6 Opportunities To Improve Your Business
Are you doing things right, and are you doing the right things? Both of these questions are relevant when looking at a business improvement initiative. Business Improvement is the process of moving your business from one state to a state that is better. A business can be improved by focusing on process, costs, or revenue. As you begin a business improvement journey, here are 6 broad categories to consider for business improvement.
1.
Develop a Business Improvement Strategy
This may sound obvious, but you’d be surprised at how many companies/organizations we engage with don’t have one. Often they have an overall business strategy, but not a specific business improvement strategy—6 to 10 places the business can be improved.
The development of the improvement strategy should begin by talking to a cross section of employee stakeholders, SMEs and executives. It’s often valuable to have an objective expert conduct these interviews for maximum value. It’s not uncommon that the analysis from these interviews will uncover the focus for specific improvement strategies and action initiatives. Those who are closest have really good ideas for solutions.
Another important step in developing a business improvement strategy is to develop a business case for each strategy or initiative. The business case includes any additional costs to implement the strategy and also the opportunity value, ie. hard cost savings, revenue improvements, and soft opportunity savings such as time or improved decision making. Again, you’d be surprised at how often we see companies/organizations looking at the cost and not the opportunity. In order to have others engage and ultimately own the improvement strategies it is important that the business case is clear and comprehensive; speaking to company and employee opportunity. The business cases will help establish the importance of various strategies and ultimately establish the timeline for execution.
Another important step in developing a business improvement strategy is to develop a business case for each strategy or initiative. The business case includes any additional costs to implement the strategy and also the opportunity value, ie. hard cost savings, revenue improvements, and soft opportunity savings such as time or improved decision making. Again, you’d be surprised at how often we see companies/organizations looking at the cost and not the opportunity. In order to have others engage and ultimately own the improvement strategies it is important that the business case is clear and comprehensive; speaking to company and employee opportunity. The business cases will help establish the importance of various strategies and ultimately establish the timeline for execution.
2.
Conduct Customer VOC with Strategic Alignment
Customers and Suppliers often have a valuable insight into your business. These folks have a different perspective on your business than employees. Even if their perspective is inaccurate, it’s still their perspective and must be taken into account and managed. These interviews, if done objectively, will provide valuable business improvement opportunities and strengthen your partnerships. An interesting additional benefit is the value of asking someone what they think. You don’t have to do everything anyone says. Let them know it’s input, then take the nuggets and use them.
3.
Design a Technology Strategy
One of the most important enablers of business improvement is technology. Make sure your Technology Strategy focuses on security and risk management, infrastructure and support services, business process simplification and agility and BI management of data and reporting. The Technology Strategy should provide a roadmap of prioritized projects along with the degree of difficulty, timing for implementation and ROI. In the end, having a Technology Strategy will save you time, resources, and dollars while improving your business. Focus here will only make your future business better.
4.
Implement Big Data Analytics to Stop Profit Leakage
Profit leakage is defined as the loss of profit caused by unnecessary costs or failure to capture revenue that has been earned. Properly implemented Big Data Analytics can be an effective tool for finding profit leakage. Every firm has some profit leakage. Because of the complexity of the data and the business and Data Science expertise required to uncover leakage, most companies/organizations don’t do it. Consider the complexity of reviewing all your vendor contract pricing to all product delivery (and exceptions) to all vendor invoices to all AP payments. Or how about analyzing shrink of each product or SKU by location identifying trends or analyzing Amazon’s payments against orders shipped, returns, and fees.
These are examples of analyses that can yield real business improvement opportunities. Often such analyses yield millions of dollars of savings and solutions for process changes that identify and plug these leakages in the future.
5.
Realign Sales Approach and Story
Customers engage your company through your sales approach and the story that you tell about your products/services and how you’re different (better) than the competition. Often, sales organizations and sales approaches grow over time. Unfortunately, the market and customers are ever changing and thus to be in sync requires periodic reviews of the structure, method and approaches—if you want to stay in touch with your customers. A perfect example is before the pandemic we didn’t really think sales could be closed on a video call, now we do! We find most companies/organizations need to do this realigning more frequently than is currently done. A review of sales approach should include how customers want to buy, what information they need to buy, and business case examples of cost and opportunity. Make sure that the sales incentives are aligned with this new improved business approach as well.
The Stories that are told by companies/organizations are usually told from their perspective. Unfortunately, that is not the best way to have your Story heard and understood. The Story needs to reflect the “listening” of the audience, in this case customer. Your Story must capture your company’s “why,” also your customers' outcomes and competitively your difference. The message needs to be simple, thought provoking and memorable. It must represent the integrity of your company/organization and contain a call to action. Realigning your sales approach and Story will be a fertile place to consider if you’re looking for business improvements.
6.
Implement Operations Process Cost Saving Initiatives
Process improvement involves the business practice of identifying, analyzing and improving existing business processes to optimize performance, meet best practice standards or simply improve quality and the user experience for customers and end-users. Common process improvement uses a combination of Lean and Six Sigma methodologies. Lean is focused on the elimination of waste (called Muda) while six sigma is concerned with minimizing variance in process. The critical part of process redesign is getting an objective evaluation of the existing process. It’s important to involve the stakeholders for future ownership of the new process, but often they will have a bias or agenda. Hence you could use a third party or you could also use another functional leader.
The critical elements in process redesign involve documenting the current process, laying out a more agile new process design. In addition, calculating the new process costs and opportunities will convince others of the need for change. Identifying the pros and cons for the company and the stakeholders will help in creating the ownership for an effective transition from current to future process design. Some of our prior business improvement suggestions can identify the processes that will yield the most business improvement opportunities with redesign.
The critical elements in process redesign involve documenting the current process, laying out a more agile new process design. In addition, calculating the new process costs and opportunities will convince others of the need for change. Identifying the pros and cons for the company and the stakeholders will help in creating the ownership for an effective transition from current to future process design. Some of our prior business improvement suggestions can identify the processes that will yield the most business improvement opportunities with redesign.
Executive Partners is a business improvement consulting firm with over 30 years of experience implementing business improvement results. They have worked with organizations from mid sized to fortune 100, developing efficiency strategies, business case analysis, and assisting in technology upgrades.
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