Innovation is about more than capturing ideas from workers. That misses the real magic that occurs when someone with extra, or superior knowledge does the task. This is where “out of the box” or extra-industry thinking goes.
Ignorance, different perspective, alternative knowledge set, fresh eyes, someone to say
Why don’t you try this? Or Oh, I can automate that with this?
These things can make a huge impact in your business and its performance.
Making Core Processes Drastically More Efficient
Invoicing, shipping, inventory counts, payroll, purchase order creation, demand planning; these are all activities that you most likely do on a daily and weekly basis. These are the key processes that move material, money, and information through your company.
These are also the best places to start when looking to make your operations more efficient. There is often so much low hanging fruit here that you can increase margins by 5 to 20 percentage points here alone.
These core processes usually start quite simple.
When the business first starts, you bill the customer, ship the product, or respond to the question by email.
These processes then run on autopilot for years without real thought. As long as they work, there is no attention given. Once in a while there might be a problem, in which case the needed adjustment is made and carried forward.
However, these processes that drive the core business are rarely planned. There is often no proactive thought given to
- increasing volume without proportional increases in labor
- reducing errors
- automating actions which don’t need decisions
If your team can ship 500% more packages without any additional labor (or stress), or serve 1000% more customers with better service and no additional admin staff or sales people, you are saving yourself 100’s of thousands in salaries, insurance, and taxes.
The problem is that even taking a proactive approach, there are so many improvements that are missed.
The wrong person is trying to improve it.
Why you are missing it
When we become familiar with something, it gets harder to see where areas of improvement are. It can be that we have already made the improvements we think possible, or just the daily exposure to the task begins to move the task from conscience thought to sub conscience completion. Thus it becomes “automatic”.
For this reason, when looking to improve operations, processes, or overall strategy, it can be hard to determine truly innovative directions using the same teams that work in those areas day after day.
Who can make the most drastic changes
The most drastic changes come from an outside actor, with a systems mindset, and deep expertise. Different expertise will lead to different ideas, but this is key.
The issue is that these types of people often call high salaries and most likely aren’t going to apply for an admin job or a receiving clerk.
This is why it is crucial that every company hires an operational innovator. They should have a high technical understanding of technology, project management, and experience in your industry. This combination can be extremely powerful!
For example, I was in one business that was run by 15 great people in the natural gas and water distribution business. They worked hard and were growing a great businesses. However, they were doing so many things manually and wasting a lot of their effort. Within 9 months we had automated a number of tasks such as collecting information, creating reports, reaching out to customers and prospects, marketing for new projects based on online builder postings, and more. We even built an inventory management tool which did all reorders based on the current pipeline.
This freed up these 15 to grow the business from 3,000,000 million in sales to over 20 in just two years. They had much more time to focus on things that required their skills such as selling and serving. The restructure of their operations freed them from robotic tasks and gave them more fulfillment in their jobs.
Put the nerd in billing
How was this possible?
A combination of industry understanding and asking a computer nerd to do billing for a week. After a while I started writing scripts, adjusting processes, asking the suppliers to do things a little differently… why? To make things easier and more streamlined.
So what do you do?
You probably can’t hire someone from Google to make your billing better, and you most likely can’t get an Amazon Warehouse exec to streamline logistics. However, you can do things like hire your own operations innovator. This one hire could have an amazing impact on your business and its direction for the next 10 years.
If a full hire is just not possible, you could also reach out to me. I do help small and medium sized businesses that operate in industries within our circle of competence.
Regardless, you cannot afford to keep doing things the same way as other companies invest in different technologies, people, skills, and methods.