In a near perfect world businesses are continually monitoring and adjusting processes, practices and people to meet the business of today and the expected business of tomorrow. But most don’t – business is going well and so we get distracted from the core foundation. Growth is what all businesses want but the stress it puts on existing process is often overlooked because leadership is focused solely on the benefits of growth. Mergers and acquisitions naturally result in duplication and overlap. Downsizing results in processes that no longer fit a smaller workforce. In all of these situations you have the additional burden of entrenched processes – piece parts owned or created for political purposes – to fulfill a contrived need rather than a sound business basis.

When a business is young the stakeholders treat it as they would an infant. It’s the rare person who fails to take their baby to every milestone check-up, assuring all immunizations are properly administered and all tests are not only scheduled but followed through. Businesses do the same in the infancy of the company – constant monitoring, tweaking, adjusting to the market, their customers and suppliers to assure best practices are in place to meet all needs and provide robust revenue streams. But so often confidence in the business slides into complacency – monitoring, tweaking, and adjusting start to take place only at high levels. The stakeholders get farther and farther away from the foundation upon which the business runs and too often take it for granted. Health checks for best practices and processes fall further and further down the list of priorities.

Enter the Revenue Gap

Revenue gaps result from sliding health checks. As the revenue gaps grow or continue, the pain of missing money can no longer be ignored. Never has a client engaged me to improve processes – a few have engaged me to create a new process – but no one ever started out asking for process improvement, management or reengineering. What they all had in common was missing money – a revenue gap. They had become aware they were losing money in a specific area and wanted/needed the problem fixed. Fix it – get me my money – can’t be much clearer than that! That’s the pain that drives change – and it’s most readily diagnosed by an impartial, outside perspective.

When that occasional ache in your foot becomes a constant, nagging, red hot and swollen pain – you head for the doctor. Businesses are the same. Someone, somewhere within the business noticed a down tick in an area. First they noticed, then they watched it, then they shared the information. Without the resources and much needed management support to do more than a cursory investigation, the problem just grows. One day it lands on the CFO’s or CEO’s desk and the pain is so glaringly evident that it must be addressed.

This is where the process improvement comes in. You might not agree to those preventative health care appointments and suggestions but you will agree to surgery, treatment and physical rehabilitative care when that swollen foot is so painful you can’t walk on it. Pain and fear are tremendous motivators and losing money generates a lot of pain and fear.

A classic example is a client who contacted me because of a $500K revenue gap. Middle management did nothing, but when it hit the CFO level, I was hired to investigate, determine the underlying cause and close the revenue gap. By the time I’d dug to the bottom, I had a list of problem areas and improvements to create a permanent resolution not only for the original gap, but also for additional unknown leaks and revenue gaps.

Revenue gaps are most often created by any new effort that isn’t fully considered for integration into the current business. The effort is initiated without assuring the existing processes and practices will meet that new effort. The current processes are usually down deep in the organization where those who initiated the new effort don’t look and aren’t overly concerned about.

Taking action on Revenue Gaps

Every business has revenue gaps – those places where people and processes are no longer aligned to operate effectively and efficiently – where business health has broken down. What does your business health look like? What got lost in the latest downsizing, merger or acquisition? How long can you afford to let it slide? Are you billing all of your customers completely and accurately? Are your suppliers billing you accurately? Are you maximizing and capturing all of the incentives from your suppliers? Where are you losing money and how much can you afford to lose?

Revenue gap recognition – and proof of what’s causing it – is the major driver for a commitment to innovative change solutions. In the same way that a person faced with a serious illness commits to treatment and rehab, a business will commit to doing the hard work – making necessary changes when they come face to face with their revenue gaps. Change is difficult – revenue gaps are far more painful and have the potential to be fatal. If you’re feeling the pain, give me a call.

• Change agents are individuals who have the knowledge, skills and tools to help organizations create radical improvement
• They choose the right improvement projects to work on by diagnosing the real issues effecting the organization
• Organize the project so that it has the best chance to succeed, by uncovering the projects success criteria, securing management support, and building the right team
• Navigate the politics of change; ensuring radical ideas become radical improvements that dramatically impact the bottom line
• They have the ability to do very unstructured work, to custom design processes to meet the goals of an organization, and are able to inspire people through self confidence balanced by humility and a sense of humor

I solve business problems. I’m really good at finding a clear path through obstacles – finding patterns in chaos and reducing it to its simplest elements. Even the most complicated relationships and problems have an identifiable underlying pattern. Whether the issue is in the front office or the back office – or the disconnect between the two – there is an underlying pattern to be teased out and addressed so that your business operates effectively. Doing this takes a particular type of personality and business experience – you have to be really interested in people and processes because it’s a balance between deliberative and instinctive thinking to find the right solutions for each situation. You won’t find your answer in a book, box or a pre-packaged 6 point plan – you’re unique, your business in unique, your people are unique and so is the product and/or services you sell. Trying to make people fit into a cookie cutter solution is a whole lot like herding cats – very frustrating and extremely unproductive.

