You know the tasks that should take you 5 minutes but for some reason take 30?
Not only does this suck for you in the moment, but the profitability of your business also suffers.
This is an example of a business process that needs improvement.
Business processes are the engine that drives your business forward.
You don’t want an engine with blown head gaskets and fuel leaks.
Strap in and learn all about what business process improvement is.
- Business process improvement involves analyzing and optimizing existing processes.
- Gathering feedback from stakeholders is crucial for assessing the effectiveness of process changes.
- Encouraging employees to suggest changes fosters a culture of innovation.
- Automation, data analytics, and structured processes can lead to business process improvements.
So, what exactly is a business process and why should you care about it?
A business process is a series of tasks or activities that are executed to achieve a specific organizational goal. These processes are completed by people and/or systems,
Every organization has business processes and they can range from simple to complex.
Business process improvement is when changes are made to an existing business process to make it more efficient.
Here are some benefits of improving business processes:
- User experience
Business process improvement is the key to achieving long-term business success.
Improving your business processes enables you to remove inefficiencies and bottlenecks.
This saves time, resources, and enables your business to break through sticking points.
Continuously improving your processes prepares you for changing market conditions and customer demands.
This flexibility gives you a competitive edge and allows you to seize new opportunities as they arise.
There are several key approaches for business process improvement.
- 6 Sigma
- Cause and effect
- Theory of constraints
- Lean thinking
- Total quality management.
Each approach offers its own unique framework for addressing inefficiencies in business processes.
6 Sigma is an effective business process improvement methodology that enables organizations to:
- Streamline processes
- Develop more efficient process flows
- Reduce costs
- Standardize operations
- Increase capacity and profitability
- Improve employee morale and development
6 Sigma uses a five-step method called DMAIC (Define, Measure, Analyze, Improve, and Control).
Define the problem and the importance of the problem for the business.
Measure the performance of the current solution and establish a quantifiable improvement goal.
Analyze the inputs of the business process and how the inputs affect the outputs.
Improve the current business process based on a solution that considers:
The control step involves implementing the solution, performance benchmarking, and documentation/training.
The beneficial outcomes of using Six Sigma are:
- Meeting strategic goals
- Increasing revenue
- Reducing costs
- Providing consistent and reliable products/services to customers
The best part of 6 Sigma is that it engages employees in improving their own business processes. This builds confidence and makes employees more valuable assets to your business.
Cause and effect diagrams enable crisp communication of complex business processes and how to improve them.
Using cause and effect diagrams is especially useful for identifying problems at each step of the business process.
You do this by visually showing how an input causes a specific output.
The Theory of Constraints is a method businesses can use to identify and improve business processes.
It takes a scientific approach by hypothesizing that every complex system has a constraint that acts as the weakest link. By addressing this constraint the business process throughput will improve.
The Theory of Constraints has 3 main components:
- Five Focusing Steps
- Thinking Processes
- Throughput Accounting
Five Focusing Steps is a cyclical process for identifying and removing constraints.
The five focusing steps are:
- Identify the constraint
- Exploit the constraint
- Subordinate and synchronize to the constraint
- Elevate the performance of the constraint
Thinking Processes are a collection of strategies and tools used for optimizing systems with many interdependencies.
The core thinking processes are:
- Current reality tree
- Future reality tree
- Evaporating cloud
- Core conflict cloud
- Negative branch reservations
- Positive reinforcement loops
- Prerequisite tree
- Transition tree
- Strategy and tactics
Throughput Accounting is a method of accounting that focuses on throughput rather than allocating costs.
By prioritizing optimizing the current constraint, businesses can experience:
- Increased profit
- Fast improvement
- Improved capacity
- Reduced lead times
If you’re interested in learning more about the Theory of Constraints I highly recommend checking out the book by Eliyahu M Goldratt.
Lean thinking approaches business processes with a focus on continuous experimentation.
It starts by understanding what customers value and the problem they need to solve. Then it seeks to improve the work and the people involved in creating value.
Lean enterprises focus on understanding the customer and finding better ways to provide value.
This approach emphasizes respect for the humanity of customers, employees, suppliers, investors, and communities.
It is not a rigid set of beliefs and methods but progresses in specific situations with the goal of reducing waste and improving value.
By using lean thinking, you can improve the efficiency and effectiveness of your business processes.
TQM is a business process management technique that involves all members of an organization in improving processes, products, services, and culture.
TQM promotes total employee involvement and empowers individuals to work towards common goals.
