Systems & Process Improvement for
Entrepreneurs and Small Businesses

Traditional System Optimization & Process Improvement – Slow and Expensive

Do you find yourself needing to optimize your team’s performance but are short on time?  Need results fast and can’t afford to do formal process improvement projects like Six Sigma?  Have you looked into hiring a system optimization consultant to help you, but it made your eyes water?

Finding the time and money to do formal process improvement and system optimization work is a big challenge.  Its time consuming for not only you, but everyone involved in the systems and processes you are trying to improve.  Formal projects can take months of meetings, analyzing, and building solutions to address problems that are found.

The costs can add up quickly as well.  Payroll for everyone to work on the project and if you hire any outside help, you’ll be paying rates of $250+ an hour for anyone that is good.

Certified People Are Expensive!

Yes, they are, but the truth is, you don’t need a fancy certification to make real, meaningful gains when it comes to the productivity, efficiency, and effectiveness of your organization.  I say this holding two highly respected and sought-after certifications, a Lean Six Sigma Black Belt and the PMP (Project Management Professional).

My PMP Certification
My Project Management Institute PMP certification

I don’t regret getting these certifications; they helped me understand process improvement and project management to a level I never would have reached without them.  If you want to become a process improvement and system optimization expert, by all means, go get certified.

But if you’re wanting to make meaningful improvements in your business and improve your system optimization, you don’t need to invest the time and you can learn the basics yourself to do a great job without the high costs of a consultant.

Why Do These Certifications Exist Then?

First, there is some sense of “legitimacy” that can come with a certification.  A good certification (usually) represents some amount of time invested and baseline knowledge needed to pass an exam.  For example, a person must work 3500 hours in the capacity of a project manager before they can take the PMP exam.

That being said, many of the requirements can be “faked” and passing a test is sometimes more about knowing how to take tests than actually knowing the material.  I’ve met more than one certified professional that admitted not having required hours and filling out the application with bogus information.  Applicants are often audited at random and not everyone is audited.  Even when it happens, listing a buddy as the contact that can “verify” your work experience works quite well.

Ultimately obtaining these certifications, even legitimately, is more about book smarts than street smarts – some of the best practitioners I’ve known in process improvement, system optimization, and project management have no degrees and no certifications.

Another reason these certifications exist is to justify the high costs of the professionals.  These certifications come with the illusion of value that has been created over the years through clever marketing.  The larger organizations publish case studies on how professionals with their certification perform better, do more, bring more value, etc. so they’re “worth the money.”

Those that have the certifications defend their decisions to invest the time and money by regurgitating the marketing messages about value and complexity of work that the certification providers have armed them with.

Certifications also create a barrier to entry that is difficult and time consuming to get over.  If you need your system optimized today, there’s no time for you to go spend a year getting certified.

Formal Projects Take Too Long

As technology has become a bigger part of everything we do, business has moved towards speed being a critical component to success.  This includes being able to quickly assess productivity, efficiency, and effectiveness problems in your organization and being able to resolve these issues in a timely manner.

With formal methodologies, it can take months to get through a project to the point of seeing benefits.  The longest formal Six Sigma project I’ve run took 14 months to finish and there were no benefits to the organization for the first six of those months.  Even the short projects were 4-6 months with no benefits until the project was ½ over.

Why do these projects take so long?  First, a formal project requires detailed documentation of every single piece of your system/process.  Every input, output, process step, potential failure, risk, etc.  Not just documentation, but analysis of each piece as well.  Identifying, with statistics, the impact that each little piece has on the whole, in an effort to identify which pieces have the biggest impact on the system.

The letter my company gave me after completing their Six Sigma Black Belt program
The letter my company sent me after finishing their Six Sigma Black Belt program

This might be useful work if you had no idea how a system worked and it was completely alien to everyone involved in your project, but the truth is, there ARE people involved in the system already that know it very well.  They can usually tell you what’s broken and where to spend your energy on system optimization without you needing to spend the time doing days and weeks of fact gathering and analysis.

Second, these formal processes have a number of formalities and bureaucracy that are built in.  While it’s different in every organization, they generally have some required tools that must be used in every project.  Some of these tools, like a Failure Modes and Effects Analysis (FMEA) can take weeks to complete.  They also have gateways that require several hours, if not days of preparation to ensure the “methodology” was followed and the project is ready to advance to the next phase.  Because these projects take longer in general, that means more time spent on project overhead activities like status reports as well.

Third, these projects also generally require large justification exercises to show the business that they got value out of investing so much time and energy into this giant project.  In my experiences, these justification exercises can be manipulated like most things with the right numbers and spin, and they are usually done at the end of the project!  Doing them at the end means you can’t really change anything or get the project time back, so even if you can’t spin the project to show a positive outcome, there’s nothing you can do to fix the project because it’s already over.

How to Optimize your Systems and Processes

The question remains – without using a formal methodology, how DO I optimize my systems?

While following a formal improvement plan might allow you to eek out a little more value, taking a simpler, faster approach can get you 80-90% of the value with much less time and energy (Pareto Principle anybody?)

Here’s a step by step guide you can use to get great value out of doing system optimization yourself, without the need for certifications or consultants.

Take it One at a Time

When people start working on improving their Productivity, Efficiency, and Effectiveness, they tend to want to do everything at once.  “All of the systems and all of the processes need help, so let’s fix them all!!”  While it’s a great goal to fix them all, it’s better to focus on one at a time.

