The Complete Guide to Process Improvement
Process improvement is a wide-ranging topic with lots of different elements to consider if you want to be successful at it. In this article, I take a deep look at all of the different considerations and best practices around having a process improvement practice that will help your business operations run smoothly and deliver more value to your customers.
What are Business Processes?
Before getting deep into the weeds of Process Improvement, it is important to understand what a business process is. A business process is a collection of related, structured activities or tasks that produce a specified service or product, with inputs and outputs wrapped around the process. With business process management (BPM), business processes and their improvement become more understandable, manageable and improvable. BPM helps companies identify redundancies within their business processes by mapping out the different tasks that occur during each business process. There are four different types of business processes: Customer, Strategic, Operational, and Support.
What is Process Improvement?
Process improvement is a systematic approach of identification, analysis, and improvement of existing business processes to optimize performance with the goal of increasing business benefits such as revenue, customer satisfaction, market share, profitability, productivity and speed.
The Evolution of Process Improvement
For more than 60 years, business process improvement has been applied to businesses across many industries and countries -- with particular focus on business process reengineering (BPR) initiatives undertaken during the 1990s. During this time, business processes were typically managed within functional organizations (e.g., HR for payroll processing or finance for invoicing).
Then in the early 2000s, business process management began shifting the emphasis from managing business processes only within functions to managing them across organizational boundaries as services shared among multiple business stakeholders -- e.g. customers, suppliers and employees. Because of this, companies began training all their employees in how to do their business process improvements to increase business benefits up and down the entire organization.
Why is business process improvement important?
Being able to improve on current business processes help organizations become more efficient in executing their goals. A competitive advantage can be gained by improving business performance through a robust, well organized business process improvement practice. Business process improvements benefit not only internal operations but also customers who interact with company representatives or use company products and services.
What are some examples of business process improvement?
There are many business process improvements which can be made, but some examples of business process improvements might be:
Streamlining business processes by eliminating redundancies within business workflow
Establishing business process benchmarks to determine how well business processes are currently running in an organization and baselining them so they can be measured over time for future comparison.
How do I get started with business process improvement?
The first step in getting started with business process improvement is to determine what kind of business process improvement the company needs. For example, aggregating data from different departments' reports will help create a more effective business decision than working without this information. Also, there may also need to be several small changes to facilitate large scale changes in the future.
After identifying business process improvement needs, choose the business process which the business is most in need of improving.
Next, break business process improvement projects into small, attainable goals with deadlines for completion.
Work with employees to develop ideas on how business processes can be improved.
What are some business process improvement methods?
Many organizations use different types of business process management (BPM) methods when deciding how to improve their business processes. Some popular business process improvement methodologies include:
Six Sigma
Lean Six Sigma
Lean Management
Total Quality Management
Theory of Constraints
Continuous Improvement
The Six Stages of a Process Improvement Cycle
The process improvement cycle consists of six major stages:
1. Planning Business Process Improvement
This stage helps companies identify business problems that need solving by looking at the existing processes which are currently being used in their businesses. During this phase, it is essential to gain buy-in from all levels within an organization.
2. Establishing a Baseline
A baseline should not be confused with a measure where data is compared during control charting . Instead Baselining is defined as establishing "a reference point or level against which future performance can be measured."
3. Define Goals and Scope
This phase is all about defining business process improvement goals, the timeline for those goals and business requirements to meet those business process improvement goals.
4. Coming Up with Possible Solutions
Company managers and their teams should come up with various solutions to solve business problems. These solution ideas usually go through a cycle of testing, revision and vetting before they are chosen as the final business process improvements that will be implemented by companies.
5. Implementing Solutions
After managers have completed the previous phase successfully, it's now time to put into place any needed changes or new systems that will improve business processes.
6. Verifying Success
Next comes verification; employees should follow everything written in the plan created during Phase 1 and check business process improvement results against set goals. If everything works according to plan, business process improvement should be deemed successful.
Process Improvement’s Impact on Culture
Improving a process begins with the organization within which you work.
That organization has a culture, and no two organizations share the same culture, which of course is the first level of complexity. Walmart does not share a culture with Amazon and New York Presbyterian Hospital does not share culture with the University Hospital of Southern California.
