How to Transform Your Organization with Business Process Improvement.
Running your company without a strategy for business process improvement can be a problem in the long run. After their Digital Marketing Company folded, Dijiwan had this to say: “A good product idea and a strong technical team are not a guarantee of a sustainable business. One should not ignore the business process and issues of a company because it is not their job. It can eventually deprive them of any future in that company.”
As your business evolves, effective processes of today may be ineffective tomorrow. The inability to identify areas for improvement could make you lose everything you have worked for. Here’s a breakdown of what to expect:
CHAPTER 1 – The 101 of Business Process Improvement
Carrying out business process improvement without having a grasp of what it is can be likened to embarking on a journey without a destination. At the end of the day, there’s only one place you’ll arrive — nowhere. Let’s take a look at some definitions.
According to Techopedia, “Business process improvement (BPI) is an approach designed to help organizations redesign their existing business operations to accomplish significant improvement in production. Effective BPI helps to generate promising results in operational efficiency and customer focus.”
Moreover, in the words of BusinessDictionary, BPI is “improving quality, productivity, and response time of a business process, by removing non-value adding activities and costs through incremental enhancements.”
One aspect remains constant in these definitions: the existence of a process. Before you can talk about business process improvement, you must already have an established process. Just like the saying, “You can’t give what you don’t have,” you can’t improve a nonexistent process.
At the end of the day, you want to see positive changes in your business when you put in the effort to improve your processes. So what are the benefits of business process improvement? We’ll find out in the next chapter.
CHAPTER 2: What You Stand to Gain from Business Process Improvement
So much is being said about business process improvement that many people have wondered what the fuss is about. For Nick Roosevelt, it all seemed incredible. His medium-sized shoe production company was doing considerably well, but he was open to opportunities for improvement. Though reluctant, he decided to give it a try. “Two years down the line, it turned out to be the best decision I made in the business,” he said. You stand to lose nothing when you seek to improve. Worst-case scenario, you’ll revert to the previous processes, right?
“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives.” – William A. Foster.
Take a look at some of the things you stand to gain from business process improvement.
1. Better systems
There’s a misconception that only dying businesses need process improvement — that’s not true. It’s great to have a system that works, but that shouldn’t make you too relaxed. For all you know, there’s a lot more you can achieve.
Existing business processes do not necessarily have to be bad before the need for improvement arises. If they have worked over a period of time, it’s evident that they are good. But remember, good can always be better. Why settle for less when you can have it all?
Business process improvement can be built on the strengths of existing systems. It’s totally okay to look out for “better sameness.” Fine-tuning an already existing process creates a familiarity that makes it easier for you to adapt and achieve expected results.
Doesn’t it get boring doing the same thing for years? “You don’t change a winning formula.” Touché, but we can improve a winning formula.
According to Business News Daily, “one of the keys to any successful business is being able to come up with new ideas to keep operations, products and services fresh.” It’s about improving upon something already on the ground as it opens you up to the possibilities of outdoing yourself.
The need for innovation is even more imperative when current processes are lagging behind in comparison to industry standards. The worst thing that can happen is for you to stick to processes that obviously aren’t working. Put sentiments aside and get practical. Why waste resources on ineffective processes?
Innovations have a difficult time thriving in an old environment. For the “new” to take center stage, the “old” has to give way. Trying out new ideas is one of the ways through which organizations can identify more effective processes for business advancement.
3. Customer satisfaction
Businesses don’t give themselves revenue; it requires satisfying a need through a service or product to keep money coming in. Unless you are running a charity organization, it’s important that your customers feel you can fulfill their needs enough to want your products or services. When you put your customers first, you aren’t going out of business anytime soon. It takes identifying and implementing improvement to provide better customer satisfaction.
Non-complex processes are good for customers as the former make their experiences easier, simpler and convenient.
