The Process Ninja

The World's Worst Process?

I struggle to think of a worse process than the one I'm about to discuss. It's a worldwide process - active in almost every country in the world, if not all. Wars are fought over it, businesses built on it and from my point of view it's inefficient and unnecessary in this day and age. What is it? It's cash.

Yes, those little coins that swim around in your pocket and which you throw into fountains to make your wishes with - they have been with us for thousands of years and I now believe the time is right to get rid of them forever. Let's think about a world without cash - a cashless society.

• Most bank branches would cease to exist - there would be no need for over the counter transactions, no more waiting in horrible banks in horrible queues
• There would be no more ATM's - no longer would you have to trudge around looking for one to get cash
• Retailers would no longer have to go through tedious cashing up processes or have to dash out to get "change" from the bank
• Billions, if not trillions of unpaid tax would be returned the the economy as there would be no way for businesses to put cash "in their back pocket"
• Cash related crime would be almost totally eliminated - who would want to steal your wallet when you could call up and freeze your card instantly? There would be very few robberies of retailers as there would be no cash to steal!

Cash transactions represent an highly inefficient process and one which adds little value from a customer experience point of view. It's a legacy thousands of years old that has come to be accepted, but which should not be tolerated any more. It's time we eradicated its use and made our lives simpler. And as for the fountains, well, they'll find something else to throw in them...

- TPN

My Presentation from the BP Group Sydney Sundowner

My presentation from the BP Group Sydney Sundowner a couple of weeks ago. Here I discuss some of my recent experiences with using outside-in process design at two very different clients.

- TPN

Why speed and flexibility will be the new process essentials for 2010

We are in the midst of a process revolution. At no time in our history have businesses been so prone to the speed of change. Technology today has changed the game plan and the field is becoming more level. Big businesses no longer have the advantage they previously had. New media has turned things on its head.

But it’s also a consumer revolution – never have we had the ability to express ourselves so rapidly or as effectively as consumers.  What does this mean for organisations? It’s a case of adapt or die. Social media tools such as Twitter are meaning that customers are venting like never before (both good and bad), but mostly bad. They now are able to be heard by the world – and heard instantly.

Those blundering corporations that don’t return calls, don’t respond to e-mails and don’t give the service that they spend so much money advertising are going to have a wake-up call. They have never been at risk of such consumer erosion in their history. They are at risk from upstarts, from small business, from competitors who “get it”.

In the last 30 years or so we’ve become accustomed as customers to being disappointed. We’ve gotten used to “press 1 for blah, press 2 for blah…” and being shunted around in circles, our problems being passed around like hot potatoes until we give up. Not any more. Consumers now have the power and they’re using it. We are entering an age where they will expect a higher standard of service than ever before (and so they should). Remember “good old fashioned service”, well it isn’t old fashioned anymore.

As a result Business processes now need to be flexible enough to change to rapidly respond to customers’ needs and wants. If ever there was a time for BPM to prove its worth, that time has come.

Turn Your Business Outside-in (my latest article for www.flyingsolo.com.au)

My latest article for small business website Flyingsolo - "Turn Your Business Outside-in".

Who Needs Processes - Watch the Ninja on BNet

Process for Small Business - The Undiscovered Country?

One of the biggest issues I have with BPM is it's focus on big business. We all sit in our shiney office blocks buying our big, expensive BPM tools and talking about governance, etc, etc. But outside our freshly cleaned windows is a little world filled with shop and cafes, butchers and bakers - small businesses "the lifeblood of the economy".

What use is ARIS or BPMN to them? How can they implement SOA? They can't - it's totally unfeasable - but does that mean that we should designate small businesses as process free zones? Of course not! There are still practical process solutions to help small businesses.

I onced owned a cafe - when I bought it all the knowledge was in the previous owner's head - I sucked all this information out and documented the entire business - I made the knowledge transferrable. I turned the little cafe into a totally process centric business (and it worked!) Let's not forget how McDonalds started - once it was just one restaurant until they developed it into a process centric business (a franchise!)

But this isn't to say that every small business should aim to be a global giant - process can help small business owners to build better businesses. It can help them become more efficient, save money, improve customer service, improve standards - all the things we want for big business.

So the next time you think about BPM, spare a thought for the little guys - they need our help too.

