Improve Operations in 7 Steps

“Without continual growth and progress, such words as improvement, achievement, and success have no meaning.” Benjamin Franklin

ProcessStepsBottlenecks, inefficiencies, and lost revenue opportunities occur within every organization.  They can be hidden from view because “that is the way we have always done it”, “it’s too hard to change”, or because employees are fearful that if they speak up, they may lose their job.  In reality, most companies that conduct efficiency studies in order to find better, faster, and smarter ways of doing business often find that staff are more productive and enjoy their work more than before.   The process of evaluating business activities isn’t difficult and you can Improve Operations in 7 Steps.

Step 1 Define the Purpose:  Managers must first define a purpose.  The purpose may be to identify areas of improvement, determine alternate approaches for work performance, impacts of new system implementation, or determining how to implement a new policy, procedure, or strategic goal.  By defining the purpose, the team can then evaluate and analyze information in that specific area of focus.

Step 2: Document Activities:  Once the purpose is defined, the team can document processes by developing steps that incorporate inputs, outputs, completion times, decision points, and responsible parties.   Supplemental  information such as policies and reporting methods may not be depicted in a process diagram, but they do provide additional points of reference for the design and recommendations of future process actions.

Step 3: Identify Gaps:  Once information is collected and documented, areas of impact or improvement can be identified and classified. Some initial discussions for how to reduce or mitigate the inefficiencies often take place at this step, as the larger picture comes into view.

Step 4: Identify Alternate Methods:  In this step, we identify what actions, activities, or systems might need to be updated to improve operations.  Brainstorming and reviewing multiple ideas and perspectives furthers progress and promotes innovative thinking.

Step 5: Developing a Solution:  Not every idea and alternate method is realistic or achievable.  During this step, managers review multiple solutions and determine which one is most applicable to the business and its mission and vision.  Information in this step can include updating processes to achieve improvement, recommendations to changes in policy, procedure, training,  purchase of IT systems, or supplemental documentation to support a smooth implementation.

Step 6: Implement the Solution:  Organizational improvement solutions are not implemented overnight.  Testing, training, and deployment to employees can take weeks and months depending on the size of the solution.   As the solution is implemented, it is important to document lessons learned to help further improve the solution after it is implemented.

Step 7: Evaluate and Assess:  Now that the solution is in place, is it meeting or exceeding its original expectations?  Is the solution impacting other areas of the business?  What type of information and reporting can be extracted with this new approach?  It is important for managers to evaluate the solution  to determine if adjustments or refinements are necessary, and in order to fully identify the benefits gained.

The identification and improvement of business operations does not have to be complicated, but does require buy-in from management in order to communicate progress, report on results, and to ensure resources are assigned to document the issues and develop solutions.  The process of evaluating business activities isn’t difficult and you can Improve Operations in 7 Steps.

Do you have a great success story of how you have helped improve your operations?  If so, I would love to hear about it!

Internal Control Demystified

“You can make a lot of mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you’re too inefficient.” Sam Walton

ComplexOperationsInternal control means different things to different people.  When we think of internal control, often things like financial reports, misappropriation of assets, and instances of fraud come to mind.  While these issues are extremely important, there are many other aspects of effectively designed and implemented internal controls, including operational processes.

Operational controls, as the name implies, address day-to-day business operations executed in a manner consistent with regulations, laws, and regulatory guidelines.  Segregation of duties, delegation of authority, purchase card monitoring, cash controls, policies & procedures, time card approval, and annual performance evaluations are examples of operational controls.

So, what are internal controls and why are they important?  Internal controls are the processes and procedures put in place to help achieve an organization’s objectives.  Implementation of properly designed internal controls ensures resources are used efficiently and effectively to achieve desired objectives, maintains compliance with applicable laws and regulations, promotes the maintenance of reliable and timely information used for decision-making, ensures programs and operations are discharged with integrity, and contributes to the reliability of financial reporting.  It’s important to note that internal control does not just apply to financial management, but includes any area involving utilization of an organization’s resources.  In short, internal control is a process to achieve success in overall business operations…a means to an end, not an end in itself.

