Could your process improvement efforts use a little… improvement? As companies grow and evolve, their processes grow in complexity. Poor process improvement leads to higher costs, fragile infrastructure, and frustrated teams that are unable to reach their full potential.
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As the pace of change gets faster and faster in nearly every industry, adaptability, often discussed as business agility, has become the most important business competency.
Processes that do not work lead to numerous problems:
- Customers complain about poor product quality or bad service
- Team members get frustrated
- Work is duplicated or not completed at all
- Costs increase
- Resources are wasted
- Bottlenecks develop, causing teams to miss deadlines
By making a commitment to process improvement, companies can save money, boost innovation, improve talent retention, and create more value for their customers. So why do so many companies lack proper process improvement practices?
Often, it’s a matter of cost – more specifically, sunk costs. If your entire company uses (albeit mediocre) software, you’ve already made a significant investment of time, energy, and resources into using that tool. The cost of switching to another tool might seem too much to bear.
But the reality is, companies save money by identifying inefficiencies in project teams with many layers of management or manufacturing teams whose motions equate to money. In order to fully make a commitment to process improvement, businesses have to accept that the risk of not evolving is far greater than the risk of changing the status quo.
What is Process Improvement?
Process improvement is the proactive task of identifying, analyzing and improving upon existing business processes within an organization, with the goal of improving process efficiency.
Continuous improvement is the ongoing practice of process improvement; it’s a process improvement that is woven into the fabric of daily work, as opposed to process improvement that happens once a quarter (or less frequently) with no follow-up. Continuous improvement can be viewed as a formal practice or an informal set of guidelines.
When implemented successfully, the results of effective process improvement can be measured in the enhancement of product quality, customer satisfaction, customer loyalty, increased productivity, development of the skills of employees, efficiency, and increased profit resulting in higher and faster return on investment (ROI).
Why is Process Improvement Important?
Every business relies on many processes, or a set of activities to accomplish an objective. These processes help maintain order and consistency and should also increase efficiency.
However, processes often become unwieldy over time. When that happens, they end up creating delays and eating up costs. Process improvement helps teams keep process top of mind, so they can operate efficiently, consistently.
Maintain a Competitive Edge
Another reason to focus your energy on process improvement: Your competitor probably will. Put another way: If an organization is not continuously improving the way it performs processes, it will likely fall behind in the market.
That’s because at least some if not all its competitors will be making such improvements. Succeeding in today’s business environment means constantly looking for ways to do things better.
“Unhappy customers, stressed colleagues, missed deadlines, and increased costs are just some of the problems that dysfunctional processes can create,” according to Mind Tools, a provider of on-demand career and management learning solutions. That’s why it is so important to improve processes when they are not working well.
Types of Processes to Improve
Any type of business process can be improved, from the most strategically important to the most mundane. Processes can be formal or informal.
Processes considered formal, which are also known as procedures, are documented and have well-established steps. For instance, a company might have procedures in place for receiving and submitting invoices, or for establishing relationships with new clients.
Different kinds of processes have one thing in common: They are all designed to streamline the way individuals and teams work. “When everyone follows a well-tested set of steps, there are fewer errors and delays, there is less duplicated effort, and staff and customers feel more satisfied,” MindTools says.
7 Tips for Managing Process Improvement
Clearly Define the Current Process
First, clearly define and visualize your current process. Consider: How do we do things now?
Visual process improvement relies on using visual elements (like cards on a digital Kanban board) to represent your workflow (as opposed to text-based methods, such as to-do lists).
Text-based methods of process management don’t translate well into process improvement because they don’t connect the dots between what work is done and how it is completed. Most teams don’t spend a lot of time discussing how work is being completed, but the process we use can directly affect the quality of the work.
The only way to achieve a true, accurate understanding of our processes is through process visualization: Creating a flow chart of how work moves from “‘to do” to “done.” Visualizing your process can be immensely helpful in illuminating areas where you can improve.
A clearly defined process can eliminate some of the most common sources of inefficiencies in teams.
For example, having a clearly defined “Quality Assurance” step (with criteria for whether a work item passes QA) can help to reduce defects and errors that might have otherwise gone unnoticed.
Getting started with visualizing your process starts with:
- Defining the various steps involved in your process
- Determining the time it takes to complete each step
- Outlining who typically works on each step, and where handoffs occur
Define the Business Challenges
Define the business challenges you are trying to solve with process improvement. What are your big-picture goals?
Albert Einstein is quoted as saying, “If I had one hour to save the world, I would spend fifty-five minutes defining the problem and only five minutes finding the solution.”
If your team or organization has been using Kanban boards to manage your workflow (and even if it hasn’t), everybody probably has ideas for how to improve your existing processes. Once you decide to start practicing continuous improvement, it can be tempting to spend your theoretical hour brainstorming ways to improve your current workflow.
But there’s a difference between practicing continuous improvement and going down rabbit holes. You’ll have far better results if you can first define the problems you’re trying to solve, then brainstorm solutions to help you solve them.
1. Start with organizational goals.
What organizational goals is your team working towards right now? Are you trying to build better quality products, or improve your service offerings? Do you want to achieve faster delivery cycles or billing cycles?
If you’re practicing Lean / Agile, you might call these Objectives and Key Results, or OKRs. Looking at these can be a great place to start any process improvement exercise.
Look at each organizational goal and determine how well your process helps you achieve it. For example, if your larger organizational goal is to amplify the voice of the customer, think about your team’s current workflow and how well it is working to amplify the voice of the customer.
If you see opportunities to improve your process to better help your team achieve that goal, then you’ve defined your challenge: We need to improve our process to help us better amplify the voice of the customer.
