Let me give President Obama a reprieve for a few days, especially after the abomination (or is it obamanation) of his Thursday evening performance pretending to the nation that he has a clue as to how to create jobs in a free enterprise system.
So, it occurred to me, for today’s blog, that I switch to a meat and potatoes topic and talk just a bit on the functional components of an operating business.
A business, large or small, only has four major parts to it. If it’s a small business, those parts can be combined into one person. If it’s a large business, those parts can be subdivided, sub-subdivided, and sub-sub-subdivided into multiple parts. However, at the end of the day, there are still only four major parts to any business.
A business consists of: marketing, sales, production, and operations.
Every one of those is critical to a business operating successfully, and therefore has to be done by somebody even if, with a sole owner, one-person shop, it’s the same person.
A quick review:
• Marketing is the process whereby you identify and communicate to a prospect database, as qualified and targeted as you possibly can.
• Sales is the process of converting those prospects into customers or clients of your business with an eye towards an on-going relationship, rather than the transactional sale.
• Production is the process of developing, delivering and fulfilling the marketing expectations of the product or service you offer.
• Operations is the process of supporting the marketing, sales and production processes, with such things as facilities, equipment, legal, accounting, and so forth.
In a small business, one or just a few people tend to address all functions. And that is perfectly okay. However, when they do, they need to realize that all four of those functions need to be addressed. From my experience, for example, the owner or owners of the business tend to be strongest in a particular function. I have met people who are incredibly strong in marketing and sales, but who can’t fulfill to save their lives. I’ve also met an owner or owners who are exceptional at designing and delivering a product, but can’t market or sell. In truth, each one of those functions is a complete function unto itself and has to be handled as such.
In a larger organization, on the other hand, the challenge is exactly the opposite. Each of those functions is an equal function. However, the corporate culture develops through a process of bifurcation so that each one of those continues to subdivide until the corporate hierarchy becomes more important than the underlying four functions. It’s at that point that the organization is functioning for its own survival, not to meet the needs of the customers or the marketplace.
I’ll return to the more extended essay blogs in the next few weeks (for better or worse). But, in the meantime, this is a short blog with a simple and defined message. Each of those four functions should have one or more individuals driving the results. An organization simply cannot survive or grow if all four functions are not handled or are not handled properly.