Start With the Word Straight From the Customers’ Mouths

Remember that customer who, with a simple complaint that got escalated, started this whole process? It’s time to contact them (and others) and get more information on what really matters to them. We’ve found being able to engage with your customers, (and their customers) is the most efficient way to fine tune an organization’s process. Many organizations make assumptions about what their customers truly value about the relationship. Perhaps you think speed is more important than perfection, or value is more important than selection. If you haven’t asked your customer lately, then it’s just a set of assumptions. Using invalidated assumptions in a value scoring method can be wasteful and even dangerous to your brand. Remember: the speed of changing needs / trends is real in every industry. If you think yours is an exception, check again, really listen and learn. So, before you embark on any process improvement work – refresh your intel on customer needs and wants.

Starting to Stop – Eliminate Non-Value-Add Processes and Process Steps

Assume that a certain percentage of the processes and procedures you currently follow are a complete waste of money, time and talent. Don’t set your sights too low on this one – it could be as high as 50-70%! A Boston-based research firm has tracked process effectiveness across industries and internationally for over 25 years. Their findings: year in and year out, over 70% of process steps in any given process are non-value add. Even considering that maybe 20% of process steps are regulatory requirements, GAAP, etc. – that still leaves at least 50% of non-value add steps. Do you still think this is not a serious business topic to discuss?

Whether it be through risk aversion, risk mitigation, or simply to address a short-term issue process, steps simply get added – seemingly in the middle of the night! We call it Process Step Growth – a distant cousin of Scope Creep. Did we really do a good job of putting these new process steps through some kind of value filter? Was the risk that was mitigated worth the lifelong cost of the new process step, or was the step added to “Make the legal team happy?” Has anyone recently asked the question “Does the problem this process solve still even exist?” I’m guessing you wouldn’t be surprised to hear that our client work shows that the typical process owners aren’t able to clearly articulate the raison d’etre for every single step in their process. If that’s true in your organization, it’s time to start stopping that work! Here’s a tip – your employees are simply dying to tell you what those unnecessary process steps are – all you have to do is ask them! Using MBWA (Management by Walking Around)– start asking the question of your employees who are closest to the customer – “Can you trace everything you do back to benefitting the customer?” Prepare yourself – the answer will likely be “no” and it just might open a floodgate of new ideas (and some old grievances.)

Fine Tune the Piano – the Concerto Will Get Rave Reviews From Your Employees and Customers

Once you’ve started to stop those non-value-add steps, you can truly home in on those steps that have potential. Fine tuning process is hard work – you’ll likely have debates between team leads, platform and product owners. And that’s where the fun begins. A civilized and well facilitated debate like this brings not just a fine-tuned process, but something that could be revolutionary to your business. We commonly use the “Five Whys” with our client in these conversations. As we dig deeper into the genesis story, ownership rights and campfire history of process steps, we often see a burning platform emerge. New purpose, new utility, new ownership and a direct link to value – that’s the kind of process you want in your organization!

Be on the Lookout for Process Creep

Once you’ve reset the stage on process, don’t resort to old habits and thought patterns. Make sure you hold each other accountable for evaluating the efficacy of a new process. Here’s an example: one of our clients was keen on implementing a new “Financial Control” step in the Expense Account/reimbursement process because there were some individuals in the organization who were not appropriately documenting a specific kind of expense.

The proposed solutions added 2-3 process steps for the entire organization. When we asked the originator of the idea to estimate the organizational cost associated with the process change, then estimate the actual cost of the risk, we found that the cost substantially outweighed the risk – over five to one! It didn’t even come close to paying for itself. Then, the CEO turned to the originator of the idea and asked: “Can we identify those in the organization that your proposal is trying to address?” And when the answer of “yes” came, he knew his next step was to address the problem individually rather than have the entire organization take on the burden for an isolated incident. Again – always ask – “what problem are we trying to solve?” or “what opportunity are we trying to identify?” before implementing a new process. Effective processes ought to incorporate sufficient intel and metrics to reveal both emerging issues and opportunities.