Article authored by Vince Hannant, Founder of Melior Esse, a consultancy that helps organisations unleash their growth potential.
Everybody in your organisation has some part to play in operations optimisation. In my experience, it is rarely addressed in silos. You need a helicopter view of your operation, and you need an understanding of all the interdependencies. Lack of focus in one or more of the following areas may impact the progress of efficiency where you have invested. Here are some thoughts on key areas to approach.
Operating margins
Understanding the operating margins of each of your products is critical. Have a strict baseline of what resource is needed to support the good delivery of product. Consider both people costs and software/product costs of the delivery materials. Every delivery intervention costs, no matter how small. At times, you may be pressured to alter your model to meet client demands. Understand if it is core and necessary or a luxury. Scope creep costs money.
Also, be clear to understand how your product scales. Some unit economics don’t increase exponentially with volume, but some will. Do not fall into the revenue trap of thinking that increased learner numbers, and therefore profit, means you can afford to add more into your programme.
If someone suggests adding a workshop, or site delivered instead of remote session, to a programme you should instinctively have a feel for what this would do to profitability. Knowing your margins ensures that you can make considered decisions for clients when they ask you to flex your product. Do not be driven solely by, “we must, or we will lose the business”.
Central overheads
Understand the minimum operating requirement and how it scales for each of your supporting functions such as quality, finance, administration operations, learner support, compliance etc. Define ratios of how much of each service you need by volume of learners. Make decisions of increasing or decreasing the team based on this model, not on emotional decisions of people’s capacity. You cannot service 2000 learners with a back office of 4. But, equally, don’t over-recruit due to inefficiency of the system or individuals. Be clear on what it should cost to run your service optimally and then manage this.
With clarity on your product margins, you will understand how much money you have available to contribute to your central costs. If the maths does not add up, it is sensible to revisit your product models. Otherwise, you will create a constant squeeze on the administration side of your operation of never quite feeling you have enough time or staff.
Be clear on investment risk vs reward
It can be easy to get excited about potential improvement change. New solutions come to market and new technology is always emerging. Sometimes, a competitor will introduce something that a client may pressure you to include in your offer.
At face value, everyone can get caught up in what seems to be an exciting opportunity for improvement that will delight your customers. It may well be the right thing to do, but we urge you to go back to basics when making your decision to invest in development. Be sure of where your return is coming from.
Sometimes it is necessary to add a feature to stay competitive, and in other situations you will be providing added value that you can charge for. Be clear on expectations – which should be based on more than a hunch, as to whether an enhancement is going to erode or improve your margin.
Start with the learner experience
Start with the learner experience when defining your operating processes. Put the learner experience at the heart of every decision. Have we said that enough? No apologies for reinforcing it. A poor learner experience turns a potentially good product into a bad one. Do not allow the functionality of a system, or the voice of a single department to outweigh balanced input from all.
Put yourself in the shoes of learner when reviewing new processes before you implement changes. Limited touch points, maximum effect is what you need to strive for. The more you do right first time, and do well, the less inefficiency and duplication you will have to tolerate. Your learners do not care for the limitations caused by systems, governance, or funding rules. They want to get on with their learning and interact with your company smoothly at each touchpoint.
Responsibility and accountability
How many meetings have you been in where you’ve all agreed what needs to be done, but two weeks later the action is still hanging there unaddressed? How many times have you been frustrated that you know what department is responsible for something, but not what individual in that department? It seems the simplest thing to define, but so many organisations fail to define who should do what at a granular level.
Define the responsibilities and accountabilities for every step in your processes. Nominate one person every time, wherever you can. This will minimise the endless email chains when people try and resolve difficulties and will have a higher, quicker consistent resolution rate. We find working through a RACI definition process adds tremendous value. The concept may be nearly 70 years old, but there is a reason it has lasted the test of time and many evolutions in business processes.
We often find that although most of the time the process re-affirms who does what, it always uncovers ambiguity to be quickly resolved. This process of course also focuses on Inform and Consult for every action, which helps improve your general communications channels and plans.
Process definition and implementation – inclusion
There are many approaches to defining process, and I dare say you probably know a Six Sigma (or equivalent) qualified individual. So, I would not use this space to try and tell you all the options to find the right approach for your business.
However, if my decades in the change implementation world have taught me anything, it is that bad change can be implemented easily when communicated well, but good change will fail when not communicated well. Involve all parties in the debates about what needs to change, and always be clear to ask why each change should be implemented. Ensure all key stakeholders have a final sign off, and that your last agreement with them is who to include and how to implement the change.
Communication
Communicate, and then over communicate when implementing change. I’ve seen so many instances where a team has summarised months’ worth of change work in one instructional email broadcast to many. They then expect the business to be experts in five minutes and follow every step perfectly.
A marketing adage from the 1930s defined that a message needs to be repeated seven times for it to be absorbed by the receiver. Communicate, over communicate, use different methods such as email, webcasts, small group tutorials etc. Invite feedback; make it interactive. Get your audience listening and engaged. Offer FAQs and bite-sized instructional videos. Your change stands more chance of adoption and success then.
Performance improvement
Our last thought on the subject is to question if process or operational change is even required at all. Don’t alter operating principles and processes to cover up underperformance. This will lead to inefficiency and frustration.
Invest in the development and performance management of your team to deliver within the parameters you have modelled based on the collective experience of the team. This is the toughest part of leadership and management. It’s easy to throw away a process as “not working”. Be clear, is it not working or is it just not being followed? Don’t create work for the many due to the underachievement of the few.
Summary
We have years of experience in Melior Esse at implementing change effectively. We understand how to get to clarity and that people are at the heart of every implementation. If you are struggling to implement improvement at pace, why not have a chat with us? Maybe we can set you on a more enjoyable and fruitful path of better operational efficiency.
As your needs evolve, so does the suite of Aptem products. We partner with providers across the sector, offering so much more than technology alone – insight, development, support and guidance. Talk to us today.
