Business owners often complain about the long hours they continuously put in with little returns to show for their efforts.
Firstly, it is important to understand the difference between operational activity and management effort. Without a firm understanding of the two processes outcome and effort can easily be confused.
Operational activity is being busy and spending lots of hours IN the business which is always a necessary requirement in the early phases of a new business.
However, Management effort is the time spent ON the business – reviewing the key indicators and taking corrective measures to improve performance and business returns.
The more time spent on the business should reduce the time owners need to spend in the business but many struggle to understand how to achieve this balance.
In aviation you often hear the term “controlled flight into terrain” Controlled flight into terrain (CFIT) describes an accident in which an airworthy aircraft, under pilot control, is unintentionally flown into the ground, a mountain, water, or an obstacle. The pilots are generally unaware of the danger until it is too late.
In business the similarity is an operationally sound business – doing the day to day things but without a clear vision of the goals and targets that need to be achieved for viability and sustainability. Something that I refer to as “Activity versus Effort” or ”passive management into receivership”. The Franchisee has three primary roles:
The Shareholder sets the ROI objectives, The Director(s) develops and reviews the strategies and tactics and the Employee executes the operational plan.
As a guide the approximate time that should be spent on each role is:
- Shareholder 1 hour per week
- Director 5 hours per week
- Employee as much time as set by the Director(s)
Unfortunately, under pressure and stress these roles get blurred and the fixation always centres on the operational aspects which become urgent and demanding.
The process outlined above requires and delivers – structure, discipline, organisation and sound information allowing thorough consideration of all Key Performance Indicators for optimum planning.
However, very few of us have all these attributes in our business DNA. Rather they have to be learnt and engrained through a standard approach and systems.
Every business has the potential to become a case study. If you are operating in a one dimensional role you could risk the viability and sustainability of the business. Know the roles and take control.
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