The “Process” Component of a Successful Business
My current blog series is focused on my Five Ps of Business Success philosophy and the business operating system model I’ve developed around it. These five components – People, Product, Pricing, Process, and Planning – not all of which are financial, are integral to both your strategic plan and day-to-day operations.
The Process component of a business is quite often largely neglected, yet it is the key to everything your business does, from realizing your vision and fulfilling your mission, to reaching your goals and operating efficiently. In previous blogs I’ve discussed the WHY behind your business. Process is the HOW. As Gino Wickman states it in his book, Traction: Get a Grip on Your Business, Process is about finding your way.
Would you head out on any trip, long or short, without knowing the route you need to take in order to reach your destination? Probably not! Yet many businesses devote little time and attention to developing, refining and documenting their processes. It’s easy to get caught up in day-to-day details of running your business and put process development on the back burner. But each day that you neglect the Process component of your business costs you money, time, efficiency and control.
Wickman recommends that identifying your company’s core processes be an activity of your leadership team, not only for input but because your key people need to agree on how to refer to your core processes. He cites six core processes that are common to most businesses.
- The Human Resources (HR) Process: How you find, hire, train, manage, promote, retain and fire people
- The Marketing Process: How you get your message to your target audience, generate interest in your product or service, and develop prospects
- The Sales Process: How you convert a prospect into a customer
- The Operations Process: How you make your product or provide your service to your customer (Wickman notes that there are likely one to three core processes, or sub-processes, with operations.)
- The Accounting Process: How monies flow in and out, and how they are managed
- The Customer Retention Process: How you take care of customers after delivery of your product or service, and how you cultivate loyalty and get referrals from customers
Core processes need to be identified for every activity of your business – and you need consensus within your leadership team about what they are and what they’re called. Next, they need to be documented.
Wickman suggests that the person on your leadership team who is accountable for each process be the one to document the details of that process. For example, the head of Human Resources would document the HR Process using these simple steps:
- Follow the 20/80 guideline – document the 20 percent of the specific processes, or procedures, that produce 80 percent of results, rather than documenting every minute detail.
- Capture the basic steps so that those who are following your process don’t skip important steps and always stay on purpose.
- Document with the purpose of cultivating consistency and efficiency within your organization.
- Allow for some flexibility within the 20/80 guideline as some processes may require additional detail.
- Avoid redundancy and keep the document as streamlined as possible, using bullet points and checklists that can be easily referred to when possible.
As you are documenting your company’s processes, consider the following points and include language to address them:
- Are your written processes efficient and effective?
- Who does what, when and how?
- Do your processes produce optimal quality and quantity?
- How do you measure each process? Do you benchmark?
- Are your written processes used in training?
- Do your processes maximize time and minimize cost, with a focus on quality?
Once each process has been documented, package them. Wickman suggests titling your document with your business name and the word, “Way” – for example, “The ABC Company Way.” Publish them in hard copy, on your company’s intranet, or however they are most accessible to your people for reference and training purposes.
Take the time to effectively implement your new “Way” within your company. Consider having a company meeting or Lunch-n-Learn event to introduce your “Way” to your staff. Creating a visual, or infographic, that summarizes each core process gives a clear overview without being overwhelming. Enthusiastically present how defining and following your processes will create improvements for everyone and boost the company’s productivity as a whole. Provide training rather than leaving it to each individual to sort out what applies to them. Then manage your people and their activities according to the processes. This documentation provides a solid foundation for operating your company yet one that is dynamic – it can grow and change as your business evolves.
Strengthening the Process component of your business will give you more control. It will make troubleshooting easier when problems arise. It adds value to your company and provides you with more options for growing your business, maintaining it, or even selling it. You’ll find that taking the time and making the effort to define and document your “Way” is one of the greatest investments you can make in your business.
As the former owner of a multi-million dollar company, I’m a CFO with a CEO perspective, which provides me with a unique understanding of the Five Ps of Business Success and how each contributes to a company’s overall performance. I’d welcome the opportunity to help you take the important step of identifying your “How” and documenting the “Way” to get you on track for growth and greater success.