7 Mistakes That Destroy Your Business Efficiency: An Expert Interview

7 Mistakes That Destroy Your Business Efficiency: An Expert Interview process.st /business-efficiency/ 7/19/2017

Lately, we’ve been diving deeper than ever into the real problems companies face while scaling and systemizing their businesses. Whether that’s failing to understand why processes are important, being clueless about how to create processes, or being unable to police process adherence, we’ve covered a lot of ground on our blog. One thing we were short of, however, was the insight of hardcore process experts, real businesses, and our readers.

I got in touch with Jerilynne (better known as MamaRed) Knight, a process consultant of 30 years and an experienced Process Street user. After reading an extremely insightful comment of hers on Ben’s article about operations manuals, I interviewed her over the phone for well over two hours and learned more about the way processes work in the real world than I have from the books or articles I’ve read since joining Process Street in 2015.

Jerilynne has worked for clients of all sizes, from a company of just 10 employees to huge American corporations.

What links every company she’s worked with? They waste resources because of grave inefficiencies, and then get concerned about spending money to fix their problems.

“Documented processes are a proven way to make businesses more efficient, but often they don’t want to listen. I remember one executive saying “I don’t know why we have to do this shit. No one reads it”. I leaned forward right up into his face, and I said “do you want to know why people don’t read that shit?”. I told him that people check out the process manual and find it’s too difficult to read, or that processes aren’t applied in a way that slots them into the way people expect to work. There’s no taking shortcuts when it comes to processes.”

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In this article, I’m going to share with you a vast wealth of insight, experiences, and tips for improving business efficiency. Here’s some of the most deadly process mistakes to avoid.

Mistake #1: Refusing to identify the areas where you’re wasting the most time and money Carefully allocating money for anything but processes

As the quote from Tom DeMarco goes, “You can’t control what you can’t measure”. Is your team repeating work?

Are they changing their workflows in ways you don’t know about? Are you sure that everything is happening in the most efficient way? It’s easy to say that nothing needs changing because most tasks appear to go smoothly on the surface, but, in Jerilynne’s experience, things aren’t ever quite what they seem.

“I sat down and found one thing that was being repeated 36 times. The same exact text, 36 times, and it had to be proofread and edited. I calculated out the time that takes everyone involved and it came down to almost 8 hours wasted.”

That’s 8 hours if it’s calculated at 3 minutes per edit. As anyone with writing experience knows, says Jerilynne, you can’t even find where you need to be in the document in 3 minutes. Even by underplaying the numbers to make it seem more realistic, the business in question wouldn’t listen.

Jerilynne described the outcome to me: “What happened is that they changed the processes without talking to anyone who actually did the work. They started out with 41 editors and cut it down to 20. Again, it wasn’t documented, and the problem wasn’t solved.”

Jerilynne also outlined an example of an average everyday mistake that could be avoided by implementing processes. Every time the mistake occurs, it wastes one hour of time — how much that one hour actually costs the business all depends on who’s making the mistake. If it’s a repeated mistake that affects two people in the engineering team per week, then that’s 4 hours of engineering time out of the window, which could be several thousands of dollars monthly, wasting away invisibly and unable to be tracked without processes.

Let’s look at the example:

Most small businesses have someone on first-tier support. They take the call, they talk for 15 minutes, they don’t have any answers for that client. The client’s frustrated and that’s 15 minutes of time spent. Then, that person goes to the engineer and says “oh my god, I can’t figure this out, blah blah”, and tells the whole story which takes 15 more minutes. That’s 30 minutes. Then, the engineer tells first-tier support what they should tell the client. That takes another 15 minutes. First-tier support gets back on the phone with the client, and then takes another 15 minutes explaining the same solution they just heard from the engineer.

That’s one hour wasted in total!

That’s the hidden costs of bad processes. That’s the time-wasting no one knows about it, and no one knows how to solve. At least one hour per mistake.

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I wondered how much time an organization like this would need to spend to create processes, to see if that’s a clue as to why processes are often overlooked. Jerilynne explained to me that an experienced writer should have no trouble getting each process documented within the space of 2-4 hours.

Mistake #2: Stubbornly relying on old-school tools

We surveyed our blog readers (if you responded, thank you!), and found that 12% of respondents were managing their processes with nothing at all, and, of the remaining 88%, most respondents which mentioned tools said they use Microsoft Word, Excel and PowerPoint almost exclusively.

