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A business functionality model is not something that many family or owner managed businesses will have considered or even heard of.
What do we mean by a business functionality model?
Basically it is a means of ensuring that the right people are doing the right things within the management structure of any ambitious and growing business.
Of course in many smaller businesses, the proprietor or director may be running everything and as such will have to “wear different hats” in the day to day running of the business. So what are the key components of a Business Functionality Model?
There are three key components:-
Business Operations - This is the area in which the day to day operational aspects of any business will rest. It will include, for example, production, distribution and sales and is generally the one area of the business functionality model that is dealt with best, as it is utilising the skills of what the managers and other employees do most effectively i.e. delivery of the products or services of the organisation. Clear allocation of responsibility is a key factor and there are likely to be heads of service lines, manufacturing, distribution and sales etc. in larger businesses.
Business Support - This is the area in which key support services are present in the infrastructure of a business and in larger businesses could cover the following areas, each with a responsible Department Head:-
For smaller businesses, it is clearly not possible to employ people to specifically look after each of these areas and for many it will be a case of outsourcing to suitably experienced and qualified external consultants or advisers.
Business Management - The final area is one which many businesses do not consider at all, often due to being fully occupied with business operations and business support issues. It is what we often refer to as “working on the business rather than working in the business”.
Typically this area will be the responsibility of a Managing Partner or Managing Director and cover such aspects as:-
Anyone running and managing a smaller business needs to perform a juggling act to cover all of the three key areas outlined above, but never underestimate the power of ring fencing time to address the strategic planning aspects. It requires discipline to get out of day to day operational mode but will provide great rewards through investing sufficient time in working on the business.
Armstrong Watson have assisted many businesses with their business functionality and strategic planning models and we would be pleased to assist your business. We would be delighted to offer a free introductory Blue session to help you with this process.
Douglas Russell, Partner
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