Operational Business Practices - Essential Elements

The following describes the elements we feel are essential for one's business to become operationally excellent. This blueprint or recipe for Operational Excellence, in a step-by-step order, is in terms of the progression of the implementation of "operational" Sound Business Practices by any sized business, to enable business growth to the next level.

These are the steps to success, in the order listed. Deviations in the order can be made where it makes sense for you and your business, but don't stray too far. This is like a cooking recipe, and you usually don't tamper with a recipe until you've followed it exactly at least once.

1) Establish the Business Vision Statement

Vision is a mental picture of what lies at the end of a road never traveled before, and a Business Vision Statement articulates the future status of the business. Another way of looking at a Vision Statement is that it is part one of a two-part description of the overall intent of the business.

The Vision Statement describes the future: where the business is going or where management wants it to go. While the Mission Statement, part two, describes today: why the business exists today and/or what management is doing to pursue the vision of the future.

Together they provide direction for the business by focusing attention on doing things day-to-day to accomplish the mission, while taking steps to pursue the vision of the future - the long-term business intent.

Note, that you also get much more mileage and buy-in with the Vision Statement when it is word-smithed in a group (the team) setting, and you can accomplish the end objective much more quickly when you start with a straw man versus a blank sheet of paper, which is what Skeleton Star, Inc. is all about. When published after group input, the vision is shared, and those who participated feel personal ownership of the Vision Statement.

Note: From a chronological standpoint the Mission Statement is usually created first - out of need. The Vision Statement will usually be formulated after the business has progressed to the point that it's viable and profitable. However, from a Business Planning or Business Model perspective the Vision Statement is usually listed first.

2) Establish the Business Mission Statement

A Mission Statement should be created, and published, as a means of giving the members of an organization, associates, stakeholders, and customers a uniform perception of the purpose of the business.

The business purpose is an expression of the reason why the business exists. Another way of looking at a Mission Statement is that it is part two of a two-part description of the overall intent of the business.

The Vision Statement, part one, describes the future: where the business is going or where management wants it to go. While the Mission Statement, part two, describes today: why the business exists today and/or what management is doing to pursue the vision of the future.

Together they provide direction for the business by focusing attention on doing things day-to-day to accomplish the mission, while taking steps to pursue the vision of the future - the long-term business intent.

Again, as in the process for the Vision Statement, it is best to create it with your staff and/or team to gain consensus and buy-in, then publish and communicate it; the value of doing it this way is that the mission is shared, and those who participated feel personal ownership of the Mission Statement - everyone owns the result.

3) Establish the Business Values Statement

A key component to enable success is the Business Values Statement which goes lock step with employee handbooks and other internal and marketing documents that portray the culture and ethics that define what you can expect the behaviors of the company and its employees to be.

They should be the fundamental principles (AKA Values) by which the company conducts its business. Some companies publish theirs, and some don't. However, with today's onslaught of major accounting practice frauds that have obliterated employee pension funds and investor monies, it has become increasingly more important for legitimate companies to state their positions relative to ethics.

Companies that do, at least get categorized as having "good intentions"... those that don't seem to fall in the other category, in general, of not having "good intentions".

Business ethics cross many subject areas and are based on broad principles of integrity and fairness regarding issues such as accounting practices, product quality, customer satisfaction, employee wages and benefits, local community and environmental responsibilities, etc. If you could sum Principles / Ethics up in one other word it would be Integrity.

A solid ethics statement, documented as the Company Principles / Values Statement, creates team commitment and understanding relative to how the company desires to operate, and gets you categorized as having "good intentions". It enables your team to operationally focus accordingly, and it enables others who read it to understand how the top of the organization visualizes the ethics of the company.

4) Establish the Operational Business Model

An Operational Business Model is an operational plan to enable the business to accomplish the mission, and achieve the vision.

An Operational Business Model, also known as a three-year or five-year operational business plan, usually consists of the company's / organization's vision statement, mission statement, values statement, scope, objectives, strategies, and initiatives - a plan to follow to enable the business to accomplish the mission, and achieve the vision.

One should exist at the corporate level reflecting the Company's plan, and each down-the-line reporting organization should have their own which dovetails into the corporate version.

If you're following this "blueprint" you're well on your way to getting your Business Model completed since you've already created your Vision, Mission, and Values Statements which are all components of the Business Model.

The thought process to create the rest of the Business Model enables you to focus on the future as well as the present; provides the mission to accomplish the vision; provides the objectives, strategies, and initiatives to accomplish the mission, while taking the steps to accomplish the vision.

