“Grow your business” is a common call to action, but it’s irritatingly unspecific. It’s a vague, end-of-the-rainbow goal that lacks accountability – grow it how? When? Using what?
If you want big growth, there’s a lot of evidence to suggest you need to start by thinking small. Concentrating on focused operational business systems (or FOBS, as we like to call them) is often key to solving much bigger picture problems and it’s often in addressing these details that big leaps forward can happen. Sometimes it’s about automating a repetitive or time-consuming task to free up time to focus on more important matters; sometimes it’s about making a cumbersome process more efficient or accurate. But by delving into the systems’ details, you can take control of your business from the ground up, building strong, effective foundations to support genuine business growth.
Take cycling, for example.
What does cycling have to do with your business?
More than you might think. It’s all to do with making little changes at a granular level.
Speaking about his famous approach of “marginal gains,” Sir Dave Brailsford from Team Sky said: “If you broke down everything that could impact on a cycling performance — absolutely everything you could think of — and then you improved everything little thing by 1%, when you clump it all together, you’re going to get quite a significant increase in performance.”
Back in 2004, Sainsburys used a similar approach from a different angle. In a bid to achieve an extremely ambitious sales target of £2.5 billion, they started from the bottom up and worked out that if every shopper spent a small amount more each time they shopped – £1.14, to be specific – they would reach their target. They devised a clever way to encourage shoppers to try new recipes to increase basket spend a little bit each time, and sure enough, the sales curve started to rise. Rather than letting shoppers continue to shop the way they always had, they offered new ingredients and disrupted the usual autopilot shopping habits to encourage incremental spending.
It has been reported that every year, Google apparently carries out 12,000 data tests to spot weaknesses; and this sort of micro-focus can be seen across many other sectors as well. In each example, the principle is the same – when you make small changes at ground level, the knock-on effects can be enormous. Enhancing the way specific business processes and systems function day-to-day will have a big impact in the longer term.
So what do we mean when we talk about focused operational business systems?
We mean drilling down into the day to day processes you and your employees use to go about getting stuff done, and improving them from the ground up.
Take a look at this:
A lot of those systems will be fairly common across many merchant businesses. And within each one, a number of things need to happen to get to a satisfactory result. Some are more obvious than others perhaps, but there will be areas which could be improved in every business. (Even ours. Shhhh.)
For example, finding automated ways to match purchase invoices to purchase orders speeds up the buying process, removes much margin for error and ensures that materials and services are always being ordered at the agreed prices. It means there’s a record of every purchase which can easily be cross-referenced next time round, without having to waste precious staff hours on an arduous but essentially straightforward task.
Within selling, it might mean measuring quote conversion rates and reasons, improving the speed of putting quotes in front of customers, looking at techniques to get better acceptance rates and using quotes to up- and cross-sell additional products. Little changes add up to big differences and often equate to meaningful savings across a business, in terms of time, resource and money.
Stock management is heavily reliant on efficient processes. When it comes to stocktaking, measuring the time taken to do a stocktake and the period the business/branch has to close to do it often shows opportunities for improvements. Finding methods to speed up counting or move to perpetual counting will increase efficiency, plus reduce errors and the need for recounts. Ensuring that the integration of this information with the rest of the business is instant and accurate reduces down time, improves customer service quality and increases trading opportunities.
How do you know which of your systems could be improved?
Take some time to think through the steps needed for each transaction, and work through them systematically. Use these three steps as a guide:
- Document and measure the current process
- Look for better processes and agree where changes should be made
- Systemise and automate that process
Importantly, this should be an ongoing process, so once these steps are carried out, their success or impact should be analysed; can lessons be learned? Can further improvements be made? It’s a fluid evolution and one that applies to every aspect of your business. And if you need a hand – well, you know where we are.
From deliveries to finance reporting, there are always business processes that will benefit from a little focus and streamlining, whether it’s automating invoice reminders or switching to hand-held scanners in the yard to reduce data entry time. There are ways every business can make small adjustment to its processes. You might be surprised at how quickly the little things add up to very significant changes.