Improved Processes Enhance Profits

Tips for improving your businesses processes and enhancing profits

As a female entrepreneur you’ll have been through the many steps of setting up a new business from designing your product/service to the detail of the business processes you need.

Processes are fundamental to any business, but they can’t be set in stone. They will need to change as your business grows and also in response to changes in the business environment.

Processes that do not work can lead to numerous problems, such as: complaints from customers, frustrated team members, or work getting duplicated or not completed.

As a business owner, you may have come across such negative outcomes but not know the root cause. Correctly identifying the problem is a common challenge but it is also the first and most important step towards finding a resolution and improving processes.

Broadly speaking, there are two main methods for identifying the solutions your business needs:

Problem-solving session
Customer journey/value stream mapping

Let’s look at both so you can decide which will work best for you.

Problem-solving session

Problem-solving sessions are ideal for when you already know what the problem is but are unsure how to solve it.

The first step in a problem-solving session is to create a commonly understood/agreed description of the problem:

What the problem is ‒ a simple problem statement
When the problem has been seen
The magnitude of the problem
The impact/ consequence of the problem (why is it important)

You may end up with a specific description, such as “We have lost 17% of our clients in the past year”, or a vaguer one, such as “Our profitability is going down”. It doesn’t matter too much whether your description is specific or vague, as long as everyone is agreed and there are no assumptions about causes or solutions at this point.

Once you have a clear description of the problem, it’s time to measure the extent of the problem. To do this, you will need a comprehensive list of value elements (anything that affects your costs or benefits your clients). This is a good time to involve the wider team, including a representative sample of people who experience the issue.

One way to identify the reasons that the problem is occurring is to use a fishbone diagram to identifythe possible causes. For each branch (i.e. each possible cause)list every element that is involved in that branch.

The reasons for the problem can generally be grouped as 8Ms or 8Ps:

The Ms

Machine (technology);

Method (process);

Material (Includes Raw Material, Consumables and Information.);

Manpower (physical work) / Mind Power (brain work):

Measurement (data from reports, checks and controls);

Milieu / Mother Nature (Environment).

Management / Money Power;

Maintenance

The Ps

Physical Evidence;

Personnel;

Place;

Product or Service;

Price;

Promotion;

Process;

Productivity & Quality

Once you have clearly articulated the problem and discovered the extent of the impact it is having, the next thing to do is to identify some solutions and immediate fixes, perhaps through a workshop where the team can brainstorm.

The outcome of this workshop will be a range of potential solutions which you can test and implement. It’s always a good idea to prioritise the solutions based on their likely impact and the amount of time, effort and/or money they require.

Customer journey/value stream mapping

If you are less certain about what the problem actually is, or want to be more comprehensive in your solution-gathering, or are seeking to improve processes in general, a customer journey map or value stream map is likely to be very useful.

The idea of a value stream map is to visually capture all of your current processes down to the last detail. From there, you can work through each process to ensure it is adding value and you are delivering on customer expectations. Anything that doesn’t add value to the business or customer is either removed or changed.

The first step is to create a comprehensive list of all your value elements ‒ anything that affects your costs or benefits your clients. If it helps, think of these elements as client touchpoints ‒ times at which customers interact in some way with your business.

The next step is to gather data around both the monetary and time value of each element; how much are they worth and how much do they cost? How long do they take? How much does this time cost you? As you go through each element, try to identify those that:

add value for the customer ‒ things customers are willing/wanting to pay for
are business non-value-added functions ‒ things your business needs to operate but which don’t add value, such as regulation and compliance costs
do not add value ‒ waste to be eliminated.

From this point, it should be fairly straightforward to identify any processes that aren’t adding or delivering value and begin investigating whythey don’t deliver value.

Perhaps sales have become used to promising a two-week delivery timetable, for example, but have stopped passing this assurance on to the delivery team. The product/service is then delivered after four weeks instead of two and the customer is upset. The customer may understand, however, and fail to report their experience back to your company. Here you have a hidden issue that is undermining your business and removing value from your processes.

Get the whole team involved in this discovery stage to help uncover these hidden issues. You could even start with a customer survey to identify any loss of value from your clients’perspectives.

When you have identified the problem(s) it’s time to get on with finding solutions. Again, a team approach can be very helpful – don’t reject any idea out of hand. Take a look at each and consider if there is anything in there that may help. Ultimately, the idea is to make your processes as lean as possible, to ensure they add value, and are all completely aligned. Some waste processes can be immediately eliminated while others will need improving through some sort of change in order to deliver value.

Another option is to combine the two methods described above. Start by writing your problem statement, then gather client feedback and complete your value-stream mapping. Then you run a problem-solving session on each touchpoint in your value stream map in order to ensure that every touchpoint delivers maximum value.

Of course, regardless of the method used, the trickiest part is being objective enough to accurately identify the root issues. To help overcome this issue and make the process faster and more effective, organisations will often hire an external consultant to analyse their current processes, identify issues and offer tried-and-tested improvements. They know all the little questions to ask and the steps to follow to drill into the minute details.

Consultants will also be experienced in helping other organisations solve challenges and will, therefore, know what works in different situations.

If you don’t have the budget for a full-time consultant, you can always use platforms like Consulthon in order to get some free ideas around what the problem may be and how to approach the issue from expert consultants. You can then arrange follow-up calls or meetings with the consultant with the best approach, allowing you to check-in with an expert at key milestones along the way.

Given the current situation of your business you’ll know which method is the best one for you. Getting into the habit of addressing processes issues and find solutions to the problems is important especially as your business grows and you have more calls on your time. What’s most important is that your business runs smoothly, your customers are happy, and your brand and your profits continue to develop positively.

ABOUT THE AUTHOR

Marieta Benchevais co-founder of Consulthon, a UK Management Consulting Expert Network. Businesses can raise a Business Challenge and the network’s experts will brainstorm solutions. After selecting the answer they like the most, the business can book a paid one-hour advisory call and deep-dive session with that consultant. All the consultants are vetted by Consulthon and the platform offers businesses access to a wide range of skills, in a variety of sectors and countries.