People and Processes are the “doing” part of running a business. All businesses need a clear process, prescribing steps for the team to achieve a desired goal. Just like baking a cake, if you get the process wrong, then your end product will be a disaster.
In very small businesses, this process can remain simple. Operations can be directly managed by the owner. The challenge however comes when the business begins to grow and the owners can no longer do everything in an efficient, timely manner. This is a transition point for the business. If the owners fail to recognize the need to hire people and impose a clear structure, they will either limit potential growth or burn out by trying to manage the unmanageable.
Whether your business processes are simple or complex, here are some basic principles to ensure you can deliver the desired result:
Processes must be “lean” and efficient. The concept of “lean” was made famous by Toyota, the car manufacturer. A lean process is one that delivers exactly what the consumer wants with minimal waste of time, effort and resources. Lets say you own a bakery. If your processes are not lean, you will find that you are wasting ingredients in a number of ways, spilling them on the floor, making several batches of poor quality mix and so on. The waste of ingredients results in a waste of other resources since you must now incur unnecessary utility costs to bake rejected batches, and to clean up more messes. Ingredients and utilities cost money and your inefficient bakery will struggle to make a profit.
Invest in People:
People must be motivated and competent. If they are poorly trained and lacking in focus, then your business will be compromised, no matter how well structured. People are the most important resource in a business. Make sure that the people who work for you are the best you can afford and that they are well trained, appropriately compensated and properly supervised.
Machines are more efficient than people at doing routine, structured tasks. Automate processes where possible.
Set Clear Rules:
Impose controls to ensure your processes are clearly defined and followed as prescribed. Let’s say you are a shoemaker. In order to produce a high quality shoe, you must select quality materials and ensure that the cutting, assembling and stitching are done to a high standard. These are all process control points which you must monitor, especially if you have apprentices working in your shoe shop. One of the keys to managing a successful business is to ensure that its people and processes produce quality output. Quality output means satisfied customers and more sales at higher prices. That gives you a big advantage over your competitors and allows you to grow your business. In our next segment, we will look at the final “P” Principles.