Published on March 11, 2014
The Business Plan: The Business Plan Operational Plans BUS 239- Business Applications Seminar The Business Plan : The Business Plan General Company Description Products and Services Marketing Plan Operational Plan Financial Plan Operations Defined: Operations Defined Creating an environment for implementing the market plan through teamwork. Read Burrows, pages 91-100 for a full explanation of how a well ordered team can function for both a start-up and an established business. Keep in mind that for the start-up, the entrepreneur or the partners must shoulder all the roles of team members. For the established business, the roles of the team are important, but the depth of talent improves the chances of success IF the proper selection process has been utilized. The Successful Business Equation (Burrows): The Successful Business Equation (Burrows) The Successful Business = Satisfied Customers + Motivated Employees + Satisfied Shareholders or Owners Organizational Failure stems from: Not using Market Facts to make decisions Losing touch with customers Using Facts or Analytics to Make Decisions: Xerox’s “Plan of Work”: Using Facts or Analytics to Make Decisions: Xerox’s “Plan of Work” Richard Palermo is credited with creating a team structure for Xerox in which the term “High Performance Management System” was used to describe cross functional teams that created a “Plan of Work” based upon a specific project or problem. http://www.xerox.com/ http://www.xerox.com/about-xerox/history-timeline/enus.html Take a “tour” of Xerox’s current website to see what the organization is doing now, and take a historical view of what they have done in the past. What evidence can you find that the “Plan of Work” approach was used at Xerox? How is Xerox perceived today? Burrows’ Characteristics of a Strong Operational Team: Burrows’ Characteristics of a Strong Operational Team Well-founded in analytics Broadly cross-functional Capable of problem solving Composed of role players Specifically tasked Jointly accountable Disciplined in approach Well-Founded in Analytics: Well-Founded in Analytics Standard set of Key Indicators Important to organizational success Vital few vs. trivial many Accurate measures Objective, not subjective measures Creates common goals Reduces power struggles Everyone is on the “same page” Broadly Cross-Functional: Broadly Cross-Functional In creating a culture based on data-driven decisions, it is important to assign the right people to resolve issues or “Plans of Work”. Each team aligns its assigned area to the needs of the customer, based upon the organization’s functions to satisfy the customer’s need. These areas may consist of team members from legal, finance, operations, marketing, logistics, sales, and/or planning, based upon the project or problem. The entrepreneur does not have the luxury of a “deep bench” in selecting people to work on cross-functional teams. It may be only the entrepreneur and his family, or his partners in the small organization. Capable of Problem Solving: Capable of Problem Solving Your organization must have people who are capable of contributing to solving operational problems. The first step is to get the right people (Collins: Get the right people on the bus, the wrong people off, from Good to Great, 2001 ) Read Case 16 of Miller , “Hire Character”, p. 60-64. Be prepared to discuss how hiring can make or break your Operational Plan in DB 4. A valuable tool is the development of job description, based upon the functions that are needed, as opposed to individual personalities. In your BUS 153 class, you should have studied how to write job descriptions. Follow a problem solving method (Lean / Japanese methods) or the scientific method proposed by Burrows: Discover-state the problem Hypothesize-exam alternative solutions Simulate-create models (“what if?”) Select-conduct cost/benefit analysis Deploy-Take action Composed of Role Players: Composed of Role Players Roles of Cross Functional Team Members: “Leader”- decisive person who can help team members coalesce and facilitate the problem solving process “Sales person”- someone who can present ideas to the sponsor and get them “sold” “Quality Control person”- is a detail-oriented person concerned with refinement of the plan “Loyal Workers”- are people who are happy conducting analysis, participating in meetings, following up to work for the good of the team Specifically Tasked: Specifically Tasked There is a clearly stated purpose for the team Defined by marketing plan One market segment per team Create a formal charter Purpose and specific goal Team members Identify senior management sponsor Definition of parameters Establish timeline to reach goal Jointly Accountable: Jointly Accountable Each member of the team is charged with a specific task The team reaches consensus, defined as perhaps not in total agreement, but everyone can “live with the decision” and, more importantly, backs it. The team jointly defends its decision in presenting it to senior management Disciplined Approach: Disciplined Approach Time commitment for meetings, daily, weekly, or monthly priority Develop meeting protocol with team rules (e.g., “no cell phone calls”, “no tardiness”) Respect for team colleagues Be prepared for the meeting Accept and complete assignments Share information electronically Follow scheduled time limits Disseminate notes/minutes/findings Create different models for projects vs. improvements vs. problems Create a sense of urgency to reach the desired objectives Palermo’s “Plan of Work” for Teams (Burrows): Palermo’s “Plan of Work” for Teams (Burrows) Implementation of “Plan of Work” on a “Job Ticket” for each of the definitions of Business Success: Satisfied Customer, Motivated Employees, Satisfied Shareholder/Owner Develop a purpose statement with quantifiable goal(s) Define the work steps required to reach the goal Assign 1) a team leader who has a passion for the project; 2) an executive sponsor or “champion”; and 3) team members Document the current state, including benchmarking with competition Define the future state Develop a transition plan to go from current to future states with individual team member accountabilities; present (“sell”) the plan to management Implement the approved plan Monitor the results Benefits of Proper Analytics: Benefits of Proper Analytics Avoids data overload Avoids creation of a “pretty document” that goes on a shelf and is never used Cross functionality draws in the whole organization Customers, employees and owners see the “big picture” Foundationally based in fact, not merely opinion, or the “squeaky wheel” Results are relevant Has a defined beginning and an end Results are understandable The process provides a wide perspective of the organization’s function The results should pass the “so-what?” test Results validate the process and the inputs that went into the decision making “Catchball” as a Means of Operational Goal Alignment: “ Catchball ” as a Means of Operational Goal Alignment Read Case # 28 from Drucker for an analysis of how Texas Instruments used the concept of goal alignment (Japanese Lean Management name Hoshin Kanri ) to develop a culture of employee involvement in solving operational problems. Be prepared to do additional research for DB 4 in Module 3, Operational Planning. Why is catchball so essential for lean success? Because it is a systematized, teachable, repeatable way to: Confirm the practicality of proposed plans. (and their probability of success) Actively solicit (and often act upon) feedback and ideas from the "lower" level people that are responsible for actually implementing the plans. Greatly improve wide-spread understanding of what needs to be done, why, and how. Greatly improve ownership and buy-in from the people responsible for results. Demonstrate and encourage non-dictatorial leadership skills for all levels of executives, managers, supervisors, and team leaders. Source: http://www.systems2win.com/c/catchball.htm Summary of the Operational Plan: Summary of the Operational Plan The checklist provided in Assignments has the following major areas to cover in your operational plan: Legal structure Delivery of product or service Location Employees Production Distribution The checklist is based upon the SBC video from Module 2, the SBC Network Business Plan and the Burrows reading, pp. 91-100. The development of the Operational Plan is a good time to think about the culture that you wish to develop in your organization. Will the culture be top-down with a command and control structure or will it be a participative culture? The Burrows reading and Drucker Case #28 give insight into how to create a culture that includes everyone in the organization and provides a means of decision making based on data analysis and planning.