“Don’t be fearful of risks. Understand them and manage and minimize them to an acceptable level.” ― Naved Abdali, Author of Investing Magazine

Risk is defined as “the possibility of loss or injury.” Quite simply, risk is the possibility of something undesirable happening.

We deal with risk every day…. We could be hit crossing the street, or driving our cars, or falling in the shower. All possible, undesirable risks. The same relates to business as there are risks that threaten the ongoing success of any organization.

As we continue our discussion on signs of operational effectiveness, managing risks is critical for sustainability and growth. My father used to regularly ask me “what is the worse that can happen?” This was his way of getting me to consider the risks of actions I was about to take so I could determine if even with the greatest risks, it was worth moving forward…. Or not.

How does an organization address risk? There are several factors to consider related to risk management:

• Avoiding risk is unattainable; but there are many methods to mitigate the risks an organization faces.
• Building a risk assessment into every project, initiative, and/or program encourages mitigating those risks that could arise.
• Understanding possible risks allows an organization to be proactive versus reactive.
• There is a higher probability that a project or initiative could fail if there is not an effective risk assessment built into the project plan.
• Establishing a standard risk assessment process and methodology encourages long term success.
• It is important to manage the cost of risks including considerations for ignoring risks and taking no measures to address those risks versus placing too much importance on a risk and utilizing extraordinary resources when the risk is not that great.
• A risk assessment should be built into the annual planning process.

Utilizing risk management within an organization encourages operational effectiveness.

“At the heart of a successful business strategy is a customer experience that is elegantly simple and positive, where consumers are likely to come away satisfied – and return.”

– Andres Angelani, CEO of Softvision

As we continue our discussions on signs of operational effectiveness, we need to include a significant indicator: happy Customers. Unfortunately, there are some organizations that do not even know whether their Customers are happy. Therefore, having a clear understanding of the signs that indicate a happy Customer aligns with creating operational effectiveness.

A Customer is happy when:

• Services or products are consistently delivered on time and are error free.
• Staff provide timely responses to Customers’ inquiries, questions, and/or concerns.
• The Customer believes in the organization so much he/she returns for additional services or products.
• The organization provides routine updates on changes, improvements, or anything that could impact the Customer.
• They are treated as if they are the most important and only Customer the organization has.

To monitor and increase the probability of a happy Customer, consider the following simple methods:

• Clearly define the characteristics of a happy, satisfied Customer.
• Define criteria to measure this.
• Establish a method to routinely obtain input from Customers.
• Evaluate that input to identify those opportunities for improvement.

A happy Customer, per Gregory Ciotti, Content Marketing Lead at Shopify, is described as follows:

“A satisfied customer is one who will continue to buy from you, seldom shop around, refer other Customers and in general be a superstar advocate for your business.”

A happy Customer is yet another sign of operational effectiveness.

“The value of documentation is two-fold: the end product provides a needed resource and the process of looking at the tasks performed strengthens the organization.”

Aldridge Kerr Client

We at Aldridge Kerr are passionate about the value of documentation. Why? The list is long but here are a few key reasons:

• To provide a resource for training new Staff and avoiding knowledge gaps when Staff leaves
• To gain insights into the existing way a process is performed and where improvements are needed
• To clarify a new system, product, process, service, or strategy – by documenting the desired process, it becomes easier to execute
• To comply with regulatory requirements and/or audit reviews
• To position the organization to create repeatable, sustainable processes
• To minimize knowledge gaps
• To allow the organization to focus on growth and excellence
• To prepare for a sell
• To help create operational effectiveness as we have been discussing throughout this year

When you look at the above list, what three (3) do you see as most important? Or do you have additional reasons?

Also consider that while documenting a process, there are two critical deliverables:

• The evaluation process in which the topic to be documented is assessed for continued relevance, improved efficiencies, need for added internal controls, and the identification of business metrics to provide oversight and ongoing assessment.
• The end-product is the documentation, whether it is a Procedure, User’s Guide, Policy, System Specification, or training material.

The goal is to build an operationally effective organization through process documentation.

“If you want a successful & scalable business, it’s got to be a repeatable process.”

Frank Bria, Fail to Learn Podcaster

Processes are an intricate characteristic of a functioning organization. Contrary to popular belief, all organizations have processes, although often those processes are not effective or do not work as intended. The goal to strive for is creating effective repeatable processes.

So, what is a “repeatable process?” We at Aldridge Kerr define it as any process that needs to be repeated on a regular basis and therefore requires that the process work effectively and efficiently. When processes that are repeated on a regular basis but are not built to incorporate process improvements, then sustainability becomes more difficult to achieve.

What are some of the characteristics of an effective, repeatable process?  

• It is done consistently in the same way over and over again,
• It provides clarity as to job responsibilities,
• It can be repeated (performed) by various people within the Company,
• It positions a Company to concentrate on the tough decisions instead of the day-to-day tasks (processes),
• It supports timely deliverables and higher quality,
• It allows for further growth to occur more quickly,
• It provides a method to assess and manage existing tasks, and
• It has been tested and determined to be effective.

Building effective, repeatable processes is another sign of operational effectiveness. Assessing your existing processes provides the roadmap to achieve sustainability and growth. Aldridge Kerr are Experts is building an Organization’s repeatable processes.

“I learned that we can do anything, but we can’t do everything… at least not at the same time. So think of your priorities not in terms of what activities you do, but when you do them. Timing is everything.”