Using measurement to improve your business

My recent post on chefs has provoked some further questions, and one of those questions centred around measurement, ratios and monitoring of how my cafe was performing. I wanted to share some of those insights with you. Here's how I used measurements to help to improve my business:

Revenue:

"Revenue is vanity, profit is Sanity" - this is some of the best advice I've heard. OK, the cafe needed to make money to keep going, but profit is always the most important measurement.

However I measured my revenue (and GST) via my POS (point of sale system). This system also allowed me to have a breakdown of the number of customers and the type of items that were selling. Therefore I would periodically "prune" the menu to bring in new dishes to improve sales. It also helped me to monitor the number of customers over a period of time and to identify whether average spend per head was changing over time.

Profit:

Profit can be tricky to measure in a complex business - but it is absolutely vital! But to measure profit you must understand costs...

Costs:

The percentage guide is a methodology that some café or restaurant owners use to manage the costs of their business. It states that each cost should fall into a category which makes up a particular percentage of turnover (ex GST), as follows:

Category              %

Staff wages        25-35

Food                  25-35

Rent                  10-15

Other (utilities, insurance, repairs, etc.) 10-20

Profit     = Whatever is left!

The percentage guide is useful, but the most important thing to remember is that there must be balance. E.g. if the staff costs are high, this should be balanced by the food costs or rent being a bit lower. You can see that if all your costs are at the top end (35+35+15+20=105%) – you will be losing money!!! But if you can keep all your costs low (25+25+10+10) you will make a 30% profit (which is very good for a café). What you should do when looking at the financials is to work out the percentage for each line item.

What I did was to meaure my food and staff costs on a weekly basis using spreadsheets. As time went buy I would test out new staff rotas and tweak menu items to cut cost - but which did not affect another key item - quality...

Quality:

I developed a process centric business. I had operation manuals, checklists, etc to ensure that the business ran consistently whether I was there or not. Staff knew exactly what needed to be done at any time of the day and what the standards of the cafe were. Consistency and quality are key to a cafe or restaurant. Customer surveys help to monitor our customer service and food standards. In essence it was developed like a franchise - and this helped me to be able to step away from the cafe when I needed to.

Measurement is vitally important for any business - not just to be able to understand "where you are now" but to measure where you have come from...

What a chef can teach you about process and efficiency

In a previous incarnation I used to own a cafe. I never ceased to be amazed by the chefs that worked for me. Here we would be on a Saturday lunchtime, packed to the gunnels and one chef would be churning out food for all these people. So what did I learn from them?

Preparation:

From when they came in in the morning, if they weren't cooking food they were preparing the ingredients for the dishes.

 

Forecasting:

The chefs were always planning ahead - what will I need to order next? What is running out?

Quality:

The chefs were the first to tell me if an ingredient wasn't good enough or if a staff member wasn't pulling his / her weight.

Co-ordination:

As a chef you need to have multiple dishes ready at the same time. They did this by having all their ingredients ready and then starting the longest cooking dish first. It's like they had multiple egg timers in their heads!

Economies of scale:

By using the same ingredient across the menu in different dishes we were able to save money by ordering bigger quantities and reduce wastage by using up ingrediants quicker.

Procedures:

When a new chef came on board they used our operations manual to transfer knowledge to the new chef quickly and to maintain consistency.

Discipline:

Chefs are born into hard working almost military environments where they learn to have a tough skin, take orders and do what they are told. The kind of whinging and crying that goes on in offices would not be tolerated in a kitchen. Chefs learn discipline and hard work from day 1.

Now ask yourself - how your staff match up to these characteristic and (more importantly) if they don't match up, what are you going to do about it?

Can processes cure Business Insomnia?

I recently read (yet another) interesting article by Valerie Khoo entitled "Business Insomnia". It's about how stress running your small business can take over your life to the point that you can't sleep (or are waking up in the middle of the night).

When I was first running my cafe I certainly was a victim of business insomnia because the business was totally dependant upon me. But slowly and surely over time I built my business processes, trained my staff and freed myself from "being the business". It's important to make the distinction - you run the business, but you are not the business. If you are to build your business rather than be consumed by it, you have to step back from it - and the way to do that is to build a process driven business.