This involves adopting a process-centered approach and integrating quality into the organization’s culture.
As a result, organizations achieve their vision, mission, and goals with quality as a core component.
Continual improvement is emphasized in TQM, driving competitiveness and effectiveness. This is done by monitoring performance measures for unexpected variation.
Using TQM can transform your business processes into efficient systems that meet customer needs.
Timing is everything when it comes to improving your business processes. Knowing when to make changes can mean the difference between success and stagnation.
Identifying the right time for business process improvement is often driven by specific triggers.
Here are some trigger examples:
- Significant change in the business environment
- New regulations, emerging market trends, etc.
- Decline in performance indicators
- Decreasing customer satisfaction, rising costs, increased churn, etc.
- Business system upgrades
- When upgrading existing systems, it is best practice to refine existing business processes.
Being proactive and recognizing triggers will ensure your business continuously evolves.
In my experience refining your business processes is a continuous process that never ends.
To improve your business processes you need to follow a systematic approach.
Check out the following steps I use to establish kick-ass business processes;
Start by clearly defining the goal of your business process. This sets the foundation that’ll lead to greater efficiency, profitability, and success.
To define the process goal, consider the following:
- Articulate what the business process should do. How would you know how to improve your process if you don’t even know the process goal?
- Ensure that your process goal aligns with the goals of your organization. This’ll help focus on improvements that have a meaningful impact on your company’s success.
- Define key performance indicators (KPIs) that’ll allow you to track progress. These metrics should be quantifiable and provide a clear sign of whether you’re moving in the right direction.
Next, you need to map out the various steps and components involved in the business process.
This will create a visual representation that you can use to identify bottlenecks and inefficiencies.
Mapping the process involves analyzing each step in detail by identifying sub-processes.
Identify the following:
- Key inputs
- Key outputs
- Decision points
This mapping exercise allows you to see the big picture as well as the specific details of how the process functions.
It also helps identify areas for improvement such as automation.
Mapping processes also enables you to communicate with stakeholders better. Who doesn’t love a visual aid?
I recommend using a diagramming tool to map your business processes.
Now that you have a clear map of your business process, it’s time to fine-tune and perfect it to achieve optimal efficiency and effectiveness.
Start by identifying any bottlenecks, redundancies, or unnecessary steps in the process.
Look for opportunities to streamline and simplify tasks, cut waste, and improve productivity.
Involving key stakeholders in this refinement stage is key to gain valuable insights and perspectives.
You can also use design thinking at this stage to involve the stakeholders in the design process.
Leverage your process maps to identify areas for improvement and brainstorm potential solutions.
Remember, the goal is to create a process that maximizes value creation while minimizing effort and resources.
After fine-tuning and perfecting your business process, you need to actually put it into action.
Implementation is where all your hard work pays off, as you start executing the new process within your organization.
Communicating changes to all relevant stakeholders is critical. You also need to provide them with any necessary training or resources to ease the transition.
It’s important to have a clear plan in place for implementation. This includes timelines, milestones, and performance metrics.
As you begin implementing the process, closely track its progress and make adjustments as needed.
Keep an open line of communication with your team members and encourage feedback to ensure a smooth transition.
Once certain processes are implemented they will be tested. If the feature is not up to snuff the process will be refined.
This will ensure process effectiveness and identifies any potential areas for further improvement.
Testing the process is crucial for both performance and user acceptance. This is the time for making adjustments before fully integrating it into your operations.
Testing involves collecting data, analyzing metrics, and soliciting feedback. Collect feedback from employees and stakeholders involved in executing the new processes.
Conducting tests and simulations are needed to detect bottlenecks and inefficiencies.
Once the new process is being used, testing allows you to measure the impact of the new process on the following:
- Customer satisfaction
- Cost reduction
- Any other desired outcomes
Remember that business process improvement is an iterative process. The testing phase provides valuable insights that can inform future refinements and optimizations.
Take a moment to reflect on the progress you’ve made so far, but don’t stop there.
It’s time to dive back in and iterate, fine-tuning your newly improved business processes.
Listen to the people and the data.
Iteration allows you to continuously test and make adjustments to your processes based on feedback and data.
Here are three key actions you can take during the iteration phase:
- Analyze Metrics: Take a deep dive into the metrics that matter most to your business. Look for any areas where improvements can be made or bottlenecks that need addressing. By analyzing metrics, you can identify opportunities for optimization.
- Gather Feedback: Engage with stakeholders, employees, and customers to gather feedback on the new processes. Their insights can provide valuable information about how well the changes are working. Use the insights to determine if you need to make any further adjustments.
