What are the types
of operational issues in the BUSINESS?
At the beginning of 2019, our company summed
up the results of a study to assess the quality of design and implementation
of business processes using the open service. Over the past 2
years, 165 companies have been diagnosed on the site, more than
1,300 business processes have been evaluated. As a result, each
company received an integral assessment of the quality of management, as well
as a list of existing problems. In turn, we analyzed the results and made
a comprehensive analysis of the quality of management in small companies in the
following areas:
1. Lack of Technology
This root cause is the undisputed leader
among the rest. It lies at the root of 85% of the problems that were
identified in the studied companies.
What is technology applied to
business? This is a description of the result to be obtained, operations,
objects and means of activity, requirements for performers. Why are there
no technologies in the company? As a rule, this is due to
the banal misunderstanding that a business is a complex socio-technical
system. And, like any complex system, a business system must be
designed. Designing allows you to get, among many others, two main
effects:
- Reduce, in some cases dramatically, errors in the work of the
- To find "white" spots on the map of the activities of the company. These are the types of activities that should be carried out, but for some reason, so far no one has thought about it.
In practice, managers often believe that it
is enough to define a goal, and then employees themselves organize and, by
virtue of their abilities, come up with the necessary technology. Yes, it
happens that it works. But in a limited class of situations: in small
companies whose employees have sufficient intelligence and knowledge. The
second common misconception is that by “trial and error” the necessary
technology will sooner or later develop “itself”. Most often this does not
happen, and if it does, the cost of resources “for mistakes” turn out to be
excessively large.
The consequence of the above is that the
company must have a cohort of business architects and regular
organizational design activities. In practice, the best solution is the
approach when a qualified specialist (Director of Organizational Development),
who is functionally subordinate to all managers, heads this activity. The
main non-trivial idea here is that all managers must be business architects. Or
rather, they should have time to occupy such a role. In practice, a
vicious circle arises: “To think about the optimization of activities, we do
not have time. And in order for time to appear, you need to optimize
activity. Only the will of a top manager can break this circle. We
will talk about this in the following root cause.
Examples
of reasons based on the lack of
- Orders for resources are not always placed with suppliers in advance, due to which there are late deliveries;
- There are no quantitative, clearly measurable criteria that measure customer
- Attracted staff does not meet the requirements of the company in terms of competence and
- The existing cost management system does not allow to avoid unnecessary costs and creates a shortage of resources.
2.
Lack
of Understanding
After identifying the root cause 1, a
reasonable question arises - why the company didn’t set up activities for the
development of technology activities (sorry for the tautology)? Why do
companies allow themselves to lose money due to inefficiency? The
answer is simple - the lack of insight from most top managers about
organizational design. A particularly depressing picture has to be
observed in the regions. "Impregnation" of the necessary
knowledge of heads of the first persons goes, but goes slowly. Plus, many
domestic top managers and business owners live "here and
now", and often look for tools that should help solve local problems
quickly, sometimes without regard for the long-term development of the
business, without regard for the interconnection of individual objects
in business system .
This is confirmed by the popularity of
training's and seminars in the spirit of “10 secrets of successful sales”, “5
secrets of success in marketing” , etc. The list goes on and
on. We are not against training. We love them. Simply searching
for a “magic button” that helps solve business problems in three steps often
becomes the usual practice of managers. At the same time, only a few think
that the main cause of many problems that they want to solve is the lack of a systematic
approach to business development. Again, we return to organizational
design as a special type of activity. To activities that the first persons
in the business have no right to ignore! (The amendment is in a
competitive environment. Where there is no competition, development
technologies there are probably not so much in demand).
Also, speaking about organizational design,
we would like to note that the respondents to the research noted the following
problems when implementing the development strategy of a company:
- Lack of regular monitoring of the competitive environment;
- An irregular analysis of changes and trends in various industries, which would allow a clear orientation in the market situation, finding new stable and promising markets;
- An irregular analysis of the legislative and regulatory framework, which would eliminate all risks associated with legal changes;
- The lack of regular independent employee reviews of existing markets for suppliers of goods and services, which would allow access to the most profitable offers;
- An irregular analysis of the demographic, social and cultural changes that are taking place, the lack of consideration of appropriate forecasts in the development of long-term plans and programs.
3. No Funds
It is obvious that for the implementation of
many activities necessary for a long and prosperous existence of the
company, including organizational planning activities, budgets are
necessary. Unfortunately, we have no recipes for how to eliminate this root
cause for companies that have funds only for the implementation of current
operating activities. Only monopolists can allow themselves not to pay
attention to development, to the effectiveness of their
activities. Although, as we see now in Russia, even monopolists have begun
to actively address the issues of the effectiveness of their
activities. Therefore, the best development of events in the absence of
funds is the sale of the company.
4.
No
Control
Indeed, there are situations when both the
technology is developed and the staff is trained, but the work is not done as
it should. For example, respondents noted the following problems
associated with lack of control:
- The launch of technological equipment into operation is not always carried out after all the necessary procedures for adjustment and testing have been carried
- Installation and adjustment of technological equipment is carried out without taking into account the requirements of documentation for this equipment;
- The implementation of shift tasks is not reflected in management accounting promptly and in a timely manner;
This is really a serious problem, and the
essence of it is quite unexpected. Technically, the solution to this
problem is quite obvious: control methods are introduced at the stage of
development of the underlying technology, or the technology itself is
structured in such a way as to prevent wrong work.
5.
No
Information system
Strangely enough, only one problem that
respondents noted may clearly be related to the lack of the necessary means for
work - the information system. This problem:
- Orders for resources are not always placed with suppliers in advance, due to which late delivery occurs.
Let us make the assumption that there is a
work technology, but the volume of the nomenclature for an order is so large
that it is impossible to process them manually. Fortunately, the necessary
information systems exist - these are systems that, for example, implement the
MRP II resource requirements planning methodology (today these are all systems
belonging to the ERP class). It allows, given the delivery time for each
item in a timely manner to create orders to suppliers.
Hi. I’m Designer of Blog Magic. I’m CEO/Founder of ThemeXpose. I’m Creative Art Director, Web Designer, UI/UX Designer, Interaction Designer, Industrial Designer, Web Developer, Business Enthusiast, StartUp Enthusiast, Speaker, Writer and Photographer. Inspired to make things looks better.
Blogger Comment
Facebook Comment