Quality guru J. M. Juran believes that 80 per cent of problems encountered in organizations can be put down to systems and the remaining 20 per cent to people. In small businesses this is especially true. Often prices, costs, marketing, quality control, inventory and strategic management are run on a whim rather than through an established process. Direct experience and informal management practices frequently prove to be adequate and compatible to the narrow resource base of small Arms. But in some industries, small business management is characterized by deficiencies which adversely affect other business functions, especially during times of market turbulence, and when business growth demands more managerial expertise and administrative support.
What are the systems and processes in your business?
'It is not products, but the processes that create products that bring companies long-term success. Good products don't make winners; winners make good products,' say James Champy and Michael Hammer in their bestseller Re-engineering the Corporation.
If a company divides itself along product lines few eyebrows are raised. A building society, for example, divided its operations into separate businesses in the 1980s. These included mortgages, life policies and credit cards. Though it appears to be a logical thing to do, the trouble is that the fascination with products overlooks customers who are not so easily separated. A single customer may take out a mortgage and a life policy and want another credit card. They would prefer to be able to do so from a single entity rather than being passed from one product division to another.
The faith in good products leading to competitiveness is long-established. Yet time and time again innovative products have failed to yield the anticipated financial results. Other companies quickly copy them or produce their own versions of the product. With time-cycles diminishing, this is more efficiently done than ever before. Organizations can no longer rely on a new product reaping huge dividends over a lengthy period as competitors try and make up the lost ground. Products are now easily copied and retain their uniqueness for a shorter and shorter time.
In contrast, processes are more robust competitive weapons. They are unique to a particular organization and, as such, are virtually impossible to copy. The trouble is that understanding and utilizing that uniqueness is not easy. Understanding processes fully is time-consuming, complex and involves negotiating the maze of corporate politics and functional strongholds. It involves finding out who does what, where, why and with what impact on your stakeholders.
If you think about a task which forms an important part of your work you will quickly see what a minefield process analysis is. Consider a few basic questions:
- Why do you do the task?
- Where do you do it?
- When and for how long?
- Who else is involved in completing the task?
- Who does the task affect inside your organization?
- Who does the task affect outside the organization?
- What resources do you use to complete the task?
- What information do you need to complete the task?
Any task you do can be looked at in terms of time, people, resources, information, internal users and external users. In addition, there is always a hefty dose of personal relationships, politics and sensitivities.
Complex though process analysis clearly is, at its heart is a straightforward idea. A process has been defined as 'any activity, or group of activities, that takes an input, adds value to it, and provides an output to an internal or external customer. Alternatively, a process can be seen as a group of activities which cause change to happen through the execution of a number of simultaneous tasks. The change and the processes are in line with the organization's goals and aligned, as closely as possible, to the needs of your stakeholders.
There is nothing mysterious or startlingly original about processes. All businesses have processes and they are a concept which people easily understand. The trouble is that people may not recognize the fact that their activities form part of a process.
Think of a process in your business. Write it down in a similar way, detailing the actions required and by whom. Obviously if you are just starting your business the likelihood is that the personnel will be yourself and yourself only. Looking at the process map are there any areas where:
- the customer could become confused dealing with too many people?
- information is gathered and not used?
- the process could miss a step and be improved?
- improved technology would make the process quicker and easier?
- there is a pointless functional divide between who is involved?
