The commonly accepted elements of financial success in business are well established: good product and service, cost-effective procedures, skillful marketing and customer service, competitive pricing, visionary leadership, a highly-productive workforce, and consistent execution. In the last post, we encouraged the food industry to operate like high-performing businesses by adopting the right tools, competences, disciplines and courage to run profitably.
In this post, we’re going to examine a diagnostic which one can do in order to get a deeper understanding of your operational wastage and efficiencies.
Over the past 6 years, we have utilised an Operational Assessment Tool, which is an objective measure of organisational ability, on more than 60 public and privately held corporations, from a wide variety of industries throughout the world. Unfortunately, our research shows that management in many organisations often have a disconnected and idealised view of the operation they lead. Just as individuals who lack self-awareness often have trouble navigating the waters of life, these organisations rarely make the list of the most financially successful.
Our research reveals a strong correlation between a proactive and structured management culture and financial results. Financially successful organisations do not simply let their organisational cultures drift and evolve “organically” (as we hear all the time); they take an active hand in management. A crucial key to achieving this is to put in place feedback mechanisms, such as internal diagnostics (surveys, interviews, workshops) that allow management to maintain an up-to-date, objective view of how aligned their organisation is to the vision and strategic intent of the food group.
The importance of this clarity of perception cannot be overestimated. A high performing and nimble business will result in improved product and customer consistency, staff retention, customer service, delivery goals and performance which all result in repeat business and higher gross profit.
This in turn requires objective assessment into the operations, to understand what needs to improve and to gauge its capacity to respond as well as its tendencies to resist.
Just like a mechanic conducting an MOT for a car or a doctor running a thorough health check for a patient, an operational diagnostic is most effective when done by trained professionals, but writing and issuing a survey to a sample of your staff is a quick and easy way for you to get a sense of how your business is running:
There are 3 key elements of an operational diagnostic focusing on sustainability, speed and consistency.
Sustainability: Is the knowledge, processes and ways of doing things being captured within the organisation? I.e. what if a specialist skill suddenly walked out the door or was not able to work for a long time such as a head chef or yourself or any other key staff member? Is there an effective succession, training and knowledge capture programme in place so that the business hedges against any sudden loss of key staff, teams or processes which could put elements of the business at high risk? Can a potential franchisee or purchaser use your business infrastructure to continuously deliver consistent results? How ingrained is the key knowledge in your organisation? Ask some questions concerning the above areas.
- Speed: Does the organisation make sure people are up-skilled quickly, all share the same level of information and have the tools and support to enable them to contribute more quickly and smoothly? Is there a lot of ‘feeling around and coming to grips’ within the organisation when people start or is there a more organised method of giving the right pieces of information to the right people at the right time to help get delivering to expectations quickly and consistently? Investigate the above areas in a section of your survey.
- Consistency: Does the organisation have the infrastructure in place to support, coach and measure the performance expectations? Are all of the tools focused on achieving your scorecard measures such as consistency of profit, service, product and operational expectations? Is the process in place to execute flawless customer, staff and product consistency? It’s important to ask your staff if they perceive this to be in place.
One of a number of methods to executing a survey in your organisation could be as follows:
- Write up the survey using 3-5 headings with 3-5 questions under each heading for a total of 9-25 questions.
- Write an introduction to the survey which states that the management is committed to continuous improvement and the survey aims to assess areas in the organisation that might be improved.
- Make sure you are clear that you are committed to making the survey completely anonymous for employees or you will not receive honest feedback.
- Use paper, email or an online survey tool like Survey Monkey depending on what works for your organisational culture. Keep in mind, that online results are easier to aggregate.
- Issue the survey to a cross-section of up to 10% of your organisation and keep it simple (the survey shouldn’t take more than 15-25 minutes to complete)
- Collect the survey the following day (the longer you give people to complete, the longer they will take to return it)
- Aggregate the qualitative and quantitative results
- Once you identify some key areas of interest from the survey, conduct 3-5 interviews with random staff to bottom out and clarify the issues you’ve uncovered
- Organise a meeting with senior management to discuss the results, agree the solutions, prioritise the actions and assign accountabilities within the organisation.
- Organise a meeting with senior management to discuss the results, agree the solutions, prioritise the actions and assign accountabilities within the organisation.
- OrganiseIssue communications to the workforce to thank them for completing the survey and list the improvements which will be made in the organisation and by when in order to promote continuous improvement.
This diagnostic takes one person about 3-5 days to do (end to end), 15-25 minutes from a sample of staff members and approximately, four hours at the end of the diagnostic in order for the management team to understand the results via a briefing on the state of the organisation and 4 hours from your management team to agree on prioritised actions and assign accountabilities to individuals in order to execute improvements.
Some common areas for improvement highlighted by our diagnostics are:
- Improvements to performance structure and incentives
- Communication structure, process and content
- Training and consistency programme improvements
- Prioritised and re-worked systems and processes
- Required elements of support from management for the workforce
By conducting an in-depth diagnostic, identification of key drivers and areas of improvement can result in a prioritised action plan of what could be done in order to capitalise on missed revenue associated to operational effectiveness. Once you understand the challenges to your operational drivers, then your organisation is far better equipped to tackle any type of terrain or market conditions.
Business isn’t rocket science – it’s retailing or food delivery at the end of the day. Why can’t everybody beat McDonalds or Pret or whatever the best company in their industry is? Because it takes more than strategy and the taste, look and feel of the end-customer value proposition. It takes years of consistent execution and a solid infrastructure for a company to achieve sustainable competitive advantage by initially running an operational diagnostic to see how things are running and what to improve. The whole company needs to be focused on execution and the tools and infrastructures to achieve it.
David Gibson advised some of the world’s best-known companies while working at Accenture. He set up Gibson Business Infrastructures (GBI) to specialise in helping food retail and restaurant companies.
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