4. Staff satisfaction
Organizations with professional ethics acknowledge the contributions of their staff in the actualization of business goals, and as such, they seek to create conducive working environments to make the execution of duties easier. Besides the importance of incentives in employee motivation, business process improvement also plays a major role in motivating employees to be resourceful due to the ease and clarity they experience in performing their functions.
5. Reduced operation cost
With better processes, the time frame for business transactions are shortened, errors are drastically reduced and qualitative performance is repeated, thereby increasing customers’ confidence in the credibility of an organization.
Business process improvement seeks to get the job done with minimal and effective processes. Cutting down the long chain equates to reducing costs and resources.
It’s human nature to take action only when we feel threatened. Just in case you want to be sure that your business is on the verge of danger before doing the right thing, the next chapter reveals some red flags to look out for.
CHAPTER 3: Red Flags Indicating Your Business Process Needs Improvement ASAP
This reminds me of the fire brigade approach.
Photo Credit: Hope in Homeland
The danger is lurking around. You see it but choose to look the other way because you haven’t felt the impact yet. Only when it begins to crumble do you realize that you can do something about the situation. Why wait for the fire to start burning when you could prevent it in the first place?
Your business is the last thing that deserves the fire brigade approach. You know why? You could lose everything. Here are warning signs to look out for before it gets to that point.
- Non-repeatable processes or process duplication across your business.
- Inadequate “how to” information and knowledge across your business.
- Continuous errors in business due to faulty processes.
- Poor controls, especially over manual processes.
- Dissatisfaction with the impact of current processes in your business.
- The absence of accurate and timely information.
Business process improvement enables you to:
- Create a framework for standardization to facilitate repetition of internal processes.
- Make business instructions available in an accessible repository.
- Troubleshoot processes to identify reasons for errors.
- Model processes in line with operational controls for effectiveness.
- Update information repository to provide recent and accurate information to employees.
Did you check most of the boxes, if not all?
Who gets the bulk of the work done? The employee. It goes without saying that employees play important roles in business process improvement. They can contribute either positively or negatively to the process. We’ll discuss how to prevent the latter in the next chapter.
Chapter 4: Your Employees May Ruin Your Business Process Improvement
Photo Credit: TmForum
Developments in technology may be fast-paced, but it’s still far from replacing human labor. Until that happens, the contributions of employees at the workplace cannot be overemphasized; undermine them at your own peril.
People are the process.
Documented business processes can be likened to ordinary documents without the input of competent employees to breathe life into them. Employees of every organization are just as important as its business processes because they execute these processes with their skillsets to meet organizational goals.
According to Aberdeen’s 2013 Employee Engagement Survey, “being able to track the effectiveness of engagement and recognition efforts can help organizations better align engagement with business objectives and improve performance.”
When you treat your employees well, you’ll enjoy the following:
- Increased productivity
- Employee loyalty
- Great performance
- Higher employee retention
- Fewer sick days
- Better customer interaction
The idea is to have the best input from your employees as you improve your business process. Think of them as partners in this project.
Now that we understand the contributions of employees, here are a few points to note as you engage them in business process improvement.
Why have many employees if they all perform the same tasks? That’s a waste of resources. Delegation enhances productivity by promoting division of labor and specialization. By performing specific tasks over and over again, the skills of employees are sharpened, giving them the confidence of achieving repetitive successful results.
Getting employees involved in business process improvement requires the explicit assignment of roles. There’s little or nothing they can do when tasks and responsibilities aren’t spelled out well. Also, boundaries in responsibilities need to be stated to avoid friction and conflict between two or more people.
Employees can’t give what they don’t have.
Assigning tasks to employees is great. However, it takes having the technical know-how of assigned tasks to make meaningful contributions. If your employees’ skills are top-notch, it goes without saying that the outcome of their operations will be top-notch too. However, employees with sub-par skill-sets are bound to create a clog in operations, making one too many errors that are difficult to ignore.
