8/3/11

The Magic of Machines: Operations & Opportunities (Part 3)

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 Part 2 of Operations and Opportunities, we touched on the business machine in terms of sales, because this is usually one of the hardest areas with the most resistance for enabling the machine which is really a tool.

Perhaps an enhanced understanding of the machine would be helpful.
  • The machine does not have human error other than what a human builds into the processes, or where the human tries to interrupt, delay or change the processes of the machine.
  • The machine does not get tired, have bad days or have distractions. It works in the background, moving processes, supporting human effort and identifying opportunities as a part of the process.
  • Its sole purpose is to drive the gears of business and produce results.
  • The machine runs efficiently incurring little additional cost once implemented, excepting maintenance, updating and normal quality controls.
  • The machine drives profit.

The book “Warren Buffet’s Management Secrets” by Mary Buffett and David Clark describes companies with a “durable competitive advantage.” The descriptions of the best companies utilizing the advantage all have machines at work for every process that can and should be repeated throughout their companies. It is worth taking a look at some of the examples they cite.

If you are a real estate brokerage, franchisor, software company or country club you do basically the same things over and over. You have sales promotions but your base product does not change and your processes do not change much either. All of these companies add to their product and service mix which does mean some changes to the machine, but not a retooling of all processes. Companies, such as car companies, which annually release new models have significant production and process retooling with each new model but even they try to use as many components, from a chassis to a promotional process, as possible to build efficiencies which control costs and drive profit.

The business machine actually is behind all operations in a company. In some cases, it is working well and production is high. In others, especially businesses where there is a high degree of personal interface, it is often not utilized in part due to fears, concerns and control issues.
  • Fears include that the sales person or manager will not be the center of the process and final product. They are not now, as the consumer is not tied to the person.
  • Concerns include individual ways of doing business. A signature style can coexist nicely and be complemented by a business machine. The signature should exist in the relationship and not the process.
  • Control issues are perhaps the greatest and in many cases the most difficult to conquer as they are often driven by management and even leadership who are either clinging to the ways they have always done things or may not want the limelight of accountability.
The magic of the machine is that, given the chance to operate at peak efficiency, many costly challenges businesses face can be significantly reduced or eliminated.


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