It all looks good on paper. Your product or service is up there with the competition, you can fend off new entrants to the marketplace, the demand is stable and your suppliers are solid. Then it happens.
Profits start to fall.
You may have seen it coming. If you’re on the ball you will have identified the threat. The cause may be legislative changes for employers, or increasing legal protection costs, or the need for increased customer support.
The crunch may even stem from something as simple as a key member of staff leaving your employ.
Yes, we’re talking about that ever-present bane of business – Overheads.
In the face of increasing costs, profit margins can be sustained in only three ways –
1. Increased product price – could be death to your competitive edge.
2. Decrease in quality or professionalism – while the process may take a little longer, this will kill you just as surely as pricing yourself out of the market.
3. Increased efficiency.
No prizes for guessing the best option.
Efficiency is rarely an issue in the early stages of business development. Teams are small, commitment is high and everyone gives one hundred and ten percent. It’s in later stages of business growth that problems arise.
Every team member has strengths and weaknesses, but as a business grows, certain individuals become key to the operation. Even a relatively low priority function, performed with commitment, may assume a high level of importance to your operation. Think of a cleaner who makes sure the reception area is always presented in tip-top fashion, or a switchboard operator with just the right tone to match your business image.
Often individual strengths mask team weaknesses and one interactive person may cover the shortfall of three others. Resourceful people resolve daily issues in their own way, discovering solutions that they can use again and again. The hard pressed business leader may never know the issues that have been successfully resolved, let alone the methods of solution.
People become silos of knowledge, unable or unwilling to disseminate knowledge either between themselves, or to the business.
Imagine a computer guru employed by a small company. The guru will build a method of operation based around expert knowledge and particular solutions affected within the organisation. Over time the guru will develop methods of computer application usage that best solve issues which face the business. Should the day ever arise when the guru is replaced by another computer expert, the new incumbent must start the learning processes related to the business operation over again.
Similarly a customer support operation may find itself dependant on one or two individuals, keeping things running smoothly by virtue of excellent memory capacity. You probably didn’t select the operatives for that attribute and chances are you never saw it as a training need. It came by chance.
What are you going to do when, by the same laws of chance, the people with that talent leave your employ?
How do you control the uncontrollable?
The short answer is – you can’t. What you can do is to make sure that people within your organisation are efficient and that they act as a team. You need to equip them with the necessary tools to minimise impact when the uncontrollable occurs. The difference between the individual and the team is simply that team members know how to cover and complement one another. Team members share data. Knowledge relating to your business operation should always remain within the organisation and be available to each team member.
Let’s look at the basic issue of rising employment costs. Minimum wage rates are always moving up. Training costs continue to increase. Health benefits continue to be a desirable element of the employee package. You can’t sidestep these elements and they force you to focus on making sure that the team you employ is lean. Even that has its drawback. Lower numbers results in less coverage for sickness, holidays and the unexpected. So, while lean is desirable, efficiency is a must.
Knowledge control helps give your team flexibility. Documentation of processes results in all necessary people being positioned to cover shortfall. New employees can pick up responsibilities more rapidly and the management team can refer to the process documentation when further streamlining analysis is required.
ffox Software offer a range of documentation procedures designed to deliver efficiency and tackle cost issues.
Instead of just pointing you towards a method of knowledge control and abandoning you to make your own way, we can become your Knowledge Control Partner, showing you how to distil and disseminate the knowledge in your organisation.
Please check out our web site at www.ffox.biz/smeindex.htm
More articles from Chris A Watkins may be found at www.ffox.biz and www.cawatkins.blogspot.com
© Copyright 2007
Profits start to fall.
You may have seen it coming. If you’re on the ball you will have identified the threat. The cause may be legislative changes for employers, or increasing legal protection costs, or the need for increased customer support.
The crunch may even stem from something as simple as a key member of staff leaving your employ.
Yes, we’re talking about that ever-present bane of business – Overheads.
In the face of increasing costs, profit margins can be sustained in only three ways –
1. Increased product price – could be death to your competitive edge.
2. Decrease in quality or professionalism – while the process may take a little longer, this will kill you just as surely as pricing yourself out of the market.
3. Increased efficiency.
No prizes for guessing the best option.
Efficiency is rarely an issue in the early stages of business development. Teams are small, commitment is high and everyone gives one hundred and ten percent. It’s in later stages of business growth that problems arise.
Every team member has strengths and weaknesses, but as a business grows, certain individuals become key to the operation. Even a relatively low priority function, performed with commitment, may assume a high level of importance to your operation. Think of a cleaner who makes sure the reception area is always presented in tip-top fashion, or a switchboard operator with just the right tone to match your business image.
Often individual strengths mask team weaknesses and one interactive person may cover the shortfall of three others. Resourceful people resolve daily issues in their own way, discovering solutions that they can use again and again. The hard pressed business leader may never know the issues that have been successfully resolved, let alone the methods of solution.
People become silos of knowledge, unable or unwilling to disseminate knowledge either between themselves, or to the business.
Imagine a computer guru employed by a small company. The guru will build a method of operation based around expert knowledge and particular solutions affected within the organisation. Over time the guru will develop methods of computer application usage that best solve issues which face the business. Should the day ever arise when the guru is replaced by another computer expert, the new incumbent must start the learning processes related to the business operation over again.
Similarly a customer support operation may find itself dependant on one or two individuals, keeping things running smoothly by virtue of excellent memory capacity. You probably didn’t select the operatives for that attribute and chances are you never saw it as a training need. It came by chance.
What are you going to do when, by the same laws of chance, the people with that talent leave your employ?
How do you control the uncontrollable?
The short answer is – you can’t. What you can do is to make sure that people within your organisation are efficient and that they act as a team. You need to equip them with the necessary tools to minimise impact when the uncontrollable occurs. The difference between the individual and the team is simply that team members know how to cover and complement one another. Team members share data. Knowledge relating to your business operation should always remain within the organisation and be available to each team member.
Let’s look at the basic issue of rising employment costs. Minimum wage rates are always moving up. Training costs continue to increase. Health benefits continue to be a desirable element of the employee package. You can’t sidestep these elements and they force you to focus on making sure that the team you employ is lean. Even that has its drawback. Lower numbers results in less coverage for sickness, holidays and the unexpected. So, while lean is desirable, efficiency is a must.
Knowledge control helps give your team flexibility. Documentation of processes results in all necessary people being positioned to cover shortfall. New employees can pick up responsibilities more rapidly and the management team can refer to the process documentation when further streamlining analysis is required.
ffox Software offer a range of documentation procedures designed to deliver efficiency and tackle cost issues.
Instead of just pointing you towards a method of knowledge control and abandoning you to make your own way, we can become your Knowledge Control Partner, showing you how to distil and disseminate the knowledge in your organisation.
Please check out our web site at www.ffox.biz/smeindex.htm
More articles from Chris A Watkins may be found at www.ffox.biz and www.cawatkins.blogspot.com
© Copyright 2007
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