The top-down communication model in most organizations leaves very little room for employees of lower ranks to make meaningful contributions. People in top positions may be more experienced, but that doesn’t take away the first-hand experience that employees who perform certain tasks have such tasks.
Create friendly channels for employees to air their opinions about business processes without fear of victimization. They should have access to people who they can communicate their opinions and suggestions too. The shorter the channels of communication are, the faster and easier it is for them to speak up.
Employees need to be in the know in terms of the quality of their input. It’s important that they are informed, via appropriate channels, when they are doing the right thing or not. Giving members of staff unlimited freedom without keeping them in check is most likely to get them too relaxed and nonchalant about making progress. Once all resources needed to enhance their performance are on the ground, there have to be consequences for failure.
A paycheck may be the standard reward employees get for their contributions, but it takes more than a paycheck to make them go the extra mile. Excellence at work mostly takes place when an employee’s drive goes beyond their take-home pay. A little appreciation gets them to do the extra work even when no one is watching. When you show gratitude to staff for their efforts, they feel a sense of worth and go all out to get the job done.
There are options to choose from in implementing business process improvement. In the next chapter, you’ll discover which one is the best fit for your business.
CHAPTER 5: Business Process Improvement Methodologies
When you make the decision to improve your business process, the next question to answer is, “How do I go about it?” Business process improvement methodologies give entrepreneurs several options to choose from in their journey to improve their business operation. Some of the most common that top businesses thrive on include:
1. Six Sigma
Photo Credit: SoftExpert
Derived from statistics, Six Sigma, which gained popularity when Motorola adopted it in the early 1980s, requires the addition of certain process improvement tools to already existing work procedures. In the book Six Sigma: SPC and TQM in Manufacturing and Services, Geoff Tennant explains that “Six Sigma is many things, and it would perhaps be easier to list all the things that Six Sigma quality is not. Six Sigma can be seen as a vision; a philosophy; a symbol; a metric; a goal; a methodology.”
Why do you need Six Sigma?
It helps you measure the efficiency of processes by identifying and wiping out errors, inconsistency, and waste. If it’s not making any positive contributions, it doesn’t belong here.
“The most dangerous kind of waste is the waste we do not recognize.” – Shigeo Shingo
According to President of Calgary, Alberta-based RK Business Solutions Inc., Rose Kasianiuk, who is a Six Sigma black belt holder, explains that the methodology is simply about “breaking processes into steps — and that’s a thing small businesses aren’t good at.” It takes away the uncertainty that comes with working based on common sense or trial by error and gives your business a standard to maximize opportunities for growth and development.
The Six Sigma method of business process improvement guidelines include:
Define the problem
Successfully pulling off the Six Sigma methodology begins with the identification of problem areas. Oftentimes, people assume they know what the problem is, but when it comes to expressing that problem, they are unable to.
Write a problem statement. Doing this enables you to capture the core issues on paper and makes it easy for other people to see and understand the problem without having to consult you over and over again for clarification. A good problem statement takes into consideration the needs of customers and seeks to provide customer satisfaction.
Appoint a project leader
The project leader is the ship pilot whose responsibility is to ensure safe business sailing and achievement of business goals. He is also known as a black belt expert. As expected, the black belt holder must be strong with great skills — not to attack people but business problems.
Think of the black belt holder as the mother hen who guides other team members. If no one in your organization fits that description, you can hire a new employer, or better still, train an existing staff to attain that expert level.
The black belt holder appoints team members who are known as green belt holders to fill key positions. Proper briefing and training should be carried out where necessary to ensure they are competent for the tasks ahead. All team members execute their assigned tasks based on instructions given by the black belt to attain good results.
Measurement at this level entails mapping out the current processes in a bid to identify lingering problems. Data collection is the basis for measurement. Compare operations data against set standards. Capture all processes involved. Go past core processes, down to the very list to cover all areas for authenticity.
