Operating Systems Handbook Bob Ducharme @ Amazon.com
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The American system of business management is admired and emulated around the world. The American system is characteristic of two positive traits in the American psyche: (1) a lively interest for making things better for the future and (2) openness and willingness to alter in order to achieve that end. No society in the world is more prolific at creating new businesses than the United States capitalistic system. Often, however, as little businesses owners and managers, we are so busy starting new ventures and fighting daily fires that we don’t take the time to learn basic, successful management principles. These principles have been tested and proven by our more prominent companies over years of trial and error. They are readily available as a resource to the little business owner. Many enterprisers are technical experts in the product or service they offer. The entrepreneur, however, often times starts a business without any formal training or experience in the best management exercises and principles. By “management” here we mean the business of with great success managing the non-technical side of the business, the “back room” activities. It is the “business of running the business”. As a result of highly inadequate or inattentive management, galore little businesses fail in the early years. They fail not because of a weakness in their product or service concept, but because the business was not the right way organized or managed. Once a little business has emerged from the start-up phase, or grown to a sure level, management proficiencies will have to modify or the business will inevitably run into trouble. Although situations vary widely, for numerous little businesses management crises get started in the range of $1-3 million in annual sales or 5-15 employees. When management issue becomes critical, the owner or manager of a little business ought to evolve or modify from a manager of things to a manager of persons and from a technical expert to a strategic thinker. Change is never easy, exceptionally for gifted enterprisers who have deeply rooted habits formulated over time. But failure to grow as a manager is a major, perchance the major reason why a business will falter, stagnate or even collapse beneath it is own weight. But what have successful business owners produced have is missing in troubled businesses? First of all, owners of successful businesses have produced personal characteristics that they were not inevitably born with and that reflect in their business organization: o Invariably they have a positive attitude towards their business and life in general. “Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” Mark Twain o They are consecrated to their effort. “The only place you’ll find success before work is in the dictionary.” o They are patient. “Entrepreneurs are plainly those who grasp that there is little divergence among obstacle and prospect and are competent to turn both to their advantage.” Victor Kiam o They are persistent. “Many of life’s failures are persons who did not realize how close they were to success when they gave up.” Thomas Edison Secondly, the owners of successful businesses have invented a business blueprint called a Strategic Business Plan that without doubt or question describes their business concept, their mission and their doctrine of business. In this document, they have set personal and corporate goals and set out specific time lines and schemes to achieve them. Thirdly, successful business owners think of their laborers as “associates”, a bestloved descriptor used by Sam Walton and a more significant idea of a management/employee relationship. Successful owners view their associates as their most priceless asset and resource. Associates are gathered into an Organizational Structure that functions as a well-oiled machine. This structure, including all it is policies and procedures, inspires associates to carry out to their utmost capablenesses and gives them the freedom to achieve, rewarding those who excel in symmetry to their contributions and disciplining those who deviate from satisfactory behavior. Positions, tasks, duties and responsibilities are specified and communicated routinely and performance is measured regularly. Training, occupation enrichment programs and incentive compensation plans are designed to give hope or courage to each associate to excel. Fourth and last, the owners of successful businesses have invented Operational Support Systems. These may be financial or non-financial, manual or automated. The goal to be attained of these schemes is to help and make effective all the actions of the organization. Well structured, they likewise relieve management of a lot of day to day routine activities, giving owners more time to be strategic thinkers. The data provided by these tracking schemes provide critical selective information on sales, cash flow and other financial performance selective information so that senior management may take timely action as alter occurs. Red flags appear early, before difficulties become unmanageable. IN SUMMARY, THE FOUR KEYS TO SUCCESSFUL SMALL BUSINESS MANAGEMENT ARE: (1) Owners have produced habits and traits that are Positive, Committed, Patient and Persistent. (2) A living Strategic Business Plan is in place. (3) An Organizational Structure has been devised that inspires persons to be their best and allows them to do so. (4) Operational Support Systems are applied that track performance and relieve senior management of each and everyday detail yet supply them with critical info to manage the business. Let’s go a littler deeper into what is meant by a Strategic Business Plan. Successful businesses operate within a planned framework. A Strategic Business Plan is written for a minimum of three years or two years beyond the current budget year. The plan describes the company’s mission, analyzes corporate and selling strengths, evaluates weaknesses and how they will be overcome. It identifies target markets and pricing schemes and describes strategic confederations that subsist or will be pursued. The plan describes positions on any other issues seen as critical to the long term health or viability of the business. “Failing to Plan is Planning to Fail” Now let’s look a little deeper at what we mean by Organizational Structure. The basic building blocks of organizational structure for a business are: o An Organizational Chart, Job Descriptions, Task and Duty Lists, a Job Performance Evaluation System, an Employee Handbook, a Policies & Procedures Manual and an Incentive Compensation System. When all of these organizational elements are in place and being used routinely, the institution will have structure and purpose. Employees will feel they recognise where the company is going and what their role is in helping it get there. They will recognise the boundaries of what is expected as satisfactory conduct and they will be conscious that great performance will be rewarded. Now let’s look a little deeper at what we mean by Operating Support Systems. Usually the most involved system for a little business is the Accounting System. This may be a comparatively simple system such as QuickBooks® or Peachtree®. These systems are pre-designed and user-friendly and are peculiarly good for non-manufacturing businesses that merely buy and resell items. Also, they manage customers, vendors, accounts receivable and accounts payable very well. Finally, they have the capability of generating splendid managerial and financial reports, almost in a minute or two. No matter what the type of business, some type of accounting software package is necessitated that may capture each day dealings in a real-time surroundings and be effortlessly operated by in-house personnel. In today’s fast paced business world, relying on an accountant to provide periodic affirmations of company performance various weeks or even months after the fact is not an satisfactory strategy. Other systems little businesses ought to have in place (typically these are automated Excel®-based systems): o Cash Management, Annual/Monthly Budget with Variance Report, Labor Burden Tracking System, Job or Product Pricing System, Incentive Plan Distribution System, Break-Even Calculator and a Weekly Sales Reporter. Even if you have none of these developed, the task is not as daunting as it may seem at first. Plug-in schemes are available from a number of origins at modest cost and include backup training and help (one such source may be found at http://www.isbminc.com). A business that has these four critical parts in place stands a much higher probability of success than businesses that are not so equipped. © Institute for Small Business Management, Inc. All Rights Reserved Most helpful customer reviews 2 of 2 people found the following review helpful. 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