In today’s economy, many companies are feeling pain like never before. Business is declining. Growth is extremely difficult. Everyone is seemingly caught in a cycle of fear and experiencing extraordinary levels of stress.

In this landscape of challenge, however, opportunities exist. To find them, companies need to look beyond traditional process improvement initiatives and consider a complete transformation.

Organizations that thrive in a down economy focus on the future. They continually re-think their process, structure and culture, and focus on evolving demands of the marketplace.

If you are looking to grow profitability and improve cash flow in a down market, just removing waste from an existing process may not get you there. Instead of looking to improve productivity by 10 to 15 percent over the next year, focus on transformation, and you will achieve dramatically higher returns.

We have one client whose profits doubled in three years after initiating the transformational journey. We helped another company effectively ramp up to meet massive new market opportunities. A new and nimble approach grew revenues from $10 million to $1.5 billion during a 10-year period.

Transforming a Business Versus Continuous Improvement

Continuous improvement takes an existing process and removes the activities that do not add value – the problems that prevent you from generating good, reliable business results. It looks at where you are today and how to improve business outcomes. It is change with a small “c” – addressing the low hanging fruit to survive.

Business transformation, on the other hand, is redesigning your entire system. The focus is not about what you are currently doing right or wrong. Rather, it looks at where your business has to go to accommodate future demands. It is about defining a vision and executing a plan for sustainable success. Transformation is change with a capital “C” – building a new business enterprise that thrives.

Transformational changes commonly deliver 10 to 20 times the benefits of continuous improvements initiatives. A real paradigm shift can help achieve results never before imaginable. It is a fundamental change in how you run, improve and grow your business.

The First Step in Transforming Your Business

Start by understanding how your markets are evolving and how you need to reposition your company in the emerging marketplace. Envision a new future. What are the benefits in terms of cost, growth and market share?

Your business model evolves over time. New trends and technologies can make existing processes obsolete and ineffective. It is like trying to improve the buggy whip production process, while the marketplace adopts gasoline-powered vehicles. Even the most effective production process will not deliver profitability.

Transformation starts with a vision for success, then work backwards. Redesign your business based on future needs rather than today’s operations. Ask yourself, “If we started all over again, what would we be doing and how would we do it best?”

Addressing Employee Resistance to Change

It is human nature to resist change. Many established organizations are unable and/or unwilling to take the necessary steps for success. Generally, the most resistance comes from management. Other employees often are more open because they experience the flawed system on a daily basis. In fact, some of the best employees may be frustrated because a stagnant environment has squelched their ideas for improvement. Transformation requires structural change.

To overcome opposition, it is important to create a compelling vision, communicate the benefits and get some quick wins.

Getting Employees to Help Transform the Business

Most improvement efforts hit roadblocks based on silos. People are trying to make departmental improvements, rather than looking at the big picture. Eliminate that mindset. Look outward, not just inward. Get your team focused on the whole system and the external marketplace, with an eye on the future. Make sure they understand how the sum is more than each individual part. Then, identify the champions – the top 10- to 20-percent that have demonstrated prior initiative, capabilities, competencies and a willingness to try new things. Provide them with a vision for success and get them engaged for real business transformation.

Sustaining the New Culture

Sustainable improvement requires effective management. It is all about driving the right behavior. Too often, conflict develops between day-to-day operations and transformation efforts. Eliminate this conflict by aligning your management approach with your transformational process. Managers are typically skilled at leading operational tasks, but they often lack the experience and confidence to drive true business transformation.

Change needs to be definitive and implemented with bold leadership. No one will embrace the new approach, if old ways remain intact. There always will be a place for process improvement. Yet, to build a new culture, you must make the old one obsolete. Completely usher in the new and better system, and implement the transformation throughout the entire organization.

How to Bring Information Technology into the Sustainable Improvement Process

The reaction of many business owners faced with information technology (IT) choices is fear. While they are very knowledgeable about what they do, they may not know as much about the technology that could help them better run their businesses. Simplifying, standardizing and automating your processes can help businesses overcome that fear. It is taking that large, complicated process, breaking it down into smaller steps and identifying what the value-add and nonvalue-add steps of that process are. When you do that, you can make the process run more effectively from beginning to end.