Another reason you have to be really interested in people and processes is because the end result is about aligning people and processes with the business goals – finding the right (unique) business solutions for your company. Listening skills – the ability to connect with people – is essential. Only when you have established that connection will you be able to effectively collaborate and ensure buy-in to make necessary changes. Your business has to have a solid foundation of process and practices that are results driven – otherwise you will struggle, falter and ultimately fail. And your people have to believe in and support those processes and practices – if they don’t have a sense of ownership in the processes they won’t commit to making them successful.

The decision to bring in a change agent – specifically one who focuses on process improvement – happens when you know that you need an outside, impartial perspective to assist you in getting your people and your business unstuck. When you’re feeling a sense of déjà vu during staff meetings held to address the current problems and potential solutions or feeling a bit like Bill Murray in Groundhog Day as you’re reading the latest customer satisfaction, upward feedback or production statistics, you need a change agent.

When you’re looking for better ways to work, to improve performance and customer satisfaction – either in reaction to the external environment (economics, politics, legislation, competition) or the internal environment (processes, structures, people) – you need a change agent. The outside, impartial change agent works with you by analyzing the existing problems, current reality, desired future goals, and potential barriers to those goals. Once determined, the change agent works with you to organize and implement the new processes, train employees on new procedures and acts as a role model to demonstrate new and better ways to work. Your best change agent will stand beside you in persevering in the face of challenge or ambiguity, dealing with conflict constructively, assuring employee buy-in and gaining commitment to taking the relevant actions to assure success – from concept through implementation.

The theme sounds like this:
• Senior VP X is focused solely on a promotion to EVP but refuses to acknowledge innovative opportunities presented to him that could actually facilitate his chances of that promotion for fear of rocking the boat
• Manager Y rejects every suggestion brought to her – she seems beaten down and gets frustrated when recommendations for improvement are brought forth
• It’s obvious to the whole team what needs to be done but no one above them wants to hear it – collaboration and engagement are resented and rejected out of hand
• Staff is continually told they need to work smarter but management won’t entertain any proposals for ways to do so – which is interspersed with ‘just be glad you’ve got a job’ and threats of downsizing and demands to increase productivity and customer satisfaction
• ‘Seat warmers’ are ignored while other staff members are expected to put in more hours to make up for their lack of productivity
• Management just doesn’t get it – it’s like they want the organization/business to fail

When you’re managing for the status quo rather than results you are locked in a dysfunctional perspective of your business as well as of your role and responsibilities. That perspective is so skewed and so narrow that it only sees what’s in it for you and is colored with beliefs like: same problems, different day; this is the way we’ve always done it; nothing will ever really change so it pays to go with the flow and not rock the boat – and, if I can just keep my head down (and my people quiet) long enough to live through this I will be rewarded. Internal politics rule the day and ruins the business.

A terrific quote attributed to the late, great Satchel Paige sums this up pretty well – “It’s not what you don’t know that hurts you, it what you think that just ain’t so.”

These managers are destroying morale, killing innovative ideas in their cribs and just plain wearing people down. This results in lower productivity, poor customer service and decreasing profits. Your best and brightest – mid-level managers and highly performing staff members – are polishing their resumes and using vacation days to interview elsewhere. Soon you’ll be left with the people who are there only because they are too afraid to leave the known or too comfy warming that seat everyday because it’s all they have to do to collect a paycheck.

This is a wake-up call. If a copy of this article lands on your desk, take note. It’s time for a shift in perspective – to resuscitate your confidence, passion, character and integrity. It’s time to do the job you were hired to do – manage. Leadership means you have a responsibility for making your business successful. Engage and empower your staff – listen to them, seek out best solutions, look for innovative ideas, communicate and motivate and support your people, manage for results not the status quo.

One dozen pages on travel policy alone tossed out and replaced by three sentences that include the radical concept of ‘common sense’! As a business consultant who is passionate about common sense business practices, policies and processes I’m considering some travel of my own to Sunnyvale, California to meet with NetApp and see their common sense in action.

