The foundation of any good business begins with the identification of a need and fulfillment. This simple principle, originally shared by one of my college professors, captures the spirit of how entrepreneurs start their journey.
From this foundation, word-of-mouth spreads in your market causing demand to grow, which leads to additional sales and the need to hire more employees to execute the work. However, a few challenges arise with this growth. For example, how do you know what you need to hire for and how do you effectively train new employees to handle the additional workload?
These are critical questions to ask, and an important principle to remember is that growth is not always linear. More sales plus more employees doesn’t always equal more output. As a business owner, pushing through friction and reacting to all the challenges that come your way can only take you so far. To successfully scale your business, processes need to be put into place so that the business can operate and grow on its own.
This brings us to a critical principle laid out by Michael E. Gerber in his book “The E-Myth Contractor.” Stop working “in” your business and start working “on” your business.
Although the time you spend to create process and structure may not be directly tied to revenue-generating activities, taking the 30,000-foot perspective can help you increase profitability in the long run.
How to Begin Improving Operational Efficiency
The first step toward improving operational efficiency begins with asking yourself the question: Do we have an organizational chart? Are job roles and descriptions clearly defined for my employees?
In many organizations, especially in small businesses, employees wear multiple hats. However, this shouldn’t be an excuse for a lack of defined and documented structure. A tool I developed to help my clients in this department is called the “Functionality Chart.” This takes the standard organizational chart a step further by including the employee’s daily tasks and core responsibilities, which are often poorly documented or hard to find.
When you capture information using this methodology, it allows for a clear understanding of each employee’s role. This awareness promotes a sense of purpose that leads to an increase in job satisfaction. Additionally, if you are considering hiring someone new, it provides valuable insights into what responsibilities can be delegated to the new employee, and ensures that you are hiring the correct resource to help your company scale efficiently.
Processes Repel Chaos
If your organization hits a bottleneck, ask yourself, what does the process say? If the answer is, what process? Now you know what the problem is.
Process is the engine that runs your business. A new engine runs great, but over time it will require maintenance, need parts replaced, and – at some point – a complete engine rebuild.
When designing and implementing processes into your business, you can manage chaos, assign responsibilities, provide accountability and create a framework for growth and sustainability. However, the task of process documentation can be overwhelming because many companies only begin this task in response to a recent mistake they wish to avoid in the future.
The exercise of creating documentation should be a collaborative effort. When the employees who are responsible for the work are part of the creation and documentation process, they bring valuable insight, which can help with process improvement and accountability. Ultimately, the goal of process documentation is to show employees how to complete the work properly. Remember, you hired them because they have the skills, correct documentation will show them how to apply those skills.
Let Software Work for You
Once we have the organizational structure in place and core processes documented, we can evaluate our current software stack to ensure that it is helping us operate more efficiently, instead of creating more work.
The goal of adding business software to your organization is to remove manual work by creating efficiencies and improving productivity by automating repetitive tasks.
The number one failure of most software implementations is due to a lack of understanding of your company’s systems and processes. Ask yourself the following questions as it relates to the software that you are either using or looking at purchasing: What tasks are repetitive? What are the daily activities? Who will be using the software? What are the current bottlenecks and how will this make us more efficient?
There is no magic software… only a magic process. The more you understand your processes, the easier it is to select the correct software to achieve your goals of operational efficiency.
Perfection Is the Enemy of Progress
One of the main reasons why most business owners don’t put in the work to make improvements in their organization is because they are striving for perfection. A common mental block that many business owners often fall victim to is the concept that if something isn’t 100 percent correct, then it’s not worth the effort.
However, it is important to remember that all businesses began from nothing more than an idea. When you strive for continuous improvement, even small changes over time can add up to a big impact.
One way to create a culture of continuous improvement is by having weekly meetings with clearly stated agendas. This creates a feedback loop and helps build habits with your team. It also gives them an opportunity to tell you what is and is not working. These should be set as a reoccurring meeting on a shared calendar that is never missed or rescheduled.
By following these four steps, businesses can transition from chaotic and inefficient processes to well-structured and streamlined operations. This shift can result in predictability, higher profitability, business transparency, higher employee satisfaction and increased productivity. The landscape of every business in the tech sphere is changing weekly and by embracing systemization, it will allow your organization to adapt to the changing market demands and also allow you to gain a competitive edge.
About the Author:
Jason Sayen is the Founder of I am Sayen, a consulting company focused on helping companies visualize their process through Workflow Documentation. He is a Lean Six Sigma Blackbelt who is on a mission to help his clients align teams, streamline operations, and build a foundation for scaling through effective process improvement initiatives.