Improve My Business

If you are looking for ways to improve your business, and that is what this blog is about after all, auditing might be just what you need. When most people think about auditing they start to get concerned, they think that someone is going to come in and try to find things they are doing wrong, but this is just a misconception. Auditing isn’t about finding out what an individual person is doing wrong, its about finding weaknesses in your business system so you can improve them. I encourage anyone who is looking to improve their business to go through an internal audit.

Internal audits are great, they are relatively low cost because you are using your own people and they serve the dual purpose of cross training employees. Ideally in an internal audit each area of the business will be audited by someone who doesn’t typically work in that area. This does two things, first it brings a new set of eyes to the area which can provide a fresh perspective on how that part of the business is running. Second, and perhaps more importantly, it gives employees a better understanding how the business runs outside of their particular area.

So what should you expect from your internal audit? First you should expect to find out how well your documents match up with the reality of your business. If you find that they don’t match up well it could point to one of two problems. The first thing it could indicate is that you are failing to keep up to date documents. This means that as things are changing in the way you do business the changes aren’t getting added into your documentation. Alternatively it could point to a failure in your training methods, meaning that your documentation is correct but for some reason the employees on the floor haven’t been properly trained to follow the documentation. Either way this could present significant challenges for training new employees and controlling important factors of your business.

The second thing you should hope to get out of your internal audit process is greater cross unit functionality that will lead to better work flow. By giving employees the opportunity to learn how the business groups that surround them operate, they will naturally have a better understanding of how their work fits into the larger puzzle of the business. When employees have a greater understanding of how their work affects other areas of the business they can start looking for ways to improve the usability of their product for internal customers. For example you might find that by having someone from your sales department audit the assembly line, they find out that before a job can be started all of the information they take from the customer has to be transposed onto a work traveler for the assembly line. This takes time away from the line employees and generally slows down production, so the sales staff, instead of recording the information in their own method, starts recording it directly onto the traveler, allowing the production staff to focus on production.Without the internal audit, the sales staff may never have realized that the method of recording customer information they were using was actually creating more work then necessary for the production staff.

The final thing you can expect from you internal audit process is increased employee participation in improvement efforts. Your own employees may be your greatest untapped resource for improvement ideas, they just aren’t being encouraged to share them. By asking employees to get involved in an internal audit with the goal of improving the business it shows them that management values their opinions and wants their help to make the business better. You might be amazed at some of the great ideas your employees have for improving your business that they have just been sitting on because they figured no one cared.

The list of benefits you can get from an internal audit extends well beyond the three examples I have given here, but even if these are the only benefits you see, it will still be a great step towards improving your business. The best part is that all it takes is a little training and a day away from their usual work for your staff. This is why, for my money, internal auditing is one of the best ways to find business improvements.

Technorati Tags: Business, improvement, process improvement

Process Mapping should be the foundation for any initiative to increase the performance of your company. Whether you are trying to achieve cost reductions, increased quality, higher employee satisfaction, increased efficiency, decreased wastes, or improvements in any other company performance metric, you should start your initiative with process mapping. To show the importance of process mapping let’s start with an example we can all relate to, writing a paper.

If you were asked to write a report drawing conclusions about the value of a particular niche in a subject that you weren’t familiar with you wouldn’t start your research with a laser focus on the niche. If you did you would inevitably wind up writing a sub par paper. You wouldn’t have an understanding of the greater context of the subject and your paper would be lacking the depth of understanding that a well written report requires. Sure you may learn everything there is to know about that niche, but how could you draw an accurate conclusion about its value without first understanding how it fits into the overall subject. Most of us, if asked to write this kind of report, would begin by looking at the overall subject and seeing how it fits into everything else around it, then exploring the interactions between the different parts of the subject, then exploring our particular niche. This way, when we draw a conclusion about the value of the niche we have been exploring, we know that the conclusion takes into account how this niche interacts with the broader picture.

