One aspiration of wanting to be a Small Business Owner is the freedom to manage your time. However, a Small Business Owner who is running a business, full-time and hands-on, is not different from an employee of the business. The highly-sought freedom becomes an illusion, especially when the business begins to provide different products and services, with operations in multiple locations.
How can the Small Business Owner become a hands-off owner, and achieve independence of a small to medium-size business? The solution is to virtually automate the business by structuring it into a system where anyone can easily step into anyone else’s job. Here is a three-step plan for automating your business: Organisation Chart, Key Performance Indicators and Training Manuals.
1. Organisation Chart: An organisation chart is a diagram showing the internal structure of a business. It outlines the roles, responsibilities and relationships between the individuals who run the business. The chart, company-wide and specific to departments and units, places the highest-ranking individuals atop the chart and position lower-ranking individuals below them. For example, an assistant manager falls directly below a director, indicating that the former reports to the latter.
There are various ways of designing organisation charts, but their common objective is to situate the principal officials, departments or functions of the business within the hierarchy, with the others following below in order of descending ranks. Most importantly, the organisation chart lets each employee see how his or her role fits into the general structure of the business.
Why do you need an organisation chart as a Small Business Owner? You do because you don’t want to be an owner who directly commands and controls employees on all levels, in addition to the managers who report to you. A chart establishes the role of each department or unit, and the reporting line of each employee. Imagine if your business doubles its present size and, in pursuit of the illusion of control, you spend your working hours listening to every employee. That is a recipe for exhaustion and chaos. What to do? Design the organisation chart of your business, and allow it to work. It is not easy to let go, but getting this right is essential to automating the business. It will free you from worrying about myriads of low-value managerial chores, and release you to focus on the strategic checks necessary to keep the system free from abuse and incompetence.
2. Key Performance Indicators: A Key Performance Indicator (KPI) is a measurement that helps the Small Business Owner, and other members of the business, to know whether a department or unit or employee is achieving, or failing to achieve, the strategic goals of the business.
How does a Small Business Owner identify the right KPIs for a business? KPIs must be defined, quantifiable and specific to the business. They must be communicated throughout the business, department or unit. They must be factors that are critical to the success of the business. Above all, a KPI must benchmark and track the performance of every employee in every department or unit of the business.
It is easy for employees to be busy performing tasks without precise and measurable results, which is no better than playing football without goal posts. Such vagueness can keep ineffective employees in the business, and the Small Business Owner will attempt to manage this by trying to be watchful on every level. This is a wasteful distraction.
A business must break down every task, with an end goal for every position held by every employee. Every standard job must have a non-negotiable KPI score, and an employee that consistently falls short of his or her KPI must be taken off the payroll. Business Owners who allow such employees to hang on are using their time and money to sabotage their own business. Business Owners who knowingly keep incompetent employees are sending the message that feelings, friendships, loyalty or any other excuse, are acceptable alternatives to performance, and unwittingly tilting organisation behaviour towards everyone trying to be likable to the Business Owner rather than being useful to the business. Even worse, the Business Owner is telling other employees that performance is optional, that it is okay not to achieve standards.
And when, inevitably, the business starts operating at a loss, and the Business Owner begins to miss payroll, these same under-performing employees will grumble and scramble for alternative employment. The bottom line is that a Business Owner and an employee do not need to negotiate a non-negotiable. An employee would not keep working for the business without receiving pay, and the Business Owner should not keep an employee who is not performing.
3 Training Manuals: A training manual is a set of instructions designed to improve the quality of a performed task, by breaking each task into a predictable and consistent system. It can be particularly useful as an introduction prior to training, an outline to be followed during training, or a reference document after training. It may also ensure that information on skills and processes needed to perform tasks are available in one place. Training manuals can be work books used to provide basic information, examples and exercises; self-paced guides for trainees to work through on their own; reference manuals with detailed information on processes and procedures; handouts to support training done during sessions; and job aids that provide step-by-step instructions for use in the workplace.
Training manuals provide the final component for automating your business. These can be books, booklets, audio, video, etc. created for departments, units and positions within the business. Each position in the organisation chart needs a training manual that contains the operating protocol for every client-facing role, and does not leave anything for the employee to figure out. The manual is ready for use only when someone, without prior knowledge of it, is able to study it and give it a successful test performance. Furthermore, by self-learning from the manual, a newcomer to the business must be able to do the job required of a position on the organisation chart. There must be a manual for every employee, from entry-level employee to high-level manager, with each manual being specific to the position on the organisation chart.
With your organisation chart, key performance indicators and training manuals in place, you should watch your system for a trial period. After minor fixes, gradually ease yourself from daily management, and shift attention to working on the business instead of working in the business. Your ultimate step will be to hire the right person who can handle every aspect of the business, replace you as the prime mover of the business, and give you the freedom to concentrate on high-value work without taking your eyes off the dashboard of the business. Or, better still, set you free to pursue other interests. That is the prize for automating your small business.