Q: The folks who run the shop and the people who deliver our services are giving me a headache. I”™ve worked hard to put in place policies that will help us to save money and keep us out of trouble with our clients. But I find the procedures I”™ve laid out are ignored. People seem to do whatever is convenient. The shop is a mess. Our trucks are worn out with careless driving. Inventory is left lying around, gets lost, damaged or outdated. Each week I find things that have to be thrown away and it makes my blood boil. No one seems to care that I”™m paying for the inefficiencies and losses. What can I do?
Thoughts of the Day: Define operations”™ role. Figure out who”™s in charge. Assign everything to someone ”“ from inventory to work hours to trucks. Set goals. Single out the worst offenders and make them accountable. Reward the high performers.
If the company is to be profitable, the people who touch the customer, who assemble products or provide services, must do two important things. They must improve the customer”™s world. And they must deliver efficiently.
Delivering efficiently includes using the least amount of time, energy and materials. In other words, focusing on conservation of resources. Improving the customer”™s world means operating as close to error- and offense-free as possible while delivering what the customer expects. Make sure your people understand that definition and buy into it.
Take a look at your organization”™s structure. Everyone can”™t report to you. The optimum number of direct reports anyone can have is six to eight. The more diverse the functions reporting to you, the fewer direct reports you should have. If you have sales, finance, marketing, human resources and operations reporting to you, you may max out at five direct reports.
Put someone in charge of operations. You might be tempted to say you don”™t have anyone strong enough to do the job. But with everything else on your plate, you”™re not doing a good job managing operations, either.
Give up trying to be the big hero and start training someone to do the job. Have that person work beside you. Show them the way you want things done. Write out procedures, if you haven”™t already done so. Make sure the person you”™re training understands that job security hinges on living up to the standards you”™ve set.
Break operations down into smaller pieces ”“ inventory, assembly, truck maintenance, customer delivery. Assign one person to each area. Make it clear you plan to hold people accountable.
Define what you expect by setting goals. With inventory, focus on accuracy of counts and waste rates. Define the optimum time for delivery. Set a quality standard for assembly. Create a budget for truck maintenance.
Track performance in each area ”“ by day and by week. Use charts on the wall to show what”™s happening. If inventory is wasted, make everyone aware of it. If assembly and delivery beats the schedule, make everyone aware of that, too. When truck maintenance goes over budget, find out why.
Talk in meetings about the cost of errors. Share reports that document inventory waste, lost productivity, and customer returns.
Ask people if they are willing to be personally liable for losses. And when they say no, point out that no matter what, YOU are personally liable. Make it clear you”™re no longer willing to bear that burden alone.
Deal swiftly with the worst performers. Take them aside to discuss what”™s going wrong. Find out if they care about the poor results and what they”™re doing to correct the situation. If they don”™t seem to care, put them on notice that their jobs are on the line. Until people understand that there are real, personal consequences for noncompliance, things are unlikely to change.
Single out the high performers at weekly meetings. Recognize their contributions. Ask them to talk about how they achieved their results. Consider a reward: tickets to a game, lunch on the company, leaving early on Friday.
Andi Gray is president of Strategy Leaders Inc., strategyleaders.com, a business consulting firm that specializes in helping entrepreneurial firms grow. She can be reached by phone at (877) 238-3535. Do you have a question for Andi? Please send it to her, via email at AskAndi@StrategyLeaders.com or by mail to Andi Gray, Strategy Leaders Inc., 5 Crossways, Chappaqua, NY 10514. Visit www.AskAndi.com for an entire library of Ask Andi articles.