Collected data can only yield effective results when they are valid and reliable. Take a closer look at the data to check for the discrepancy. Place the data side by side each process. Lay all observations on the table and measure findings to identify root problems. Your data should give you a clear picture of your next line of action.
Satisfied with your data? If yes, it’s time to swing into action and do the one thing the whole process was intended for: improve. Brainstorm out-of-the-box strategies for improvement. How will you solve the problem? Fill in the gaps one after another.
Having completed the process, there has to be an evaluation of what worked, and what didn’t work. From these results, you’ll be able to streamline other processes to ensure that only workable processes are implemented and non-workable ones are taken out.
Photo Credit: Lean Accountants
Think longevity, think Lean.
Achieving success with a business process is one thing, maintaining that success over a long period of time is a different ball game. Car production company Toyota was the first to implement Lean in the 1930s with the aim of “making the vehicles ordered by customers in the quickest and most efficient way, in order to deliver the vehicles as quickly as possible.”
The process is automated to a complete halt when there’s a problem in production, preventing faulty products or processes from being performed.
Why do you need Lean?
Lean enables you to implement and maintain continuous progress in your business. It also helps to save company resources by reducing waste to an insignificant level.
Amazon has been able to deliver excellent services to her numerous customers worldwide by implementing Lean principles. Since its inception by Jeff Bezos, the online company has strived to prevent any forms of waste and ensure customers don’t pay for waste in the event it occurs. To achieve this, the multibillion-dollar company has more staff in its customer services and fulfillment centers than its IT department.
James P. Womack and Daniel T. Jones broke the Lean process down to five stages in their book Lean Thinking:
Specifying value is the first step in implementing Lean because the whole process is built on providing value to the end customer.
What value do you seek to provide? It’s not okay to just know it in mind; you need to properly document it for everyone involved to see. Identify specific products or services that customers find appealing, and seek ways to better serve their needs.
Having identified a specific value, you need to map out ways to get it across to customers at the best price, condition and shortest time possible. As a guide to successfully map out an effective strategy, you need to consider three important management aspects of any business: information management, problem-solving and physical transformation. Identify the present value that your processes offer to customers and outline areas for improvement to attain future value streams
Clogs in the work process are a huge setback. Aim to create seamless flow through the following ways: Evaluate the effectiveness of the individual process and tighten loose ends; ensure each process connects freely to the next without any break; and observe the flow to ensure there’s no room for waste.
Products produced are meant to be purchased and not stay with you for too long. When they remain on your shelves, your money is tied up, resulting in a loss in the long run. To avoid this, first, avoid excess production. Then, check stock to identify finishing and available products. Third, make provisions for products running out of stuck. And finally, halt production when all products are fully stocked.
Perfection isn’t a destination but a journey. Always be on the lookout for ways to improve your processes. Go through the established process over again from the top. As you do this, you find loopholes you may not have noticed earlier.
Photo Credit: 1000Ventures
Kaizen is the Japanese word for “change for better.” As defined by Kanbanchi, it refers to “any activities that continually improve all business functions or processes and involves every employee from the CEO to the assembly line workers.” This improvement is made possible through effective processes.
Kaizen helps you to:
- Increase productivity
- Simplify tasks
- Encourage constant improvement
- Improve employee morale
- Improve quality
Here’s what happens during the Kaizen process:
- Employees halt production once any flaw is noticed
- The report observed flaws to a supervisor
- Give recommendation for improvement
Automobile Manufacturer Ford Motor Company recognizes the benefits of Kaizen and has benefited from its efficiency. When Alan Mulally came on board as CEO in 2006, he implemented the Kaizen process with an emphasis on creating efficient processes for Ford. As a result of this, they were able to sail through the recession of the late 2000s, putting the company back on the tracks of success.
“I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.” – Bruce Lee
Duration of improvement is taken into consideration here. Regardless of the efficiency of a model, if it takes too long to be planned and executed, the essence is partly defeated as a lot of damage would have already been done. Kaizen provides prompt and timely improvements to better operations.
