“Thou preparest a table before me in the presence of mine enemies: thou anointed my head with oil; my cup runneth over.” – Psalm 23: 5
We have recently shared some experiences on the effectiveness of a shepherding squad in addressing challenges in governance, investment finance and marketing.
The role of operations, as a business system, is to grow the company and this growth is measured by an increase in profitability.
Profit, in its simplest form, is “sales minus expenses” and may be increased in three ways by: (1) expanding already profitable profit centres (this was addressed before), (2) increasing human, technology and process productivity, i.e. increasing output for a given level of input and (3) containing costs. These latter two elements constitute an enhancement of operational efficiency which, for a given level of sales, results in increased profitability.
In the graphic below, the Shepherd guides the operation of the boat steadily towards the horizon of profitability. He and his squad have learned from global experiences from which the ISO 9000 standard (laying out the fundamentals and vocabulary of international quality management systems) has emerged.
Simultaneously, the other members of the squad complement his efforts by manning the oars of productivity and cost containment. The squad will have significant diverse knowledge and experience in training requirements, appropriate leading-edge technology and the principles of quality and cost control.
In this column, we shall share how experienced shepherding squads may expertly guide entrepreneurs to increase operational efficiency in a competitive environment so that “my cup runneth over”.
Many attempts have been made internationally to help start-up entrepreneurs. This assistance has included formal management training, physical space, mentoring and grants or loans. No uniformly successful model has yet emerged. These attempts should be but are not normally the vision of national public-private partnerships.
Experience in working with entrepreneurs in the Caribbean over the past 20 years has provided great insight as to the needs of the entrepreneur.
In one case, batches of entrepreneurs were literally herded in a corral and fed, over several weeks, with a compulsory course of management training. Sounds good, but guess what? When these eager beaver entrepreneurs were then assigned to a mentor, most reported that the training did not really help, and it was a waste of time. The course was generic and academic and did not address their start-up business needs.
The lesson from this was that the start-up entrepreneurs first needed guidance – not formal management training, money nor physical space, but guidance. Mentoring was initially the solution for this but on further interaction with start-up businesses, it was determined that one-on-one mentoring was not fully efficient and that the shepherding squad concept was better.
We invited three experienced retired individuals with a total experience of 120 person-years to meet with 12 start-up businesses individually. These start-ups had business experience ranging from six months to two years and were still struggling to get their businesses off the ground.
The result of this experiment was amazing. Imagine 120 years’ experience interacting with less than two years. The entrepreneurs were blown away by the intervention and had their immediate challenges addressed on a timely basis through interactive discussion with the squad. Training, technology and process control challenges were satisfactorily tackled and operational efficiency was enhanced.
How would the members of the squad be remunerated for their services? Just like investors and entrepreneurs, primarily out of “future profits” with “Shepherding as Collateral”.
The operations business system induces growth in a company. It controls the rate at which profits are generated for a given level of sales. Let us develop an operational culture in which team members are motivated by a shepherding squad to be the best that they can be. In turn, let the synergy of this combined force keep the competition at bay. Be blessed and may profitability and holistic happiness abound for the benefit of the company and all its stakeholders.