Every business runs on its processes. However, it’s the poor processes that contribute to budget overruns, missed deadlines, workflow efficiencies.
A process is a series of sequential steps, by an individual or team, to achieve a goal. Some processes are complex, involving many individuals, like manufacturing a vehicle. Other processes have fewer steps, like administering payroll each week.
Regardless of the intricacies, poor processes can negatively impact business efficiency and growth. There is considerable connectivity of processes across an entire organization. To understand how poor processes negatively impacts organizations, let’s look at the 3 ways poor processes can hurt businesses.
- Decreased efficiencies
- Increase in chaotic work environments
- Revenue loss
1. Poor Processes Decrease Business Efficiency
A business, in any industry, without clearly defined processes, supported across an organization, will experience a decrease in efficiency.
Efficiency losses typically occur during the movement of product or the transfer of information from one person, or from one department, to another. The ability for every team member to clearly understand the process flow of product or information will determine how efficiently work gets done. The success of a team to produce a product, or provide a service, is contingent upon clearly identified processes.
Key Performance Indicators, or KPI’s, can highlight discrepancies in business efficiencies. Depending on your industry, KPI’s can include measurements of customer expectations and product or service delivery reliability. Quality metrics can measure team performance or the quality of a product. KPI’s can also measure vendor performance and the level of quality service provided to the organization.
Strategically, it’s critical for the executive team to be in lockstep on an organization’s corporate goals and objectives. Consistency in vision and buy-in of the corporate direction by senior leaders will ensure clear path by their teams.
For middle managers, strong processes are crucial for accountability and focus. The processes provide the vision for individual contributors to effectively execute their responsibilities.
Well-defined processes provide individual contributors clear direction to perform their tasks. Without the clarity, individuals can overlap resources or work on tasks that do not align with the organization’s objectives.
2. Poor Processes Increase a Chaotic Work Environment
The lack of clear processes will impact everyone in the organization and contribute to a chaotic work environment.
One of the most foundational elements of working on a team is having trust among co-workers. It’s important to everyone’s success to trust in others and their ability to perform the designated tasks with their job function. With poor processes, added chaos in the work environment is almost inevitable. This chaos is the result of executive leaders, middle management and individual contributors lacking confidence in each other. Responsibilities can become unclear and accountabilities may be uncertain.
Playing a position on a team requires knowing everything about the position. Group consensus of each person’s responsibilities on the team is important to hold each other accountable. Poor processes inhibit understanding of team members’ responsibilities, impacting accountability. The uncertainty about abilities of teammates can be poisonous to any team, regardless of the innate talent. Leaders an extinguish chaos by creating clear and solid processes. In turn, this promotes confidence and helps to build a cohesive and collaborative team.
Poor Processes Contribute to Revenue Loss
Many business leaders instinctively want to jump right to solving for revenue loss. Leaders: revenue loss cannot be the trigger to improve processes in your business. Yes, poor processes are a direct result of revenue loss. However, it cannot be where leaders begin the journey to solve the problem of poor processes.
Revenue loss is the result of a lack of clear processes. Yet teams contribute to the efficiency by not understanding the importance of processes and their ability to outline them. However, improvements cannot be realized until existing processes are developed, and a baseline measurement is established.
Following the identification and implementation of processes, workforce chaos will be minimized. When chaos is reduced, teams will trust one another. As well, teams will start to communicate better and depend on one another. Following these positive results, teams will align with goals and objectives of the business. As a result, the business will see an increase in revenue due to efficiency gains from the new processes.
Revenue loss can be caused by many variables within a business. Tackling inefficient processes as “low hanging fruit” and developing streamlined processes can be beneficial and attainable for teams. Each small win in improving processes will add up to a huge impact for the organization.
However, for many teams with bottlenecked processes, it’s difficult to objectively evaluate how to improve the process. This is normal. The team is so close to working in the process, it’s hard to evaluate from the 30,000-foot view. The good news is that bottlenecked processes in any work stream can be rectified.
Improving Business Processes
This is where others outside the team can help. Reach out to an onsite Change Agents or a business consulting firm to facilitate improvement efforts. They can evaluate objectively, and lead efforts to uncover process deficiencies and lay the path to streamline processes. This can provide tremendous benefit to the team and the organization.
Continuous Improvement efforts are directly linked to organic Change Management. On a continuum, these efforts lead to true Organizational Development. When a business is healthy and functioning efficiently, the talents of each employee, at every level of the organization, are utilized.
The success of an organization is directly linked to processes and people. Develop clear and efficient processes with supporting structure. Commit to developing people as they are an organization’s greatest resource.
Is your organization seeking business process improvement, or to foster an environment of continuous improvement and improve employee engagement? RTG Solutions Group can help! Give us a call at (813) 943-5727 or contact us here.