Operations Management is key to creating more opportunities for your business and the people in your employ.
It doesn’t matter how high your sales are if you can’t cost-effectively convert those sales into profits. The lower your Gross Profit, the more likely the business is operating at a loss, with less money available to pay other operating expenses at a profit to you.
You need accountable operations managers who recognize that any decrease in Gross Profit Margin means they need to find quick ways to reduce your direct operating costs so you make more, not less, money off of each sale.
Overview
In the start-up phase, ownership will be highly involved across all sales, ops, and finance. When operations managers are brought in to help the owner get work done in their business, they will begin to let go of the following accountabilities for operations:
- Operations Process Management
- Operations Standards + Quality
- Ops Productivity & Efficiency
- Job Tracking
- Equipment Utilization
- Material Evaluations
- Operational Reports
- Material + Inventory Control
- Safety Standards + OSHA Requirements
- Operations Policy Compliance
As you delegate each of the above responsibilities, ask yourself: “Am I going to delegate the accountability for the result as well, or am I going to hold onto that?” If you want to be accountable for operating results, then you are delegating responsibility for the actions to be performed because you are holding onto the authority over those actions.
Actions with only responsibility but no authority means that all you can do is hold your responsible manager for doing the action or not. You can’t hold them accountable for the results of a responsibility if you don’t give them the authority to shape the actions required to produce the planned result.
