A list of questions and checks to help you see if you should automate a process or not.

I've had a lot of people asking for this.

This is just what I use.

1st half are open-ended questions for exploration
2nd half are rankings for prioritization.

Hope this helps you!
1. Do I understand what I am automating?

Often times we think we are automating a process, but instead, we may be automating a destructive pattern.

Do it manually for a few weeks.

Dont perpetuate bad actions.

Go through the learning as a person, automate what you learned.
Example:

If you are filtering people for hire, and you automate right off the bat, you may automate based on the wrong criteria.

Its better to filter manually, do some calls, have some interviews, and adjust the process a bit until you are automating the right thing.
2. What do I gain?

Automating, just to automate is not useful. It just creates another system to maintain without any upside.

Each automation adds to the complexity of your business process. As complexity increases, so does areas for breakage and unintended consequences.
3. What do I lose?

Every automation results in loss.

Proximity to the process.

You may miss a "regime shift" as things change.

You may lose closeness to your customers and personal interaction.

You miss an understanding of your operation as it grows or changes.
4. What learning will I miss?

Related to the above. When you do something manually, you auto-adjust based on changes.

When automated, the environment, rules, practices, culture, or something else slowly moves over time.

You won't be there to learn and adjust.

Have a plan.
-- If after all of this you still wish to automate, move to prioritizing and filtering your ideas and potential projects --

For this I focus on

Impact
Strategy
Risk
Cost
Return
1. What is the impact?

- What operational function is being affected
- How much of a difference/impact will this make for stakeholders? (employees, customers, suppliers)
- What is the targeted outcome for the stakeholders? (otherwise, you won't know if its working or not)
2. Does it align with the Strategy?

Every company should have a few targetted strategic outcomes they are working towards?

If the automation doesn't further these, it could be a distraction. Rank how well it fits in with the few strategic objectives you have.

Rank for each obj
3. Does it increase value?

Will this impact any of the levers for value?

- EBITDA / Cash Flow
- Multiple Expansion
- Customer Perception
- Competitiveness / Moat
4. What are the costs?

- Time Required
- Maintenance time and energy required to keep up and running
- Upfront investment required
- ongoing costs required?
5. What are the risks?

- Distraction or a focusing agent?
- How much specialization is needed, and does it exist in-house?
Based on these, you can
1. Rank
2. Combine into ratings for each category
3. Rank projects

Work on those that are
- strategically aligned
- impactful
- increase value
- are low risk/cost related to the upside

You can really use this for any operational enhancement project!

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More from @joshuamschultz

10 Jan
Much of lean thinking today calls buffers "waste"

"Look at the growth potential, we need to sink all funds into it."

Buffers arent waste, they're small payments to ensure long term survival

It takes your company from outperforming THIS year, to out performing across ALL years
Buffers allow flexibility when you need it most.

They give you optionality, and the resources to capitalize when real, step-wise opportunity presents itself.
Buffers give your operational flexibility to allow your processes to "breathe" under

tough,
high activity,
strained, or
above-average times.
Read 8 tweets
8 Jan
FYI: As anyone who has worked with me can attest to,

I am extremely slow to automate!

For someone that can code, build, talks about it a lot, is a natural systems thinker, and has used it quite a bit...

... I am very slow to automate something.
Automation is a tool, not the end.

The end is to scale effective operations.

Automating the wrong thing is like flying cross country and being a few degrees off... you'll end up 100's of miles from your destination.
I love to get in and do things manually.

I like to understand the nuance.

I like to see what helps and hurts.

In short, I like to know exactly what I am about to automate.

Sometimes I decide certain parts shouldn't be automated. Other times I move to augmentation.
Read 4 tweets
8 Jan
Getting from $1m to $3.5m is extremely difficult for small businesses

You are out-growing current resources, but not yet cash-rich enough to get what you need.

This used to be a business graveyard or plateau.

Not anymore, here is how to cross that chasm...
... With the myriad of automation software, no code tools, integrations, and connectors (smb.joshuaschultz.com), you can scale your operations without hiring someone new, and without needing to be a computer engineer.

Here's how to continue scaling with little to no cash!
When looking at streamlining the operations of your SMB, consider this scale on where the most value can be added.

Different functions allow more upside than others, so to really increase

cash flow
lower time
make an impact

Apply automation in this order:
Read 11 tweets
7 Jan
Its hard for a company or group of people to work together, if everyone is unclear, not in agreement, confused, or not in the know on:

How the company delivers value.

This is not about what the value is or why... its about how do we, as a company get this to our customers.
The idea of Value Delivery is crucial, and many leaders
1. assume every knows
2. assume when they spoke, everyone heard the same thing
3. assume they don't need to know

This is so wrong. You NEED ever single person understanding how the operations are setup
Why are incentives here and not there?
Why do we hire faster in that area?
It seems all the tech is built in that division?
Is there a reason the employee manual is more lenient with them?

Issues in finance, HR, operations, and IT - but all because of operational misalignment
Read 4 tweets
6 Jan
Why talking to your people is the most important thing you can do!

For a new acquisition, there's a general template I follow for the 1st 100 days.

The Number One point on that list is PEOPLE

I have failed this once, and succeeded once, let me share why this is most important.
1. You are in spreadsheet mode

When working on a new acquisition you are in the numbers and in the models.

Net working capital true-up
First 6 mo cash flow
Valuation multiple
Realizable EBITDA
etc

Many new acquirers don't come out of this, and lose customers, employees, and $$
2. Verifying the Model

Post acquisition, you are verifying the model in realtime, adjusting, making sure you are good with the bank, investors, yourself.

You are checking actual expenses to see if they match.

Perhaps you are implementing a few easy cost cuts.

People!
Read 18 tweets
4 Jan
Risk Decay, a bias in how humans see large risk events, can have a major impact when building a business that can last 100+ years.

Protecting against this is hard, but here is a way that lowers the chance of it ruining your business...
Risk Decay is the idea that our perspective of our vulnerability to a risk declines as that risk falls further and further into history.
When a major risk occurs, it is in our face, emotions and all.

Following preventive measures and spending money on risk mitigation are no problem. Image
Read 7 tweets

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