When it comes to improving your business it sometimes appears that we are overlooking the obvious, which is to focus on the basics:
- Improve quality & consistency
- Reduce customer lead time
- Improve cash flow
- Reduce costs
- Increase profit margin
- Improve employee morale
With so many options that range from IT solutions and process automation to Lean and Six Sigma promising to help business achieve these objectives, how does one know where to start?
It depends on where you find yourself in the performance improvement hierarchy. Business improvement methods vary depending on the performance improvement maturity of an organisation. At the base you start with your core strategy, infrastructure such as HR, finance, IT, communications, and your corporate culture.
Basically these components are in place in every mature organisation. For most businesses ready to move to the next level, the number one starting place on the performance improvement hierarchy is to standardise andistabilise the way you deliver customer value. By deploying process management and standardised work you can standardise your approach to the routine tasks that are required in order to create customer value. When you do this you make it easy for your employees to serve your customers and deliver value on a consistent basis.
By adding visual management, that is posting meaningful measures at the end of every day, you can measure and report your effectiveness at meeting your customer’s needs on a daily basis. You can compare visual management to reporting the score of a sporting game such as AFL. A regular report of the progress of each team is what engages us in the game. Every employee can see how the firm is performing in relationship to what the customer is expecting.
You are thereby enabling your employees to identify opportunities to improve the quality, cost and speed of serving the customer. Outlined below is a process maturity model that can help you evaluate how effective you are at managing your business processes or standardised work. Select the level that best describes your company.
Level 0: Ad hoc work: no or party documented, processes/work.
Level 1: Documented process/ work: ISO standards, Business Process Management System (BPMS) was developed, but not deployed.
Level 2: Documented process/work: Partly deployed, but inconsistent
Level 3: Documented process/work: Fully deployed, consistent
Level 4: Documented process/work: Fully deployed, consistent, universally used, measured and automated
Level 5: Documented process: Fully deployed, consistent, universally used, measured, automated and continuously improved.
By taking a process approach to stabilising around best practice, you can improve your business productivity by a minimum of 20% to 30%. By reporting meaningful information to your employees you can ensure better performance in meeting your customer’s expectations and improving employee morale.
By focusing on the basics, profit takes care of itself.