People x Process = Profit, but, where is the breakdown?

If you have attended business seminars before (regardless of source), you will most likely have come across this common equation:

People X Process = Profit, where

“People” = your team and

“Process” = your system (training, procedure manuals, flowcharts, checklists, scripts, etc., etc…)

In short, your team runs your system, your system runs your business… if both are working well, your business will run profitably with or without your active participation.

So… where is the ‘but’ in this equation?

The equation is broken whenever the business owners focus too much on the “People” part; here are some of the symptoms you may recognize in your own businesses:

1. If results are not as expected, owner blames it on staff incompetence.
2. If staff fails to perform a task as expected of him/her, owner blame it on staff not able to follow instructions.
3. If staff does not enthusiastically back an idea, owner blames it on lack of motivation.
4. To solve all of the above, sometimes owners take the easy way out by sending staff for more training, usually external, at great cost to the business.

 

Frankly, it is always easier to focus on the “People” part than the “Process” part, because to focus on the “Process” part, the owner needs to acknowledge:

1. When the system is broken (or not created in the first place), the Business Owner is responsible.
2. When there’s lack of clarity, the Business Owner is responsible to have clear vision and to give clear instructions.
3. When there’s a lack of motivation, Business Owner need to identify the source, which can be lack of clear instructions, lack of clarity/career path, multiple conflicting instructions, etc… Sources which are not related to individual motivation level to do a good job.

 

Conclusions:

1. As a business owner, you have to be very honest with yourself: Are you focusing too much on People and too little on Process because it’s easier to blame others than to take ownership?
2. When you have a better Process, you will automatically recruit a better team, ie, you get better People, because great people are attracted by well run businesses with great leaders who have clear goals, regardless of size.
3. When you have a better Process, you will also know exactly what type of people to recruit, more effective recruitment strategies produce better quality People.

 

If you are not happy with the state of your team today, it’s time for a reality check: People x Process = Profit, are you focusing on the right area?

 

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