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How an operations manual can save your business

In your business, system errors can show up in the form of work stoppages, poor customer service, excessive product returns, late deliveries, high levels of frustration among employees, poor financial results and any other number of unwanted outcomes. Depending on the size and health of your business, any one of these problems could be disastrous.

Like many owners, you may believe that systems are the silver bullet to solve all your frustrations, but your systems are only part of the equation. You need good people, too, to work the systems. And where will they look to understand how to do that work? Your operations manual.

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What is the main purpose of a business operations manual? 

An operations manual may be your single most important resource to lay out your way of doing business so that every employee has a guidebook to train with, keep them on track and go to when they need direction.

To understand how imperative an operations manual can be for a small business, let’s look at an example where not having one can truly mean life or death: a rocket launch. The film Apollo 13 offers an example: 

April 13, 1970: 238,855 miles from Earth, a spaceship experiences a disaster. An exposed wire—the result of tiny manufacturing and testing errors before takeoff—causes a short circuit that leads to an onboard explosion. On airplanes and rockets, these rare and tiny system errors can be catastrophic.

In space, Commander Jim Lovell—and back at Houston’s Mission Control, Flight Director Gene Kranz—find themselves in a desperate battle against time to save the astronauts’ lives. They’re forced to pivot in order to abort the planned moon landing, preserve the remaining power and oxygen, build a filter from scratch to reduce the poisonous buildup of carbon dioxide, and find a way to use the lunar module to “lifeboat” all three astronauts back to Earth. They don’t have the systems to do this—but they do have an operations manual to adapt from, to give them a blueprint for how everything is connected. 

The lesson we can draw from Apollo 13 is that one small flaw early in the process is likely to be multiplied by other small flaws in downstream systems. Minor—sometimes almost undetectable—flaws in your systems can and will create major problems for your end results.

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How do you write an operational manual for a small business?

A well-designed business will always have an operations manual that’s been intentionally designed and kept up to date. But it doesn’t have to be in a ringed binder. Nowadays, it’s just as easy to manage your operations manual through project management software like Asana. 

More important than how it’s managed is what it communicates. An operations manual should communicate that:

1. You, as the owner, think and lead systemically, recognizing the connections among all areas of the business instead of treating the business as a collection of walled-off silos. Systemic leadership means the business is built from the ground up with a strategic focus on control and attention to detail, not quick wins.

2. There’s a culture of continuous improvement in place that includes innovation, quantification and orchestration.

3. The entire company is continually involved in building systems. Employees work on the business as well as in it, thinking systemically about the business to build and document systems that work.

4. Each system found within the operations manual integrates employee training, individual development, and robust internal cooperation and communication.

An operations manual is a living and adaptable document

A poorly designed business may also have an operations manual. But it might be obsolete or sitting on a shelf, covered in dust. It might lack a strategic focus or ignore the connections across all areas of the company. It’s probable that such a company will be suffering financially. This is the system equivalent of garbage in, garbage out. Action plans that no one uses and that don’t produce great business results are just a waste of time. 

A leader in this situation often resorts to micromanaging day-to-day work instead of guiding the business with a clear vision and destination in mind. There are likely to be high levels of frustration for both the owner and the employees and an unproductive culture of disengagement.

The difference between a poorly designed business and a well-designed business is having an operations manual that’s integrated with your strategic objective, which recognizes the interconnectedness of all business functions and lives within a culture of continuous improvement.

It’s this same type of systemic thinking that enabled Jim Lovell and Gene Kranz to respond quickly in a crisis, set aside their existing operations manuals and, from scratch, design new systems that would save the astronauts' lives.

If you find that your daily routine—or those of your employees—relies on systems that don’t work, you have a responsibility to fix them. If the systems do work, they should give you a framework within which you can do your best work. And in doing so, they set you free. 

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EMyth Team

Written by EMyth Team

We share free resources and stories from our clients, Coaches and team members about how to build a business that serves your life. Our posts will give you updates on our business insights and free educational content.