For profit businesses must actually create a profit. Not that there is necessarily a link to the stock market. Tesla has only lost money and has a higher market cap than Ford that earned $5 billion in profit last year.
But I digress…
Most common sense assessments of why a business needs a process would be centered on manufacturing companies. Even a truly custom shop can have standardized processes for performing certain actions and this can help manage repetitive activities in a very efficient way.
The rise of service businesses such as McDonald’s and Subway showed the process, in all its glory and simplicity, right in front of the customer.
Every Big Mac has “two all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.” And yes, I did that from memory without checking “the Google.”
The supply chain for quick serve restaurants and other businesses that deal with fresh produce requires improved ordering so that the freshness can be achieved without paying extra shipping costs. Providers to the fresh produce industry have started to use different types of insulated packaging to protect from heat and cold. The user probably said “we need better packaging to reduce spoilage” and the wise packaging rep told his or her marketing department about the new product opportunity.
At this point the new product development system kicked into gear and assessments were completed and protoypes developed (I am simplifying this description) so that these new products would satisfy and retain the customers.
If you are efficient then you should be more profitable. But this is also over-simplifying things. If the product doesn’t help the customer get its job done effectively (yes, even a customer at McD’s has a job to be done – enjoy a meal so they can make it through the day) then you may not sell what you need to cover costs. While you may be controlling variable costs with efficient processes, you also need volume and margin to cover your fixed costs and earn a profit.
This approach also holds true in marketing. There are efficient ways that certain processes can help improve your effectiveness in each of the 4P’s. And there is also the need for flexibility to adapt as customer needs change or PESTLE influences impact your company or industry.
And then there is the human factor. One person in the process that has a tiny brain cramp at the wrong time may result in no pickles or onions on your Big Mac, potentially creating a dissatisfied customer. Despite the training and reinforcement, things will happen. And that is why process work must be continually evaluated and the people in the process need to be guided appropriately. Help them understand how important each person and step is to attain customer satisfaction. Train them on their importance and how it needs to fit within your broader customer-centric focus.
Be flexible enough to learn from those that are deeply involved in the process. This is true in any industry and situation. Those on the front lines will provide their opinion and views. It is up to you as leadership to assess and determine if their suggestions are worthwhile or should be parked for now. Remember that you need to respect people’s opinions if you ask for them. And you should be humble enough to know that you won’t know every answer. Your people need to have some level of flexibility to make the right decision.
As I learned in a leadership course twenty years ago “if it is not illegal, immoral, and nobody gets physically hurt” then whatever the person did is probably OK. Or it can be easily corrected without making them feel bad.
And this should help you be more profitable in the long-term.