Internal controls are implemented and sustained by people.  It’s not merely policy manuals and forms, but people functioning at every level of the organization.  Internal controls protect employees by clearly outlining tasks and responsibilities as well as providing clearly articulated checks and balances.  An effective internal control program encourages adherence to prescribed policies and procedures.  All personnel are responsible for communicating problems in operations, deviations from established standards, and violations of policy or law.

Some organizations envision internal control requiring additional employees, adding new systems or even a complete overhaul of the current business environment.  While big changes may be necessary in some situations, this is not always the case.  The changes may be as simple as re-evaluating an underutilized existing system or reorganizing employees to increase responsibilities, resulting in a greater value to the organization.  It is not always a matter of increasing expenses, employees, or adding new standards.  It is simply a matter of evaluating the current structure and adjusting in areas where inefficiencies can be turned into opportunities.

It’s important to note that internal control can provide only reasonable assurance to an organization’s leaders regarding achievement of operational, financial reporting, and compliance objectives. It is not absolute assurance.  Internal control helps prevent errors and irregularities from occurring.  If errors do occur, an effective system of internal controls will help ensure they are detected in a timely manner. Properly designed internal controls increase credibility with stakeholders and customers and provides for more timely and accurate financial and operational information for decision makers.

Do you have any tips or best practices for managing and implementing Internal Controls in your organization?  If so, we welcome your thoughts in the comments below!  

Ask Organizational Questions to Improve your Bottom Line

“Almost all quality improvement comes via simplification of design, manufacturing…layout, processes, and procedures.” Tom Peters

magnifying-glass-450691__180When faced with challenges such as reduced profits, bottlenecks, or high turnover, managers typically focus on the specific issue,  develop a fix for the problem, and move on.  While this may appear to correct the issue, more often than not, the manager has only corrected a symptom, and not the root cause.  In addition, a change in one business area often impacts other business areas, either positively or negatively.  To help identify the source of inefficiencies, managers must be willing to look at the organization holistically and Ask Organizational Questions to Improve the Bottom Line so results can be realized long-term.

Managers should ask a series of questions or conduct an Organizational Assessment to analyze the company to provide a more accurate picture of the areas that are doing well, and those that could use improvement.  These evaluations and assessments are traditionally not difficult or overly time consuming if conducted properly. Identifying a focus area such as improved profits, resource management, or performance improvement will help frame the questions and provide information and data points that can be used to make informed decisions. Also, managers that use a mix of direct and open ended questions to obtain information are often provided with details and information that may be overlooked by only looking at data and figures. Taking a holistic approach to assessing the organization provides management with information that may not otherwise be identified by looking at one specific function or business segment, and can remove individual bias or leanings which could prevent further improvement, which can have long lasting positive impacts on operations and revenues.

To help get you started, here are some common questions across a range of departments to help identify the barriers for improvement. Remember, since a change in one area often changes something else, managers should work across multiple departments to validate root cause symptoms, prevent new risks from appearing, and confirming functions that can positively impact performance and results.

Executive Leadership: How does company culture, values, and mission impact operations? How is the company strategy communicated to employees at all levels of the organization?  Are strategic goals specific, measurable, attainable, realistic, and timely?  What factors have negatively impacted the company, and how have they been mitigated for future success?  What external factors impact business performance?

Administration: How solid are the internal operations?  Are they process driven, but still provide  latitude for management?  How often are processes, procedures, and templates  reviewed and updated?  Do quality assurance plans address internal operations, or just focus on customer products and services?  Are templates and training available to ensure consistent and reliable results?

Finance and Accounting: What financial trends have been reported historically, and have these trends improved?  What audit findings have been identified, and have they been successfully mitigated?  What type of controls are in place for handling cash, checks, vendor payments, and reconciliations?  How accurate are budgets compared to actual results?  Are changes/upgrades in technology reducing costs in other areas?

Human Resources: Has the business experienced turnover in specific roles or departments?  How long does it take to recruit new employees?  Are new employees able to start work with little to no training or ramp up time? Do open positions traditionally get filled by internal employees? Are employees provided with their position description and responsibilities handbooks?  How often is information with respect to company policies and procedures communicated to employees?  When was the last employee survey conducted?  Are employees properly trained?