The process enables you to look three to five years into the future, and lay out the appropriate objectives, strategies, and initiatives to get there. In short, you end up with the recipe to take your business to the next level.

This is where you would do the necessary brainstorming to formulate the objectives and strategies to pursue in order to elevate your business to the next-level. Objectives would be broad-based statements of what you want to accomplish. Each Objective would have one or more supporting strategies which indicate the things you need to do to accomplish the objective.

Strategies would consist of both enabling strategies and operational business strategies. Enabling strategies would be those fundamental items you need to develop, foster, and instill in your organization in order to have the capability to bring your operational business strategies to fruition.

For example, before you could accomplish business strategies like, e.g., implement a global growth strategy or implement an integrated manufacturing and facilities plan you might first have to accomplish enabling strategies like, e.g., ensure that your organizational values become the foundation of your organization; define and improve organizational systems; or, foster an environment that stimulates professional excellence and encourages contribution by all employees.

Each strategy then should have one or more supporting initiatives; exact actions to be taken, to successfully carry-out the strategy. Each initiative should be prioritized and worded such that you answer who is going to do it; how will it be completed; and when will it be done.

Then, when you have completed the Business Model, one of the major advantages of having a documented Business Model is that you can then periodically (quarterly, annually at a minimum) review status and compare the plan to reality. This allows you to assess what worked, what didn't, and to do some tweaking of the plan to enable greater and quicker strides toward the vision.

Regular reviews of the objectives, strategies, and initiatives (housed within the Operational Business Model) enable the team to re-focus on what was to be accomplished. The review process enables you to redirect actions that had strayed; and initiate new ones based on lessons learned, changes in the marketplace, changes in technology, etc.

The Business Model and its review provide the capability and tool for you to be able to proactively manage the enterprise, rather than "flying-by-the-seat-of-your-pants" and allowing confusion, chaos, and luck to manage the business and the future.

Good management is the key to success and good management starts with planning and setting goals. That is what an Operational Business Model is all about.

5) Manage the Business

The above gives you the basic recipe for operational success, but somewhere along the way as your business grows you need to hire, train, and motivate employees. Valuable employees are critical to your success.

You can have outstanding vision, mission, and values statements coupled with a well thought out business model, but without employees who can execute, achieving the next level of success would be doubtful.

Write employee job descriptions, clearly defining the duties, responsibilities, special requirements, and work conditions for each position you desire to fill. When your business is in need of additional staff, use these job descriptions when you interview employment candidates as a basis for appraising each candidate.

Also think through and write down your principal company / business policies, and/or create your employee handbook. Doing so will help you establish order and will provide guidelines for your day-to-day business activities. When you hire employees, be sure they know and understand your business policies so you and they will have the same expectations as business is conducted day-to-day.

You might be able to start out with family members or business partners to help you, but if the business grows as you had hoped, the time will come when you must select and train outside personnel. Careful selection of personnel is essential and critical.

Once the job descriptions are completed, line up applicants from whom you can make a selection. To select the right applicants utilize the job descriptions you created above to zero-in on bonafide candidates.

In a small business you would need flexible employees who could shift from task to task as required. Include this in the description of the positions you wish to fill. At the same time, plan your hiring to assure you create an organization of individuals capable of performing every essential function.

For example, in a small business a salesperson may also have to stock shelves and do bookkeeping at the outset, but as the business grows you would need dedicated sales personnel, stock persons, and bookkeepers.

To select bonafide applicants, your next task would be to screen want ad responses and/or application forms sent by employment agencies. Some applicants could be eliminated sight unseen. For each of the others, the application form or letter would serve as a basis for the interview which should be conducted in private.

Put the applicant at ease by describing your business in general and the job in particular. Once you have done this, encourage the applicant to talk. Selecting the right person is extremely important to you, your team, and your business. Ask the appropriate questions required to find out everything about the applicant that is related to the job, and if possible consider how the personality exhibited will merge into the existing team.

References are a must, and should be checked before making a final decision. If possible, make a personal visit or a personal phone call directly to the applicant's immediate former supervisor. Verify that the information given by the candidate to you is correct. Consider, with judgment, any negative comments you hear and try to read between the lines. Checking references can bring to light significant information which may save you money and future headaches.

Now, assuming that you've hired some solid employees, a well-selected employee is only a potential asset to your business. Whether or not he or she becomes a real asset depends upon the training you provide.

Some rules of thumb to follow are:

  • allow sufficient time for training.
  • don't expect too much in too short a time period.
  • let the employee learn by performing under actual working conditions, with close supervision.
  • do some follow-up on the training.

