Introduction
Operational drag, a term coined by strategists Alex Charfen, reflects the burden and friction within the various moving parts of a business. In the relentless world of modern business, this drag acts as an anchor and inhibits the business from rising to its apex of productivity. In this blog post, we will cover the broad definition of the term drag, its effects, and strategies to avoid operational drag so you can bring out the most of your business’s potential.
What is Operational Drag?
Operational drag is the term used to define the factors that prevent a business from functioning or moving at its peak productivity. It is the systems and processes out of sync that acts like an impediment to the company’s progress. As Charfen states, ‘operational drag’ is the term used to define the factors that prevent a business from functioning or moving at its peak productivity. Just as a car is able to perform better when the drag on it is lowered, a business’s efficiency can be improved by reducing operational drag.
Key Examples of Operational Drag
- Lack of Add Value Automation: Tasks that can be automated as repetitively done tend to consume a considerable amount of time, eroding efficiency.
- Ineffective Inter Team Communication: Communication disconnect within a team or with other departments can result in a lopsided and uncalibrated output that erodes and battles the company’s productivity.
- Inefficient Systems: Outdated, Misaligned, or Complex Tools and Software
Why Operational Drag Matters
In this day and age, having a lean and nimble business structure is essential. Operational drag is a critical chokepoint for scaling your business. Spending too much time handling day-to-day operational matters hinders a team’s focus on things that really drive value, like optimizing processes, generating revenue, innovating, and business growth.
Negative Impacts of Operational Drag
- Reduced Productivity: Increased slack time leads employees to focus on managing more inefficiencies rather than and high-value tasks.
- Increased Costs: Because of operational drag, a business is more likely to incur high operational costs as resources, time, and energy are wasted.
- Poor Customer Experience: Systems that are inefficient can cause slow response times and errors, which in turn leads to poor customer satisfaction.
- Stagnation: Business growth is more challenging when an organization is weighed down with operational issues as it also hinders innovation.
How to Eliminate Operational Drag and Make Tomorrow Easier
Streamline Processes
Review your existing processes to assess where complexity is unnecessary, and you’ll be able to identify pinpoint areas of improvement. Every workflow should be designed to eliminate redundancies, and ensure every step provides value to your business.
Take Action:
- Map out your processes: Develop a flowchart or a diagram that depicts your business processes visually.
- Streamline Procedures: Create standard operating procedures (SOPs) for tasks that are performed on a regular basis.
- Streamline SOPs: Designate precise instructs that fall within the obligations of other personnel in order to reduce the load on yourself and the team.
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Embrace Automation
Your team’s attention will no longer be needed on repetitive tasks that are of minimal value if you have embraced automation. Operational slowdown can be reduced through automation tools that are meant to speed up processes and free your team to concentrate on the more important strategic tasks.
Actionable Tips:
- Customer service automation: Train your chatbots and email responders to handle repetitive questions.
- Automatic data entry: Train software to fill forms, enter data, and compile reports.
- Automation of task management: Programs that serve as task managers such as Trello and Asana can automate the assigning of tasks, sending of reminders, and tracking for completion.
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Discuss issues more efficiently
Operational drag will occur as a result of poor communication. Lack alignment and poor coordination among teams as the result of mis-inform can lead to blunders, wasting time, and reserve tanking. Comprehensible communication enhances coordination and integration among parties to facilitate the smooth running of the tasks.
Actionable Tips:
- Implement collaboration software: Use platforms that provide real-time communication such as Slack, Microsoft Teams, or Zoom.
- Role and Responsibility Assignment: Every definer derived from the rules should be allowed and therefore no, NO responsibility and CAN NO blame should be incurred.
- Regular check-ins: Schedule daily or weekly meetings so that the entire team is on the same page and any potential challenges are flagged early.
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Invest in the Right Technology
Outdated or inefficient software tools can lead to operational drag. Technology can improve efficiency, elevate productivity, and even mitigate human error.
Actionable Tips:
- Evaluate your tools regularly: Ensure that the software used is meeting the intended business requirements.
- Upgrade when necessary: Invest in business tools in the long run even if there is a short term cost.
- Train your team: Ensure your team members understand how to optimally use the systems and processes in place.
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Measure and Analyze
Once solutions have been implemented to identified areas of operational drag, it’s necessary to measure and track progress. Improvement and further optimization can be identified through data and analytics.
Actionable Tips:
- Track KPIs: KPIs are a tangible way to measure the impact of attempts to reduce operational drag.
- Conduct regular reviews: Schedule monthly or quarterly reviews of business operational performance.
- Use feedback: Actively solicit feedback to improve operations sourcing from your team members to increase accountability.
How To Prepare For Tomorrow: Developing Habits Of Operational Excellence
Continual removal of operational drag fosters a culture of efficiency within your organization. Improvement efforts taken on a daily basis aid in achieving significant results over a longer period of time.
This is how you can make changes that are permanent:
- Lead by example: A business leader needs to model the behavior that they want to see in the rest of the team.
- Engage your team: Allow your employees the freedom to pinpoint and address the issues concerning operational inefficiencies.
- Concentrate on big picture objectives: Operational drag reduction allows committing a greater share of time and effort towards business growth, innovation, and customer relations.
FAQ’s
1 – What is Operational Drag by Alex Charfen?
Operational Drag is the resistance of a business that possesses operational friction caused by inefficient processes, stale communication and systems, and operational framework within the business. It also includes outdated systems that hinder productivity.
2 – How do I recognize operational drag in business?
In business assessment, operational is explained in a step by step aftermath approach that includes system gateways thought of as a blockage and convergence towards a point of balance between the processes that are thought of as efficient. Gather insights from your team and evaluate the data to see areas of operations where resistance occurs.
3 – Why is operational drag particularly harmful for a business?
Slower throughput, for instance, frozen business workflows, reduced employee productivity, increased operational and customer service costs, decreased customer satisfaction, and stagnated business growth are all caused by operational drag. Slower throughput stagnates business workflows, reduces employee productivity, increases operational and customer service costs, decreases customer satisfaction, and stagnates business growth.
4 – When adopting policies aimed at cutting operational drag, how long do you expect to observe results?
The amount of time it will take to observe results will vary from business to business, based on the degree of operational inefficiencies present. However, through consistent adjustment and adopting policies aimed at automation, recovery in productivity and operational costs can be noticed in a matter of weeks or even months.
5 – Can all forms of operational drag be eliminated through automation?
Automation is capable of minimizing a lot of operational drag, but it’s worth noting that all processes do not need or can be automated. There is a balance between tasks that are better suited for automation, and some that require human attention, judgment, and decision-making.
Conclusion
Operational drag may be the single biggest obstacle to business operational efficiency and growth. However, it’s not impossible to overcome. Following the steps mentioned above in this post; blocking communication silos, investing in the appropriate business technology, measuring and assessing business processes, automation, and constant communication will, in the long run, help business work with less operational drag, and simplifying work processes.