2. Consider team and personal goals.
You probably also have team goals that you’d like your process to help you meet. You might want to improve documentation, use tools more efficiently, or reduce the time you spend in meetings.
Brainstorm a list of these goals as a team, and develop a system for voting on which goals you’d like to focus on in your process improvement efforts.
Perhaps the entire team agrees that reducing time spent in meetings is a worthy goal to incorporate into your continuous improvement efforts. Toward this goal, the team decides to replace several standing meetings with regular update emails. You all commit to making better use of meeting time by requiring agendas for all meetings and only inviting people who need to attend.
This type of improvement activity might not directly impact the customer, but it can greatly increase team efficiency, which can then have a positive impact on the customer.
Identify KPIs: How Will You Measure Impact?
How will you measure the impact of process improvements? What kind of impact are you trying to make?
Do you want to:
- Increase team productivity?
- Boost efficiency?
- Speed time to market?
- Increase customer satisfaction?
- Improve employee morale?
- Gain competitive advantage?
Peter Drucker is quoted as saying, “You can’t manage what you can’t measure.” To achieve any of the goals on this list, you must have a plan in place for measuring progress. Do you have systems in place for measuring process improvement?
Whatever your goal, ask yourself what you’ll need to know in order to measure progress.
To increase team productivity or efficiency, you might want to measure work in process, cycle time, and lead times.
To speed time to market, you might track cycle time on new feature development or the lead time of a new marketing campaign. To increase customer satisfaction, you might track sentiment ratings on support tickets or set up a way to ask customers to give you a Net Promoter Score (NPS).
Employee morale might be measured through an anonymous survey sent a few times per year.
1. Set up a system to gather metrics.
Whatever you need to measure for process improvement, set up a system for it. If you’re using Kanban boards to manage work, you can build a board to track metrics to fuel your improvement activity.
When used in conjunction with a well-designed Kanban system, Lean metrics provide actionable insights that help teams answer important questions like:
- How long does it take to complete a piece of work once we begin?
- What’s the average cycle time for each type of work?
- Where does work get stuck? How long does it wait between active steps?
- Are we underestimating how much time it takes to complete a request?
- Are we overloading any particular team member? How can we relieve this burden?
2. Practice clean data collection.
Before you begin analyzing metrics, ensure the quality of your data. Make sure your team is using the board in a consistent way. Before drawing any conclusions, ask yourself two questions:
- What does this metric truly measure?
- What insights am I trying to learn from this data?
The answers should be fairly similar. Data is only useful when it is analyzed accurately, in context.
Identify and Cut Waste
Nearly every process has some form of waste hidden within it. We’re defining waste in the Lean sense here, as anything that does not add value to the customer. If you identify and eliminate areas of waste within your processes, you will save time and produce higher quality results.
As you think about your team’s process, answer the following questions:
- What issues frustrate team members and / or customers?
- Which steps are creating bottlenecks?
- What is causing costs to rise or quality to decline?
- Which steps require the most time to complete or cause the most delays?
Again, speak to people who are most affected by the process and ask them what they think is wrong with it and what improvements they suggest.
Create Open Streams of Communication
Improving communication and collaboration requires you to eliminate boundaries so team members can easily participate in process improvement by sharing (and finding) feedback and ideas on a regular basis. Ideally, this helps people communicate clearly and fully the first time around to reduce the amount of back-and-forth communications.
Kanban enables teams to visualize work, creating opportunities for process improvement as they discuss capacity constraints and other bottlenecks.
Software improves communication and collaboration by connecting people more closely (even when they work in two entirely different locations) and putting all relevant communications in a single place. Ultimately, it leads to fewer emails, which means teams members spend less time digging through their inboxes trying to find answers and more time getting work done.
Establish a Cadence to Review Process Improvement Efforts
Process improvement is always a worthy use of time, but without a regular cadence to review improvement activities, it’s easy to let them fall by the wayside.
Whether or not your organization formally practices continuous improvement in the Lean sense, you can establish a system that allows you to practice process improvement in a consistent, sustainable, and effective way.
In general, process improvement activity gets less attention than project and break-fix work. It’s natural to let urgent work take priority over important (but not pressing) work. This is why it’s critical for teams to find ways to keep them top-of-mind and dedicate time to improvement activity.
Some teams review process improvement activities at every standup, while others dedicate a monthly or quarterly meeting – typically called a retrospective – to align around improvement efforts.
Establishing a regular cadence for both standups and retrospectives, and making sure you know how to run them effectively, is the key, even when more urgent work is looming.
Visualizing process improvement activities on the team’s Kanban board alongside other work is a great way to give improvement efforts the space they deserve. Leaders can reinforce the importance of process improvement by encouraging team members to block off time to devote to it. Similar to Google’s “20% time” policy, which is meant to encourage employees to spend time on innovation, dedicating time to improvement activity is an investment into the future of your company.
You might find success with dedicating a few afternoons a month to process improvement, or adding a few questions to your daily standup to keep improvement efforts top-of-mind. Whatever cadence works for your team, stick to it! While the impact might not be immediate, you’ll certainly see the impact of the work over the long-term.
Measure the Impact of Process Improvement Efforts
You did the work to track your performance metrics. Don’t forget to put them to use!
Before you begin work on any process improvement activitiy, determine success criteria: How will you know if it’s working? Then, during your regular meetings to review performance activity, be sure to discuss the performance of current or recently completed improvement projects.
As our world grows in complexity and the pace of innovation continues to hasten, every company needs a methodical, sustainable approach to maintain a competitive edge. Effective process improvement practices can help organizations operate more efficiently, reduce risk, deliver more value, and realize greater returns on their investments.
No industry, no organization, is safe from disruption: But by committing to process improvement, companies strengthen the muscles they’ll need to compete.