So, the first step when addressing process improvement is to understand the organizational culture. A step many companies fail to take.
So many leaders and consultants learn the hard way that perfectly reasonable solutions and improvements never achieve the results they expected because they failed to understand the culture within which those improvements were made.
Teamwork is Key to a Strong Process Improvement Practice
Projects are seldom undertaken alone. In most situations they involve a group of individuals. Even when a single individual is the one responsible for undertaking most of the work, that person must interact with others so in many ways the team is larger than a single individual.
However, many teams are teams by name only and are different from a highly motivated group where team members share in achieving and exceeding the goal of the project. We call that group a high-performance team.
How a Company Should Involve Employees in Process Improvement
Businesses use employee suggestion programs and employee surveys as part of their process improvement practice because they find them effective tools for getting ideas about possible changes. Undertaking a process improvement approach does require a vast organizational change that does take time, training, and patience. Organizational-wide process improvement initiatives are a company culture shifter!
Process mapping or business process mapping is the act of documenting the business process, including all of its components. If a business wants to change one step in a business process, they can look at the business process map for that process to see how it works so they can accurately make changes. Maps are also helpful because if supervisors are communicating with employees about what needs to be done, maps help them use the same terminology so everyone understands each other. Having individual teams and departments map out their existing processes is a great way to get started and involve everyone. You never know where a good idea for a process improvement project will come from!
Businesses often improve their processes by evaluating whether staff members have the right training and skills needed to do their jobs well. If an employee does not have enough knowledge or experience to do their job well, then this could be hurting the business because poorly trained employees may need more supervision and mistakes might cause other business processes to be held up. A senior manager might decide to hire new employees with the right skills for the job if they feel changing business processes is too difficult or risky.
These are just a few examples of business process improvement methods that businesses use. The best way to know what improvement method works best for business is to test out different changes and see which one seems to work best. There are many other business process improvement methods that can help achieve the same goal as the ones listed above, so it's important for business owners to look at their process improvement efforts closely so they can find ways to improve them in order to get results.
Process Improvement Is An Ongoing Effort and Is Not Easy
Process improvement is an ongoing effort to improve business processes. The business process could be related to business development, marketing, production or any other business functions. There are many ways of improving business processes but it all comes down to making changes in order for the business process to function more efficiently and effectively.
Process changes usually involve adopting new business practices that will help you meet your business objectives. Successful process improvements often come from identifying areas of improvement through key performance indicators which can show where you might need to change things up a bit.
Process improvement is also not simple. It is not simple because improving processes is an interdisciplinary and interdepartmental effort that requires the right approach, the right people, and the right skills.
When implementing process changes, make sure you keep track of the changes, understand why you made them and what business result they are intended to achieve. This will help you reset the business process if needed once your business starts growing.
Process improvement is a continuous business process that should not stop since it will bring benefits to business at all times. Thus, just like businesses adopt changes in their products and services over time, business processes also need to be improved to keep up with business needs.
The ones which involve interacting with customers or even employees can be challenging but rewarding at the same time. Business process improvement is an important part of business management that no business owner should ignore since it will bring benefits to business at all times. Thus, just like businesses adopt changes in their products and services over time, business processes also need to be improved to keep up with business needs. The more sophisticated your business becomes, the more business process improvement will become an integral part of your business.
Key Takeaways
Process improvement is the examination of business processes to identify and implement opportunities for improvement. Process improvement is business process management (BPM) done by business process professionals, who use business process analysis, business process mapping, value stream mapping, business rules, business workflow modeling tools and business process automation software to help improve an organization's efficiency.
Process Improvement has a significant impact on an organization’s culture, so it is incredibly important to take that into consideration whenever building and implementing a process improvement program. Changes to any process can affect an employee’s way they are use to doing work, so to avoid change resistance, involve employees who will be affected by change and ask for them to be a part of the process.
Finally, it is important to remember that process improvement should never stop. Continuous improvement, which is a discipline inside of process improvement, forces us to always be examining processes to find ways to gain efficiency and eliminate waste, with the goal to deliver more value to the customer.
