Posted 29-04-2008
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Conclusive Advice
by Stephen Cuff

Two keys to expansion and success

Balancing the amount of production relative to the amount of organising

There are two key roles that make expansion possible but tend to get in each other’s way. A bit of a problem right there! One is Production, the other is Administration, and they are very often at loggerheads. 

Sometimes these positions are held by separate people who are called the Operations Manager and the HR Manager or other similar titles - but these roles are sometimes a little vague to people and are not what I am driving at here. I like to call these two key roles Production Manager and Administration Manager. Their sole purpose is to handle the two primary steps of creation and expansion of any viable business.

To produce anything you have to be organised. In the simplest of terms, to make a cup of coffee you have to arrange the pieces needed to produce the cup of coffee. Simple ? Yes. (Yet I have met people incapable of making a cup of coffee!)

When you need to expand this further to make a living out of it you need to increase volume without breaking the coffee machine. But, if you spend too much money on increasing the production capacity (the primary task of Admin is building production capacity) then you end up over-spending before you can drum up enough business to make a profit.  The age old problem.

The key is in balancing the amount of production relative to the amount of organising that you do to make that increase in volume possible. Hence the need to separate the Production role from the Administration role.

Take the example of the solo entrepreneur who decides to expand. They put on someone to help with the paperwork, while they handle the production. The really smart ones make sure that the Administrator can also train new people for any of the roles in the business. So, when the time comes, and another Technician (Product producer) is needed, the Administrator can get them set up on the job and operating without the need for strong intervention (and associated time input) from the Production Manager.

The Production Manager gets the products rolling out. The Administration Manager creates the business framework and support systems to help the Production Manager increase the volume. Those two roles never, never, never, never, never change.

Production = products out
Administration = production capability

The Production Manager is only ever concerned with getting the maximum output from the business machine.

The Administration manager is only ever concerned with being ahead of the Production Manager and putting in greater and greater production capacity (more business machine) so that expansion never ceases. I get this picture of someone frantically laying track down in front of a rolling locomotive?.

For a start-up business:

If the Production Manager (usually Owner) has not yet documented how they produce their products, then they are behind that particular 8-ball to begin with.

So the Administrator’s first and foremost task is to document the intellectual property of the Production Manager. In reality, producing the HOW TO of the product the organisation creates. Then they are in a position to recruit and put on some new Producers to create more products, then more support people to help at those points where they are needed.

This applies to all sections or functions of a business. You have the CEO who looks after the external focus and direction of the business. Reporting to the CEO is the Production Manager, who oversees and demands production from those in Marketing, Sales, Finance, Operations/Technical, and so on. The Administration Manager arranges the resources to keep ahead of the demands of the Production Manager and actually reports to and works for the Production Manager. The Administration Manager puts people in place at the overload points and rapidly trains them for their role. You can and should still have people in charge of Marketing, Sales, Finance etc. But the over-arching Production and Administration roles still exist and are vital to strong growth. The Administration Manager puts people on the job. The Production Manager makes them produce.

The reason why these two roles are sometimes at logger heads is simple. A good Production Manager drives production as hard as they can which tends to find and break the weak links in the chain. A good Administration Manager is trying to string together good people within the business framework, then the Production Manager comes along and overloads it as soon as it has been built.

IF (and a big IF) the Production Manager and the Administration Manager are at the same level in the business structure (hierarchy) they will butt heads continually. It is a big mistake to have them at the same level and the CEO or owner will be continuously needed for dispute resolution, otherwise a compromise of ineffective interaction will be settled on between the two. Both methods will limit growth unnecessarily.

The established business:

For the already established business, you will probably have been identifying the two people in your business who tend to do these functions. The trick is to be able to support them properly, and have them work as a team but with the Production Manager the senior of the two. After all, the primary reason for the business is the product of the business, not how nicely the paperwork is arranged.

If you don't have the functions held by separate people as described above, then you are almost certainly limiting your business growth.

Are you laying track quickly enough in front of your business, or are you simply getting run over by your own locomotive?

 

Stephen Cuff is the Managing Director of Conclusive Consulting Group, specialists at increasing the productivity of organisations and individuals. Coaching, consulting, mentoring, planning, implementation of business success frameworks. Contacts: www.conclusive.com.au or call 0413 049 070. Free subscription to monthly tips e-news also available.

 

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