To do this in a manageable, productive, and efficient manner, take a high level look at all of the systems in your organization.  Think of the term system as anything you do, not just technology.  What are the 6-12 things you do in your organization?  As an example, assume you are running a retail clothing store.  Your systems might look like this –

  1. Daily Store Open
  2. Receive shipments of merchandise
  3. Stock sales floor
  4. Sell to Customers
  5. Daily Store Close
  6. Clean Store
  7. Weekly Schedule Management
  8. Weekly Special Sales Management

Before you start on anything, you’ll want to identify the one system you’re going to work on first.  Where you start is really up to you, but consider which systems are taking the most time overall or causing the most problems/rework.

People Usually Know Where the Problems Are

Part of the time spent in the formal projects is trying to understand every possible problem with every little piece of the system in a very scientific manner.  This is done so that nothing is missed, and no surprises happen later on.  It’s done to get the team focused on the “scientifically proven” right things to be fixing and removes potential bias or misunderstanding from the puzzle.

What I’ve seen over the many projects that I’ve run is that, in reality, people usually have a good idea where the big problems are.  By listening to those that already know the system or process, you’ll be able to efficiently get to root causes of the issues that are leading to problems.

There are usually clear indicators on where you should focus your system optimization efforts without the need for large, in depth analysis exercises.

Talk to the people that interact with the system, are Customers of the system, built the system, or have any other type of involvement with the system.  Ask them about what’s working well, and what’s not working.  Get them to SHOW you, if possible, where they think problems lie.  By spending a few hours talking with folks and seeing their experiences, you’ll get a good understanding of where the 80-90% is that you can address with less effort.

From our retail store example, talk to the employees that receive the shipments about how it goes, what problems they have, what slows them down, etc.  They will be able to tell you where they see problems, where they get frustrated, where they waste time, etc. without needing a formal review.

Do this for each of the systems in your organization, then make a decision on which one has the most opportunity for improvement and start your system optimization efforts with that one system.

Light Documentation

If it isn’t already done, put the process down on paper.  This doesn’t have to be a fancy flowchart or swimlane diagram.  It could be as simple as opening a Word or Google doc and writing out the steps one at a time.  This will help frame later discussions on how to improve things and will help with discussions on where/how things go wrong.  Continuing with our retail example, we might document the shipment receiving process like this –

  1. Delivery gets scheduled for a specific time and day
  2. Delivery truck driver shows up and rings the back bell
  3. Salespeople decide who’s staying on the sales floor and who’s answering the door
  4. Person that answers the door unloads the truck into the back-room entry
  5. Truck driver completes paperwork
  6. Truck driver gives paperwork to salesperson that brought in the merchandise
  7. Salesperson moves merchandise from back-room entry to appropriate shelves
  8. Salesperson returns to sales floor

This is a simple example, and there’s no right number of steps here, but try and be consistent with the level of detail for the steps (don’t make some super detailed and others high level).

Understand Where People are Spending Their Time

With the steps outlined, you can use this as a guide to talk with the team about the areas of opportunity and how they are spending their time.  Use this as an opportunity to discuss challenges, delays, or areas where the employees think improvements can be made that would make the system optimized.

You might also consider having employees track the time they are spending on each step, either by using software that’s made to track time like Timecamp, or by simply using an Excel or Google spreadsheet.  This will provide some data that can be used to discuss how long things are actually taking and compare that to how long things SHOULD BE taking.

Focus on the Key Inputs and Outputs of the System

As you’re looking at your system, think about the inputs and outputs of each step.  Do you have the right things at the right time?

This is an area of opportunity that presents itself often with systems of all sizes.  Certain steps require inputs from previous steps, but they don’t always arrive on time or in the right order, creating problems and delays in the overall system.

For example, in our retail example, we have a step of completing paperwork.  There are inputs that are required to complete that paperwork – shipping details, quantities of items, type of items, time of delivery, etc.  If the details on what was shipped are incomplete, and the driver has to spend time opening up boxes and counting items, that’s extra time in the process that could be saved by improving the information the driver is given.

Ruthlessly Eliminate Non-Value-Added Steps

As you look at the steps you’ve got in your system, look for opportunities to remove steps that do not add value to the paying Customer.  The important part to this is the “PAYING CUSTOMER” and not internal to your organization customers.

If you are doing something that a Customer will not pay extra for, you are spending time (i.e. money) doing something that is giving you no return. 

While you might find internal value for the activity, that additional activity provides an opportunity for your competition to save money and offer a lower priced product.

A few common steps that are non-value-add include any type of rework (something was not done right the first time and needs to be redone), any type of work review (checking to see if something was done right), and any type of reporting (might be important for internal use, but Customers aren’t going to pay you more for a product because you spent a bunch of time/money building internal reports into your system).

Process flow showing value added steps in red
A process flowchart showing value added steps in red

You should try and remove any steps that do not add Customer value.  If you cannot remove them, look to reduce them as much as possible, or outsource them if that is an option.

You can’t always eliminate all non-value-added steps in a system.  For example, if you need to generate a report used by a government body for compliance, you won’t be able to remove that step even though the Customer isn’t going to pay you extra for it.

Automate Where Possible

AS you evaluate your system, look for opportunities to automate steps where possible.  Automation will speed things up and reduce the number of mistakes in any system and will potentially lower your operating costs as well.

Automation with technology is the only way you’re going to efficiently scale your business.  In short, people do not scale without hiring more people.  There are only so many hours in a day and people can only work so long before they get tired, need to eat, need to sleep, etc.  Technology has none of those needs and can work around the clock at huge volumes.  If you’re serious about increasing your scale, an automation strategy is critical to making that happen.

Manage and Track Changes

Once you implement changes to your system, think about how you might be able to track those changes to make sure they stick.  It’s common to make a system change and have people revert to their old habits as time goes on.  It will take a conscious effort to reinforce the changes you make until they become the new habits.

Following these steps will allow you to make great progress on system optimization and process improvement quickly without the costs of hiring a high-ticket consultant to do the work for you.

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