Any successful business is a sum of offered services, product, assets, technology, procedures, Know How and the people serving the business. A procedure is an “automated machine” that creates and delivers the services and products, obtains assets, innovates Know How and runs the company towards success, while people are elements serving this machine.
Let’s imagine a huge automated factory working non-stop producing a product which passes dozens of stages at the production conveyer, where hundreds of employees are serving this huge machine. This factory called Procedures. Successful company differs from unsuccessful by determined procedures, strategies and high-quality work delivered by the employees.
Most of the companies are determining people as the key factor, whilst the business processes take also a major part of organizational success. A procedure is more than just understanding of what is required in the organization. A procedure is a law, rules and regulations of the organization aimed to improve and control the business in its best aspects.
I determined the main 5 phases that help an organization to build well-integrated procedures.
Phase 1. Determine the Goal
Any procedure has its own purpose to be achieved. An organization must determine the exact goal to be achieved. It can be a minor goal as “Order A4 Papers”, or a major objective as “Achieve Sales Goals”. The goal is not part of the procedure, but the procedure is the instrument helping to achieve the goal. For example, the goal can be “Finalize any payments in the organization within 3 hours after receiving a payment request”, or the organization might have a goal “Increase the absolute performance of the employees of the Analytics Department.” A well-developed, correctly implemented and professionally followed procedure will help the organization to be at the closest distance to the set goal.
Clearly determined goal will frame our thinking to use every possible tool in achieving the goal.
Phase 2. Shortlist Key Players
Once the goal is successfully determined, we need to spread the net of steps from the goal via engagement of all possible departments and key players that require participation to shape the result to the desired look. For example, if the goal is to make the fast payment of received invoices, the key players will be Purchase and Finance Departments, Purchase Executive, Accountant, Finance Manager or maybe even the Managing Director, depending on the corporate structure. If the main goal is to increase the performance of sales employees, the key players will be Sales Employees, Sales Manager or maybe even HR.
Shortlisting the key players will allow us rationally frame our procedure into responsibilities of relevant departments.
Phase 3. Traceback
At this stage, you must turn up your mind into a white paper for drafting unseen and creative ideas. At this stage, your mind should not be influenced by draft-thinking, previous procedures or past. This stage must be entered with rational thinking, which will be a pen writing a new workflow on the white paper of your mind.
Traceback needs to be started from the final stage of the wanted result and going step by step back to the beginning. Let me come back to the example we considered above “Finalize any payments in the organization within 3 hours after receiving a payment request”. Using the Traceback we will proceed as follow:
Result: Payments are made within 3 hours.
Traceback: How are they made?
Step: Via online banking or issuing and signing the cheques.
Traceback: How it happened?
Step: Accountant issued the cheque and signatory signed it; or finance manager transferred the funds using the online system.
Traceback: Who signed the cheque or authorized the payment?
Step: Managing Director has signed the cheque and authorized the payment.
Traceback: How Managing Director received a request for payment authorization?
Step: Finance Manager provided the necessary information.
Traceback: What necessary information consist of?
And so on…
During the Traceback, we need to ask questions beginning with “Why, How, Who, What, When, Where”. These questions allowing us to be reasonable in thinking and free from all unreasonable and irrational influences.
Phase 4. Select Indicators
Upon reaching an approximate understanding of achieving the goal of procedure via the Traceback, as the progressing phase, we will select and start monitoring the indicators related to the drawn process. Selected indicators must be related to the process itself and individuals involved in the process.
It’s important to brainstorm the ideal outcome and possible indicators of the procedures that will give us a picture of the performance of the process. In our example of making the fast payments, we have 1 goal “Process the payment within 3 hours”. The relevant indicators to current, simple procedure will be:
- Processing time (as our main purpose is speed);
- Delays (as our main purpose is speed);
- Full information about the payment (as we’re processing the payment based on the information. Certain draft of required information must be pre-determined);
- Typos or mistakes during the cheque preparation or online transfer (as payment method is cheque or online transfer);
- Or any others which are important for your particular business.
The quality of process and the performance of individuals is estimated by looking at the selected indicators during every initiation of the procedure. Current phase is the Efficiency Estimator of achieving the goals by the procedure.
Phase 5. Cut off
The more parameters and steps in the procedure to be considered and processed, slower the procedure becomes. The last stage of shaping the constructed procedure is to answer the question “Is there anything to be removed to make it simpler and faster?” Here, can be considered: certain steps, participants, tasks, indicators, etc.
By revoking certain steps and stages, which aren’t involved in direct contribution of reaching the goal of the procedure, the organization becomes more flexible, fast and maneuverable.
By Akhmed Idigov