things done when organization is lacking!

Never Organize for Organization's Sake

When embarking on the task of getting organized, it's important first to look at what it is you're trying to produce or accomplish. What's your goal? It's easy to get lost in the woods if the destination isn't clearly defined and known. So the first step is to name what you want to accomplish. A complete understanding of what products the business produces or could produce is the starting point for any organization project.

Make a List

Start off with a list of, say, 10 things you'd like to improve about the business. Now narrow the list down to 3 items… and then pick one. Hopefully it will be the one that, if done now, will quickly improve the overall performance of the business.

Name What You Really Want

Name what it is you really want. If you don't completely name what it is you what to accomplish, you can end up with weird, unworkable solutions.

Example: Doing It Wrong

Situation: Production is being slowed down waiting for replacement parts. 
Improvement Wanted: Speed up the production line. 
Solution: Keep a large inventory of parts on hand. 
Problem with this Solution: Ties up my money in inventory; drives up assets; drives up taxes. Parts are hard to control and start walking out of the shop; lost revenue. 
Solution to Inventory Problem: Hire a parts person. 
Problem with this Solution: Increases inventory and payroll.

See how nutty this can get? What went wrong? What's really needed isn't named completely.

What's more, as you can see by this example, it isn't enough just to name the problem; you also have to name what you want, to come up with a solution that makes sense. By naming the thing you really want now, you can start walking backward from that point to come up with the actions needed to organize the area.

Example: Doing It Right

Let's go back and look at the original problem.

Situation: Production is being slowed down waiting for replacement parts. 
Improvement Wanted: Speed up the production line.

Now Name What You Really Want: The right parts at the right time, without increasing inventory or payroll.

What does it take to get the right parts at the right time without increasing inventory or payroll? What do you need to do to accomplish this goal? Now let's work out a solution.

Walking Backward

Now with this one area of the business, look at what steps are needed to be done to get this area into the condition you imagine. Make a list of the actions that have to be taken. Look it over carefully and ask yourself, “If I take these steps, will I get what I want?” Make sure that each action makes sense and that there aren't any needless or redundant steps.

Possible Solution: Look over appointment book the night before for all vehicles that are scheduled to come in, and preorder the parts that will most likely be needed. Now work out the rest of the steps needed.

Getting Others to Understand and Use New Systems

A great tool for management to use when organizing an area is a flow chart. A flow chart allows you to put down on paper what you're visualizing. Flow charts allow you to see where there might be a flaw or a bug in your thinking.

Once again start with what you want and start working it out from there. Once you have it worked out on paper, you can easily show it to others to gain agreement that your plan will not only help the shop, but will also make their lives easier.

Go through any new procedure with the people who'll be involved. Do dry runs and drill it until the new procedure is smooth and everyone's questions are answered. You can come up with great new organizational plans and systems, but if you can't get the people that need to use them engaged and in agreement, your efforts will go to waste. But when you take the time to do it right and train people on any new system, life is good! Good luck in your efforts and here's to a more organized business!

Learn how to better organize your business by attending the Management Success "How to Increase Your Profits" Seminar.

MANAGEMENT SUCCESS! "How to Increase Your Profits" Seminar