From our Senior Leadership Table, we asked our Chief Operations Officer, Franciscah Nzanga, on what is needed when developing operational efficiency for a startup. Here’s what she shared:
What is operations? Put simply, it is the inner working of a business or organisation. It includes all the different facets that keep the “engine” of a business running. Operational efficiency is the ability of an organisation to reduce waste (including time, effort, and materials) as much as possible, while still producing high-quality products and/or services. In an organisation with operational efficiency, the cost of inputs will be less than or equal to the cost of outputs.
The best way to approach building operational efficiency is to break it down into three pillars.
Determine where you want to be and build backwards from there, deciding on the best strategy to get you where you want to go. This includes your financial strategy, sales strategy, growth strategy, etc. This means taking into account your target market and the challenges that you might encounter in reaching them.
It’s important to have a clear understanding of your entire value chain. From start to finish, what are the steps your product or service takes? In establishing this, it is important to consider several things:
How do you ensure smooth sharing of information across the A-Z value chain?
New systems need to take into account a change management approach – both leadership and staff need to buy into the systems that have been set up. This means there needs to be proper onboarding and training structures. It can often be more challenging to get existing employees to fully utilise new systems, as people can be resistant to change. This means that regular reminders and reinforcement can help solidify new systems.
Most importantly, it is essential that those in authority lead by example. If leadership feels the need to cut corners, then something is wrong with either the implementation or the system itself.
Enforcing new systems can sometimes require a carrot and stick approach, rewarding the adoption of a new system and having consequences for those whose uptake is slower. For example, you can institute an employee of the month award to recognise an individual who is utilising a new system. As a consequence for slow adoption, it could be as simple as not accepting any leave requests that don’t come through a new HR system, for example.
Even with this, however, flexibility is important in order to encourage further improvement and innovations. No system is guaranteed to be perfect, especially when it is first implemented.
It is essential to periodically audit your systems. Are they meeting your needs? Are people using them? Are they improving efficiency? This can be done through Lean Innovation, regular system and process audits, feedback surveys (both internal and external) and/or data analysis.
How will you manage the data you collect along your operations process? It’s important to keep in mind:
For more insight on the discussion, kindly watch the full webinar HERE.
No matter your organisation’s size or how long you’ve been in business, it is essential that you prioritise operational efficiency. When an organisation has efficient operations, it results in saved time, minimised costs, increased employee retention, and ultimately adds to your organisation’s competitive advantage.