Information Technology:  Can existing technology be used more efficiently within the organization?  How much information is lost when stored on local computers?  Do  contingency plans include information on managing IT assets during a disaster?  Does the company rely disproportionately on manual versus automated data?  Does current technology solutions still require manual validation between systems? How old is the technology?

Operations:  Are customer surveys conducted and results used to identify areas for improvement? What discrepancies are identified when conducting unplanned audits of company assets?  What type of safety mishaps have occurred, and has additional training been provided to prevent such mishaps from occurring in the future?  How often are operational processes reviewed and updated?  Can technology improve operational processes?  Is time lost in processing administrative requirements?

Sales and Marketing: Is the current return on investment acceptable for your business type?  Are sales goals being met on a regular basis?  Do products and services result in recurring orders and steady income streams? What percentage of sales are to repeat customers?  Can products and services be rebranded to existing customers for additional sales?  Are there alternative methods to improve sales goals by leveraging technology and associations?

By looking holistically across the organization, managers should Ask Organizational Questions to Improve the Bottom Line. Do you have other suggestions or tips to help managers cross departmental lines for improved performance and subsequently the company’s bottom line?  Have you recently performed an Organizational Assessment and improved operations?  If so, I’d like to hear from you!



3 Tools to Reduce Failure and Lower Risk

“My fault, my failure, is not in the passions I have, but in my lack of control of them.” Jack Kerouac

Most of us do not wake up in the morning planning or wanting to fail, but it happens.  As defined by Merriam-Webster, failure is an omission of occurrence or performance; a lack of success.  Failures in the workplace can be minimal or catastrophic and have long term consequences.   Oftentimes, after these failures are evaluated, corrective actions are put in place to reasonably prevent the issue from recurring in the future.  Instead of reacting to these failures as they arise, there are things we can do today to help minimize the potential for failure.

We have assisted customers respond to failures, and developing solutions to proactively prevent them using these 3 Tools to Reduce Failure and Lower Risk. Having found that these three areas are often the root cause of the failure, by reevaluating or implementing documentation, education, and communication tools in the workplace, most failures can be avoided or significantly mitigated which saves time, money, resources, and stress for the organization and its staff. 

1. Document – Documentation is the most important tool to prevent failure and lower risk, and is often the area that is most overlooked.  While many organizations may be bound by regulation and policy, if that information isn’t documented in a way the operators can understand, then it can easily be misinterpreted which results in incorrect reporting.  When reviewing or creating policies, processes, and procedures, think about the audience they support, and make sure that the lowest educated member of that audience can easily understand what is required.  It may mean that the reference is updated and tailored for different subsets for the various users (think entry level, supervisor, manager, etc.), so the terms, words, actions, and language resonate with the audience.  Documentation should also include templates, checklists, and written delegation of authority for key functions.  While there are many benefits to having a robust set of business documents and processes, including improved organizational awareness, increased information for cross-training and on-ramping new employees, other benefits identified by AccuProcess include validation that operations align with business strategy, increased control and consistency, and improved operational efficiencies, all of which reduce the potential for failure.

2.  Educate – Documentation is good, but if the end user is not trained, then failure will happen.  Education goes beyond sitting in a classroom or watching a video, as participants must have method to put what they learned into practice.  It is good practice to use a mixture of education and training methods, from formal classroom instruction, to informal on the job training and demonstrations.   Sites such as TrainingToday and have great information on training methods if you need some ideas to help reinforce the messages from source documentation. In addition to learning a specific skill or process, education improves job satisfaction and quality, and also promotes innovative ideas for further improved performance.

3. CommunicateHewett Ripley speaks on the Marketing Rule of 7 and identifies that back in the 1930s, it used to be that people had to hear a message at least seven times before they would take action to buy a product or service.  With additional technology and demands on our time since the method was developed, staff and employees need even more communication with managers and staff on company values, policies, and procedures which aid in the prevention of failures and issues.   While communication methods do not always have to be formal or written, but it must be reinforced regularly so information is obtained, understood and retained.  Leverage existing company tools, systems and materials to reinforce messages.  Some ideas include dedicating a few minutes to review information at staff meetings, intranet sites, printable flyers in the hallways, and even laminated reference cards kept with employee badges.  Sandra Thorton has a great overview of various communication tools that can be applied by organizations of any size and industry.  Even the document and educate tools can be used as communication methods!

