Is Operational Excellence the Key to Improving your Bottom Line? 4 Questions to Consider
Charles Kettering, an inventor credited with over 140 inventions, most notably the electric starter for automobiles once said, “a problem well-defined is a problem half-solved.”
For many businesses, therein lies the struggle: defining the problem. Companies that experience consistent profit loss, high operating costs, and poor customer satisfaction may not always have the correct resources available to address their most pressing issues. Embracing an operational excellence methodology can help business managers from C-suite executives down to operations, sales, and marketing departments enhance business processes and correct inefficiencies, thus increasing their bottom line.
Striving for operational excellence enables a culture of growth allowing for long-term, sustainable results. With the right tools and processes in place, lean workflows develop and inefficiencies decrease.
If you answer yes to one or more of the following questions, developing a strategy to help achieve operational excellence can increase profits and get your business to the next level.
Are you experiencing low Customer Satisfaction (CSAT) and/or Net Promoter Scores (NPS)?
While product quality, design, and price can all be factors in poor CSAT scores and NPS, nothing has a greater impact than poor customer service. The deeper issues leading to poor CSAT scores and NPS are service incompetencies, inconsistent communication, and a lack of what quality customer service looks like to your employees. When customer satisfaction is poor, fewer customers that purchased from you in the past will do so again. Fewer of those customers will recommend your products and services to others.
Most service incompetencies develop not because of inefficient processes, unequipped employees, and a lack of strategic vision. Ensuring quality at every point of the process is essential to an operational excellence framework. In the end, this helps provide value for the customer. All employees, no matter what department they work in, should know what defines quality customer service for your company. Companies should strive not just to make the sale, but to cultivate a long-term customer that will tell others of the great service you provide.
Is your quote-to-cash lifecycle too long?
You only have one chance to make a first impression, and that includes your onboarding process. Whether it’s lead management, project management, or communication between departments, businesses should strive for seamless processes and efficient workflows to best meet customer expectations.
Every step in the client onboarding process should be clearly defined and communicated. For many businesses, interdepartmental communication and alignment are nonexistent. Communication between sales and operations is critical. Having the correct process in place from the first customer touchpoint will reduce redundant efforts and shorten the quote-to-cash lifecycle. Helping employees see the flow of value to the customer enables your organization to achieve operational excellence.
Are you unhappy with your operational costs?
Operating costs that exceed budget or are simply higher than desired damage profitability. Whether it’s outdated technology, inefficient processes, or employees misaligned in their positions within the organization, bloated operating costs keep you from achieving the bottom line you want.
Reducing operating costs requires a deeper look at a business’s processes, technology, and employee effectiveness. Businesses that are using technology that’s outdated or poorly customized waste time and likely aren’t experiencing efficient workflows and processes. Also when employees are in positions that don’t align with their skill sets, operating costs increase because extensive training or even replacements need to take place. Striving to achieve operational excellence can help cut costs while still maintaining operational efficiency.
Are redundancies and poor communication holding your teams back?
Sometimes when businesses aren’t reaching the profitability they desire, redundancies and a lack of communication between departments can be the key culprits. When a business analyzes its processes and workflows, it can gain a wealth of understanding as to why revenues are down or operating costs are high.
Installing a governance board to inspect processes and strategize short and long-term goals can rectify problems that exist in day-to-day processes. A board can help define the purpose behind each process and how each step ties into the company’s objectives.
Inefficient processes can often be the result of numerous things including a merger or acquisition. If the merger combines opposite cultures, companies may experience a sharp decrease in their net income*. The operational excellence methodology helps define which processes and tools are necessary to make the merger successful.
If one or more of these issues are a concern in your company, using an operational consultant can help improve processes, reduce costs, and create efficiencies to help you thrive. Peak Process Group specializes in helping service management organizations drive growth by developing operational excellence. Get in touch with us to see how we can help your business thrive.
*Harvard Business Review, One Reason Mergers Fail: The Two Cultures Aren’t Compatible, October 2, 2018
Let’s chat
In just two months, Peak helped one company save over $700,000. How can we help your business maximize profitability today?