SOPs

The Secret Sauce to Success: Business Process Improvement

Business Process Improvement is the key to long-term growth and boosting revenue for any business.

Introduction

Think about two competing organizations that provide similar products or services at different prices.

Company A provides unrivaled quality; they’re the best at what they do. But service is slow, customer support is lacking and business processes run amok at the first sign of trouble. 

Conversely, Company B offers good quality, consistent service and streamlined operations. Which one would you bet your money on? Chances are, you chose the latter. Good job. 

When organizations don’t focus on optimizing their business processes, customers are often left dissatisfied — even if the quality of deliverables is top-notch.

And some companies just do it better than the rest. To some, it may seem like a hack. News flash; it isn't. 

There is a method to it, known as business process improvement. 

For example, American Airlines famously saved over $40,000 a year just by removing one olive from each salad.

This is a perfect example of mindful business process improvement. It is the main differentiating factor between an industry leader and the lower strata; between an extremely successful business and one that’s barely surviving in the market. 

(Source)
(Source)

Either due to lack of awareness or because they’re self-consumed in maintaining the status quo, businesses often shut the door to any scrutiny when it comes to their business processes.

Most of their time just goes into maintaining current inefficient ways of working, which can hurt their bottom line and customer retention. 

But let’s be real. Running a business is no easy feat.

And when you’re hard-pressed for time, it’s easy to get blindsided by competitors. To prevent this from happening, business process improvement is non-negotiable.

Not only does it help streamline your processes, but it’s a great way to optimize resources and enhance customer experience, 

But before we tell you how to implement business process improvement, you need to know the basics. So let's jump in. 

What is business process improvement (BPI)?

Business process improvement is a method where organizations approach, identify, and evaluate the inefficiencies in current methods of functioning. BPI can help an organization:

  • Redesign existing processes: Once a bottleneck has been identified,you can brainstorm for ways to remove it and change your processes accordingly.
  • Improve operational effectiveness: By optimizing processes, business productivity shoots up, leading to higher efficiency. 
  • Enhance productivity and workflow: Encourages cohesive collaboration where everyone is on the same page and pursuing the overarching goal. 

Regular evaluation, correction and adaptation to ever-changing demands are integral aspects of growing and improving a business. BPI gives you the framework to do this. But to implement it, you will first need to classify all business activities into one of the following three categories:

  1. Operational: These include all daily and repeatable tasks that are instrumental in running the business. For example, in a bank, processes like opening an account, depositing cash and sanctioning loans occur everyday. Similarly, for a D2C brand that sells furniture, manufacturing would be an operational aspect.
  2. Management: This has to do with the human resource development and supervision of the operational part of the business. It includes budgeting, corporate governance, and other policy-related decisions which help the business run smoothly. Management deals with improving collaboration and communication among different units of an organization as well.
  3. Supporting: Anything which doesn't go in either of the previous two categories is mostly put under the support bracket. It could include processes like recruiting, technological support and accounting.

There are a host of methodologies you can follow to improve and optimize various aspects of your business through tangible steps and frameworks. Let’s look at some of the most popular ones. 

4 business process improvement methodologies

Improving your business operations requires multiple rounds of exploration, scrutiny, evolution, and adaptation.

It's a never-ending pursuit, often based on the methods of BPI. These methodologies are tailored to resolve various inefficiencies in operational, management and support activities of any business.

Here’s all you need to know about them: 

Agile management

An incremental approach to planning and guiding, agile management breaks a process—or several processes—down into smaller units. This makes it easier to manage operations without the risk of feeling overwhelmed. Traditionally, there are five phases of agile management:

  • Envision: Doubling down on the vision of the project.
  • Speculate: Includes brainstorming and collaborative thinking about the task at hand.
  • Explore: Focuses on implementing new changes and understanding their impact.
  • Adapt: Phase for modifications to any processes or suggestions for improvement.
  • Close: Determines end-point and result of process improvement

The defining characteristics of this methodology include segmentation and prioritization for improved efficiency. This leads to goal delivery in a time-bound manner. The agile method is all about delivering maximum value against business priorities.  

