July 15, 2021
Hold my beer — I’m going to show you how to take a systems approach to operations management. ??
We’ll start with a question a lot of founders, leaders, and entrepreneurs ask to grow their business:
Where and how do you invest your resources (time, money, etc.) for the biggest returns?
For us, as a growth agency, we help people understand where in their funnel are the biggest opportunities. We’re experts at actionable growth analysis, illuminating blindspots, and prioritizing the ideal tactics for maximum impact.
For any business leader – regardless of industry or model or offer – it’s all about uncovering gaps and right-sizing your response to them.
Now – let’s apply that mindset to operations management.
Step back for a moment and think of all the times:
What if each of time something annoying happened, you turned those headaches into something that created more value for your business?
A systems approach to management can do just that — and the result is High Output Management. ?
For real, it works. But, you also need to learn how to identify levers (the tactics that turn will turn your lead into gold).
So we’ll cover high output management first. Then, points of leverage.
Finally, I’ll show you some rockin’ examples of how this all comes together — or you can just jump to the examples if you think the theory’s going to put you off.
And after that, I’ll need my beer back. ☝️?
This term “high output management” comes from a cult-classic book by Andy Grove, Former Chairman and CEO of Intel.
Why read it?
Well, besides the fact that Andy Grove was such a practice-what-you-preach kinda guy that he wore his company ID badge on the cover…
“It costs ten bucks. It takes a day to complete. It’s probably worth several million dollars in mistakes you’ll avoid during your career,” says Ian Tien, CEO and co-founder of open-source Slack alternative Mattermost.
He’s absolutely right — this book offers a multitude of tips for operations management. However, the point we want comes from Chapter 3.
Here’s the choicest snippet from Ian‘s summary of the acclaimed book:
Managerial leverage dramatically impacts organizational output. Managers are responsible for increasing the output of their organizations and neighboring organizations they influence. Managers “leverage” their time by spending small amounts to have large impact through three activities: 1) information gathering, 2) decision making, 3) “nudging” others. Doing it right means positive high leverage actions: delegation with supervision, training and influencing processes with unique skills or knowledge. Doing it wrong means negative high leverage actions: delaying decisions, meddling, abdication, and unnecessary interruption.
—Top Takeaways from Andy Grove’s High Output Management
Thank you, Ian, for condensing the day-long read into something our lazy arses can digest with even less effort. That’s what we’re here for: smallest amount of time for largest impact.
From the quote, “influencing processes” is precisely what a systems approach to management does.
You can respond to that text at 2 a.m., but it’d be cooler if you didn’t have to. And it’d be a lot cooler if the text never came. Aside from threatening your staff with public shaming — or termination, if you love your sleep that much — how can you change your operations management style to capitalize on that problem?
Archimedes — the Greek guy who streaked his town yelling “eureka” when he discovered fluid displacement — has yet more poetry to offer us on the physics principle of leverage.
“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.”
Now when most people adapt classical physics to business, they try really hard to include every aspect. Lever length, fulcrum, effort, load arm, lever arm, and mechanical advantage (… some actually succeed). It’s a clunky metaphor. Sucks.
For operations management, let’s keep it simple.
All we want to think about is:
Ladder’s COO and Co-Founder Michael Taylor says:
“As a manager, the different actions you can take to solve a problem have very different impacts on the organization depending on their form, and you should be intentional with the way you use them.”
When it comes to deciding which action to take — choosing the right point of leverage — this article from The Systems Thinker is a great guide. It’s nearly 30 years old, but like good ol’ lever, systems thinking never goes out of style.
One thing I absolutely agree with: “The appropriate leverage point is far removed in time and space from the problem or the symptoms of the problem. Obvious leverage points tend never to be real leverage points.”
In other words, answering that 2 a.m. text is not a leverage point.
What I disagree with is this bit: “When the appropriate leverage point is found, things tend to get worse before they get better.”
As you’ll see in a second, you can use tactics that create growth and accelerate your business. You probably know by now that pain doesn’t mean gain.
The author is bang-on when he says, “When a leverage point is not effective, things will get better in the short term but then decline over time.”
Let’s get out of the academia and into some true-to-life operations management applications.
You see that 2 a.m. text from your terrified strategist.
“I’ll handle it,” you text back.
And you do. You dash off a pitch-perfect email in 30 seconds, put the client back on track, go back to surfing delta waves.
A month later, it happens again.
What’s the point of leverage for maximum growth here? How would you take a systems approach to management?
Start with what’s wrong: you addressed the problem personally, directly, immediately, and separately from anyone else who encounters it. There’s zero leverage in that.
Instead, you could (and frankly should) BCC your strategist on the email. But let’s go beyond that: get a good night’s sleep (and perspective), call the client the next day, and invite the strategist to listen in.
That’s sure to be an interesting exchange, now isn’t it?
What if you recorded the call so that other strategists could learn? You could even hold a training session after the call and invite multiple people from the team so that more people learn.
And while you’re at it, you can ask one of your staff to transcribe the training — forever memorializing it in a wiki, Google Doc, presentation, or a guru card (that’s what we use). That way, your strategists can refer back to the issue in the future… at 2 a.m.
As you can imagine, after awhile, you’re going to build up a tonne of knowledge and expertise. That has value.
Go present your hard-won learnings at an event outside the company. And once you do, slap the key points and dazzling video of your jaw-dropping preso on your blog. Who knows, someone may read it and decide to work with you as a client or staff.
You’ve just turned all those soul-draining 2 a.m. texts into sales marketing and recruiting collateral!
What’s the highest leverage you can gain from a systems approach to management? Automating operations management through technology. Infinitely scalable, available to everybody, requires no technical chops.
Ladder is sort of notorious for this kind of thing:
Mike Taylor with the last world on using points of leverage in operations management:
“People don’t do this enough because they’re always busy, and they’re always busy because they don’t do this enough.”
Alright. Posts’s over. Hand me my beer. ?
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