Process and Strategic Advantage | Extraordinary Business
How strategy and process engineering will help you create strategic advantages in your company.
If you know the fast food industry, you probably know that they go through great stakes to ensure that everything is done the same way, every time, no matter what store you go to. While you might encounter various personalities and different store layouts, for the most part, the cashiers greet you the same way, they ask you if you would like to try the special, they get your order, try to upsell you, ask you if you would like anything else, let you know how much your order is, etc..
Now, if you go to a McDonalds, for example, it is not going to be the same experience as going to a Chick-fil-a, although the two are competitors and serve fast food items. Surely, there is some overlap, but while McDonalds puts a lot of emphasis on getting people fed, you might assume that Chick-fil-a might focus more on the experience.
You can see this looking at the dining room: often, in the dining room at McDonald’s, if you see employees, they are typically cleaning something and don’t pay much attention to the diners except to offer a friendly greeting. On the other hand, at Chick-fil-a, you will probably find that the staff typically roams the dining room in a very friendly way, speaking with guests and answering each request with, “it would be my pleasure.”
With respect to price, you will probably pay a bit more for Chick-fil-a’s over-the-top service, (plus you cannot get a burger).
What is the difference? What is the point?
When considering processes for a company, each step in the process has a cost associated with it. If you are looking at a production line, for example, if you want to make sure that every single piece that comes off of the line is perfect, you will need someone to check each piece that comes off of the line.Two things happen: 1) the line slows down and 2) you have to pay that person or people to check the products. Is the expense worth it? In some respects, that is up to you. This is your process and you must, like Chick-fil-a, compensate for the increased expenses along the way.
If you will settle for a standard product, or even a slightly sub-standard product, your processes will probably reflect it. You will probably want to do things as inexpensively as possible so that you can charge as little as possible for your product while still making a profit. This may look like outsourcing or offshoring some or part of your processes so that you can get the product into the hands of the consumer.
In either case, process will be part of what will create strategic advantage for you. Process can be the differentiator, creating higher levels of customer service, quality, response time, lower costs, efficiencies, etc.. Therefore, process engineering or re-engineering, i.e.creating or refining processes, will be the outcome of your strategic plan.
Think about it like this: your company, as do most, wishes to increase sales volume. There are several ways you can do that 1) increase marketing activities, 2) increase sales activities, 3) be more effective and efficient with both. Tied directly to this thinking is sales and revenue. Therefore, when you think about increasing sales and/or marketing activities, there are costs associated with it.
The question becomes “What are the costs,” and “What are the potential returns?”
By mapping out your processes and determining the costs associated with it, from lead development to nurturing to conversion along with estimated close rates, you will be able to determine the acquisition cost. You will also be able to identify any bottlenecks, or places where the process will slow down, or and wastes of resources, such as when employees are standing around waiting for work. Reworking or re-engineering the processes will help your organization run more efficiently and ensure that you are accomplishing your goals.
The alternative, of course, is to use a paint-by-numbers approach, where you take generic processes and apply them to your organization. While this might be considered a “functional” approach, it is highly unlikely to give you any advantage or enable you to accomplish your goals.
To build an extraordinary company, it doesn’t happen by accident or by taking a “paint by numbers” approach. You must plan strategically and create, refine and/or implement processes that will bring your strategy to reality.
Rick Meekins is the Managing Consultant at Aepiphanni, the trusted advisor for business leaders who are seeking forward-thinking solutions to help them plan for and navigate through the challenges of business growth. Our entrepreneurial multidisciplinary team works with clients to develop differentiating solutions and provide direction focused on lasting, strategic results. We exist to help our clients CREATE | DESIGN | BUILD extraordinary businesses.
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