Trying to take on an initiative to improve the performance of you company without first going through a process mapping exercise is like trying to write the paper by taking a laser focus on the niche. Before you can try to improve the performance of any one particular area of your company, you first have to understand how each area of your company operates internally and how the different areas interact with one another. This is why process mapping is  invaluable for company performance improvement projects. With a good process map you will understand the ins and outs of each part of your company and how the work that makes your company run gets done. With this understanding you can then focus on improving particular metrics with an understanding of everything that affects that metric and is affected by it.

Targeting a performance metric and taking steps to improve it without having the context of a good process map will inevitably have negative consequences for your business. While you may be able to achieve increased performance in that area you won’t see or understand the organizational cost of those achievements. The goal of improving a performance metric is always to make the company as a whole better, and to do this you have to start from an understanding of how the company as a whole operates, which is precisely what a good process map gives you. Staring with good process mapping gives you the foundation you need to insure that your efforts to improve the performance of you company are achieved and sustained.

Technorati Tags: Business, eliminating defects, improvement, process improvement, process mapping, quality, Streamlining

There is a lot of positive press lately for green initiatives – you know, doing something that not only makes sense from a business standpoint, but is also environmentally friendly? Everything from hybrid cars, to turbine power, to solar cells, is getting some press.

Consider that process improvement is also a tool in the green toolbox – after all, if you are working to become more efficient, that promotes using the minimum… and if you are efficient, you will be more competitive, so you have a better chance of being, and staying, productive in your industry.

The next time that management is considering which green tool to champion, remind them that process improvement is the best green tool since it takes product quality, minimization of resources, employee innovation, and customer satisfaction into account.

Technorati Tags: enviornment, green business, green initiative, process improvement

In this Tech Talk article from the Worcester Business Journal, the author talks about the need to hire folks who understand process improvement, to help bring lasting change to organizations.   Read about it here.

Technorati Tags: process improvement, tech, Worcester Business Journal

When you find an error in your process or system, you should do an analysis of the reason you made that error.  Many times, you may find out that the reason that an error was made is that you don’t have a process - or that the process wasn’t followed (but that’ll be another post…)

So, if you don’t have a process - design one!

HOW do you design a process?  Easy peasy - map the process out.  How do you map a process?  Write down the steps that need to be done in order, try following those steps, then refine it until you’ve got it where  you want it.

Here’s an example:  we rent our Texas beach house out on VRBO and HomeAway. During this time of year, we get a LOT of requests for summer rentals.  The big risk is to rent the place twice for the same night(s) - double booking, so we want to make sure that we have a process in place.  Sure enough, we didn’t have our process in place, and ended up with a double booking this year; luckily, we caught it within an hour of accepting the second booking, so only had to apologize profusely and refund the deposit.  [It would've been MUCH worse if both families had shown up at the beach place expecting to stay for a week!]

So the problem remained - we had double booked.  How to revise our current process?

1. we stopped letting all folks take and make reservations - I am now the linchpin for the reservation process, and although others can check the account and answer queries, I’m the only one who accepts a deposit.
2. We track every reservation and deposit on a spreadsheet - and the process has to be followed in order.  So, a reservation has to be logged in and the calendar dates have to be blocked out before we deposit the money, as an example - to ensure that money isn’t accepted prior to verifying that the calendar is available.  The spreadsheet is sorted by date, so this should ensure that we don’t double-book.
3. Our double check for this is to make a copy of the check or credit card deposit, and to file those by dates  in a paper backup file.  [That's how we found out that we had double booked - the calendar hadn't been updated, but we had a deposit for that week already.]
4. Then, and only then, do we let our guests know that they have secured the reservation and continue the process.

We are hopeful that these tweaks will work for us, but are vigilant to identify possible ‘loopholes’ in the process, and plug them up. This is the essence of effective corrective action - monitoring to ensure that the process design is robust enough to prevent recurrence of the problem.

Have you had a problem, or made an error, and put a process in place to ‘fix’ it?  Post it here or contact me at marymcd@mcdcg.com - I’d love to hear about it!

Technorati Tags: beach home, process design, process improvement, process map