Lean Processes Improve Your Business’s Health
If you overate on Thanksgiving, then you might be thinking about the upcoming holiday season with an eye to avoiding excess weight gain. But, did you know that If you’re a business owner, there’s another area where you need to pay attention to excess weight…and that’s in your business! That’s right! Keeping your business running lean and fit is every bit as important to your business as keeping your body lean and fit is to your health!
Let’s look at some of the things that add excess weight to your business, hindering your business’s health and even reducing profits.
- Dissatisfied Customers
"A happy customer tells a friend; an unhappy customer tells the world.”
This is an old business adage that’s been around for many years, but that’s taken on a whole new meaning with the Internet and the proliferation of social media. Dissatisfied customers truly can tell the world with a few clicks of the mouse. Bad reports on the web add unhealthy weight to your business by discouraging new customers, taking attention from new business generation to ‘fix’ complaints, and disrupting workflow.
RX for Staying Lean: Focus on keeping your customers happy. Ultimately, what all customers want is value. Value creation occurs when the quality of services received is perceived as high compared to their cost. Know what your customers want and set up processes that enable you to provide what they want better, faster, and cheaper.
- Inefficiencies in people and processes
As long as the work gets done, most organizations don’t look very closely at ‘how’ it gets done. In fact, often the assumptions we make about how the work gets done don’t reflect reality at all. Moreover, when it comes time to train a new person to perform the tasks, the steps are not documented, making the training process more arduous for trainer and trainee alike. Just ask an outside observer to observe the work process and see if he/she could repeat it without assistance. Chances are they can’t.
RX for Staying Lean: Document, improve, automate or outsource processes. Once you know what the current workflow of a process is, look for steps in the process that don’t directly create value for your customer. You may find that with some ‘back-office’ processes there is no direct value to the customer in any step of the process. Steps or processes with no direct value to the customer should be eliminated in one of two ways: (1) If the process as a whole benefits the customer, then manage, improve, and smooth your process flow to eliminate all non-valued-added activity (e.g., wasted time, wasted movement, wasted inventory due to overproduction, customer delays, waiting for approvals, delays due to batching of work, unnecessary steps, duplication of effort, and errors and rework); (2) If the entire process provides no direct value to the customer ( e.g., payroll, accounts, maintenance of HR records and other back-office activities) outsource it.
- Inability to Make Use of Data
All companies know that in order to grow and thrive, they must increase productivity, reduce costs, improve market share, increase competitive edge and reduce waste. The problem occurs when it’s time to collect and measure data to determine what’s working and what’s not. Often the data is maintained in separate departments, in separate systems, with no simple way to gather the data into a meaningful, centralized and accessible location. Many times the data is ‘unstructured,’ which simply means that there is no easy way to extract the data because it’s not held in a searchable database or spreadsheet.
RX for Going Lean: Centralize and automate. Use people effectively at all times by establishing automated electronic workflows that ensure that documents are at the right place at the right time. When you define, measure, analyze, implement and control processes you can often reduce or reallocate staff to more customer-centric tasks. Use management-level reports to spot trends early and make corrections fast to maintain and improve market share. Oversee customer-facing activities to reduce variables, strengthen and improve consistency across the entire customer experience. Run lean and reduce the drain on resources by eliminating excess work processes that add no value in the eyes of the customer.
Put Your Business on a Diet!
Dieting can be a drag when it means cutting out the foods you love, but when we’re talking about reducing the fat in your business, the right approach can make it far easier than you think. Just as a personal trainer can help you with your fitness program, a knowledgeable process improvement consultant can start your business on the path to lean process improvement and fiscal fitness.