Extending the bottom line, the bread and butter of process improvement, the crux of the local sandwich shop and of fortune 500 firms alike, encompassing every sized firm and industry in-between. Champions of efficient processes are few and far between with logistical giants Amazon and Walmart (among others) demonstrating how flexible and feedback driven systems can minimize redundancies and create data-driven real-time networks that make these organizations far more efficient than the majority of the market. Amazon and Walmart are perhaps only two examples of efficiency from a “higher power,” however, they demonstrate just how significant the implementation of efficient processes can be in any industry and how they can set a business apart from its direct competitors.
According to the International Data Corporation (IDC), “businesses lose 20 to 30 percent in revenue to inefficiencies.” Instead of acquiring more clients, developing more products, or cutting costs every imagine if every business invested in becoming the most efficient version of itself… For starters, upper-level management would get a big pat on the back and bonuses to match. Yet the effects would be felt across the organization, where even the lowest level employee would find less needless redundancies and time-wasting above them allowing for increased productivity across the board.
What is Process Improvement?
Business Process Improvement is the implementation of various methodologies to dissect a business’s internal processes, often discovering previously unknown inefficiencies along the way, and then “fixing” said processes. By identifying bottlenecks, poor systems integration, and redundancies across a process, management can maximize employee output as famously addressed by Adam Smith. Many businesses and even federal agencies have intelligent business systems that are grossly underutilized. For example, many businesses/agencies have data-driven systems already in place to eliminate the duplication of data entry and integrate departments, yet employees are unaware of system capabilities, wasting employee energy and company resources. Often the answer to improved efficiency is not a system redesign, it is merely identifying failures across the process and promoting an open dialogue between both employees and management. Employees are often aware of inefficiencies, yet these processes have been in place since the last ice age, and as such, are “untouchable.” Again, it is not uncommon to have one or two individuals in upper-level management be too hands across every facet of operations and despite their best intentions, creating a bottleneck that is far more difficult to talk about openly than it is to identify. Instances such as those described are common and are thankfully often a simple although not necessarily “easy” fix.
The post-process improvement stage is equally critical to the future success of a business as identifying and solving the original inefficiency. Creating a plan with long-term time horizons focused on maintaining and improving the new status quo as the business and industry continue to evolve. Creating a company culture that is decentralized can help to solve future inefficiencies internally. That is not to say that an organization must not have a centralized hierarchy, it is the cultural component in which employees are encouraged to voice concerns proactively and to work cross-functionally to solve issues more efficiently. A successful long-term initiative benefits from the engagement of both management and employees across every level of the organization. Again, creating a culture that rewards problem-solving behavior is key in continuing down this newly discovered path of efficiency, or for lack of a better term, enlightenment.