Six sigma & lean thinking

Six sigma was designed to improve manufacturing quality by removing the causes of defects and minimizing other variables to streamline the business process.

Nowadays, its application is beyond just the manufacturing sector. In fact, businesses from all industries now apply six sigma to improve business processes efficiency and optimize resources.

Six sigma relies heavily on data and statistics-driven analysis. It removes the likelihood of error and eliminates defects and inefficiencies, while simultaneously improving profits.

With this methodology, companies can resolve inefficiencies in any business process using the DMAIC framework, as shown below: 


(Source)
(Source)

There is one more framework called DMADV. This is used to introduce new processes at six sigma quality levels. Here, the first three elements—design, measure and analyze — remain the same. The last two are replaced by “design” and “verify”. 

Another interesting modification in six sigma is lean thinking. It involves removing any process that doesn't add value to the end customer.

This means each activity should bring a certain value to the table, raising the company's productivity, and customer satisfaction.

Total quality management (TQM)

The process of continually detecting and reducing errors in business processes — especially supply chain — while prioritizing customer satisfaction.

Though this is similar to lean thinking, this approach focuses on long-term focuses on long-term optimization. The core of this methodology is to keep customers at the heart of everything.

Unlike the other methodologies, TQM doesn't rely solely on statistics and data.

It adds intangible variables like commitment from employees and culture on top of this. There are primarily five broad tenets of TQM:

  • Commitment and understanding from employee.
  • Quality improvement culture.
  • Focus on customer requirements.
  • Continuous improvement in processes.
  • Effective control.

Think of this as a generalized approach — the frameworks are not set in stone, except for a few core principles which promote business process improvement.

It calls for commitment and dedication to provide value and impact customer satisfaction; not just from the high managerial positions but from everyone involved in the process.

This framework is highly adaptable, which means it will suit a wide variety of businesses. 

Theory of constraints (TOC)

This BPI methodology is perhaps the most effective in solving a problem and improving business processes in a limited time frame.

It was introduced by Dr. Eliyah Goldratt and put forward in his book The Goal. Based on the principle of finding problems and bottlenecks, the idea is to begin by finding the limiting factor.

In other words, the constraint due to which the process is inefficient or not able to achieve a certain goal.

With this methodology, you will need to take a more focused approach to resolving an issue and overcoming inefficiencies in a precise manner.

A host of business problems can be resolved with the help of TOC’s five focusing steps, which include:

  • Identify the constraint: Zero in on the bottleneck that’s causing delay or process inefficiency.
  • Exploit the constraint: Quickly improve aspects of the problem with existing resources and manpower.
  • Subordinate everything else to the constraint: Review process activities to ensure they are properly aligned with the constraint for maximum business functioning.
  • Elevate the constraint: In case the constraint hasn’t been eliminated, brainstorm ways to control it, including capital investment.
  • Find the next constraint: Look for a new constraint and repeat the cycle.

Theory of constraints is an ongoing process, and involves a repetition of the above five focus steps.

It's particularly helpful in solving inefficiencies where there are overlapping business processes.

By remedying one bottleneck at a time, this approach gradually and steadily makes the entire ecosystem robust. 

6 steps to getting started with business process improvement

If you haven't applied any of the above methodologies before or are new to implementing business process improvement, then it might seem daunting and confusing (or downright disorienting) right now.

Some of these approaches may also seem too technical for your business needs. 

To cast away your apprehensions, start small. It's important to be patient and make changes in a step-by-step manner.

Here's a simple guide to help you start on your journey to elevate your business to the next level.

Map your business process 

The first order of business is relatively simple—pen it all down. Create mind maps of all the processes in your business, irrespective of the department. This will help you understand how different tasks and departments overlap with each other. Based on this, you can evaluate which tasks to focus on. Ask yourself questions like: 

  • Which of these takes top priority? 
  • How do these processes create bottlenecks? 
  • To what extent is overall productivity affected? 

