The Profit is in the Details of your Business Process

A flow chart is a simple way to improve the efficiencies of your business process and to increase profit.

Lind Hanson

Most companies employ a number of tactics to improve their business operations and get more "bang for their buck." Tactics organizations employ usually get down to examining, analyzing and improving business processes. Over sixty years ago methodology was developed to focus on charting how work was performed on the job to find out where money was being lost. Today companies, especially smaller ones, often overlook process improvement which is proven to increase profit.

We are all creatures of habit. When something works, we tend to repeat it over and over again. But over time people add their own spin to their work and it can reduce efficiency in a company. With a focus on serving customers, companies need to learn how to be more efficient by uncovering waste. For example, in sales there is usually unnecessary time spent with customers that does not provide them with added value. In addition, there is wasted time spent with a prospect who will not become a customer for your company. Analyzing processes will help companies understand what is working well and what needs improvement. This article shows how to use a simple charting method that was developed in the early 1600's by Alexander Flow.

In the example of sales, process improvement enables companies to bring immediate value and results that will impact top-line results without further investment in people or technology. In other words, companies are clearly able to see what needs to be changed to optimize their existing resources. This is possible by developing what we call a process map.

A simple way to get started with a process is to develop a top down flow chart as outlined in the steps below. Before you begin be sure to explain to the people involved that you need their support to help reduce costs and make them more efficient. Ensure they do not feel like this is a way to eliminate their job or they will not cooperate.

  1. Select a process. Choose a process that is being completed by someone in your firm who does the work - the person (or persons) who does the work day in and day out. For example a sales, billing, or inventory process.
  2. Break the process into macro steps. In sales it could be prospecting, qualifying, selling and closing.
  3. Draw blocks across a page of paper (flipchart paper works well). Each block or box from left to right across a page will contain the macro step in the process.
  4. List the sub steps. Below each block identify the sub-steps for each macro step. For example, in qualifying, the sub steps could be: research and assess account potential, identify decision-maker and other players, and develop account plan.
  5. Assemble a work group in a large room with lots of sticky notes, markers and wall space.
  6. Retain or appoint a facilitator to lead the group. Ensure the facilitator is prepared to enforce good, basic meeting etiquette with no finger pointing.
  7. Have the group review each step and sub step to ensure you have captured every step in the process. Agree on what to call each step. Write down any changes on the flipchart paper or in big letters on the sticky notes with a marker.
  8. Agree on who does each step or who should do each step. Pick a functional title (salesperson, accounting, etc.), rather than "John" because people change.
  9. Confirm the cross functional interactions between this process and other work groups (how a process moves from sales to credit to accounting to purchasing to inventory to order fulfillment, etc.).   Use a different color of sticky notes than the ones you used for the steps and sub steps.
  10. Come to a consensus on the time spent on each sub step and mark it on the flipchart paper. When you begin associating time with costs you begin to see where there are delays, rework, rejects and where you are losing money.

Companies using detailed process maps are getting results quickly. They also have another advantage. The process maps are a great help for training new and existing employees and employees who have been promoted or transferred. Perhaps the most important by-product that I've seen with process mapping is giving your employees a new perspective on their work while powerfully illustrating inefficiencies and gaps. It prepares the work force for change by presenting an objective look at the potential benefits of moving beyond the status quo. Some companies believe that getting departments together to collaborate like this results in increased productivity. There certainly will be a greater understanding of everyone's jobs.

In the midst of an economic downturn, it is the perfect time to review the processes your employees use to serve their internal and external customers. In summary, process mapping provides these critical benefits to any organization:

  • It enables the team to tap into and trace the paths within your business to the customer and back again to the company.
  • It ensures that the team can pull together to create real value for your customers while building profit for the company.
  • It helps individuals understand and accept organizational changes across functions.
  • It provides the framework for measuring performance goals, which people can set for themselves.

There is a lot of detail in a process map, because each process is very detailed. But it is worth the time because there is profit in the details.

Linda Hanson, CMC, is a certified management consultant and author of 10 Steps to Marketing Success. She writes, speaks and consults on marketing, management and customer service issues and can be contacted at Sign up for her free newsletter The Superior Performance Report.