Maximize Your Business Processes, Minimize Your Internal Barriers
Nearly every futurist speaker at industry conferences this year, organic growth is harder and harder to achieve.
Is the infamous “Boiled Frog” fable a metaphor for your industry?
They say that if you put a frog into a pot of boiling water, it will immediately leap out to escape danger.
But, if you put a frog in a kettle that is filled with water that is cool and pleasant, and then you gradually heat the kettle until it starts boiling, the frog will not become aware of the threat until it is too late. The frog’s survival instincts are geared toward detecting sudden, not gradual, changes.
This story is a warning to stay alert not just to immediate threats but to how the environment is evolving as well. Faced with a number of slowly developing trends, most industries will have to work harder to take advantage of opportunities for top-line growth. To fund any new top-line growth initiatives, they also have to focus on taking waste out of their current operations. Most industries are simply going to have to do more with the same—or fewer—resources.
What Is Business Process Improvement?
Business process improvement is about getting more output from the costs you already have. Cutting costs, by itself, does not necessarily make a process better—in fact, if you don’t understand how costs relate to the business process, you can actually decrease many processes’ efficiencies.
There are many successful approaches to process improvement: TQM, Six Sigma, Lean, and GE’s Work Out. However, the challenge with improving business processes in today’s world is that most organizations are typically still organized “vertically” into functions—yet a business process would be mapped “horizontally” across a number of functions. This issue alone can foster a number of communications and cultural barriers to maximizing operational efficiencies. The following information provides an overview for improving business processes and then a new idea for minimizing internal barriers.
Steps for Improving Your Business Processes
- Determine your business model. How exactly do you earn revenue and where does revenue come from?
- Create a process map for each of your company’s core processes. Core processes should reflect the primary way you deliver value to customers and still make money for the enterprise. Make sure your process map includes suppliers, inputs, outputs, analytics, and members together to see the overall process. Clarify boundaries, ownership and effectiveness measures; recognize process sequences; and identify bottlenecks and opportunities for improvement.
- Use the process map as a communication tool to engage employees across functional areas in identifying and implementing process improvement opportunities.
- Demonstrate commitment from the executive team by setting disciplined standards and then “inspecting what is expected” through ongoing review of core processes to achieve operational excellence.
A New Idea for Minimizing Your Communication and Cultural Barriers:
Some organizations have created Business Process Portfolios, which are collections of a company’s various workflow operations and associated technology solutions. The “custodian” of these Portfolios is often the CIO. This individual is typically in the best position to understand how all the “bits and pieces of work and technology” of a business process work together horizontally across the company.
The responsibilities of the Business Process Portfolio Custodian include :
- Create/oversee Process Portfolios
- Define costs and performance metrics and determine return on any procedural improvement for each Process
- Assess each Portfolio for business impact, dependency, breadth, quality, service level, and process risk
- Develop investment strategy. Are investment needs because of a crisis, to monitor and maintain, is it non-critical, or should the organization abandon/ignore the business process?
- Oversee projects to improve performance
- Help the Executive Team prioritize investments based on the business goals
- Implement a communication/feedback platform whereby all employees are educated on the core business processes and are engaged in delivering value to the member as stipulated in the process map and overall goals of the organization
Operational excellence, whether in manufacturing or service environments, has become a global quest—even marginal operating improvements can mean the difference between success and failure. It’s time to use business process improvement methods to sustain—and even improve—the performance of your credit union and the health of the industry.
For more information please call us today at 800.395.1410.