What's the first thing that comes to mind when you hear the word processes? We all have a basic notion about what processes are since we run different processes daily. In business, we must go one step further and think about process improvement; that is, how to perform them more efficiently to increase productivity.
However, to improve the processes and have a direct impact on the results of our business, we must identify and differentiate the critical processes of the business models from the support processes. While this may seem like an easy task, analyzing the context and determining the best way to approach said analysis requires expertise. Organizations must be proactive in identifying, evaluating, improving, and controlling the processes that contribute to competitive advantage.
Why is continuous process improvement important?
In most cases, the critical capabilities and resources of companies tend to be generic or very easy to copy. The most exclusive thing a company has is its processes, so if an organization does not improve on them continuously, it becomes prey to the competition. At least one competitor - not to mention everyone - makes improvements to their processes regularly, since they understand that to succeed in today's business world they must be able to generate their value proposition more efficiently.
If you face the following scenarios, you should consider analyzing your processes.
Recurring customer complaints
Badly designed or poorly executed processes negatively impact efficiency and customer experience. Products or services of poor quality, breaches in delivery times, among others, will result in dissatisfied customers. An unsatisfied customer means the loss of a valuable opportunity to generate good references, in addition to losing the possibility of making recurring sales.
Inefficient processes discourage collaborators. Who wants to be part of a system that induces frustration? Poorly designed processes may cause the morale of your employees to decline since they may feel that all their efforts are offset by the typical inefficiencies in the processes. These inefficiencies, among others, are duplicate jobs, unidentified bottlenecks, and the possibility to have nobody know where his or her responsibilities start and end.
Loss of productivity and efficiency
Do your costs increase over time? Inefficient processes cause a waste of resources and loss of productivity. Bottlenecks, inefficient workflows, and ignorance of the inputs required to execute the process may all take place if you have inefficient processes.
Loss of competitive advantage
Do you feel you are losing the battle with your competition? Most likely, your processes do not permit you to create a sustainable competitive advantage over time, which is probably why you are failing to move faster and taking longer than your competition to achieve results.
What types of processes can be improved?
Any type of process can be improved, from the most strategic one in the value chain, to the support processes. It is important to make a difference in the formality of the processes since they are always present in every organization, formally or informally.
Formal processes are those that are identified and documented in such a way that each activity is detailed. They are especially important as they are associated with customer or employee safety considerations, legal issues, financial considerations, and other critical functions. In these cases, it is important to follow particular steps to execute your work.
Informal processes, on the other hand, are created by individuals and groups within the organization to complete certain tasks. These processes are not documented but are important to achieve the company's goals.
What are some of the best practices for process improvement?
Having the intention to improve your company's processes is not enough. You need to execute certain activities correctly. Here are some good practices to gradually improve processes over time:
Map the process
Once you determine which process should improve, document each activity by using a flow chart or any other tool. Identify each key step in the process by exploring each phase in detail, since each activity includes particular tasks. Involve people who run the process regularly so that no detail is left uncovered.
Analyze the process
Use the map of your process and evaluate the following factors:
- What issues cause frustration in employees and customers?
- What tasks generate bottlenecks?
- What causes an increase in costs or a decrease in quality?
Design the process
Once the process is analyzed, it is time to make changes that eliminate the identified problems. Work with people who are directly involved with the process as they always have the best suggestions to improve it. Involving staff is beneficial since they will feel more empowered and have less resistance to change. At this point, it is worth mentioning that depending on the complexity of the process, it may make sense to make an impact analysis to understand all the effects of improving the process.
The next step is to acquire the necessary resources to implement the new process. Make a list of everything you need, including guidance from senior management or colleagues from other departments such as finance, IT, and human resources. Contact each group to make sure they understand how the new process will benefit the organization.
Implement and communicate the change
Improving business processes may require changes in current systems and equipment. Consider taking a pilot test that allows you to learn about potential problems. Keep in mind that changes are not simple for employees or teams, so you may face resistance to change.
Evaluate the process
Once the new process is implemented, follow up to verify that the improvements have the expected performance. Monitoring the process allows you to anticipate any problems that may occur. Review with the people involved in the new process how it works and if new changes are required.