Business operations, for any company, can always be improved. For a middle market corporation, honing effectiveness and efficiency is critical. You need all available resources to hit the next stage of growth and be able to manage competition from much bigger companies.
Rather than working piecemeal at fixing sporadic problems, you're better off using a strategy to systemically address different aspects of your operations. Here are five different strategies that can help shake loose your business operations and free up resources that you could better use elsewhere.
Go Lean
Lean is an operational philosophy that focuses on continually improving activities that lead to delivering the products and services your customers, internal and external, value. By enacting practices that add value and avoiding practices that don't, a company makes its operations more efficient. The National Center for the Middle Market has a worksheet to help executives determine whether their organizations actually employ lean practices or are just using some of the relevant jargon.
Focus on Quality
There have been multiple versions of quality management in business theory over the years, such as statistical process control as taught by W. Edwards Deming, the total quality management movement popular in the 1980s, or practices like Six Sigma. Originally intended for manufacturing, these practices have expanded into many operational aspects of companies. The idea is to reduce waste and rework, saving money in the process, and to improve results, making the company more effective.
Improve Forecasting
Whether selling products and services, purchasing and managing inventory, controlling a supply chain, or properly staffing, any company tries to forecast demand and capability. Many companies are poor at forecasting, however, meaning that they are either unprepared to meet market demand or they waste money and activity on maintaining overcapacity. For example, according to an NCMM white paper, when bourbon distiller Maker's Mark announced that it would water down its products because poor demand forecasting left it unable to satisfy consumers, customers were irate. Fortunately for middle market companies, there are sophisticated tools and extensive knowledge available to improve forecasting of all sorts.
Introduce Customer-Centric Thinking
Management teams are often fond of saying how their companies are customer-centric. Think about your own experience as a consumer and then consider how many companies actually do put the customer first. A customer-centric approach to business is actually incredibly efficient. Ultimately, it is customers and their perceptions of and attitudes toward a business that decide its fate. Focus operations and strategy to embrace customers and make them happy, and you're on the fast path toward business success.
Try Some Old-Fashioned Business-Process Reengineering
At one time, business-process reengineering was one of those periodic management fads. Companies were going to rework their operational processes to become more efficient. As many such fads go, it was often too much talk, too little action. And yet, the idea hasn't lost its validity. Business processes tend to develop over time. As conditions change, companies keep adapting and adding to them. By the end, you have a clumsy process in place that was designed by committee. But by truly reengineering, companies can pinpoint the wasteful processes concerning how they do business and develop more effective procedures. While reengineering your business processes, remember to get frontline employees involved. They're the ones who actually know how things happen, and they might even have input into how you could make them better.
What is the most efficient way to introduce new business operations on a company-wide scale? Let us know what you think by commenting below.
Erik Sherman is an NCMM contributor and author whose work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, Newsweek, the Financial Times, Chief Executive, Inc., and Fortune. He also blogs for CBS MoneyWatch. Sherman has extensive experience in corporate communications consulting and is the author or co-author of 10 books. Follow him on Twitter.