The Importance of Process in Any Business

Yesterday we posted an article – The Front Office Process – From First Call to Referral

This follows up that item with an explanation of the importance of “process” to any business, regardless of size or business activity.

Many will have read Re-Engineering the Corporation – Hammer and Champy’s seminal work, originally published in the Harvard Business Review and subsequently a best seller in the management category.

The book explained how any business could find more efficient, and effective, ways of delivering to the bottom line when activities were understood as parts of a serial process, rather than stand alone tasks.

The book was so successful in the 90′s it gave rise to the re-engineering wave driven by new systems needed to address the Millenium Bug.

Riding the wave SAP grew from a bit part ledgers vendor to the dominant ERP solution for corporates.

The major consulting businesses were equally successful, albeit briefly, selling services to help those corporates redesign their processes and implement SAP to enable them.

The concept of process is standard practice for anybody in the scientific or engineering fields. It’s less well understood in business, where resources are organized by function.

A process simply operates across those functions.

For example, a customer asks for a quote for house decoration. The tradesman arrives to survey the job, measures up, helps the customer choose colors and finishes. Then he figures the cost and quotes a price. When the customer agrees the job, the tradesman schedules the work, paints the house, submits an invoice, collects the cash, revisits the customer, asking if she’s happy with the work and does she know anybody else who’s thinking of decorating her house.

This is a process. In our terms it’s our First Call to Referral process.

The engineer understands how the use of process helps him understand how to do it better

By planning what should happen, measuring inputs and outputs for each of the milestones, executing the plan and reviewing the results, the engineer can figure where precisely his process can be improved, increasing predictability and reducing redundancy. In other words increasing value and reducing cost.

The decorator can improve his process in just the same way.

This theory has been at the very heart of management consulting since the 1940′s when Fayol’s “Administration Industrielle et Générale” was translated and published in English.

It’s how the Japanese transitioned from making stuff that didn’t work to the highest quality possible, with Continuous Improvement during the late 90′s.

It’s the way any business can “manage” its way to extraordinary performance, not because the guy running it is more clever, or more lucky, or has more contacts, but because he’s figured the secret to success is creating more value at lower cost, and set about changing the way his business operates to achieve precisely that.

In environments like the one we have today reducing costs is the main focus of every business owner. The fastest route to cost reduction is in sales.

When customers come to us, referred by their friends, we avoid competition. We sell at higher prices, and need to deliver less. And we avoid the expense of winning customers.

We can only achieve that Nirvana when our process is predictable, and guaranteed to deliver the ideal outcome.

Every business can find ways of doing what it does, better. The managers just need some tools to help them Plan what should happen, Execute their Actions, and Review the results.

That’s why we bulit Plan, Act, Review into the workflow of Front Office Box, in ways that anybody could use.

CRM for “widget manufacturers” is “fools gold”.

Plan, Act, Review, is what every business should be focusing on.