Manage Your Business As Processes

Many business owners and managers are frustrated by the poor results achieved by some portion of their business. They diligently track their business using metrics like sales, profits, customer perceived quality, on time delivery, etc. These are obviously some of the most important results any business needs to produce. Why doesn’t attention to these important metrics produce better results?
Unfortunately none of these metrics are actionable nor controllable as objects of management focus. No amount of teeth gnashing about inadequate sales will generate a single additional sale. No matter how intensely you beat on your operations to improve on time delivery will this lead to improvement.  
 
Why is this so? 
 
Let’s examine on time delivery as an example of the problem. On time delivery is an end result of a process, a series of ordered steps, activities, that are your production operation. This process may not be delivering adequate on time delivery to your customers. But, you cannot understand what is causing this process to be out of control without examining in detail, through what is commonly referred to as root cause analysis, the causes of this failure. Here is a brief list of some of the more common causes: 

  • Part shortages  
  • Machine down time for poor maintenance  
  • Production bottlenecks  
  • Poor part quality  
  • Lack of labor  
  • Poorly trained labor  
  • Poor scheduling  
  • Inadequate customer requirements specifications

 
The lesson here is that in order to improve on time delivery you really need to first determine the cause, second set improvement tasks that eliminate the cause, and third measure improvements in that function until you achieve a controlled state of adequate  
performance for on time delivery. 
 
The fundamental mind set is to see your business as a system of processes. Your task is to make sure the processes are well defined and operate in a controlled state to produce the desired results. The method for achieving in control processes is to determine the root causes of failure, set tasks to eliminate the cause, and track metrics that measure the reduction of the causative element.  
 
Now you might be in a service business and say to yourself, “My business does not produce widgets. How can this apply to me?” 
 
Services are also produced through a series steps. In many cases these steps are not well-defined and are further complicated by the frequent direct interface with, and frequently the participation of, the customer. It is not as easy to “see” the steps in services production as in widget production. You don’t have the machines and parts moving around with a sequence of physical transformations.  
 
Here is a list of typical causes of poor service quality: 

  • Bad service design  
  • Mis-managed customer expectations  
  • Inadequate information resources in the hands of the frontline service provider  
  • Poor training of the service provider  
  • Unclear decision making scope and authority for the service provider

 
Learn to see your business from a process perspective. Then, apply process control techniques to drive to better results in sales, profits, customer retention, and whatever else is important.

Proven Checklist for Business Success – How Do You Put Them Into Action?

I receive a regular email titled, “Management Intelligence…… from Edward de Bono and Robert Heller”((1)) . Their most recent email was “Management Intelligence: A proven checklist for business success”. Here is the checklist they provided:

“DO YOU…

  1. IMPROVE basic, measured efficiencies continuously?
  2. THINK simply and directly about what you are doing and why?
  3. BEHAVE towards others as you wish them to behave towards you?
  4. EVALUATE each business and business opportunity with total, fact-based objectivity?
  5. CONCENTRATE on what you do well?
  6. ASK questions ceaselessly about performance, markets and objectives?
  7. MAKE MONEY- knowing that, if you don’t, you can’t make anything else?
  8. ECONOMISE always seeking Limo (Least Input for Most Output)?
  9. FLATTEN the organisation to spread authority and responsibility?
  10. ADMIT to your own failings and shortcomings and correct them?
  11. SHARE the benefits of success with all those who helped to achieve it?
  12. TIGHTEN up the organisation wherever and whenever you can because familiarity breeds slackness?
  13. ENABLE everybody to optimise their individual and group contribution?
  14. SERVE your customers with all their requirements to standards of perceived excellence in quality?
  15. TRANSFORM performance by innovating creatively in products and processes including the processes of management?

Again from this email concerning this list: “These questions penetrate to the heart of successful management. They have passed, and will pass, the test of time.

This list looks a lot like others I have seen, and certainly many entries would be on such a list that I might create. But, whenever I see lists like this, I say to myself, “Great, but how do I do this?” Lets just take number 15, for example,  “Transform performance by innovating….”. What business processes do I put in place that assure that these results are regularly and sustainably produced? Or, what approaches and tools do I deploy to achieve number 8, “Economize…” ? Again, are there tools and approaches available that assure the we meet number 13, “ENABLE everybody to optimize their individual and group contribution?” Continue reading

Footnotes:
  1. http://www.thinkingmanagers.com/ []