It is not achieved by fluke, but by systemically ensuring all elements of the organization work together to achieve the desired income. There are established models which help businesses traverse the journey of excellence. There are multi-year journeys which have to be led and driven by no less than the CEO.
However, before embarking on a full-fledged journey of excellence, I would recommend small businesses to remember the following foundational principles. Small business owners should not only imbibe these principles but also implement them before setting out on an excellence journey. Here are they:
Your customer is much more
Who is a customer? Traditionally, the definition for a customer has been those people who buy the company’s product and service. However, businesses keen on embedding excellence have a much broader definition.
They define customers as any individual, entity or a stakeholder who receives what an individual or an enterprise provides. This broadens the scope of customers and includes those within and outside the organization. They are called internal and external customers respectively. So every employee who receives anything from any other employee is a customer or for that matter a downstream function receiving something from an upstream department is the customer. Similarly, customers outside the organization include just not the buyer of the product but also the community and shareholders.
To understand how progressive small business owners are looking at this, I spoke to Shantanu Ghosh, an engineer turned successful small-business owner in Jamshedpur. He manages his family hotel business in Jamshedpur. Not only has his strategies helped to increase occupancy levels of his hotel, he has today diversified into the lucrative world of “children’s coaching”. Taking about customers in his hotel business, Ghosh told me that whatever he has achieved so far is because of his deep focus on customers.
“For me customers are just not the guests who come to my hotel, but comprise my employees, community, suppliers, shareholders and the local law and order officials. I firmly believe that a business cannot be successful by just focusing on the end customer it has to make sure it meets requirements of all stakeholders some of which I mentioned. Clearly, this is a cultural thing which I have tried to drill in all my employees,” says Ghosh.
All work is a process
All work is a process. All activities that the employees of an organization perform are processes. When you think about processes, just do not think about manufacturing shop-floor.
Be it production, customer-service, accounting, maintenance, supply chain, product development, marketing or sales, everything is a process. The focus of small business CEOs should be to have this mindset and install processes across the organization.
Having a robust process management framework is fundamental to embedding excellence in an enterprise. This is just not about documenting processes, but defining core processes of the organization and finding out ways to enhance organizational performance. When you embed process thinking in an enterprise, it also means realizing that processes cut across functions to achieve organizational objectives.
When the focus is process excellence, it means being ready to sacrifice goals around functional excellence and achieve the larger objectives of the customer. A process-centric small business ensures what the final customer receives is going to be of consistent quality and employees exactly know what needs to be done. It also reduces dependence on people who may come and go but what needs to be done is well defined.
Improve, improve and improve
Installing an engine of continual improvement is a hallmark of an excellent organization. Continuous improvement is about measuring performance in all areas of the organization and taking steps to improve wherever the performance is sub-par.
Also, even if the performance is within acceptable levels, the focus should be to take the performance to the next level. The performance of the organization and its various constituents can be measured in a number of ways and includes metrics such as Error percentage, Net Promoter Score, Defect Levels, Productivity Percentage, Cost of Poor Quality, Sales Conversion, Supply Lead Times, Cash to Cash Cycle Time, Fill Rate, Inventory Days of Supply Inventory Turnover, etc.
Organizations seeking to be excellent set continuous improvement goals at the beginning of every year. Based on the performance of key metrics and the continuous improvement goals, the organization takes up improvement projects. Remember, whatever project that the organization takes up, it should be aligned to positively impacting strategic objectives of the firm and should make the company competitive. Of course, to get this continuous improvement engine going, employees need to be trained on problem solving skills and supported to work on those projects.
Empower and involve your employees
These are about using the power of people in meeting organizational objectives. Employee involvement is about not treating them as robots instead involving them in the organization’s effort to meet its objectives.
This could be achieved by seeking their ideas, involving them in solving problems or seeking their inputs in charting a new course. Employee empowerment is about them having the authority to take decisions and also the organization equipping them with tools and techniques to solve organizational problems.
Empowering employees is not easy and requires lot many things that need to be done for employees to be motivated enough to feel a part of the organization’s story. Some of the things that organizations do to empower and involve people include suggestion scheme, quality circles, ceding authority, listen to employees, training, rewarding success, team projects, visioning exercise etc.
As hotel entrepreneur Ghosh told me, “My staff is my extended family. I firmly believe that if they are not given the required freedom and empowerment, it impacts my business. A disengaged staff hits my hotel foot falls”.
Remember, when employees are involved and empowered, they are more engaged and this has a direct bearing on organizational productivity.
Source: The Economic Times