Using Operations Manuals for Precise Execution

The operations manual tells you what you and everyone else involved with your business should be doing on a daily, weekly, monthly, quarterly and yearly basis.  It’s funny to see that if you look up the word, “Operations” in a thesaurus, it equates to the term, “War Zone”. The OPERATIONS manual therefore is the place where the action actually occurs; the point of contact or interaction that each employee has with the customers, suppliers, co-workers, supervisor, his or her tasks, the company culture, etc.  The OPERATIONS manual answers more critical questions such as these:
  • What should the first person in the office do each morning to prepare for the day’s business?
  • What are the daily, weekly, quarterly, and yearly tasks of each employee?
  • What are the specific skill sets needed for each employee position?
  • How will we use those skill sets to recruit, hire, train and evaluate each employee?
  • How should you greet customers whether it’s on the phone or face-to-face?
  • How should daily problems get escalated and resolved?
  • What exactly should you say to an angry customer; and how can you win that customer over again?
  • What are the quality requirements that a company should expect from its suppliers?
  • Who determines the quality requirements for the company and how can the company understand and consistently meet those requirements?
  • What is the most efficient and effective way to produce a company’s products or services?
  • How do you determine the best ways (ways that give you the highest return) to spend a company’s money?
  • How are you going to increase sales if your marketing/advertising plan mentioned in your business plan isn’t working?
  • What should the last person leaving the office do to shutdown the business for the day?
What is an operations manual, you might ask?  Well, the best way to describe it is to compare it against a more well known business document, the business plan.  The biggest difference between a business plan and an operations manual can be found within the names themselves.  Business PLAN says that this document maps out the plan in which to proceed with a business.  The business PLAN is the forethought, the proposed strategy, the idea, or the intent that starts a business venture.  The business PLAN answers questions such as these:
How is the company organized (e.g., LLC, C-Corp.)?
What’s the business opportunity that the company wants to capitalize on?
What are the market trends?
Who are the competitors and what are their strengths and weaknesses?
What’s the company product or service mix?
Who makes up the company personnel and what are their areas of expertise?
How will the company protect its proprietary information and products?
Financially, what does the company look like now, within 12 months and within 3 years?
These and many more planning questions get answered in a business plan.  Although the business plan is a necessary beginning document of any business, it is definitely not the only document that must exist.

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A business plan can not give an owner the answers to these questions; only an OPERATIONS manual can.  When a company owner finally gets these operations-related questions answered, the owner now has a co-leader to the company.  In other words, the owner now owns a document that shows each employee how to do his or her job.  No more asking the owner for help.  No more asking the owner to remind an employee about how to do a task.  The owner no longer has to put out as many fires.  Why?  Because the fires were already anticipated, so the resolutions to those fires were already documented in the operations manual.  The employee just needs to reference the operations manual for the answers. 
Another more impressive phenomenon also starts to occur.  The owner’s time starts to free up.  The owner can now start acting like a real owner of a company and not just some all-knowing, all-day-and-night-working, fire extinguishing employee of the company.  The owner can finally take a break.  Furthermore as the operations manual gets more refined and more employees get hired, the owner’s breaks get longer and more frequent; all while the revenues keep increasingly coming in. Doesn’t that sound nice?

As you can see, the difference between writing a business plan and writing an operations manual is big.  It distinguishes between describing how you plan to run your company, and describing in every detail, how you are running your company on a daily basis. More importantly, it distinguishes between going out of business due to a lack of control and staying in business for many years.  The little time and money that you spend creating an operations manual now will bring you and your company years of rewards and success.