The Fear of IT

The most common technology issues business leaders are facing is the fear of IT. Most people are very passionate about what they do. Clients are usually good at products and processes but not necessarily technology. A lot of leaders have received faulty advice along the way, and, because of that, they have concerns about what the next step is going forward from a technology standpoint. 

You need to remove that fear; the way you do that is by understanding your processes, and then simplifying, standardizing and automating them with technology

Simplifying Your Processes

It starts with understanding your overall business strategy and objectives. Once you understand a process from a strategic point of view, even a complicated process, it is easier to understand the improvement opportunities that exist within that process.

The first step in simplifying is to identify what the nonvalue-add items are in a process and eliminate them. You do that by asking lots of questions and by really understanding what is important to your business, what keeps you up at night and what the roadblocks are to your ultimate business objectives. 

Typically, as a result, you will see a significant reduction in the number of steps in the process and gain a better understanding of what that process really is. At that point, the whole conversation becomes less difficult to understand and, therefore, much easier to implement. In the end, the process must be concise and support the overall objectives in as few steps as possible.

Working to Standardize and Automate Your Processes 

As you begin to standardize, you will often find that it is unclear to everyone how they affect the process. The most important step is to ensure that your associates are trained on the process and that they understand it from beginning to end so they know how they can affect the result of that process. Without this understanding, it is difficult to build a process that is executed consistently throughout the business.

To automate your process, look at what you can do to leverage technology to make the process more effective. Whether it is something as simple as data entry or as complicated as doing database work to help mine data, it all runs more efficiently after you have simplified and standardized your processes. As a result, your processes become repeatable and sustainable.

A good example of this is the Electronic Medical Record (EMR) process being discussed within the health care industry today. The objective is clear: allow any medical record to follow an individual as needed. The challenge is determining who needs what information when and in what format. Once this process is agreed upon, or simplified and standardized, the automation becomes easier. Until then, automation of the process is ineffective at best.

The Biggest Mistakes Companies Make When Going Through This Process

If everyone does not understand the process, then you cannot improve it. You cannot understand how you may be affecting someone negatively if you do not know everyone’s roles throughout the process.

Not understanding your business processes hurts your business flow because you may be constantly doing things that are non-value added or causing pain. If the processes are not aligned with your business strategies and objectives, leaders have to realign them to ensure they are supporting overall objectives. 

Using Technology to Improve Processes Applies to All Industries

It does not matter what industry you are in. Every business has processes, which can each be broken down into simplified steps to understand what the beginning is, what the end is and what the outcomes need to be. It does not matter whether it is health care, construction, manufacturing or distribution; if you understand what is key to your business, and the inputs and outputs required to meet those objectives, you can improve processes.

 The Right Time to Get Started

The right time is when a business leader understands that the pain exists and has the self-awareness that there is an issue preventing the business from running better. This self-awareness comes through asking questions, talking to peers, a lot of reading and/or asking the question, ‘How do I get better?’

Business leaders need to understand when the technical skills are outside their area of passion or expertise. At that point, leaders need to bring in an outside perspective to build on an understanding of business’ processes focusing on how to simplify, standardize and automate them with technology.

Transforming People. Originally aired on Friday, June 5th on 89.7 FM WNKU.  Broadcast as part of the BusinessWise feature during the Consider This program, heard weekdays from 4:00-5:30pm.

Driving Innovation and Process Improvements. Originally aired on Friday, June 5th on 89.7 FM WNKU.  Broadcast as part of the BusinessWise feature during the Consider This program, heard weekdays from 4:00-5:30pm.

Continuous Improvement vs. Transformation. Originally aired on Thursday, June 4th on 89.7 FM WNKU.  Broadcast as part of the BusinessWise feature during the Consider This program, heard weekdays from 4:00-5:30pm.