Is that a problem?

Yes. These tools are not optimized for creating, running, and tracking business processes, but they are so ubiquitous that businesses rely on them regardless.

“They wouldn’t change their tools, they would only use what they had. The fact that it was like saying ‘go build a house with just a hammer’ mattered not. It made me realize just how inefficient they were, and then I couldn’t help see it.”

Many businesses simply don’t know that alternatives to the classic Microsoft suite exist. And, if they do, they don’t trust them or find it difficult to get organization-wide approval on the change.

I told the big insurance company that we’d be able to fix their problems if we had easily accessible documentation. And, by the way, I introduced them to Process Street! The way I see Process Street is as a two-fold tool. You have the checklist itself where you can put the brief outline. If you know how to do the task, that’s fine, you can check it off and move on. But the thing that made me absolutely love Process Street was that you can then open up the other panel and go into detail. No more “go find a Word document!”.

Jerilynne told me that most businesses she’s worked with over the years — even modern organizations — haphazardly use Word, Excel, PowerPoint, and SharePoint. They had no concept of consistency or information architecture, so files and folders had random names, and the internal documentation was a big mess: “You’d have to know which folder [the document would] be in before you could look for it, which usually means no one looks and you end up with a game of telephone (a situation where employees ask each other for the correct answer instead of looking it up).”

Like a lot of us here at Process Street, Jerilynne finds that traditional office software isn’t suited to business process management. She said, “ I tried to create a process using Google Docs, and I thought I was going to cry!” .

Mistake #3: Stifling process development with bureaucracy and hierarchy

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According to Jerilynne, the bigger the organization is, the more likely it is that process development will be painfully slow, bogged down by internal politics, or practically impossible. Even though the process participants know their ideal workflow better than any C-suite decision-maker does, often the power to affect change and improve efficiency isn’t in the hands of those who need it.

Where does all this bureaucracy come from with processes? Is it because managers don’t understand the benefits enough?

Bureaucracy is one of the biggest causes of the bottleneck. Managers don’t quite understand the benefits of processes, Jerilynne said, and they’re more concerned with politics and power struggles than getting work done in the most effective way.

Why does nothing change? “The people doing the work don’t have the authority to make the decisions.”, Jerilynne explained.

To propose any kind of process improvement, we’d have to talk with the team leads, the team leads would have to talk to the manager, the manager would talk to the VP. The hierarchical structure was completely ridiculous.

The flip side of that is in smaller, more agile organizations. That’s where I prefer to work. Typically, they’re not funded really really well, or, if they have been funded, they’re running so streamlined and haven’t gotten big enough to find out that things are turning into a game of telephone. I wrote documentation for years, and it took me maybe 30 years to understand why I thought it was important and why I did it.

Mistake #4: Believing that processes aren’t directly linked to the profits, losses, and business efficiency 4/9

Finding money to fund the creation of processes is a struggle for many businesses, but even more so when businesses don’t understand the link between processes and cutting costs. The bigger a company is, the more it’s going to cost to implement processes, and the more confusing the project seems.

Since I’m not a consultant, I wanted to find out if businesses are aware of the costs and how much money they can save with that initial investment in processes.

Often, businesses don’t understand the financial reality of processes. It’s unclear how much they’ll cost or how much they’ll save, even if the business is starting to come unstuck as it gets bigger and more bloated. “In the 8-10 people range is when it really starts going downhill. The telephone is broken and the errors are starting to show up. To fix that businesses need more education about processes.”

The improved performance of a call center (shown in how quickly calls were answered and resolved) after implementing business processes.

When Jerilynne explains to companies that they’ll have to invest a certain amount of money in processes if they expect their operations to run smoothly, executives often aren’t convinced of the ROI. As Jerilynne puts it, “How can they justify taking the time away from running to the coffee shop to meet with a potential new buyer, and create processes instead?”. She went on to explain that an initial meeting to get process documentation underway would cost about $1,000 plus 1.5x the wage of every employee in the room for the time they spend away from their usual duties.

When using cloud-based process software, the costs are drastically reduced. The total cost of producing an SOP manual complete with constant revisions and updates is around $20,000, Jerilynne explained, but software cuts that down because revisions are global, automatic, and free.

