How efficiently people get work done has as much to do with business processes as it does with the productivity of employees. In fact, the design and quality of a business system largely determine the productivity of the people working in that system.
People who are part of a good system or process will not only produce more but can work above their pay grade. For example, a $10.00 per hour college student working with the Box Theory™ Software system can create value worth ten times what he or she is getting paid (shameless plug).
How to Create Highly-Productive Business Systems and Processes
- Create and document business systems, including the system components and procedures—like the ingredients and steps of a recipe. Each of your core systems should have a single purpose and productivity goal. Involve team members in the system design to get buy-in and support.
- Make one person the owner of the system or process and accountable for its results. However, when performance is unsatisfactory, avoid blaming people for the problems; first look for flaws within the system. This may include evaluating your hiring or training systems.
- Standardize business tasks so workers do the same thing every time. Repetition improves worker skills, productivity, and is the secret to consistent results and predictable profits. Stick with the system until an innovation makes it even better.
- Track the performance of systems in real-time and compare actual results with expected results. Use the data to make adjustments and improvements as you go. Numbers drive all process improvements. Pay special attention to your key performance indicators (KPIs).
- Continually strive to elevate the constraint on a system or process. In other words, improve the weakest step or eliminate a bottleneck that is dragging down performance. This will increase the productivity of the entire system and the sales throughput of the whole company.
- Reduce duplication of effort and lost time that come from excessive mistakes and rework. Improve the system to reduce process errors to less than 1%. Six Sigma methods can expose the hard-to-find causes of your quality problems.
- Prevent system downtime, start-stop work-flow, delays, half-finished projects, and the work-in-process that is sitting around just waiting to be worked on. These system-busters ruin concentration, continuity, and momentum that kill productivity. They also increase the risk of operator error and make it difficult to measure performance.
- Reduce the loss of time, energy, and efficiency due to poor layout, clutter, general disorganization, unsafe conditions, distractions, and unnecessary walking or movement. Multiple employees over the course of a year will burn up a lot of dollars dealing with these system speed bumps.
- Keep the process as simple as possible to accomplish the stated objective. If feasible, reduce customer options and choices, special handling, exceptions to routine (e.g., customization, back-orders), employee discretion, and complexity, all of which hinder system flow. Let customers and vendors do as much of your work as possible (e.g., vendors can pre-price goods or drop ship; customers can pump gas, buy tickets online, or serve themselves at buffet-style restaurants).
- Like the tortoise and the hare, a sustained and steady pace, rather than occasional brilliant bursts of speed, wins the race. The same holds true in business processes. The most optimized processes are paced and synchronized with sales demand and with the on-hand inventory. The three work together in harmony so that you have just enough inventory to process today’s sales orders. Don’t get behind and lose customers. Don’t over-produce and build excess inventory. While this is easier said than done, all improvements in this direction will increase throughput and decrease costs. Work-in-process and excess inventories are enemies to productivity and quality.
Double Productivity and Cut Costs
Effective business systems shape the patterns and habits found in every high-octane business culture. By implementing good systems, you will have happier customers and employees, and maximum profits for stakeholders.
George Stalk, “Competing Against Time,” states that every 25% reduction in elapsed process time will double productivity and reduce costs by 20%. That sounds like something worth shooting for. Wouldn’t you agree?
Now, pick an item on the list above and go make one change today that will improve productivity and cut your operating costs!
Related Article:
Ten Tips to Increase Employee Productivity
