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How to exit the operating system to the owner of the company: delegation of business processes

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“There are business owners who like seven days a week, from early morning until late at night, to deal with business issues of their company. However, many more entrepreneurs are burning with a sincere desire to live not only in the interests of the company, ”said Oleg Chumakov, a member of the Council of the Belarusian Alliance of Management Consultants. He told how the owner to get out of “operating systems “and what efforts will be required for this.

Oleg Chumakov
Oleg Chumakov
Expert on improving business operational efficiency, member of the Council of the Belarusian Alliance of Management Consultants

– According to the classics, I have two news for you: good and bad. The bad news is that there is no magic button that you can press to get rid of the operating system once and for all. Good – there is a solution.

First, you need to understand how it happened that the “operating system” sucked in like a quagmire and does not let go? Why did a business owner find himself in such a situation? Let’s analyze what is happening into its components. There are three main ones in business: “working system”, “working people” and “working money”.

“Working system”

What comes first – a chicken or an egg? People or system? Let’s be frank: if you are already sucked into the “operating system”, then either you like it, or you do not know how to delegate, or there is no one to delegate.

In any case, you do not have “working people” right now. On the other hand, there is a proprietor who is “vdzhobyvaya” and often unhappy from this.

Sounds categorical? The company has employees, of course. And they work. However, there are no people with whom you, as the creator of this business, could share the work that you do yourself. Its “operating system”. On the other hand, a great manager (an employee who knows how to effectively manage something) will not go to a company in which operational chaos is taking place. Or go and leave quickly. Or he will stay and learn to derive benefit from this chaos for himself personally.

Practical example… In one company, a distributor of well-known car manufacturers, there was an interesting employee with vague functionality – a semi-seller, semi-supplier, semi-warehouse, and so on. He “strained” the owner and was even caught stealing by the hand. As it turned out, the reason was not so much in the person as in the state of the system in the company: it was not there. And every cunning employee benefited from this. When a clear system appeared, this employee became a good commercial director. He understood how to make money legally and became useful to the company.

Output. The problem with delegation skills is not only psychology and personal skills, it is also a working system. And in order to build it up and start, finally, delegate, the owner needs to answer two fundamentally important questions:

1. What exactly should someone else do?

2. What skills does this someone else need to have to do this?

To answer the first question, break down all of the company’s business processes into steps. A simple tool from the LEAN practice will do. It is called SIPOC (SUPPLIER – INPUT – PROCESS – OUTPUT – CLIENT).

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Image courtesy of the author
Image courtesy of the author

To answer the second question, collect in one file (you can call it “Functional”) all the information from the Input and Output blocks for each step of the regulated business processes. This will give you a summary table of the actions that make the company work and make money.

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Image courtesy of the author

Now we know exactly what responsibilities need to be distributed among employees.

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Image courtesy of the author

“Working people”

When you understand what functionality your employees perform, highlight for yourself all the steps of the business processes, where you have entered yourself in the role of “supplier” or “client”. Analyze which of these steps are relevant to the business owner role-play and which are best left to other people.

An owner’s role-playing set usually looks like this:

  • Development strategy
  • Selection of the main product / service of the company
  • R&D control
  • Hiring key executives
  • Lining up the stars of the team.

Everything outside this list is the functionality of your employees, otherwise why do you need them?

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Photo from

The owner’s task is to competently distribute responsibilities between people, namely, to compare the requirements for performing the steps of business processes and the skills / abilities of employees. And very often it is at this stage that the understanding comes that the staff in the company is not fully staffed, and you will need more people.

Practical example. In one company (own production and distribution of imported goods), there was a director, whom the owner, in his opinion, paid too much money for the amount of work performed. After everything that was happening in the company was decomposed into business processes and determined which of them bring money and which support the current state of affairs, a lot became clear. It turned out that the director was ineffective in the role of the sales manager (that is, the employee who increases the company’s income), but extremely useful in the role of the administrative director (that is, the employee who saves income and reduces costs). It became clear what position in the company is occupied by an effective employee, who is lacking in the company and how much these people need to be paid.

If some functionality that you have removed from yourself remains not distributed among other employees, we enter the labor market and look for specialists whose requirements are already clear.

