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Closing the Loop on Business Processes

 

closing the loop

Ask small business owners to name their proudest moments and you’ll get a variety of answers:  opening their doors, a first customer, a significant revenue milestone, or some recognition to prove, even if they haven’t yet arrived, that they’re heading in the right direction. When you dig a bit further into the psyche of emerging firms, you’ll often get to some variation of how proud they are of their mission/ vision and how they nimbly respond to marketplace needs. After all, these two traits – focus and ability to change – are at the heart of what drives success. When you ask an entrepreneur if he has revisited his mission, the answer is often no…either because he hasn’t had time or feels it isn’t necessary. If you ask whether the business is exactly as he had pictured it before opening the doors, the answer is, of course not! Finally, ask why the owner hasn’t reflected on the mission (to make sure it’s still relevant given current business reality and to ensure he’s making decisions and allocating resources according to that framework). Has he closed the loop on business planning?

I call the idea of building dynamic feedback into processes and planning “loops” to convey the fact that a business’s job of improving is never over. The loops change in size, composition and number, but at the heart of any company is the ability to deliver a consistent good or service. Change, when managed effectively, becomes the fabric of that consistency by ensuring everyone in the organization is on the same page.

Any process within an organization is simply a codification of an arranged set of actions designed to consistently deliver an outcome. Every business process requires a feedback mechanism to confirm that the system is acting as intended. Many organizations outgrow their processes but continue to support them because there is no mechanism to retire ones that no longer make sense. In addition, there may be no visibility when a process outlives its usefulness. Sometimes, within an organization, people use multiple processes to accomplish the same task. Cross-organizational communication may be poorly developed and incapable of providing feedback on business processes.

Mangers and leaders should endeavor to put into practice as few processes as necessary to get a job done. Superfluous processes can sap time, money and innovation. Therefore, every process needs to be calculated, with a reason for existence that must be tested occasionally for relevancy. Irrelevancy can cripple an organization’s ability to respond to the marketplace.

The best organizations in the world reflect on their mission/vision often (at least once per year) because every process, allocation of resources and decision should tie into the mission/vision of the company. As a firm grows in complexity, the amount of information it stores and collects increases exponentially, and organized feedback becomes even more crucial, though harder to come by. Companies must be deliberate. They must build systems and processes to cultivate feedback, capture it correctly and access it when needed.

Next time you build a process for doing anything, consider what happens at the end of its life. How will you know it’s no longer useful? How will you retire it? How will you close the loop on business planning? Time to break the cycle – and close the circle.

Image credit: CC by Dougtone

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About the author: Ethan Mayers

Ethan Mayers is the CEO and founding partner of Synthenai, a business advisory firm that architects growth for early stage and growth firms looking for sustainable expansion. He is working on completing his first book, The Agile Shepherd: Flat Business in a 3-D World, expected to be released in 2014.

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