Improving Processes Can Improve Your Bottom Line: How Efficiency can Benefit your Business
There are a lot of things that go into making a business successful. One of the most important ones is making sure that your processes are as efficient as possible. Efficiency can help improve your bottom line, clarify roles, enhance the visibility of progress or any issues that might occur, and make your business more successful. In this post, we will discuss some ways that you can improve your processes, implement process improvement and make your business more successful!
As companies grow, they become more complex involving multiple positions in an organization. This means that there are more people involved in day-to-day operations, interacting with different systems, and working on different processes. Because more people are involved it often means more variability in what customers purchase. Additionally, as your organization gets bigger you will often find that expectations from your customers will also increase.
Because more people are involved at different experience levels it makes the processes for the company overly complex, variable, and difficult to control. This complexity in processes often adds cost and risk to the business. To continue growing, improve margin, and create a scalable company, one continuous improvement process should be to ensure that each department's processes are evaluated and improved.
The first step of making your process better is seeing that things can be better and deciding that implementing process improvement is key to your organization. Having leaders support the need for process improvement will solidify why it is important for everyone to focus on.
Leadership support is also key for change management. Getting behind a process improvement plan, value stream mapping session or process improvement event will be easier when you know that you have the support of your leader.
The Benefits of Process Improvement
There are four areas where good process will add value: communication, productivity, customer satisfaction, and compliance.
One of the benefits of process improvement is better communication. When processes are improved, it can help to improve communication between employees and departments. This can lead to a reduction in mistakes and misunderstandings. It can also help to improve morale as employees feel like they are part of a team that is working together towards a common goal.
Another benefit of process improvement is increased productivity. When processes are streamlined, it can help employees to be more productive. This can lead to a decrease in costs for the company as well as an increase in revenue.
In addition, process improvement can help to improve customer satisfaction. When processes are improved, it can lead to shorter wait times, fewer mistakes, and a better overall experience for the customer. This can help to increase sales and repeat business.
Finally, process improvement can help to improve compliance. When processes are improved, it can help to ensure that employees are following company policies and procedures. This can lead to fewer accidents, less downtime, and fewer errors.
LinkedIn Survey Results
I asked the individuals in my network what the greatest business impact is for process improvements.
23% Customer Satisfaction
One of my connections (@Laura DeVries) made a critical point. "Often people don’t actively look, so costly mistakes pass through unnoticed until they accumulate to a serious level." Taking the time to look for opportunities to improve existing processes takes a little time but can have lasting benefits for the organization.
I have been blessed to work on some awesome projects in the past where we have seen >50% improvement in the cycle-time, and drastic improvements in cost and potential revenue for an organization. What is also amazing to watch, as the new process is implemented there are often additional downstream impacts that were not initially envisioned but are realized.
How to Get Started with Process Improvement
Business process improvement can seem daunting, but the benefits are clear. By taking a close look at your company's procedures and making changes to increase efficiency, you can improve your bottom line.
Does the process improvement methodology matter (lean or Six Sigma)?
I am trained in both Lean and Six Sigma, two of the most popular process improvement methodologies. Being trained and able to execute the facilitation of a process improvement methodology can be important when you are getting started. Additionally, the facilitation skills for a particular process improvement methodology may differ depending on which one you are implementing. Facilitators in any process improvement methodology should also be able to help an organization fully understand the plusses and minuses of choosing one method versus another.
Here is my brief way of looking at which methodology you should choose, don't. Both Lean and Six Sigma offer tools and in looking at any organization you need to leverage the tools that offer the best toolset for solving the challenges in the organization. Lean offers a fantastic way of evaluating existing processes, making problems visible as well as looking not just one thing but being able to provide systemic steps for team members to eliminate waste. Process improvement in lean involves examining pain points and process improvement examples with team members that are deeply involved in the process. One benefit of lean aside from the company's ability to see rapid improvement of an improved process is that lean process improvement techniques involve implementing continuous process improvement. This way process waste is not eliminated just once, it is a continuous process in the organization. Other methods look at improvement as being implemented once, then process changes are monitored and expected to improve.
Six Sigma offers a fantastic toolset for mathematically evaluating both the problem and the possible outcome. In my personal view, the toolset in Six Sigma allows you to deeply conduct a root cause analysis and, if needed, statistical process control tools can be used to ensure that a process stays within control limits. Depending on the situation, an organization may need to continually evaluate the statistical performance of a process and if needed enhancing a process where the output can be measured.
Cross training employees in both process improvement methodologies will provide them the broadest toolset for solving any issues that they may run across. A business process improvement plan can be put in place and process improvement efforts can be monitored with team members utilizing the best tools for the issue at hand.
