by Tiffany DeBolt, PMP
Six Sigma Greenbelt, DeBoltBusinessSolutions.com
In these tough economic times, companies are rushing to cut operating expenses at a record pace. Unfortunately, many organizations are ignoring the golden opportunity to be found by simplifying costly operational processes which create financial waste.
Businesses today are facing an abrupt paradigm shift in their reality. Where there was once plentiful operating capital, there is now limited liquidity and tightening credit. Companies are being forced to significantly limit their expenses. However, these companies have spent these past booming economic years adding layer upon layer of bureaucracy and complex operational processes which eat into the bottom line.
How can this be fixed? Corporations must take on the responsibility to document and understand their current processes. From the ground up, this enterprise-wide activity can reveal areas of fallout, breakdown and missed revenue opportunities. Millions of small opportunities can be found which are multiplied and amplified by transactional volume. Handoffs where customers are left in black holes can be identified and resolved. Wasted dollars can be reclaimed by the business and spent on areas to promote greater revenue or returns to shareholders. And the business can lay the foundation in efficient processes to have a competitive advantage when the economy starts to recover.
So what does this mean for a small to mid-size business owner or an operations manager in a larger organization? There is money to be found. Owners, operators and managers need to truly understand the day to day operation of their business. How do customers flow through the process? From the point a sale is made all the way to post-sale follow-up you should understand how the business works and make sure everyone working with you has that same understanding!
How do you start to uncover these opportunities? Start by sitting down with your employees or staff to document how your product or service works through your business. Brainstorm in groups, solicit autonomous feedback from employees, and use post it notes on a wall or a whiteboard. The tool is not as important as the method. Once you have your process steps, add who does them, how long does that step take, how does the handoff happen? (Paper? E-mail? Phone call? Automated system?)
Once you have the steps, owners, duration and handoffs documented, the analysis begins. Look at your steps; are they in the right order? Are there handoffs between people or departments that are vague with no clear ownership or communication? This is often where customers go into a “black hole” or where a high probability for mistakes in handoffs may occur. The resulting breakage causes customer dissatisfaction and increases effort in reactive support costs to correct the error. Often these areas of fallout can also cause a lost customer. Make sure your handoffs are clean; that there is an accountable owner and that all the necessary information gets passed from one owner to the next in the handoff. In documenting your process, have you identified areas where your customer or product spends a large amount of time? Why? Is the delay adding value in some way? If not, shorten or get rid of it.
Review your process and note any step that is not adding value from the customer or product quality perspective. If it is not adding value, why are you paying for it? Ask yourself whether the process step is a business necessity or if it is an unnecessary task. Layers of approvals and reviews are often a sign of something that doesn’t add value to the customer. Why are they there? If it is to make sure someone else is not making mistakes, maybe you need to re-align your performance objectives and cut out the extra layers which take time and money. Reviewing all your process steps with a customer-focused eye will show you where there is waste in your business. Ask at each step, “Do I really need to do this”? If not, cut the step and re-align your process to add value for the customer.
As a last step, look at your process with revenue and customer service in mind. Are there opportunities where you could be contacting, updating and possibly up-selling your customers as they go through your process? Often in process reviews, opportunities for revenue are being missed such as a post sale or post launch follow up contact. Do you ask for and offer incentives for referrals? Do you solicit feedback to help understand the perception of your product or service in the markets? Review your process for possible customer touch points where you can enhance your relationship and understand the improvements that you or your business may need to make.
If you do not have a lot of experience with streamlining processes, the effort may seem tedious and cumbersome at first. But as you learn and improve through trial and error, you’ll soon find the tools and techniques to most effectively make a difference, and it is worth the up front effort! You come out of the back end with a clear documented picture of your business operations and a list of areas for change and improvement. Having this foundation and structure will allow you to multiply your volume without as many defects, errors or unhappy customers. It also makes training new employees much easier since you now have a very clear visual of what your business does, and the documented processes can now be an integral part of the training program.
If you are part of a large organization the value of these techniques lies in reducing complexity and errors at a much higher transactional volume or dollar amount. You may not be able to do this with the whole business right away, but pick a troubled department or business unit that has the most revenue opportunity. Your new efficiency will allow you to handle greater sales without requiring the large number of headcount to support it and by re-setting your foundation; you become more competitive in the marketplace.
For any business, the approach above will reduce waste, errors, and save money. It also will increase customer satisfaction and your revenue. The approach is not always easy, but in these hard economic times, can you afford to throw money and customers away?
Updated and published version from Sales & Service Excellence Mag pg. 6.Â
Download the pdf here.
