How do we know what the landscape of UK business truly looks like?
By asking you, our valued Vistage members.
Each year we conduct a number of surveys to get to the heart of the challenges, objectives and priorities of UK business leaders.
Our most recent survey asked 250 Vistage members to share their business priorities and list them in order of importance. The five priorities were: talent management, customer engagement, business operations, finance, and leadership. Each priority was then broken down into five sub-areas to gain a more accurate overview.
This series of blogs is designed to delve deeper into these priorities and find out why they’re so crucial to running a successful business. In this edition of the series, we’ll explore the priority rated third most important by Vistage members: business operations.
What are business operations?
As the name suggests, business operations is the collective term for everything that happens within a company to keep it running and profitable. What they entail will vary from business to business - depending on factors like industry, size, and what the business actually does.
- You may like: Vistage 2020 business priorities - Finance
However, for most businesses, they will include things like process and productivity, technology, infrastructure, risk management, and distribution and manufacturing. Business operations may not be customer-facing, but often they are the lifeblood and nerve centre of the entire company. Without the effective management of operations, businesses can struggle to remain efficient - and could see their bottom line suffer - especially as they grow.
When business operations are efficient and smooth, they have a positive impact on productivity and communication. This, in turn, can have a significant impact on growth and profit.
Productivity and execution
Perhaps unsurprisingly, productivity and execution came out as the clear top sub-priority within business operations. We hear the word ‘productivity’ thrown around a lot these days - so what does it really mean?
In a nutshell, it’s about effective use of time - or rather, not wasting it. That’s why one of the simplest ways to improve productivity is by looking at your execution - or processes. Look at your day-to-day operations. Are your systems still efficient or could they be upgraded to make daily tasks more efficient?
"If you’ve always done something a certain way, ask yourself why."
Just like individuals, businesses often develop habits over time. If you’ve always done something a certain way, ask yourself why. Is it really the most effective and economical way to do it or has it simply become a habit?
Finding quicker, more efficient ways to execute daily tasks might seem like you’re only saving minutes but over weeks and months, it can add up to a significant amount of time. In addition to this, when employees can complete tasks with less hassle or stress, it makes their lives easier, which in turn leads to a happier, more productive workplace...
Technology
...Which leads us on to the second most important sub-category. How do you make processes and daily operations more efficient? By using the right tools. In the past, most small businesses couldn’t afford hi-tech equipment but luckily that has changed. These days, the range and affordability of tech means there’s usually a technological solution to most problems.
However, instead of procuring broader, premium technology, a more effective and economical method is to identify smaller key factors that contribute to the overall success of your operations, and find ways of enhancing them. For example, are payroll processes as efficient as they could be? If not, why not try automating them? Identifying pain points and addressing them will save valuable time.
Risk management
The third most important priority for our Vistage members was risk management. Many companies used to make plans and projections based on sales trajectories and predictable markets, with little thought of potential risks ahead - or the importance of taking risks and attempting to disrupt the market.
However, in these economically and politically turbulent times, the focus has shifted. These days, risk assessment and management are key functions within businesses of all sizes.
The three main types of risk are general business risk (the risk of going out of business due to sudden economic or market changes); operational risk (loss from inefficient or poorly managed internal processes or external events), and financial risk (the risk that the company won’t have enough cash flow to operate).
Effective risk management starts with acknowledging the various types of risk, and asking the right questions. What are the general risks in business? What are the risks specific to your business? What are the most critical risks faced by your industry?
"You can adjust your goals and feel more confident in making bold decisions."
Rather than being negative or limiting, risk management can help your business take great leaps in terms of growth. When you have an idea of future challenges - or critical moments when you may be required to take a risk - you can adjust your goals and feel more confident in making bold decisions. You may not be able to eliminate risks but you can manage them and use them to your advantage. For example: a predicted risk in external factors could become an opportunity to develop a new service or product. This could see your company becoming a market disruptor, which, in turn, could lead to major growth.
Risk management is a key factor in business development and growth. When you know all the internal and external risks, you can mitigate the bumps ahead. Importantly, you can decide what your company’s preferred level of risk taking is - and when you should be taking those risks.
Click here for more information about cybersecurity and risk management.
Infrastructure
Business infrastructure is all about solid foundations and the ways in which the various elements coordinate with each other. You wouldn’t build a house on shaky ground, so why would you build a business that isn’t well-structured?
Building and maintaining a stable infrastructure comes down to a number of factors. The most crucial part is defining objectives and roles: what needs to be done within your business and who is going to do it? Do you have a defined management structure? How do you store both physical and digital data? How do your core operations work? What metrics are in place to measure performance and key processes?
- You may like: Top 2020 business priorities: Talent management
When you’re starting a business, the answers to these questions will help you establish a strong, interconnected infrastructure. However, over time, as your business grows, it’s important that your infrastructure is maintained and adjusted to suit your business’ changing needs.
For example, the first question of what needs to be done within your business could easily change: your business could become more focused on innovation, start to expand into new markets or have an entirely new wave of products and services. You may experience unexpected rapid growth, which would then put increasing pressure on your core operations. Infrastructure isn’t something you set up and leave. Like all aspects of business, it requires constant monitoring and readjustment.
Distribution and manufacturing
Distribution and manufacturing are crucial elements of business operations. If distribution or manufacturing go wrong, the fallout can be devastating: customers, suppliers and retailers could lose trust and may not use your company again. This will ultimately impact your customer retention and your profit margin.
The main components of distribution management are: packaging, inventory management, order processing, logistics, and clear communication - both across the company and with customers. Smooth, efficient distribution relies on all of these elements working together seamlessly.
"It’s vital you have the resources to offer fluid communication between company and customers."
These days, as many purchases are made online, there’s an added factor to consider: cross-channel communication. If people are buying digitally, they may need to ask questions or need technical support, so it’s vital you have the resources to offer fluid communication between company and customers.
Another factor to consider is your supply chain. Is it as efficient as possible? Could you use more local suppliers? Shortening your supply chain both for manufacturing and distribution serves two purposes: it can save you money and time, and it’s a more sustainable way to do business. Sustainability is a significant differentiator for businesses these days, so actively reducing your carbon footprint is likely to help with customer acquisition as well as retention.
The importance of business operations cannot be underestimated. It may not be as sexy as innovation or as creative as marketing, but it’s the beating heart of your business. If you don’t have solid, efficient operations, your business simply won’t reach its full potential. Conversely, taking the time to put stable foundations and smooth processes in place will ultimately lead to happier employees, happier customers and a healthier bottom line.
To download our report ‘Business Priorities for 2020’ click here. If you would like to speak to someone about how best to manage your own business’ priorities, contact Vistage today.
Images via AdobeStock and Pixabay
