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Build Business Value with Processes

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Build Business Value with Processes

By , June 16, 2020

How Processes Build Business Value

Every business has processes.  What’s not often appreciated is how documenting them adds to business value as well as profitability.  Getting your processes mapped and written down is hard work.  It’s not glamorous and rarely a quick win.  However it is an investment that repays over and over again in consistency of delivery and improved customer satisfaction.  It results in more output and less waste.

It goes straight to the bottom line.

When your team work remotely there is a great benefit in documented processes.  A client recently had to recruit someone to start work the day the COVID-10 lock down began.  The policies and processes in place make it easier to onboard the new team member.  Because they kept track of how she was settling in, they didn’t have to completely babysit her.  The benefit of getting someone on-board and effective quickly AND making them feel more settled and secure is priceless.

Documentation Builds Value

Documenting processes is simply writing down exactly what it is you do for each activity.  The real value is asking “What do we need to do to make this better for the customer, the business and the employees doing the task?”  Make it OK for the team to ask this question and do something about it.  This results in a team with an ownership mindset as well as improving the efficiency and effectiveness of the business.

The hardest part is getting started.  Having a blank sheet of paper and wondering what to write down is a great way to experience procrastination and doubt.  It probably helps to define what a process is.

 

A process is simply any input that is changed into an output. 

A system is a set of processes that work together to complete a complex whole.

 

Processes = consistent delivery for repetitive or repeatable tasks or decision-making.

Higher quality processes result in better delivery. Automated processes set in motion activities following certain triggers.  Other processes are tasks and guidelines for human operation.  Make sure that each task is designed to give a consistent outcome regardless of who delivers it.  Humans do not cope with boredom very well.  Automating tasks is often a great way of making sure nothing slips through the cracks.  Documenting processes makes sure there are no cracks to slip through.

Automation removes human error.

The benefit of “systems” is that you, as the business owner, can extend your influence and reach.  Showing others how to do increasingly complex tasks allows you to get on with strategic tasks such as the working ON your business rather than in it.  Building a set of processes and written procedures allows you to scale your business faster without reducing quality.  Processes allow teams of specialists to work more effectively together and improve efficiency.

There are three types of process:

  • Management processes
  • Operational processes
  • Support Processes

 

Each has a different function and they all work in a hierarchy.

Management processes focus on planning and are strategic.  For example, a strategy to develop a new product.  The management process plans and organises how the product is developed and then the routes and timescale to market.

Operational processes are tasks and steps that deliver your core product / service.  This includes taking the order, manufacture or preparation of services.  As well as final delivery and after care.

Support processes are all activities that make the other processes as friction free as possible.  For example, taking on new staff, making payments to suppliers, making sure IT works etc.

Standard Operating Procedures

Processes often have a consistent format.  (Don’t get too hung up on format!)  They are designed to be easily understood.  The teaching and optimising of specific activities through all the steps ensures consistent completion of particular tasks.

In the first instance simply write down what you currently do in a set of circumstances.  It always has to start with something.  The next step is optimising the written instructions.  Test them to see if they deliver the preferred outcome.

 

Processes invariably solve problems!

The solution isn’t always technology.  Sometimes it’s as simple as a checklist on a piece of paper.  Engage the mantra “Keep is Simple”.  Compliance is easier if the steps are clear in a process.  Disasters happen because of ignorance and ineptitude.  Established processes and workflows reduce both.

So why don’t all companies put them together?

It’s not difficult – It’s just not that attractive an activity!

Don’t put off till tomorrow what you can do today.

It can save your business thousands.  This could be one of the greatest investments in your business.  Your company becomes much more scalable.  As a result, performance is easier to track so you know when you are going off the rails!  Once there are processes in place, even poor ones, start optimising them to improve efficiency.  This gives customers a better experience and outcome, creating more profitability.

Bad processes lead to bad results.

Good management processes don’t just look at organising people and resources for strategic goals.   Management processes map out company activities and align with strategy.  The role of management processes is to review, analyse and understand the day to day work.  Clear, understandable steps in a task leads to the required results.

 

If you are thinking this is something you have to do all yourself, then that would be a mistake! You’ve got a team – engage them.  You’ll be surprised how many ideas they have.  The point is to empower your team to put processes together and test each other’s output.  As a result tasks get documented AND a culture develops where anyone can ask:

“Is there a better way?”

 

Creating the process is only the first step

Regular review and iterative improvements keep on changes, improvements and new tools.  The old saying “An inch is a cinch; a mile is a trial” is very true here.  Making it a habit to continually improve your processes 1% more towards excellence is the easiest, most sustainable way to keep your business on track.

To get yourself out of the trenches. engage your staff to be part of the transformation.  You gain the freedom to scale your business more quickly.  Well optimised business procedures save time and money.  This impacts the bottom line with a compound effect.

 

Poorly understood or implemented processes cost businesses in the hidden costs of inefficiency.

 

Processes should be transparent and accessible to all your team.  Regular testing by people who did not put them together leads to continuous improvement – this gives a fresh perspective and easily identifies any holes.

 

Optimising your processes leads to an organisation full of enthusiasts who actively engage with each other to deliver excellence across all the companies’ activities.  The opposite is people shrugging, saying “That’s not my job” or “I don’t know” (otherwise translated as “I don’t care”).

 

There are 5 essential questions to ask when putting processes together:

 

  • What is the goal or desired outcome of this process?
  • When does the process begin or end?
  • How do activities move the process forward?
  • Which departments / employees get involved?
  • What information is transferred between steps?

 

No process starts off perfect, but the idea is to get as close as possible.

 

Starting from scratch is a good time to ask:

 

“What would the best (insert your industry / product / service) in the world do?”

 

Then make sure you are ONLY including the activities that add value and NOTHING else!

To find out more about building value click here

Christine Nicholson

Christine Nicholson

Partner

Christine is a Chartered Management Accountant with a Law degree who brings 25 years of wisdom, know-how, and experience of working with SME’s. Her long and varied career has included working overseas, rescuing technology companies, building a healthcare business from scratch and running a zoo.

She started her first successful multi-million turnover business in 2002 and has grown business ventures for others including a bankruptcy to 8-figure exit in 18 months. Christine’s engagement consistently gets her clients increasing their turnover with improved profitability and fewer working hours.

She has saved clients thousands and increased the value of their businesses by millions. Since 2008 she has generated over £100m of crystallised value in business exits.

Christine is also an author of 3 books on Finance, Business Management and Technology businesses. She is a seasoned speaker and Professionally Accredited Member of the Association of Business Mentors.