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19. Scientific Management for small business

From the previous article in this series you will hopefully have got an idea of what a small business might pick up from Frederick Winslow Taylor’s Scientific Management – an approach which is now a century old. This time I thought I would try to be a bit more prescriptive and just say what I think there is here for almost any small business:

  1. Look analytically at what you are trying to achieve and what you (and your team if relevant) actually do – and how it impacts your outputs, your customer, your service etc.
  2. Look at the way other similar businesses operate and understand what they do well and how they do it.
  3. Choose the best method of achieving the goal and remove unnecessary processes that do not add value, streamlining those processes that are necessary to win and keep customers, and to make profit from the process.
  4. Measure all key tasks which are measurable, whether operational – for instance picking error rates in a warehouse, returns rates on a product, bad debts or late payment by customer or customer type – or marketing and strategic – for instance, profitability by customer type, sales conversion rates, response rates to marketing campaigns, customer satisfaction levels etc. Use this information to help decide what is key to your business – I have seen businesses where a close inspection has shown that a particular business sector in reality contributes nothing to the business and a lot of work, resource, distraction and cost can be eliminated without any loss of contribution. Use it also to identify what you can do to improve the effectiveness of each valid process. This might, for instance, if you have limited budget, be deciding that rather than run two different types of marketing campaign you will run more of the most effective one. Or it might identify that you have a sales training issue or customer service issue that can be corrected with training, or just attention.
  5. Identify the skills and knowledge required to complete each process and find a suitable (and suitably motivated) person or supplier to undertake the task – in other words, do what you do well and, where practicable, find others best suited to completing other necessary tasks – the division of labour concept.
  6. Be single-minded in ensuring that what you have defined is what actually happens. This does not only apply to businesses that have staff – most of us have problems in disciplining ourselves sometimes.

And the Don’ts to avoid the pitfalls of Taylorism or Scientific Management?

  1. Don’t forget that your people – internal and external – are not machines and their thoughts and feelings can have a major impact on implementing any of these ideas.
  2. Don’t forget that your customers are not machines and that to make any of this work for you, you must first understand them and respond to their wants and needs.
  3. Don’t get so focused on the business process that you miss what is happening in your market – keep customer-focused.

Maybe not a complete business philosophy, but just doing these things should keep your business sharp and effective.