Inside the Machine: Operations & Opportunities (Part 8)

The Operations and Opportunities series will posted on Tuesdays Wednesdays, and Thursdays through the month of August 2011. A number of operational issues will be addressed in the blog. For more detail, depth or individual information and answers, please contact Soltys, Inc. Comments and questions are welcome. We will post answers and responses.

In the past two weeks, we have talked a bit about the operational machine of a company, then last week we focused on KPI’s which indicate performance and health. This week, we will look inside the machine.

If the machine is to run at optimum performance, all gears must mesh, synced to turn the next process in the machinery. All KPI indicators must be showing green. Everything is connected, nothing is isolated. While working in business development with SAP software integrators, as COO for a holding company over 159 companies, and in my consulting work with franchisors and brokerages, I have had the opportunity to see business operational machines at peak functionality and many whose gears were never designed to mesh. In each case the strength of the leadership was obvious. Those who had taken the time to design for function, process and results produced the most money. Those who started the machine based on their individual strength and then became a part of the machinery rarely realized a return much greater than the contributions of their individual efforts. In many cases, they were actually not only supporting the machine but worked so hard that all other malfunctions were hidden.

Just like many industries, most of the real estate brokerage industry needs to retool and work to build the machine that will produce the desired results of the business. So where do you start?

First, create a business map of your current business. This can be a fairly simple drawing to conceptualize the key elements. Each process should have revenue and profit as a destination. In some cases, it is easiest to work backwards from the destination. Usually the starting point of each process is driven by an identified need, opportunity or lifestyle preference. These are the raw elements fed into the machine.

Second, look at the potential for each opportunity on the map, does it meet process in a junction where the opportunity can be realized and maximized? Does this create a separate map or add a branch to the map you are working on for your company. If your company is an enterprise, it will be on the main map. If any process creates a new map, it is not integrated. Control may be lost and/or optimization potentially compromised.

Does the map show you your business and the path opportunities must travel to reach a destination? This is the design of your current machine. This is a basic view inside your business machine. When you look at the simple drawing, you see points where the process is challenged. In most cases, these points are related to people.

People are the fuel and lubricant for business machines. Fuel and lubricant must optimize the machine and are not the machine. People come and go, they change as they gain experience, age, have changed needs or desires but the machine remains. Having a business machine that will work regardless of specific people is a business that can be sold, retooled as needed and is business by design. People associated with those businesses feel the power of the machine, want to be a part of the fuel that drives the machine and appreciate the lubrication that management brings. Most importantly, the results are worthy and fuel regeneration of effort.
When we look inside the machine, we should see people fueling process, management providing the lubrication for smooth and optimized operation and leadership as the architect of the business machine, tweaking and retooling as needed.

If your look inside your own machine and business map did not show the picture you wanted, most likely, your machine is defined by people rather than process.