Tips for getting started
Here are a few tips on how to get started with process improvement for your company:
Define the focus areas: Before you can make any improvements, you need to identify which areas of your process could use some work. This can be done by talking to employees, customers, and other stakeholders. Once you've pinpointed the problem areas, you can start brainstorming solutions.
Define the process: The first step is to identify which business processes need improvement. This can be done through a process mapping or value stream mapping exercise. You want to ensure that regardless of how you want to be able to see the existing business processes, process improvement areas as well as what the future processes will deliver.
Set goals: Once you have defined the process, you need to set measurable goals for what you want to achieve. These goals should be specific, achievable, and relevant to your company's overall objectives.
Implement changes: Once you have defined the process and set goals, it's time to implement changes. This can involve process redesign, automating tasks, or reallocating resources. The key is to make sure that the changes you make are sustainable and improve efficiency without compromising quality.
Monitor and adjust: Finally, you need to monitor the process to ensure that the changes you've made are having the desired effect. This may involve tracking metrics such as cycle time, error rates, or customer satisfaction levels. If you find that the process is not meeting your goals, don't be afraid to make further adjustments.
By following these tips, you can get started on the process of improving your company's business processes. The benefits of increased efficiency are clear, so don't delay in making process improvement a priority for your business.
Implementing and measuring the results of process improvement
Implementing and measuring the results of process improvement can be daunting, but the benefits are clear. The first thing that you need to recognize is that you need to measure the results of process improvement primarily so that you can clearly see where you started versus where the organization is today.
In the process of outlining any process improvement area there are a series of questions that should be asked:
What metrics do we have that show the performance of the process?
What metrics do we need that we do not have that will show us the performance of the process in the future?
Are there upstream or downstream metrics that will be impacted by process improvement? Note: Fixing a problem in one area but pushing the problem to a different area needs to be closely monitored.
Pulling together the numbers and putting them into a tool for reporting and analysis is critical. Without this, it will be difficult to track the process over time and understand what changes are having an impact.
There are a number of ways to measure process improvement results. The important part is to make sure that you have a method that is repeatable and can be used over time so that you can see the trends in the process.
Lastly, after you have established metrics you need to have regular meetings where the results are reviewed with both leadership and the teams that are executing the process. This operating mechanism becomes the opportunity to discuss what is happening and if additional process improvement actions are required. The process then becomes a living, breathing entity that is always looking for ways to improve.
Common challenges and how to overcome them
Yes, we have problems in our company but not in my department -
In most companies all of the problems that occur happen in areas away from your department either upstream or downstream of your direct employees. For this reason, I suggest that teams look at broad outputs and metrics and then trace them back from there. Having leaders understand that the idea of focusing on their area is not to place blame but to be able to fix the process for the future is critical.
The issue is that we are calculating our metrics wrong or have dirty data -
One caution that I would give any leader is that it is easy to blame the metrics or the way something is calculated. If this is the case, then I suggest that you try to understand how it was calculated and if there is a different way to look at it. It may be that you need to go back upstream or downstream of your process to find the real root cause. If the data is not clean (it hardly ever is) then ask your team if the metrics are directionally correct.
Once we find efficiencies we are eliminating jobs -
Process improvement programs should be put in place to increase utilization, optimize processes and improve overall efficiency. However, if process improvement programs are used to eliminate jobs they will be extremely short-lived. Who wants to be on a process improvement project where it eliminates their job or the jobs of their friends?
The right way to use process improvement programs would be to understand jobs and where processes need to be improved. Most organizations may have job responsibilities that shift but there is usually plenty of work to go around so if an individual job is eliminated it is the responsibility of leadership to aid individuals in finding something equal or better in the organization. This will demonstrate to individuals that the organization is serious about process improvement and are not looking at it with a short-term view.
I am not resisting, just pointing out the facts -
Individuals that are responsible for process improvements also need to know how to manage change with team members that believe that the existing processes are better than the future state process. Understanding a stakeholder's position as well as what might help them consider changing their mind can be an important tool in getting someone to move away from the current process to the future process. Change management training often can be an afterthought but it should be considered as important as learning the process improvement methodology.
Be persistent and understand that process improvement is not always easy but the benefits to both the organization and the employees are worth it in the long run.
Implementing process improvement can be a daunting task. It often requires changes in mindset and behavior as well as the implementation of new tools and techniques. However, the benefits are tremendous. Organizations that have successfully implemented process improvement programs have seen improvements in communication, productivity, customer satisfaction, and compliance. If you’re just starting out on your process improvement journey or are looking for ways to improve your existing program, we hope these tips have been helpful. Tell me about your experience in the comments below. What challenges have you faced? What successes have you achieved? We would love to hear from you!