Check on the employee's performance after he or she has been at work for an appropriate amount of time. Re-explain key points and short cuts; bring the employee up to date on any new developments and encourage questions. Training is a continuous process which becomes ongoing constructive supervision.

Once trained, employees still usually require ongoing supervision. Good supervision reduces the cost of operating your business by reducing the number of and the degree of employee errors and/or omissions. When errors and/or omissions are corrected early in the job training cycle, employees usually get more satisfaction from their jobs and perform better.

Eventually, a formal performance evaluation should be conducted with each employee. As part of the evaluation process, performance management goals should be documented for each individual. A focused organization with sound business practices in place understands the value in the incorporation of goals into the overall performance evaluation / management process.

Measurement systems begin at a young age. At school, we are assigned numerical or alphabetical ratings. Our parents, sensitive to how well we did, made strong suggestions for improvement when necessary. These types of assessments continue in many forms throughout our lives. Too often, measurement systems are viewed negatively. The primary purpose of an evaluation system is to provide knowledge about a weakness that can be improved through appropriate action. A problem cannot be solved until it has been identified.

Eventually, when multiple employees have been acquired, performance evaluations should feed a ranking process, and ranking scores should go lock-step and tie-in to employee compensation planning methodologies to ensure the company is rewarding and retaining their best and most reliable people.

In today's marketplace a business cannot afford to be less than the very best for the sake of the company and its customers. The only way to achieve one's corporate vision is to build on one's strengths and address one's shortcomings, in order to excel in the industry and marketplace.

A focused organization with sound business practices in place, understands that employee ranking is a key sound business practice to have implemented in order to ensure that they reward their best performers, and to legally justify in a time of economic downturn, how personnel were chosen to be let go.

Lastly, most employees usually require some kind of motivation, especially within small businesses. In a large company, a good employee can usually see multiple paths to advance, and even an opportunity to advance into management. In a small company, opportunities are usually very limited and the management slot is occupied by you.

Motivation can be instilled in many ways, usually via specific recognition for a job well done. But the bottom-line is that pay-for-performance is one of the best sound business practices to have implemented, in order to ensure that you justly reward the personnel responsible for the company's success - your best and most reliable performers.

A business needs to have a process that ensures that a company's best performers are appropriately rewarded and retained, and it is another key sound business practice to diligently practice. Exceptional employees are hard to find, expensive to train, and difficult to retain in the competitive arena businesses are in when it comes to attracting and retaining high-performance talent.

What it takes to ensure success then is EXECUTION, and you need good, trained, motivated employees who can execute. That is why you need to diligently follow the above process: evaluate, rank, and compensate in order to retain your valuable employees, and enable the future success of your business.

Well that's it... seems pretty simplistic doesn't it? It is! It's just a five-step plan... no big deal. But, you need to follow the overall process: establish the vision, execute the mission, follow the operational business model plan, execute... and then you review, re-direct, and re-execute per your "tweaks" in order to provide the capability to elevate your business to the next-level of growth.

Of course many other things have to fall into place, but the above (5) steps are absolutely critical to lay the foundation for the future success of your business.

And, if you really want to take "Operational Excellence" to the limit it begins at "The Top". You and your team must begin, at least, by being perceived as being operationally excellent. It has been said that "success is at least one-half perception". Together, by being people, customer, and business focused, and by paying attention to detail ("operational excellence") as true professionals, you can earn the respect and the positive perception of all those with whom you interact.

One can call it work ethic, or one can call it "drive-to-excel", but it all boils down to planning, commitment, teamwork, and solid execution such that perception is reality.

Following are the traits, behaviors, expectations, and operating standards in related work activities, that should be instilled, committed to, and demanded from the entire team, and upon which one should be judged, and upon which one's compensation should be based:

  • Outstanding work ethic AKA "drive-to-excel"
  • Very focused each work day
  • "Can do" attitude
  • Reliable
  • A "go to" person... always gets the job done
  • Professionalism: adheres to expectations and standards
  • Communications: official or pseudo official to individuals, teams, networks, distribution lists, etc., via voice mail, e-mail, memorandums, etc.; ensures every "I" dotted and "T" crossed; proper spelling; proper grammar; proper syntax; proper protocol
  • Business relationships: professional conduct and protocol
  • Individual: contributions and results
  • Team: contributions and results

At this point you've been exposed to the elements and steps we feel are essential for one's business to become operationally excellent. AND, hopefully you are ready to begin working on your operational business practices.

If you want to take our recommended approach, and start with a "skeleton", take-a-look at our products tab above to see what solutions we have available to assist you.

Best of Luck to you and your team from the Skeleton Star Team!