Simple Processes Create More Revenue
Once in awhile Mom would tell me on the way out the door to school that we were having hamburgers that night. But when I came in from playing to eat dinner, I found chicken on the table. I was disappointed by the switch, which was completely irrational because I like chicken just as much as hamburgers. But she had set one expectation and fulfilled it with another. I was an irrationally unhappy customer, but unhappy just the same.
A realtor sold a house and sent a weekend voucher to a high-end hotel/spa to the new owners as a thanks. They recommended the realtor to friends, and after the friends sold their house, the realtor sent them a very nice, expensive house-warming gift. They were disappointed and never recommended her to others.
What happened? It’s simple. The realtor didn’t have a process in place for relating to clients and ensuring she got referrals. She was winging it. The first customer told the second about the weekend and when they got an equally expensive house-warming gift, they felt short-changed because the realtor had set an expectation for how they would be treated, then changed the rules of the game on them. The second seller thought they were getting hamburgers and they got chicken instead.
Simple, effective processes are a necessity for every small business. If businesses spent a few hours putting a few processes together instead of spending weeks on fancy business plans that never see the light of day again, they would be much more successful, much more quickly.
Creating processes to help us run our business is one of the keys to getting off the treadmill.
From Brian Phillips’ Third Secret of Small Business Success (of Four Secrets):
“Consistent results come from consistent actions. Too often we fall into crisis management mode and the wheels fall off the cart.”
Enter Edward Deming – 1950 – Japan.
What is a process? – “A system [process] is a network of interdependent components that work together to try to accomplish the aim of the system. A system must have an aim. Without an aim, there is no system.” Deming
Edward Deming, the father of modern quality and customer satisfaction had an 85/15 rule “85% of a worker’s effectiveness is determined by the process he works within, only 15% by his own skill.” One-person companies need processes as much as 500 person companies (more actually). If I’m operating without processes, I’m being as ineffective as possible, and my great chicken will not be well received.
Why we don’t create processes for ourselves.
- Only big businesses need processes – my company is small enough to not need all that “organization”. We couldn’t be more wrong. Operating without processes makes us reactive, but most importantly, when we’re “winging it”, we create inconsistent experiences for our customers, ourselves, our employees. Inconsistency is one of the keys to failure.
- Creating processes sounds too complicated. Keep it simple – a few bullet points for each process, not a 30 page detailed procedure manual. Just write down what you are already doing, and decide whether what you wrote is really what you want to see happen every time. If so, you have a process. If not, you have a piece of paper that will go in a drawer.
- I don’t have time – You don’t have time NOT to do this. A couple hours a week over a few weeks should get you most processes written down. If you have 3-6 processes in your business, and you dedicated four hours a week to this, you would be done in 1-4 weeks. You likely waste more time each month and lose more customers “winging it” than you would spend in one month completing your Processes.
Why we should create processes for ourselves.
- Effectiveness/Profitability – Natural talent is not a good way to run a business. All of us would make more money if we systemize what we’re doing.
- Consistency – If each customer (or vendor or employee) has a different experience, I’m creating issues. Why not ensure everyone has the same good quality experience every time? McDonald’s is successful not because they have the best food, but because you know exactly what you’re going to get at every location, everywhere in the U.S. Consistency builds loyalty. Inconsistency builds confusion and disappointment.
- Transferability – which is a key to consistency. When Tom goes on vacation or takes a day off, or worse yet, leaves the company, the “procedures” in his head no longer exist. A good, simple, WRITTEN process can be carried out by the next person without dropping a beat, especially if you have done cross-training on each process to ensure more than one person already knows how to do it.
- Profitability/YPH – all this leads to making more money in less time!
Next week we’ll talk over specifically about how to write a good process – I’m betting that what we describe won’t be what you imagine as “processes”, but something more practical and easier to implement.