Common sense seems to be in short supply. Most companies are focused more on rules than results. Take the case of a leading global financial services firm that has a local office staffed with 80 underwriters in their home loan division. Currently each of those 80 underwriters has between 150 and 240 mortgages in their queue each morning. To put this in perspective, the most highly skilled and experienced underwriter can ‘decision’ (AKA approve/decline) 8 to 10 loans per day. Day in, day out, week after week, this group comes to work knowing they can barely make a dent in the ever growing backlog.

This is obviously a challenge for the company and its employees – but there’s more. New underwriting guidelines have been flowing into the system all year long. This impacts not only the underwriters but the processors who prepare the mortgage packages and the originators. The company has also initiated mandatory training and a new quality initiative as well as rolling out a new (and de-motivating) incentive plan for the underwriters. New rules were put in place that severely restricted overtime and the ability to take work home as well. At the same time the stress is building, the company froze salaries at the beginning of the year and those who questioned it were told to ‘just be glad you’ve got a job’!

The company wants results but is focused on rules. This is typical fear based reactionary management – instead of relaxing your grip you hold on tighter. You put more rules in place trying to control the situation. When people feel overwhelmed, out of control or threatened they forget the first rule in all emergencies – stop, take a deep breath. The answers are all there but you can’t see them when you’ve got a death grip on ‘the rules’.

Within every crisis lie the seeds of opportunity and most people only become aware of that opportunity when their backs are against the wall. Fear is actually a great motivator – you must creatively adapt to survive. When this company can step back and get some perspective – and I can recommend a great business consultant to facilitate that shift – they’ll find they are surrounded by opportunities. The answers are right in front of them – they just can’t see them for the fear – and another rule is not one of the answers. It’s time to focus on results from an entirely different perspective.

Shift the perspective to engaging and empowering the staff to collaborate in ‘owning’ the creation of best practices and processes to create a results driven business. Companies hire people for their knowledge, skills, creativity and enthusiasm. If they then put them into an environment that’s counterproductive – siphoning off only the knowledge they want and squelching creativity and slowly eroding enthusiasm by tightening the rules noose, everyone loses. You cannot be an innovative company if you are not innovative in your business practices, processes and policies.

Unless your company makes and sells rules and is profitable at it – it’s time to focus on results. When you start focusing on results and incorporate common sense, you are on a winning and profitable path.

I wholeheartedly support good IT solutions. They are essential to good business – but they aren’t the heart of the business. The development and creation of great IT solutions for your business is another area where current BPM often forgets the human connection. If your employees (and often customers) are going to be the users of these solutions and these solutions are meant to make your company more productive and profitable, one would think you would include the people who actually do the work as a critical element of the development phases. The biggest cause of failure for new IT solutions is the failure to involve the user in the process.

BPM, at its best, recognizes this is a balancing act – good IT solutions aren’t going to solve the problems created by poor communication and the resulting organizational stagnation – and you can’t develop a great IT solution without empowered and engaged employees. You start with the basics – a common sense approach to good business practices and process. When you have the basics in place you have created the environment for a vital, productive and profitable company. So, let’s start with a little house cleaning (and that doesn’t mean getting rid of people – that’s the last resort) – it means looking at the day to day business and the processes each person works with to get their job done with a fresh perspective. This is not about flowcharting work flow processes – this is about a willingness to listen to your greatest assets, your employees, and a commitment to make fundamental changes to create innovative solutions that increase efficiency, productivity, morale, customer satisfaction and your bottom line.

Today’s economy demands that you look at your businesses with a fresh perspective and a commitment to rout out inefficiencies, arbitrary rules, counterproductive processes and practices. This economy demands a return to a common sense approach to fixing businesses from the top down and the bottom up. Doing otherwise is a critical failure of will and imagination – a desire to maintain the status quo that creates a culture of stifling the will and imagination of those within your business who hold the keys to the fundamental changes that could move your business to the next level of success.

So where do you start? Management tells you that they’re bringing in a business consultant (collective groan). You’ve been there – sucks time out of your working day and nothing substantial ever changes. But what if that consultant not only listened to what you have to say but went about assuring those changes were made. Feel different now? That’s what I do. I’m a Business Process Management consultant who is passionate about a common sense approach that actually fixes businesses with a focus on people and then process. I believe in radical collaboration to create best practices by empowering and engaging those who are on the front lines and back office with a commitment from management to assure those solutions are implemented.

In the coming weeks I’ll continue to share my thoughts on my vision of BPM and I’ll be starting a series of short case studies – what does your business look like from your customer’s perspective? Most people think of process issues as very dry, boring, tedious stuff – flowcharts and spreadsheets and binders filled with charts. But there’s a very human face on both sides of any process – what does your customer see when you have a process problem? I want to open this up for you to share your experiences as a customer too.