Waste Not, Want Not: A Cautionary Tale for Small Businesses
The elimination of waste in business processes is a major concept within Lean principles
and in my opinion, a concept that should be adopted by every small business. The primary reason: waste costs your business money. If not properly managed or eliminated, it can cost your business its life.
Sometimes as business owners, we get so caught up in “getting the job done” that over time we lose focus on how we are getting the job done. I like to call this the “old effectiveness over efficiency trap.” This is especially common in small businesses. More so in those who are experiencing or have experienced a significant amount of growth in terms of revenue in a small amount of time.
In my experience, these organizations tend to hastily acquire additional resources (usually equipment and personnel) in an attempt to meet the demands of this new growth yet neglect to evaluate their current processes and systems for ways to improve and align them with the new demands and goals of the organization. The result… a significant amount of money spent (if they break even-they are lucky), a stressed-out business owner, confused and unhappy team members/employees, and an operational tempo of what I consider elevated chaos.
Please note that if this describes your organization, it’s time to re-evaluate the how you are getting the job done.
WHAT YOU CAN DO
Small business owners need not fret. Some forms of waste are easy to identify and eliminate on the spot. Others are not so easy to identify and require a more targeted approach.
Value stream mapping and other forms of process mapping can help you quickly identify areas within your processes where waste may be present or is occurring. These efficiency tools help you create graphical representations of your business processes from start to end so you are able to visually identify inefficiencies within your processes that could be creating the waste. Please know that you do not have to be a business or process analyst to map your business processes. A simple list of the steps to complete a process or workflow in sequential order is a good way to start. There is also a plethora of for-cost process mapping software online to assist you on your journey if you choose to go this route. I, myself, am a bit old fashioned and prefer Microsoft Visio to build process maps for myself and my clients.
A word of caution for small business owners in building your process maps; if you are not the one actually performing the tasks in the process – I advise you to consult with the team member(s) that is. In my experience, the small business owner’s idea of how the process is supposed to work usually differs greatly in how the process is being executed. This is very common in organizations where there are no formal documented processes or procedures in place and in those in which the small business owner at one point in time performed all the tasks in the process themselves.
A thorough evaluation of your processes can reveal waste that is not easily identified on a value stream or process map, but nonetheless, costing your business money. These evaluations are usually performed by Lean Six Sigma professionals and encompass a lot of data collection and statistical analysis. There are things, however, you can do internally to assist with the identification and elimination of waste within your business processes and systems without hiring a Lean Six Sigma professional.
(1) Engage your team members/employees who are performing the tasks in a particular process regularly to find out about issues in a process and/or opportunities to improve them. Your best first indication of something not going right within a process is usually from the person doing the work. Few are aware of this, but not engaging your team members/employees in this manner can actually be considered a form of waste. It is called a muda of ideas and occurs when the ideas or thoughts of others within your organization are discounted or not sought out.
(2) Establish process goals and metrics for all of your processes and align them with team member/employee goals. Whatever your organization’s goals and demands are, process goals and metrics should be implemented to reflect the expectation of performance for that process in support of those organizational goals and demands and then be aligned with your team member/employee goals. In doing so, business owners will be able to gauge process and employee performance and identify problems in the process where various forms of waste could be present or is occurring.
(3) Standardize and document your business processes. Standardizing and documenting your business processes not only creates consistency in your business operations, it reduces the occurrence of waste in your business processes. It also provides a clear set of instructions to team members/employees on how tasks are to be executed in your organization and identifies the individuals who are responsible for performing these tasks. Standardizing and documenting your business processes can also help you identify another form of waste that is often overlooked. It is called muda of talent. Muda of talent exists when an organization does not maximize the labor productivity or capability of its staff within its processes. As a result, the right person(s) for the job may not be the person in the job. This ultimately impacts the efficiency of the process and could be the root cause for other forms of waste in the process.