June 2010 Strategic Innovation Newsletter: 4 Key concepts to process improvement

Welcome to the June 2010 edition of Strategic Innovation newsletter, a free monthly newsletter on leadership, strategy and innovation. Delivered on the first Tuesday of each month.

Back issues are archived for free downloading at www.DanielLockConsulting.com.


Tips for improving business processes

  • The recent BP oil catastrophe is a good example of risk management. Always have a preventative plan in place and contingencies in the event things go wrong. Always remember, contingent actions are more expensive than preventative.
  • Service organisations usually have two major constraints, interface and resource/activity. Identify and crack those interface constraints. They are often the cause of significant delays and customer dissatisfaction.
  • On a personal note, give yourself permission to apply good work flow systems at home too. Stress and disorganisation will carry over to work, and vice versa.

4 Key concepts to process improvement

Your business operations can only go as fast as your process. Sure you might have slow and unproductive people, but the likelihood that a whole team would be poor performers is very unusual.

Managers talk about the ‘sales process,’ or the ‘reconciliation process.’ Butwhen it comes to the application of the principles of good work flowand improvement they say; ‘but were different.’ 

No, you’re not. I’ve heard it a thousand times.

I think the reason people negatively react and believe they are specialists because they don’t want the spirit taken out of their work. I believe this is because most of the efficiency experts out there talk of standardisation. Who wants to be standard? No one.

Here are four key principles you can apply to improve process without losing creativity:


1. Specialisation versus Standardisation:


The first key is to understand, what good process calls for is firstand foremost, is specialisation. This is the concept of the ‘divisionof labour.’ Our whole free market is built on it. Every industrialisedeconomy will automatically move to this, given it is the most productive use of capital.

So don’t talk about standardising people, talk to your people aboutmaking them specialists. For example lately I have been working withsales departments, in complicated high-end, high value transactions. 

Why are they entering data into systems, and doing and inordinateamount of administration when they should be out selling? After al lthat’s their speciality: to have conversations with clients.


2. Standardise the work flow instead


Rather than focus on the individual and their work, focus instead onstandardising the work flow. Standard forms and templates to make the administration and order fulfilment easier, with higher quality.  

Have standard routings for work, a means of tracking that work. So makesure you understand where the process flows through resources andactivities. Either or both could present constraints in your work flowprocess.


3. Centralised scheduling

When people are busy specialising in their particular activities (forexample, in the field having conversations with client), they are notable to communicate very easily with the rest of the team and activities happening (the system level). Nor should they.

Here what is required is to assign someone to scheduling, where theyspecialise in prioritising work that is released into the system,monitoring work as it flows through the process, bringing in andassigning resources to particular activities as required.

This person’s role is to synchronise the respective specialists.

4. Strong management

Henry Ford’s production line brought home the concept of division oflabour and the incredible efficiency it can bring. But it requiredmanagement. Strong management to tie all the separate pieces together, this wasn’t mastered until some 50 or 60 years later by Toyota.

I’m often loathe to talk about the car industry in my examples as mostof my consulting work is in the services industry and it only causesthe very obvious ‘but we’re different’ (see above.) But here theexample is apt. It’s hard to bring all this together.

Strong management decisions are required to allocate finite resources,the temptation is to do this in a soloed fashion and not on the system level. A focus on efficiency in any one part of the organisation cancause bottle necks up and down stream.

Correct incentives and measurements are required, and good quality management information is required.

Bottom line:

All processes, even if it’s just one person, requires all of theseprinciples to be applied is it’s to be the most productive. A focus onspecialisation, standard work flows, scheduling, and good managementdecisions.

Technique of the month: Managing yourself

Studies show that multi-tasking lowers your IQ more than smoking pot. So in theinterest of our IQ, and improving results think about these tips toavoid multi-tasking

  1. The efficiency cost of moving from one activity to anotheris massive. Therefore batch activities in the appropriate bite sizedchunks.
  2. Chunk activities, spending extended periods of time on one thing at a time, without interruption
  3. Spend a block of time once a week, being your own personal workflow organiser. Don’t actually do any work, just plan and organise.
  4. Take advantage of those weird times to do the little activities. For example, waiting for a flight at the airport, get a couple of calls or emails done. This requires a portable list you can carry with you so you can tick it off when done.