Do You Have A Strong Operating System?
In this issue ....
the basics of an operating system
375 words, a 2 minute read
Everyone has a way of operating their business. In fact, we have seen over a hundred different ways companies operate, all as custom integrators. You have heard us talk about the many ways CI companies do things in their businesses. We have also rejected the notion that one piece or several cleverly assembled pieces of software provide the silver bullet.
An operating system has more to do with process and procedural discipline than software and features. A well designed operating system keeps accountability intact along every step of the process. Yet we believe and know the advantage of businesses adopting core processes and improving through best practices. But here we are 30 years into a business model and no Roberts rules of order exist for CI operators to color inside the lines. Meanwhile, companies pursue their own holy grail of business enlightenment virtually making up their approaches as they go. The basics are not that difficult. The mysteries are not that elusive. In fact, here are the baseline requirements for having a standardized operating system: 1. First, count right. Align revenue and costs to the same point in time. 2. 2nd, count strategically. Know your income sources, their costs and the staff required to perform. 3. Recognizes Revenue properly. 4. Bid to get healthy margins. It all begins here. 5. Monitor the sales funnel (proposals/closes). Future poor revenue always shows up here first. 6. Manage the backlog flow. Near term backlog conversion is crucial. Can't manage revenue without this. 7. Manage labor productivity. Eliminate empty hours. 8. Control compensation levels. Pay for performance 9. Adopt a relentless collection culture. Discipline pays. 10. Enact processes for money, goods and labor flow in a predictable way? 11. Manage trade partners and service levels. 12. Have a service plan strategy. 13. Reduce cost of goods continuously; buy better. 14. Analyze product mix, project profit and make adjustments. Of course, vision, mission and a solid financial plan are all keys but having an operating system will put you faster and more securely on the trail to realizing your goals. Without it, you will spend more time going sideways and the team will lose sight of the big picture over time. If you are interested in learning more about the operating system that should be running in your company, call us.