I anticipate the question: “What if there are no resources for hiring new employees yet?” Then your business goal for the next time period is to earn the amount necessary to hire newcomers. The motivation for those who are in the cage is simple – we will make an effort to make us more, then together we can do more. Otherwise, the unallocated functionality will fall on those who are, and the requirements for its implementation will be for them. Demand for results.

The layout is simple – either your employees will discover new facets of talent and you will benefit, or they will understand that they do not need extra hemorrhoids and will do everything to share their work with the newcomers.

Practical example. One engineering company had a deputy director who really wanted to be a project manager. However, the owner had questions about the relationship between the desired and the real. The allocation of functionality based on regulated business processes and performance requirements gave an unambiguous answer – an employee is good as a creative director, but for the role of a project manager, a person with completely different skills and abilities is needed, and personal characteristics too. The redeployment of functionality has reduced tensions in the company and increased the return on the team as a whole.

Photo from the site
Photo from the site

So the main conclusion: it is impossible to pass on the “operating system” of your business to someone, if you do not establish its management. And management is not when problems that arise have to be extinguished personally in a constant mode of participation and no decision is made without you. This is called operational chaos. And you don’t need it.

Management of the company’s operating environment:

  • Regulated business processes that bring the company money (they are called BASIC)
  • Business processes are regulated, thanks to which the BASIC processes work (they are called SUPPORTING)
  • Functionality of both basic and supporting business processes is distributed among employees
  • Business processes are “digitized” (the speed required by the company, the cost and the desired quality at the output are known)
  • Each business process has its own curator who is responsible for its effectiveness
  • Operational data on executable business processes are collected in the management accounting of the company.

“Working money”

With the first mention of management accounting, we move on to the next component of the business – “working money”. In order for the owner not to be afraid for their money, they must work efficiently. There are several factors to consider here:

1. The company must have established management accounting – it helps to understand in time where and why unmotivated costs arise, where added value increases, and also to assess the value of the product / service provided to customers.

Practical example. The owner of one of the companies engaged in wholesale trade discovered a certain cash gap associated with the need for prompt, even burning, payment for deliveries from Russia. I had to introduce a loan for the company from my own pocket. What was his surprise when, a week later, to the question “Where is my money?” no one in the company, including accountants, could clearly answer him. As you already understood, management accounting and “working money” were not there then.

2. Funding cash flows helps to avoid cash gaps, stock up on money in advance to ensure the main (mandatory!) business processes and fulfill their obligations to partners and staff on time.

3. The CFO is required to manage the financial flows of the business. And this is completely different from the chief accountant – they have completely different tasks a priori.

Photo from the site
Photo from the site

When all these components of “working money” are in order, the owner feels good and calm. The organization of effective cash flow management provides the necessary information for the management decisions taken, which gives them validity and adequacy, helps to increase the efficiency of the main business processes and the stability of the company as a whole.

Practical example. One company, which provides technical services to the agro-industrial complex, was chronically short of money, but there were more than enough ambitious plans to conquer the Galaxy. Any roadmaps to achieve the desired rested on a lack of resources for their implementation. I had to turn to the technology of “change management” and find “low-hanging fruit”. They turned out to be work with receivables. Changing the approach to the return of receivables and, in principle, its formation helped, in fact, “out of thin air” to find money for all further changes. And the average monthly accounts receivable decreased by 15 percent.

Let’s summarize. We have got a clear algorithm for owners who want to get out of the “operating system”. It is important not to miss any of these steps:

  1. Break down the business into its main components and describe them in business processes.
  2. Divide the functionality of business processes between employees.
  3. Find “low hanging fruit” and earn money to strengthen the team.
  4. Digitize business processes.
  5. Introduce management accounting.
  6. Delegate everything outside the ownership role.

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Fidenge Pecold

My profession is a journalist, but my hobby for 8 years has been studying Forex investing and trading. During this time, I managed to gain extensive experience in investing and trading cryptocurrencies and double my capital in the Forex market. To be the author of this magazine, the site owners invited me to participate in one of the 2020 trading webinars, and I will try to reveal the most relevant crypto market news for you.

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