Welcome to the third article in our five-part series using Jay R. Galbraith’s Star Model ™ as a framework to ensure your business is aligned across five areas: strategy, structure, process, rewards, and people.
Here, we explore why process is an important aspect of company strategy. We talk about the problems that can occur when leaders don’t establish clear business processes, especially those related to communication and information-sharing. We also offer two key questions to get your company on track for success.
The power of process
When we ask clients about their business processes, we always hope to hear how one person is fully responsible for a key metric or goal, has decision-making authority around that goal, and has access to all the relevant information or data for making smart, strategic decisions.
More often than not, however, we learn that a different scenario is at play. From “Everyone is responsible!” (a nice idea that’s a risky business strategy) to multiple managers making contradictory decisions, businesses often lack a clear process for getting key information to the right person. (This messy situation usually goes hand in hand with a shaky structure, as we discussed in our April blog.)
Specifically, when no one’s thought carefully about the process, communication and information, problems arise. Decisions take forever, collaboration and innovation are stymied, and sharing information is complicated and difficult. These issues can jeopardize a company’s productivity and growth.
Insights about overtime
Let’s look at a real-world example. Our client, who owned several feed and farm supply stores, was concerned with the amount of overtime being paid to a few of their employees. As we assessed the company’s structure and process, we discovered that two different managers were providing work direction, and both were assigning and approving OT to multiple employees. Yikes!
Part of the problem was around structure, since neither manager truly “owned” the metric on effectively using resources, or managing labor hours or spending. We also realized the company had a problem with its communication and information-sharing process—or, more to the point, the lack of it.
Turns out, neither manager had access to the key data they needed to make informed decisions about assigning overtime. For example, if they’d known the employees’ hourly rates and how many hours they’d worked, the managers could have protected the company’s bottom line by giving OT to an employee with a lower hourly rate or to the person who’d worked fewer hours that week. Instead, each manager was left to assign OT based on their gut, which is NEVER a strategy for business success.
Insights about margins
In another example, we worked with managers of convenience stores who were responsible for the overall success of their store but didn’t have access to important financial information, including the margins on their products. Since they didn’t know which items were most profitable, they couldn’t maximize sales. The company paid the price with disappointing profits.
Similarly, when we partnered with the sales team at an agronomy business, we discovered the leaders hadn’t shared specific information about product sales with their agronomists, including how much product their customers bought or had remaining from a previous purchase. Accessing this valuable information would have been a game-changer for the team, which then could target their customer communications precisely and effectively.
Let’s pause here for just a moment. Maybe you’re thinking, “Wow, these problems seem so obvious, they must be easy to avoid!” Yes, some issues and solutions are both avoidable and quickly fixable. But the reality is that busy leaders often lack the bandwidth to step back and carefully think through problems.
Being thoughtful and strategic takes time and effort, and we get it when harried leaders tell us they don’t have much of either. That’s why it’s deeply rewarding when People Spark can partner with a client, quickly pinpoint a problem, and provide a practical, simple solution.
Power-up your process
An effective and efficient way to start addressing business processes is to review the decision-making responsibilities for each role. Then, ask these two questions:
- Does the appropriate person have access to all the information and data they need to make decisions that lead to success?
- What information does a person need to do this job well?
This quick analysis will help you develop processes to ensure managers and employees across the company have the information they need to succeed. When they do, they’ll do their jobs better than ever, and your company will perform better, too.
Ready to get an accurate picture of your business processes so you can move ahead with insight and confidence? Email Erin today to learn about our new People + Strategy Roadmap.