Steps to consider in pulling off the Kaizen model of business improvement include:
Outline the processes
Jumping into action may be exciting but at the expense of getting everyone confused. You need to identify and outline the processes involved and then create a sequence of the processes in the right order.
Measure current processes
The Kaizen process is incomplete without measurement. Collect operations data and measure results against expected or desired results.
Answer the following questions: “Is production output lower than it ought to be?” If yes, put measures in place to increase it. “Do certain procedures take longer to execute than they should?” If yes, make them shorter. These data give you concrete evidence of your business performance.
Identify areas for improvement
Effective measurement of the performances of your current processes exposes areas of underperformance.
Is demand above supply? If yes, this is a cue to fasten your production belts in order to meet supply. List every loophole identified and factors responsible for such. Is it a human or technical problem?
Implement improvement plan
This is when you interpret your findings. Seek out lasting solutions to problems outlined. Rearrange procedures where necessary. For example, if clients or customers spend too much time in your office, you might want to reduce the steps involved in attending to them to make things faster.
As you roll out the new process, things may not work out perfectly as envisaged. This is not an indication to pack it up — at least not yet. Pay close attention to the system to identify areas responsible for the low performance. If everything looks good, the outcome should be in line with your expectations. If this isn’t the case, you have to start all over.
CHAPTER 6: Is Your Business Process Improvement Good Enough
Everything is set. Great job!
I don’t mean to be a killjoy, but perhaps it’s too early to celebrate. Why? You need to be sure that you have truly done a great job. Remember, the whole essence of business process improvement is to get better results.
Here are some questions to answer to ascertain that:
- Cost: How cost-effective is the process?
- Timing: Is the duration shorter or longer?
- Quality: Are your products or services better?
- Simplicity: Is it easier or more complex?
- Skills: Do your employees have a grasp of it?
We are looking out for:
- Cost-effectiveness: Being able to do much at a low cost will go a long way in managing your resources.
- Shorter and better procedures: The shorter the procedures, the better. Long procedures stall work, keep the queue length and consume resources.
- Higher quality: Your output has to be top-notch. Anything short of this is unacceptable.
- Excellent performance: Your employees must be experts at their job.
The essence of the new model is to have better functionality; you need to ensure the aim isn’t defeated by paying close attention to operations to see whether everything is in good shape. Don’t expect things to take off immediately. Most new processes take time to get in tune with the system. Get first-hand information about the effectiveness of the process by asking employees who perform specific roles about their experience and implement their observations for better performance.
As you might have noticed by now, BPI isn’t a one-man effort. You may be the brain behind it, but bringing it to fore and enjoying great ROI require a team effort. Carry everyone along or get ready to face the consequences of not doing so.
- Processes constitute a nuisance if they aren’t effective.
- There’s always room for improvement.
- Integrating processes creates a good flow of work.
- Employees play vital roles in organizational success.
- Ineffective processes lead to waste of resources.
The success of your business is largely dependent on its processes. It’s like a car moving effortlessly when the engine is sound. A sloppy process is a red flag for failure and an invitation to a topsy-turvy experience. Before you know it, the business that you worked so hard to build begins to crumble, and you are running helter-skelter trying to hold it together.
There’s little or nothing you can do when the chips are down. If you’re lucky, you could get a second chance to rebuild your empire. This time, you’d certainly leave no stone unturned in creating and improving your business process. But then, “Why wait for things to fall apart before doing the needful? After all, second chances aren’t always guaranteed. Some people don’t get over the first hit; it’s so heavy it keeps them down forever.
What will your business story be? With our downloadable Business Process Improvement Guide, you can rest assured it’ll be a success. You know why? We have further outlined and itemized every single step to make it easier for you. Knowledge is power as they say. Get all you need to know to succeed in your business process improvement. We create success stories and look forward to reading yours.