– Dan Millman, writer and professional speaker

A conversation with a Client regarding priorities provides great insights into how many view making priorities. When asked, “have you identified your priorities and is your focus on those priorities?” His answer: “oh, yes, I have identified my priorities. I have 34 of them!” It took everything in my power not to tell him that this is why he couldn’t get anything done.

A challenge Leaders face is that they unsuccessfully attempt to “do it all” and “do it now.” Unfortunately, instead, this creates ineffectiveness.

Identifying your priorities is a sign of operational effectiveness if the following are included:

• Select the priorities that support the vision and mission of your Organization.
• Define the objectives and desired results of each priority.
• Limit the number of priorities. Aldridge Kerr recommends no more than 10 priorities as your focal point at any given time. More than that, then you just have a long task list, not clearly defined priorities.
• Ensure each priority is achievable in a reasonable timeframe.
• Utilize Aldridge Kerr’s Doable, Chewable Chunks® proprietary methodology as it encourages a more focused approach.
• Define what needs done for each of those priorities that will produce rapid results.
• Communicate to all impacted Staff and/or Customers the selected priorities, thus ensuring that all understand the goals and objectives.
• Only add a new priority once an existing priority is completed.

Aldridge Kerr works with its Clients to identify its priorities to achieve maximum success.

Signs of Operational Effectiveness

“If you just communicate, you can get by.

But if you communicate skillfully, you can work miracles.”

– Jim Rohn, author, speaker, entrepreneur

It is Girl Scout Cookies’ season. Every year it reminds me of an amusing family story. My parents believed in supporting young adults in their many efforts, whether it was through Boys Scouts, Girls Scouts, or other organizations. This included contributing to the various fund raisers. One year, our family ended up with 37 boxes of Girl Scout Cookies, much to the chagrin of my parents and the amusement of my brother and me.

It also exemplified a lack of communication between my parents. They had not discussed their plan for cookie purchases and who they were going to buy from and how much. One of the most amusing parts of this story is that several Girl Scouts got both parents to buy cookies from them.

Studies have shown that poor – or lack of – communication creates a multitude of issues within an organization (and families!). These include, but are not limited to:

• Staff mistrust and low morale: Staff wants to be engaged and connected. When communication is lacking, Staff instead feels disconnected, resulting in lack of trust, low morale, and even absenteeism.
• No communication reaps speculation: When an organization does not provide information and/or updates, then Staff and Clients begin to speculate. This can create havoc, resulting in disruption and potential loss of both Staff and Clients.
• Mixed messages: When an organization tells Staff and Clients that it wants to create a culture of trust but is secretive, this creates confusion.
• Lack of focus:When communication is not a priority for an organization, meetings are often inefficient and/or ineffective.
• Lack of innovation: If Staff is unclear about the priorities and communication is lacking, this can compromise creativity and innovation.

Effective communication, on the other, supports operational effectiveness within an organization. It is demonstrated by:

• Providing clarity on expectations
• Defining priorities
• Creating more efficiency among Team Members  
• Encouraging a shared vision
• Reducing fear of the unknown
• Increasing trust among Staff and Customers
• Improving collaboration
• Empowering Staff

This quote summarizes it well:

“Excellent communication doesn’t just happen naturally. It is a product of process, skill, climate, relationship and hard work.” – Pat McMillan, author, CEO

Aldridge Kerr are experts at helping organizations build a strong, effective Communication Plan and methodology.

“Success isn’t always about greatness. It’s about consistency. Consistent hard work leads to success. Greatness will come.” – Dwayne Johnson

Aldridge Kerr is often asked what we see as one of the most common operational challenges organizations have. The answer? Lack of consistency. We joke that it is better to do something consistently ineffective and/or inefficient than to perform a task in multiple different ways.

Why is consistency so important to operational effectiveness? If an organization does not consider consistency important, it can impact many areas within the organization. We believe consistency is a characteristic for operational effectiveness and regularly discuss it in our insights and blogs, as exemplified in a previous Insight.

Consistency provides the following as it:

• Reduces confusion for both Staff and Customers.
• Sends clear messaging both internally and externally.
• Allows for scalability as tasks and processes are performed using the same approach.
• Encourages ease in training others, especially for new Staff.
• Creates repeatable, sustainable processes as it standardizes how processes are performed.
• Defines terminology for reference to systems, forms, requirements, methodologies supporting that clear messaging.
• Characterizes operational effectiveness.

A routine review of Critical Processes supports the ability to establish consistent, clear methods for doing business. This creates operational effectiveness.

“Operational effectiveness and strategy are both essential to superior performance.”

– Michael Porter, Author, Harvard Professor

Each year, we select a theme with hints on that topic for discussion throughout the year. Our theme for this year is identifying the signs of an operationally effective organization.

We often ask our Clients if their organizations are operationally effective and typically the answer is either “Of course” or “I’m not sure.” How do you know if your organization is operating as intended? How do you know if your organization is effective? Are you sure your day-to-day tasks are aligning with the organization’s Mission and Goals? What is missing to achieve your operational excellence? These are the questions we will be exploring throughout this year.

As we begin, we need to first define “what is operational effectiveness?” Unfortunately, there is often confusion between “effectiveness” and “efficiency.” Dictionary.com defines efficiency as “performing or functioning in the best possible manner with the least waste of time and effort,” while defining effectiveness as “producing the intended or expected result.”

Often, an organization will concentrate on being efficient without realizing that they must first look at what is being done daily and align those tasks with the organization’s strategic goals (or “intended or expected result”). Understanding the goals and priorities of an organization is the foundation for effectiveness.

Our focus this year will be to more clearly outline the characteristics that are needed for an operationally effective organization. This will ultimately create an efficient organization as well.