By Erica Quigley, Owner & Chief Consultant of Quigley Management Consulting
Do more with less. Automate tasks. Increase profits. Sounds nice, right? But since business owners spend so much time in the weeds of their organization, these statements can sound so vague and unachievable. Any business owner would say they want to reduce manual input and errors, and they would also say they have no idea where to start or how to measure an initiative like that.
Of course, there is a process that can be followed to improve business processes (neat, right!) and to visualize the improvement along the way.
Define: What are your pain points and driving goals for the business? Do you strive to increase cash flow? Do you wish your customer service could answer your clients quicker? Maybe it is the amount of days it takes to ship your product. Use your pain as the starting point to see the full picture. Have your employees walk you through every step of what they do within one painful process. They will be tempted to skim over some points– ask for more info on these. The points that are glossed over are often the manual pieces that result in errors and wasted time.
Measure: Once you understand the steps within the process, ask for some data points. For example, if your pain point is payment does not come in from your customers quick enough, measure the amount of hours or days that each step in the process takes. If this information is not captured anywhere, start a spreadsheet for your team where you begin to track this information. It is pertinent to do this so that you can understand the process gaps and set goals for improvement.
Analyze: Once you have data, see if there are any trends. If you look at averages be sure to be cognizant of the outliers. If we use the example of payments not being received timely from customers maybe you notice that a large customer is an outlier that is pulling the entire average out of bounds. This is actually a best case scenario because you can look specifically at the outlier and figure out what is causing it.
Implement: Based on your analysis of the data you will see a few things that can be changed immediately for impact (for example: emailing invoices instead of postal mail or beginning a weekly reconciliation of orders instead of waiting until month end). If you create the ideal way you would like your business process to work, use that as your goal and begin implementing phases to achieve it.
Control: This is where you can really visualize the impact of your work and one of the reasons why collecting the data at the beginning is so important. A process can easily get messy if there is no standard for it to follow. Set a control metric for your process. Let’s say when your project started that it took an average of 40 days for payments to be received from clients. When you identified the parts of the process that are changed, you think that should bring the receipt down to 20 days. Use that as your first control and the goal to achieve. Continue to report on the data so you know if you achieve it or if it begins to increase again. You can continue to refine your goals and metrics so the exact number isn’t the important part– it is the fact that you know what the numbers are and what your company is working towards.
This approach is based on Six Sigma methodology and only scratches the surface of possibilities for continuous improvement. Once you become keen to this, you will begin to see opportunities all around.