Are You Really “Running” Your Business?

It’s not difficult to find out. Talk to your employees, apply meaningful metrics and follow up. Because what you don’t know can hurt you.

Running anything requires a great deal of time and effort. Setting goals, strategizing, planning, executing, following up and improving are all critical components of success. Many professionals do these things well, while others go through the motions but don’t really commit to doing them on an ongoing basis. It’s surprising to me the number of business owners, division heads, operations managers and even department supervisors who just don’t know what is going on in their areas of responsibility. To such people, I have a simple suggestion: Find out!

Finding out is not difficult, but it does require a willingness to speak with your employees, ask them questions and listen to what they have to say. This can be done anywhere, at any time, but is probably best done in their work areas, where those employees are likely to be more comfortable (and it forces you to leave your office or “comfort zone”). Of course, listening can be the hardest part of this process. Many of us have a tendency to stop listening to people if they are not saying what we want to hear or if they take too long to explain things. Striving to overcome this tendency is absolutely necessary if you expect to “find out.”

Finding out what is really going on in your business also requires meaningful metrics that will provide at-a-glance information that supports or contradicts what you are being told. Whether these are departmental metrics that address a portion of the business (current backlog, productivity indicators, yield rates) or higher-level metrics that reflect overall operations (order lead times, on-time delivery rate, customer returns), they should be clear and accurate enough to show what is really going on at that time.

No person running a sizeable operation can do everything alone. He or she must rely on others to help get things done. Yet, in order to successfully rely on others, you must be confident that assigned tasks will be performed effectively and consistently. You will only be able to gain this confidence over time as you review actions and results, and ultimately find out how well your people perform.

In his book “Profits Aren’t Everything, They’re the Only Thing,” George Cloutier discusses what actions are needed to run a business, and his ideas are applicable to running almost anything. First, he reminds the reader that nobody cares as much about a business as the person running it, so it’s incumbent on that person to know what is going on all the time and to determine how critical resources are being used.

However, Cloutier also stresses “Delegate, don’t abdicate,” which means assign tasks to others, but follow up regularly until you are satisfied that they are doing what they are supposed to do. (As a variation on the expression “Trust, but verify,” he believes you also should “Delegate, but verify.”) Clearly, Cloutier believes in the importance of taking whatever actions are necessary to find out what’s going on.

In addition to speaking with your people, applying meaningful metrics and following up to ensure that they are doing the right things correctly, there are many tools and techniques available that can prove useful when trying to find out. Reviewing and mapping out existing processes can enlighten not only you, but others, as to what is going on within the operation. Effective tools for doing so include:

• value stream maps (which show the relationship between value-added and non-value-added activities), 

• flow charts (block diagrams of process steps shown in the sequence performed), and

• workflow diagrams (how product or information moves through the operation, frequently referred to as “spaghetti diagrams” due to their often-complex nature).

Root-cause analysis techniques, such as cause and effect (“fishbone”) diagrams, The Five Whys (the process of asking “why” until a real cause is discovered) or barrier analysis (a focus on the controls in place that either prevent or detect a problem) can help people understand not just what is happening, but why certain things are happening.

Input/output evaluation tools such as SIPOC (supplier-input-process-output-customer) diagrams can help everyone understand the inputs needed in order for a particular process to occur and who provides those inputs. They also can explain what outputs are created by the process and who uses those outputs.

Whatever means you employ to find out what is going on in your operation should prove to be much more effective than the “management-by-hoping” approach some still practice (“I hope business turns around”; “I hope she performs better in the future”; “I hope that new machine does everything it’s supposed to”; and so forth). To effectively run your business or operation, you need to find out exactly what is going on as quickly as possible, because what you don’t know can hurt you.