Better Processes Increase Small Business Efficiency

There can be a huge difference in the level of enthusiasm and energy in a fledgling startup and an established small business. Effective, efficient processes are what differentiate companies who are competitive, innovative thought leaders from those who stagnate and struggle with growth.

To maintain that initial enthusiasm, it is important that companies evaluate and reevaluate their processes on an ongoing basis. Internal procedures should be inventoried on a regular basis to determine which processes are subjective and can be left to each individual to address in his or her own way, and which process must always be performed uniformly throughout the company.

The three steps I’ve identified below are paraphrased from an article by Alex Silberman, president of Chief Information Solutions, a consultancy specializing in the needs of small and medium-sized businesses.

Step 1: Identify
The first step is to identify business tasks and distinguish them from functions. A process document should be written for each specific technical task,, and the details of each task process must be documented. This includes, for example, writing down the specific steps needed for onboarding a new hire, importing and updating contact data, or payment processing. A task should have a detailed, documented checklist. The checklist provides boundaries for employees, but is also helpful for measuring task performance year after year. A process for fulfilling a business function is one where judgment and tolls are used. For example paying bills, and forecasting next months sales and cash needs.

Step 2: Evaluate
Once all the business process have been identified, determine whether the process is a:

• Solid Process: Well delegated and executed, the process works well from the employee’s perspective, with clear expectations and direction, good communications and regular review. Task processes must be able to be consistently performed by a 10 year old without any training.
• Decent Process: Not great, but work investing in revisiting this process. Easily completed after about one our of training or by following documentation.
• Practice Turned Policy: The classic “we’ve always done it that way” process that has been institutionalized organically. The most common characteristic of a practice turned into a policy is that it no longer works and people performing it don’t know why it’s done that way.
• Process Built Around A Person: As companies grow, individuals who have a certain position in the company may insist on working in a particular way. Processes are built around these individuals, and questioning them is discouraged because it’s a delicate subject or creates anxiety.
• Abdicated Process: When principals are disinterested with certain processes, they tend to delegate them out to others who may not have had solid training. Examples include maintaining contact data and managing lists, or sending out the monthly mailing and coordinating with the copywriters and the mailing house.
• Process That Causes Pain: This process causes a problem and is detrimental to company growth, increasing revenue, and efficiency.

Step 3: Improve
Task processes considered less than “decent” should have their existing checklists and procedures improved. Any task considered “decent” or “solid” should be delegated to employees so they may understand what is expected of them. The task checklist acts as a sort of “boundary” in which the employee can perform his or her function. These boundaries are especially helpful when a colleague is sick and someone else needs to step in. Business functions that score less than “decent” must have their objectives, measures, tools and training evaluated until they become “solid”. Keep in mind, however, that not all processes need to be perfect.

It is key to find out why they scored low in the first place. If a given function is disliked, ask why it was put in place and decide if it is still necessary. What steps need to be taken? If the process is disliked for a reason, this reason holds the key to determining how to improve it. In any case, processes that are treated with the kind of review outlines above can be improved quickly.

Businesses should avoid the risk of being defined by “immovable objects” or people who will not budge when it comes to overhauling and implementing new processes. It is important that businesses reevaluate their processes to that inefficiencies can be identified and overcome. Specific outcomes and tasks become the basis for performance management. This approach removes the overemphasis on doing things in a given way and stresses the overall objectives. These processes also eliminate inconsistent management subjectivity so performance can be focused on results.