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The importance of establishing concrete business processes

When you set out to achieve a goal, there’s a series of steps you have to take to get there. For example, if you wanted to purchase your first home, you’d need to gather a deposit, qualify for a loan, and then do the exciting job of house hunting. The series of steps that you take to accomplish a particular goal are all part of a process.

In the world of business, these kinds of processes are equally and especially important. Techopedia defines a business process as, “A wide range of structured, often chained, activities or tasks conducted by people or equipment to produce a specific service or product for a particular user or consumer.”

While they won’t guarantee smooth sailing all the time, they can certainly get you on the path to running an efficient business. Examples of business processes include proper invoicing, dealing with customer complaints, or putting together a budget. In this article, you’ll find out the importance of establishing concrete business processes and how you can go about it.

Productive employees

To begin, business processes are essential if you want more engaged employees. When workers are engaged, you’re likely to see better results in terms of productivity.

Disengaged employees, however, can be costly for your business as they aren’t optimizing their full potential. In fact, 85% of employees are either not engaged or actively disengaged at work and this is estimated to cost $7 trillion in lost productivity.

Numerous factors can result in disengaged employees as well, such as the work environment being too cold, or simply choosing the wrong office layout that doesn’t condone efficiency and effectiveness.

Something else that could result in less than productive employees is the absence of a business process. For instance, if they have the task of generating reports but don’t know what steps to take from start to finish, it could result in them becoming frustrated and disengaged. Not only may you get a subpar report, but it could also end up being tardy too.

However, when a process is put in place, you’re likely to see better engagement and more productive employees.

You could also include your business processes in a cycle of improvement by implementing the Plan-Do-Check-Act Cycle. This is a method that helps you achieve continuous improvement. In doing so, employees are ready to take next steps and it doesn’t become a case of them wasting time trying to figure out what to do from scratch.

Continuously improving your processes gives you a chance to identify where time is being wasted, bottlenecks are being created, and frustrations are rising.

Better finances

When your company doesn’t have concrete business processes, it could result in wasted resources. On the other hand, when departments are running smoothly, you should have more money to spend on growing your company.

For instance, if you use a manual process for invoicing, after evaluating it you may realize that it isn’t cost-effective. It could be as a result of what you’re spending on paper invoices or the recurrence of preventable errors.

To combat these issues and save time and money, you could introduce automation to your invoicing process. A study conducted in 2015 shows that automation can reduce your processing costs by 60-80% relative to you using paper-based processes.

Employee retention

In an organization, every employee has roles and responsibilities to fulfill. However, when they aren’t clued in on how things work and what processes to follow, they can become frustrated and disengaged. It could also lead to employees leaving, especially if processes aren’t introduced early on.

Familiarize employees with your processes as early as possible, especially during incipient stages. You can do so by implementing an onboarding process. This would require that you put measures in place that ensure new hires are given information on how your business works. This can be done through training and helping them settle into their new workplace.

Apparently, employees involved in a structured onboarding program are 69% more likely to stay with that company for three years. If you’re wondering how this saves you money, you’d be able to curb the costs associated with employee turnover. Employee Benefit News tells us that 33% of a worker’s annual salary goes towards replacing every worker that leaves.

Another example of a process that could save you money is your performance review process. Research found over 70% of high-retention risk employees wanted to leave a company because they saw no opportunities to advance in their careers. An effective performance review process can shed light on what they need to do to move up in your organization.

Improved culture

Your business processes can affect your company culture and vice versa. If, for instance, your company culture encourages participation and inclusivity, then it may be easier to implement effective business processes. Being organized and making sure employees have the information needed to do their jobs effectively is a way to build a healthy company culture.

Being able to clearly communicate is particularly needed when introducing new business processes. The reality is that existing ones will have to be refined or changed altogether at different intervals. However, when you’re able to explain such changes clearly, and you have a process that you follow for implementing changes, employees may have an easier time adapting to it.

In a similar regard, if your business has a strong learning culture, that can be classified as part of your overall company culture too. It will also make adapting to change a lot easier. For instance, if you wanted to introduce new technology across the production floor, you would need a staff transformation first which means they’re given the space to learn and prepare.

The culture you instill is what employees will exhibit, so ingrain your culture in your business practices.

A learning culture can also be beneficial for when the time comes that business processes need to be reengineered because they aren’t serving your business well anymore. If you make learning part of your culture, you can be more confident that your staff will be capable of coping with the changes.

Satisfied customers

When your business works seamlessly, customers benefit, too. If you’ve ever had an experience with a business where employees seemed clueless, under-informed, and out of sync, you know how frustrating it is from a customer’s point of view. Business processes ensure everyone is in the loop and high-quality service can be delivered to customers.

Salesforce examined the impact of subpar customer service and found 72% of customers said having to explain their problem to numerous people is poor customer service. If all of your employees have the information needed to quickly resolve these problems or they’re directed to the right person to begin with, it’s unlikely for this to occur. New Voice Media research concluded that poor customer service costs American businesses $75 billion annually, so use processes to help avert this loss in your business.

Wrapping up

There is no perfect recipe for running a business, but there are patterns of success that you can draw from. If you look closely at most businesses that have achieved longevity, you will likely see they’re productive, efficient and have satisfied customers because they have processes in place that work.

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