Inefficient Business Processes In My Company? How Come?
If you have ever undertaken the task of redesign inefficient processes, you have probably, in some point in time, asked yourself why they are inefficient in the first place. In this post, I’ll touch on some of the common reasons inefficient processes are introduced in the companies.
So, how do companies end up with inefficient processes? Three of the most common reasons are listed below:
- Improvisation
- Status quo
- Control mechanisms
Let’s cover each one of the items above, starting with improvisation. How does improvisation create inefficient business processes? Well, sometimes companies don’t have time, capital, or will, to proper model their processes. So, they use the approach I like to call “TAYGO (Tweak As You Go)”. In this approach, employees tweak business processes to meet their needs based on daily feedback from the business without overtaking major analysis.
There’s nothing wrong about updating business processes as long as the update is done with the full business picture in mind. The team redesigning the process must have a complete understanding on how the changes will impact other processes in the organization, and whether or not the changes will actually increase process efficiency. Sometimes these little tweaks are done by employees without any vision of the business beyond their department, which more than likely will affect other departments or processes.
The second item on the list is the status quo, which is a clear reason for inefficient processes. It’s not unusual for employees to not know the reason they must perform their tasks the way they do. Basically, when an employee C is hired, he/she is trained by employee B, who in turn, has been trained by employee A, who retired from the company years ago. If asked why a task is performed in a specific way, the answer is usually “because it has always been done this way.” In order to really improve a process, companies must be willing to tackle status quo as needed. If there’s no valid business reason for performing a task in a specific way, there’s a good chance that the main process can be improved if redesigned. Remember, processes must be constantly evaluated to ensure they maintain their efficiency over the years; failing to do so increases the chances that the business would be maintaining processes or tasks that could be improved or eliminated altogether.
And finally, control mechanisms, the third item on the list, are usually put in place to ensure processes are consistent and deviations are caught in time to be addressed. Even though control mechanisms are sometimes necessary, companies have to be careful to not overuse them. Too much control can actually affect efficiency, introducing bureaucracy in your processes, and increasing the time it takes to perform them.
For instance, let’s take a process that, in the past, was performed by just one person, from start to finish without any control mechanisms. As the business grows and new employees are hired to help in the process, control mechanisms are introduced to ensure that, within the process, the output of task A, which is performed by employee A, is a valid input that can be used by employee B to perform task B, and so on. By introducing the control mechanisms above, the company has definitely increase the quality of task outputs, but at the same time, it has also increased the time needed to finish the whole process due to the extra time required by the control mechanisms.
Another good example of a control mechanism would be the introduction of manager authorization requirement for specific tasks, such as purchase orders. Even though the authorization requirement gives managers control over what is being purchased and by how much, it also increases the time it takes to purchase the item, mainly due to the non-value-added task of having to wait for the manager to evaluate and authorize the request. A better approach would be to require management authorization only for purchases above a specified dollar amount, eliminating the bureaucracy on less expensive items.
In summary, improvisation, status quo, and control mechanisms are just a few of the common reasons inefficient processes are introduced in businesses. Regardless of the reason, one thing is certain, if inefficient processes are found in your business, these processes had probably not been designed properly, but just put together over the years to overcome business challenges.
Do you have a task or process in your company that could be improved? How?
