Do you ever just get tired of things going wrong in your business? Mistakes in order entry. Mistakes on the shop floor. Mistakes in handling a customer complaint. Mistakes in fixing mistakes. The list goes on and on.
One of a client's major goals for his business is, "I want to be confident that things go right all the time -- whether I'm here or not." Worthy goal, I'd say.
I started asking questions, and learned that a lot of things went wrong because people took short cuts -- bypassed what the owner thought were essential steps or checkpoints, and got into trouble. Like most businesses, however, they eventually got it right, although usually at a higher cost and with some delay.
I said, "So we have time to do it over, but we don't have time to do it right the first time?" "That's a fair statement", he said. I asked, "Why don't we just focus on doing it right the first time?"
As we started working on that, we discovered there wasn't actually a definition of what "right" was. He had an idea of how he wanted things to work, but it wasn't written down. Things that were written down were in various long text documents, and not very well indexed so anyone could find them. He was operating in a "process-free environment." Actually, many businesses operate that way, and it's one reason business owners say "I just can't be away from the office." What that really means is they own the business process knowledge base personally and they have to be on hand to direct people, to catch their mistakes, and to make most of the judgment calls personally. Tough way to live.
The antidote to this problem? Becoming a process-driven business. Creating a culture where business processes are well-defined, well-documented and then instilling a process discipline throughout the workforce. You have not only a well-oiled machine that makes money whether you're there or not, but also an increase to your business valuation. Yes, your business is worth more if you can demonstrate to a buyer that it's documented and disciplined, vs. a day-to-day drama of near misses and diving catches.
This client's business, like most, had about 6 or 8 key, core business processes, so we set about documenting those, one at a time. It's a custom "job-shop" type of business, and those include:
- Selling System -- What's our selling process?
- Sales to Design handoff -- what is required of the sales person to get a secured order into the design process?
- Design Process -- How do we design projects and how do those designs get approved?
- Design to Production Handoff -- Sometimes called "Release to Production". What is required of the design department and/or sales person to move a job to the floor? What has to happen before we start cutting metal and spending serious dollars on the project?
- Release to Ship -- Who has to sign off on the finished order, authorizing its shipment to the customer? Is the customer involved in that process?
- Field Operations -- If we do some installation or setup work, how does that process work?
- Billing and Collections -- When and how do we bill? What triggers that without any delay?
We did the same for several more of these key business processes, and things started working better. What we're working on now is handling process failures -- what happens when one of these processes breaks or (far more frequently) someone decides to skip some steps and the process fails.
That's the next step on this journey -- handling process failures.
To forward this to a friend, Click Here
Terry Weaver
Chief Executive Boards International
http://www.chiefexecutiveboards.com/
TerryWeaver@ChiefExecutiveBoards.comhttp://www.chiefexecutiveboards.com/
No comments:
Post a Comment
Comments to CEBI Blog articles are moderated to ensure member privacy and control spam. All comments except those deemed inappropriate should post within 24 hours.