Organizations that document, educate, and communicate are well on their way to preventing failure and minimizing risk.  I’d like to hear from you if you have other suggestions Tools to Reduce Failure and Lower Risk and success stories on where these tools have prevent failure from taking place!

6 Steps for Transforming the ‘What’ into ‘How’

change-architect-sign1 blog size“A policy is a temporary creed liable to be changed, but while it holds good it has got to be pursued with apostolic zeal.” Mahatma Gandhi

No matter what position or business we are in, we are bound to some degree by regulation, policies, and procedures.  These documents drive the ‘what’ of how we operate, and require that specific courses of action be complied with.  In addition to the federal regulations (which often have formalized reporting requirements), businesses and managers also utilize internal policies and procedures to track, manage, and analyze information. While these may not be as formal in nature, they do drive ‘what’ businesses do.

One of the biggest challenges many of us face is taking the ‘what’ of regulations, policies, and procedures and figuring out ‘how’ to do actually do them.  For example, if a policy requires that we identify, track, and manage risk within an organization, ‘how’ do we actually and successfully do it?  Over the years, there have been several instances where I have helped customers determine the ‘how’ without significantly impacting daily operations so that ‘what’ can be achieved almost seamlessly, using these 6 Steps for Transforming the ‘What’ into ‘How’.  It doesn’t matter the type or size of the ‘what’, these same steps can be used across all industries and requirements.

1.  Research:  The first place to start when trying to implement the ‘what’ is research.  Look external to your organization, conduct internet searches on key words, read industry articles, and see if there is any training or education events that can be of assistance.  I encourage you to look for templates, reports, and anything that may be related to the ‘what’ you are implementing.  While this will most likely leave you with stacks of what appear to be disparate information, the data collected can help develop a clearer picture of where things need to move towards.

2. Evaluate:  Once the research is collected and has been reviewed at least once, evaluate the information against what you as a manager or business owner are trying to achieve.  Look internally to the company to determine where the ‘what’ can be captured, and also evaluate existing systems, processes, and reports to see if there is a way to streamline or update existing methods to effectively collect the ‘what’.   In many cases, an additional metric, data entry, or other action can be completed to be in compliance with the ‘what’ without the need to obtain a costly system or tool.

3. Ask:  This is a critical step, and one that is often overlooked.  Reach out to your peers and contacts outside of the company and ask them how they do the ‘what’.  This step is completed now since you are more focused in what you think you may need, and can ask specific questions to help meet those needs.  You may be surprised and how much good information is out there amongst our peer group, and oftentimes we are just too afraid to ask!  I have seen customers use information from their peers and tailor it to meet their needs, without having to recreate the information from scratch. If you do find some good ideas or tools to manage the ‘what’, make sure you give the credit to the source.

4. Develop:  By now you should have a wealth of information from multiple sources to which to develop a plan for the ‘how’.  You have conducted your external research, evaluated current operations and asked your peers.  With the data and information collected, the approach at turning the ‘what’ into a ‘how’ should be clear.  It may be to add a line on an existing report, adding a field in an existing system, or creating a template to capture the required information.  Additional analysis and evaluation of existing practices may need to be captured and collected to determine if a cost impact is associated with the requirement.  This step is where managers determine what other area(s) and item(s) are impacted within the organization, and develop a plan to implement accordingly.

5. Implement:  The fifth step is to implement the ‘how’.  It is important to remember that supplemental actions in response to the implementation may be necessary. These can include, but are not limited to, employee communications, updating existing policies, and conducting employee training.

6. Review:  Depending on the frequency of the ‘how’, after one or two collections of data, it is important to review the ‘how’ to make sure it is compliant with the ‘what’ and that the data captured is accurate and contains the information necessary.  Feedback and lessons learned from those that aid in the generation and oversight of the ‘what’ should be reviewed and considered during this step.  If an adjustment or update is needed, this is the time to do so.

These 6 Steps for Transforming the ‘What’ into ‘How’ help managers and business owners alike as they navigate changes in regulation, policies, and directives regardless of size and origin.  If you have other tips or advice for those navigating implementation obstacles, please share them in the comments!