A well-organized, planned and formatted document can help you understand your business problems in a holistic manner.

This big-picture view will ensure you and your team focus on the right things that actually impact revenue and productivity.

Analyze for problems 

The next step is to view, analyze, and adjust the underlying structure and processes in your business. There are two ways to do this: 

  • Value-added business process analysis: Analyze every element in a particular process and evaluate whether it adds or detracts value from the overall task. 
  • Root cause analysis: Understand why a problem recurs, and brainstorm potential solutions. Say your training sessions for new hires are time-consuming and labor intensive. You can fix this problem by automating the training sessions with process documentation tools like Scribe. 

List all the processes that create a bottleneck and lead to inefficiencies.

This will help you get a clear view on what needs to be kept, changed or eliminated.

You can also try defining the current outcome and desired outcome of a particular task. Then, analyze the reason there is a gap between the two. This method can also help identify constraints easily.  

Redesign your strategy 

Revisiting your strategy and creating a new one is as crucial as finding the problem itself. Without a relevant and customized solution, your inefficient process will continue to wreak havoc in revenue generation and business productivity. 

Brainstorm ideas and create a list with pros and cons for each. To check for viability, conduct impact and risk analysis to understand the implications of each solution and double down on the right one.

Don't forget to get feedback from all relevant stakeholders before you start implementing. 

Implement & communicate change 

Once you’ve received the go-ahead, it’s time to execute your idea. This is when you need to make a conscious effort to communicate the impending change to all your colleagues, so they can adopt it as intended. Always remember: wrong execution can make even the best solution ineffective. And one of the biggest problems while executing is communicating your plan to everyone involved.

Take stock of software and tools currently available in the market that promote collaboration, plan building, and communication.

Asana, Slack and Notion are a few popular examples that can help out here. 

Review the process 

All your efforts wouldn’t mean much if you don't follow execution with proper review and analysis.

BPI is not a one-time solution. You need to keep going over your processes with a fine-tooth comb, especially when new ones are being implemented. 

Continuously monitor your operations to see if everything is running smoothly.

If you run into any roadblocks, understand why they happened. Then, fix it. Present your findings to senior management and ask them for input. You can also ask your colleagues for feedback on the new process. 

Finally, don’t forget to gather data and other key metrics.

This'll going to make a world of a difference when you go back again to reevaluate the process. Decide on KPIs and OKRs and track them every quarter to measure progress. 

Process documentation 

Of all the steps we’ve spoken about, documentation is hands down the most important.

Once you start implementing change to the way a particular task is executed, record this new process. This way, employees won’t have to keep repeating the training procedure.

Use Scribe to ease this part of the execution plan.

All you need to do is turn on the extension and Scribe will follow your workflow, turning it into an in-depth visual guide. Like this one:

This helps everyone stay on the same page, allowing employees to collaborate in a quick and effective way. 

You can also use Scribe to create a comprehensive knowledge base — where each process is documented in detail.

Easily organize, share and update dynamic SOPs for any team, anywhere.

In case someone is unsure how to proceed with a particular task, all they need to do is refer to a Scribe, and they’ll get an instant guide on what to do.

{{banner-sops="/banner-ads"}}

The best part? It’s super easy to use!

Supercharge business productivity with Scribe!

Even if you try out dozens of different methodologies to improve business operations, you won’t find much scope for improvement if you don’t focus on goal-oriented evaluation with the right metrics.

Once you’ve identified the right standard operating procedure, you’ll need to make it scalable. The easiest way to do this is by recording your processes, so your internal team can use them later for reference and further improvement.

In such cases, tools like Scribe can make things easier and more efficient.

Helping you document your processes and generating customizable guides, it’s a one-stop solution to all your training and communication needs.

Sign up for free today.