When you consider all the decisions you must make as an entrepreneur, especially in a start-up, it is mind-blowing. Some decisions are one-offs that you need to answer, but the majority of decisions related to your business will be about the day to day running. These decisions will be made over and over, week in, week out. When to call a lead back? What to say to someone who has a customer service request? How much to charge for a particular service? These decisions and the effort you have to expend to come to a conclusion are holding your productivity back. If the conclusion for a decision is optimal, then the decision you reach for a specific question should be the same every time. You should not waste time on making an educated choice every time an issue rears its head. Instead, you should have a clear set of instructions to be followed so that you, and your team, will know what to do when a situation occurs. Producing a formal process for given business situations is the mark of a consistent and productive business.
To take the area of sales management the benefits of a formal and shared process are evident. A study showed that having a formal sales process increases revenue by 18%. Spending time managing your sales pipeline can increase revenue by 11% for just 3 hours of work a month. Having trained salespersons increases revenue by 9%. When these three options are combined, then an increase in revenue of 28% was witnessed. Those using a formal sales process were 33% more likely to close sales at a higher rate. A formal process allows you to:
To have a formal process, you must first know what you do in various circumstances. The best way to do this is to map your process. There are formal methods, such as BPMN, but a simple flowchart that merely lists the steps in your process is adequate. You can split the diagram into streams depending on who is responsible for that section of the process. All business processes no matter their size should have a defined process. How else do you ensure quality? How else do you reduce errors? If the decision is one that you would not be comfortable with a junior member of your team making, then every time that decision is to be made, then you will be interrupted, impacting on your productivity and also the productivity of your staff member will be affected. Not having a formal process leads to inconsistencies as staff will find their process, which may not be to the high standard you expect, or it may just be different leading to other issues. If a process isn’t repeatable, then it will be hard to benefit from economies of scale. From a customer perspective, getting different answers to the same question looks like poor management. If the data recorded as part of the process is inconsistent, then it will make it virtually impossible to draw insight from the information gathered. Lack of a formal process will lead to different scope for the same role in a team. This is not efficient and may also lead to resentment if employees feel they are being treated differently to work colleagues. Unhappy staff are unproductive staff. Once you have a map of your process as it is now, you should measure how it works, compare it with other options, and then improve your process. This should be done continually as sometimes situations change and new solutions present themselves. Otherwise, you may be left behind.
You find this type of continual refinement in Kaizen, Japanese for improvement. With Kaizen, it is everyone’s responsibility to improve the processes in the business, not just management. If a development is identified that will cut waste and improve productivity, no matter the source of the idea, the improvement is tried, and compared as described earlier. If a different process is found to be more productive, then this then becomes part of the standard formal process, and the cycle begins again. These small improvements combine to lead to more substantial overall enhancements to the complete process.
Having a standard process applies to documents you use in your business. Do you write a sales proposal every time from scratch in your favourite word processor? Do you copy and paste the client and work information into an invoice each time? Do you even create the documents at all when they could be automated? Taking control of your output, and producing standardised versions, that you share across the organisation, is vital.
One of the phrases I dread, when I speak to staff in a business I am consulting for, is, “But we have always done it like that”. It makes me want to scream! Many people are resistant to change, they fear the unknown, and they get comfortable doing things the way they always have done. A continuous improvement culture frees people from this mindset as it allows them to try new things, and if they don’t work, they can change them back. It is important to remember that this is not the same as having an undefined process. Still, record the steps as a formal process, but test the changes and incorporate them into this formal document.
In developing a process, you should consider some of the points that we discovered in previous posts about cutting unnecessary tasks, and delegation. Tasks should be carried out by the most appropriate person to do the job. They should be someone qualified to do the work. If you don't train them, they will ask too many questions of more qualified staff or Google, or they will miss important aspects of the process. This will not help your productivity. At the same time, the tasks should not be delegated to an overqualified team member when a more appropriately skilled person is available. This leads to a waste of talent and a waste of productivity. If you don’t want to do a task, then train someone else to do it and give them a well-defined process to follow.
Always think objectively on whether you need to carry out every step of your process. If you can’t think of any reasons to continue then cut it out. Be ruthless; only carry out actions that add value to your operation. Always be on the lookout for tasks that are repetitive and with easily defined solutions. These are critical targets for a future article - automation.