- Continuous Improvement: Adopt a mindset of continuous improvement. Encourage employees to suggest changes and ideas for enhancing the processes further. This fosters a culture of innovation and empowers individuals within your organization.
Following these steps, you ensure that your business processes are evolving and adapting. to meet changing needs and challenges.
Remember, the goal is not perfection but rather continuous process improvement toward greater efficiency.
This continuous improvement approach fosters a culture of innovation within your organization.
As a result, you empower individuals within your organization to take part in identifying and implementing solutions that drive positive change.
Let’s explore some examples of business process improvement in action.
While the nature of the business processes is different, the method of improving them is the same.
Any idea how?
You guessed it, the 6-step method outlined above.
Check it out.
Larry’s Lawn Care is a landscaping business that provides lawn treatment services.
Business has been booming for Larry’s Lawn Care and they are getting several quote requests per day.
Larry finds himself spending at least 30 minutes manually responding to each quote.
Larry thinks his manual and time-consuming quoting process causes:
- missed opportunities
- revenue leakage
Following the business process improvement manifesto, Larry begins to map his quoting process.
Once the business process mapping is complete, Larry begins to identify room for improvement.
He thinks that templates for his quotes, a pricing matrix, and auto-filling customer information can help speed up the process.
Larry believes that automating his quoting process using software will enhance operational efficiency.
With so many quoting software free trials available, Larry decides to test his improved quoting process.
After just one week quote automation was able to generate accurate quotes in a fraction of the time it would take manually. This reduced the number of quoting errors and increased productivity.
The improvement also allowed Larry to provide more personalized and competitive quotes.
Because Larry was able to quote faster and more accuracy customer satisfaction levels raised.
This business process improvement also boosted profit margins through increased sales effectiveness.
Email outreach is a common practice used by businesses to connect with potential clients or customers.
But, the effectiveness of email outreach can vary depending on the approach taken.
Mark from Mark’s Machinery uses cold email outreach to book sales calls with prospects.
Mark finds that he spends tons of time creating and sending his cold emails.
He would love to optimize his outreach process so he can spend time on higher-leverage tasks.
Mark begins by mapping his current process:
- Find a prospect on LinkedIn
- Find the prospect’s email address
- Create a personalized email for the prospect
- Send the prospect the email
- Manually follow up every few days
He notices that there are a few inefficiencies he can refine:
- Bulk find prospects and emails
- Use AI to personalize emails
- Use email automation software for follow-ups
Mark integrates his refined business process into his workflow.
As a result, Mark begins to notice he can send more outreach emails in less time.
The automated follow-up emails ensure Mark doesn’t forget to check in on potential prospects.
By applying business process improvement, Mark optimized his email outreach strategy.
This increased the number of sales calls Mark was able to book for Mark’s Machinery.
Mark further enhanced the efficiency and impact of his email outreach by iterating on his approach over the course of the year.
Recruiting is a crucial aspect of building a successful team.
Applying effective strategies and continuous improvement methods can ensure a smooth hiring process.
Alex from Alex’s Attractions needs to hire large volumes of employees for the busy summer season.
In the past, the hiring process has been very laborious and unorganized due to all the moving parts.
Alex wants to refine the current hiring process so they can hire more people faster.
She also wants to provide a better candidate experience.
Alex begins by mapping out her existing process for recruiting.
It looks like this:
- Create job requirements
- Post job on job boards
- Receive applications through email
- Record best applicants on spreadsheet
- Conduct interviews
- Choose applicant(s) for position
Alex’s main paint point is being able to track and communicate with applicants.
After some design thinking workshops, Alex decides the best way to refine the process is to use an applicant management system.
This system will:
- Streamline the application process using automation
- Summarize application data for quick decision-making
- Improve applicant experience
- Speed up the hiring process
By centralizing the sub-processes and data the overall business process becomes more streamlined.
Alex’s Attraction partners with an integration company to build this system for them.
After a few champion users test the system the new recruitment application is rolled out.
Alex ensures that feedback is gathered from front-line users and iterates on the initial implementation when needed.
Over the few months, Alex’s Attractions is able to swiftly recruit its summer workforce without a hitch.
Business process improvement has been a game-changer for me and my clients.
There’s nothing better than integrating a freshly optimized process into your business.
Even a subtle change to a high-volume process can send ripples through your organization.
By following these core business process improvement methodologies you can skyrocket your business and never look back.