Operations Focus

By Tim Connor, Rodeo! Performance Group, Inc.

What’s The One Thing that business owners can focus on to simultaneously reduce costs, improve morale, and kick revenue up? The business process. Processes are simple, and anyone can understand their basics. The dangers with processes lie in their repetitive nature and how often they happen in a day. If a process is done wrong, it will be done wrong A LOT! That is expensive!

What is a Process?

Processes are the building blocks of business, all our internal and external services are based on them. Taking an order? It’s a process. Building a widget? It’s a process. Making a sale, dealing with a customer complaint, readying a bill? You guessed it, all of these activities are processes.

In its essence a process is a series of steps that are gone through to produce either 1) a service, or 2) a product. Makes sense, huh? Without processes we couldn’t do work,. But the problems arise from the attention we pay to our processes, whether it’s a little attention or a lot.

The End Is Where It Starts

How’s THAT for a weird statement? But think about it: isn’t the end-in-mind where you have to begin in order to know what steps should make up the work? If you’re building a monkey wrench, you need to know what a monkey wrench looks like. Unfortunately, that’s where many businesses stop – what should it look like? If you take this approach your first step will be to copy what is already out there. To build a mortgage service, you’ll look at all the other mortgage services to see what they’re doing. To run a medical practice, you’ll make a list of what all the other practices normally do.

But how about adding a little twist? What happens when you start with asking yourself: What does the end customer want from this product or service? That actually drives a very different train of thought.

Into the Mind of the Customer

To clearly define the end-in-mind you have to consider what the customer is looking for in several arenas. Customers are looking for value in the purchases they make, and in times of economic challenge that will be more true than ever. Where do they place value?

  • In the utility of the purchase – Does it do what I need it to do?
  • In the durability of the purchase – How long will it last and continue to do what it was purchased for?
  • In headaches and repairs – How much repair and maintenance will be needed?
  • And finally, in price – How much will it cost?

While cost may come up early, it is rarely the top consideration for a purchase. Durability, maintenance, utility – the better these are the higher the value in the eyes of the customer, and the more they are willing to pay because they KNOW they are getting value. These needs and wants provide the “Why” for the way you operate your business.

So you have to begin by defining what the customer wants before you can begin laying out your processes. And the more clearly you define those wants and needs, the better you’ll be able to design your processes.

The Missing Link: Designing Your Processes

Believe it or not, most business service processes are not designed at all. You heard me right – they are not designed at all. In a small business, processes come about because the original person does it a certain way, and gradually that becomes the way that process is done. Is it a good way to do it? We don’t know, it gets the job done, so we do it that way!

Early on, there might be some efficiencies in the process because the original person does it all, and usually works to do it better. But as a business grows, other duties come in, and suddenly the process begins to morph into something different. Over time the original process owner is either promoted or leaves for another job, and the process is taken over by another. Gradually over months and years, the process gathers steps the way Velcro gathers lint, and then you have a lot of steps that aren’t producing value.

As You Get Bigger It Gets Worse

The real headaches begin as the business grows, which (hopefully) all good businesses do. New people come into processes, and the busy nature of the rest of the staff means that time isn’t taken to train them on the “Whys” of the process, although they might get the “Whats” (as in what to do). Because they don’t know the why – and remember, the “why” is based on the original needs of the customer – any changes the new worker makes might not make the process produce a better outcome.

There’s another problem too. Most processes depend on other processes for at least part of their input. This is true in any business, but it becomes more evident – and critical – as a business grows. How’s that? Here are some examples…

  • the Billing process depends on data gathered from Sales
  • the Production process depends on data gathered from Sales
  • the Sales process depends on data taken from Reception
  • the Shipping process depends on data from several places.
  • See what I mean?

    So What Do You Do Now?

    One of the easiest steps you can take to begin improving processes is to review your picture of client needs and wants. A clear picture there will go far toward shedding light on the value of process steps.

    We’ll get into other activities for improving processes in Part II of this series.