Mistake #5: Not realizing that processes prevent errors that kill people (and save millions of dollars)

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In some industries like health, manufacturing and construction, failure to create processes and adhere to them can get your business deeper trouble than reduced profits. It can get you into horrendous legal trouble (and, in turn, incur billions in fees). You’d think that companies in these kinds of industries would be the ones adhering most tightly to their processes, but that isn’t always the case. Jerilynne explained a situation she’d experienced with a client working a multi-million dollar project coating the blades of airplanes.

Any error could have been a minimum of a $3m mistake. If it wasn’t done right, the blades wouldn’t turn on the plane, and you could incur multiple billions of dollars in loss of life.

Not only were the processes undocumented, they were different depending on who you asked. The more experienced workers had started tweaking the process to make it more efficient for them, and then training new employees differently. Jerilynne stated why businesses need to be so cautious of this: “ When you teach a new hire, and they make a mistake, they don’t even know where the error is or why it occurred and they can’t prove to their client that this blade they want coating is going to get out of the other end of the process, because the minute it leaves the door with an error, that’s $3m.”

Mistake #6: Underestimating the skills necessary to create solid processes at scale

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In small organizations, it’s often enough to put the person who runs the process in charge of creating it.

For example, I’d be in charge of creating and updating our blog processes because I’m the one who runs them. The bigger an organization gets, the more processes that need creating, and the more pushback you might get from employees who think they don’t have the time to do any extra work. Sometimes, that’s where consultants come in.

Sometimes, it’s just a change in attitude that’s required.

Businesses really don’t have time to document processes, Jerilynne told me. They also don’t know how to hire a fulltime employee who does. Even after 30 years on the job, businesses still tend to test experienced consultants with tasks like “write the procedure for how to tie a shoe”.

“Businesses need to realize they must invest in documented processes if they plan to grow their business. At all. It’s not going to come free. They’re not going to get someone from Fiverr that’s going to do them a damn bit of good.”

Most people can at least be trained to write a draft that an inexperienced employee can use to see if the language and details are clear and concise. Hiring a consultant, even if it appears expensive on the face of things, is actually much cheaper in the long run.

In fact, Jerilynne says most of her clients have recouped the expense in less than a year and, often, in less than 6 months.

Mistake #7: Misunderstanding the real-world situations where processes are used Not everyone who runs a process is sitting at their desk, or in a situation where they can comfortably reach for a manual and look up the correct procedure. But, even in potentially risky industries like healthcare and construction, there are ways around it. Writing in The Checklist Manifesto, Atul Gawande explained how he implemented a laminated checklist in a busy operating theater that has been proven to avoid deadly errors. Similarly, Jerilynne implemented paper processes hanging up in the workstations in a manufacturing plant.

Since you can’t just go and use a computer, you often need to think about accessibility: “Accessibility is a huge deal.

If you don’t think that processes are an important part of your business, you’re not going to allot the resources, you’re not going to think it’s necessary to have a professional writer do it, you’re going to pop it onto somebody’s lap 7/9

that doesn’t look like they have enough to do already, then you’re going to say “nobody reads it anyway, and processes don’t work!”.

In another situation, Jerilynne told me about a client who was trying to reduce human error in a team that worked in a clean room. Since a clean room is an area where you have to decontaminate and get suited up when you go in, no one wanted to go and look any processes up once they had entered the clean room. The team didn’t even go out to lunch because it took so much time to clean up again. Instead of going to grab a manual, the employees would phone up the lead engineer from the clean room and constantly ask questions, wasting the engineer’s time.

The checklist Atul Gawande implemented for safety in the operating theater.

I went back and I said “you want to know why people don’t use your manual?”. It’s because it’s locked in a cabinet in the supervisor’s office, down the hall about 15 doors away.

The best solution for most cases? Process software, Jerilynne argues: “The gift we have with this tech is that it can be accessed anywhere, it’s easy to update documentation across the board. You don’t have to reprint and redistribute the manual! Just because the tech exists and empowers businesses in this way doesn’t mean they’re going to use it properly.”

Is your business getting harder to control as you scale? Are you looking to streamline your operations? It’s time to give Process Street a try and start creating, tracking, and improving your business processes.

Get your free Process Street account today.

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