From The Stimson Group

Process evaluation and recommendation projects have continued to be a major source of my business. In 2009 alone, I have completed eight such jobs. Three were with Live Event Stagers, three with Systems Integrators, and two for companies with both divisions under one roof. I can honestly say that each of these clients is unique, but there are some themes that seem to recur. Here are some observations that have been consistent in most companies:

Organization charts can help or hinder the company's goals. Often we find an org chart that has evolved around longtime employees and "reward" titles. Business processes can then fall into silos (or kingdoms) that have developed unchecked for a little too long. Silos tend to prevent progress and make other people's jobs a bit more difficult. Generally one or two minor tweaks to the org chart can unlock the pent-up improvements, but in about 20% of my projects a bigger shakeup is needed to get the right people into the right roles. In every case I have encountered, the net result has been happier teams and smoother processes. I find that most employees want things to work better even if they don't want to be the one that has to change. Important note: if everyone has to change at least a little, then the reorganization is easier for the entrenched employees to accept.

Profitability is a great reason to examine processes. You would not be surprised to know that I occasionally come across companies that have not managed their processes well and are unnecessarily losing money. It's easy to be the hero when I can point out simple fixes. What surprises me is how often I come across operations where job costs have increased as planning has improved. It makes sense when you think about it. The more steps there are, the more places money can leak out. We work in a dynamic industry where timelines and decisions change constantly. Many processes are created to corral customers onto a path that makes the supplier more profitable. Processes also exist to satisfy the control issues of individual managers. But let's face it - most processes exist because one group of employees (operations) doesn't trust another group (hmm, sales?). I find that if you can get these two groups to agree on the goal, they can come to understand the needs and challenges of the other. In the end, there are benefits to streamlining processes.

Do the Math is one of my favorite reminders for managers. We have to have quantifiable data to support our decisions, so we need to reexamine our assumptions about what things cost. For companies facing difficult economic times, lots of small savings can really add up.

I find that most companies need to better understand the costs of doing business. For instance, our industry is subject to human error that leads to overnight shipments, unplanned deliveries, or an extra hour or two on the job site. While not all errors are preventable, you would be surprised how many can be eliminated if employees understood the cost. Take the cost of making an extra delivery to a job site. Many of my clients look upon this as a normal occurrence - but no one puts it into their budget. To do that, they would first need to know what an unexpected delivery is worth and how often they make them. Simple math says it is the cost of the driver and the van. Business math adds a cost of goods sold factor to this number, which can almost double it. Entrepreneur math would then add an opportunity cost on top of that - for the missed opportunity to make profit from that resource. Quickly that $50 mistake turns into a $300 or more disaster.

Here's another way of looking at this: how many employees, vans, meetings, and inventory could you eliminate if no one ever made a mistake? You can't eliminate all mistakes, but let's start with half of them.

The big lesson from 2009 is probably the most self-serving for me. When managers are facing difficult times, a fresh perspective is priceless. I always want to do a little more for my clients - get them even better results - but the one result they seem to value the most is an unbiased point of view.