A Simple Guide To Business Process Documentation And Improvement

People dig dramatic business success stories. They like hearing about creating viral content, growth hacking tips to increase one’s user base by 300%, and how to disrupt their respective industries.

But the truth is:

The tried and tested formula for success is simple and less dramatic, and it goes: “Always be improving.”

Not easy, but simple.

And in this guide, you will learn how to build a business that gets better every day through regular business process documentation and improvement. Let’s get started!


Four Reasons Why You Must Document And Improve Your Business Processes

Essentially, a business is a collection of related and interconnected processes.

If you are a digital marketing agency specializing in boosting organic traffic, you need procedures for analyzing client competitors, reaching out to bloggers and influencers, and reporting monthly progress.

If you run a vending business supplying cool and modern vending machines, you need clear steps for cleaning the machines, troubleshooting common issues, responding to refill alerts, and updating the firmware.

Without processes, product and service quality become inconsistent, profits are uneven at best, and customer satisfaction dips. Running a business feels more like playing the lottery!

On the other hand, you may have processes in place but are lacking in documentation. If so, here are some reasons why you want to change that:

  • Process documentation boosts productivity. Without written procedures, an employee is re-designing a task every time they carry it out. Well-documented processes, on the other hand, contain the steps, necessary inputs, and expected outputs. So you can maintain standards and consistency, while avoiding unproductive detours while accomplishing a task.
  • It reduces points of failure. Chances are, you have a star employee or two. But when your most talented worker leaves the company, so does their know-how and experience. Unless their process knowledge has been documented, the quality and consistency of your deliverables are extremely likely to suffer.
  • It optimizes onboarding and training. Did you know that 40% of employees who receive poor training leave the company before their first year? With well-documented procedures, new hires or current employees transitioning to a different position can get the training they need. The employee’s intimate knowledge of work procedures not only boosts their competence – but also improves their confidence, workplace satisfaction, and loyalty to the company.
  • And lastly, documenting a process allows you to refine it. You can improve only what you track. With the steps laid out in plain view, you can identify bottlenecks, wastage, inefficiencies, and other areas for improvement in your procedures. The improvements may be small on their own. But when taken collectively, the impact of these little tweaks can make a massive impact on your company’s financial sheet.

Simply put:

Documenting and improving processes give your business wings!

If you want to see a real-world example, then look no farther than Toyota.

The Japanese automaker was on the brink of bankruptcy in 1949. Commercial car sales were at rock-bottom in post-war Japan, while the demand for trucks – their bread and butter at the time – have nearly stopped.

Today, however, Toyota is now the world’s largest automaker, capturing significant market shares in the United States, Australia, and other countries. Their rise to the top began when the automaker added kaizen to the Toyota Production System.

Kaizen is a management approach which involves everyone – from the C-suite to production line workers – to make small daily improvements in their processes. The strict focus on streamlining work allowed Toyota to eliminate inefficiencies, improve the wellbeing of employees, and ultimately increase their profitability.

Toyota is but one example. Other world-renowned businesses like Ford Motors, Unilever, Nestle, and Commonwealth Bank have also taken the same simple but effective approach to success. If you want to join their ranks, the next section will help get you started.

Simple Business Process Documentation Steps

In a nutshell, the purpose of business process documentation is to answer who will do what procedure as well as how, when, and why users should do it. The following steps will help you answer those questions and gauge how well you’re running your business:

  • Write a name and an introduction for the process. Simple and clear titles work best. In the introduction, describe when users should perform the procedure. An account deletion request, for example, may trigger a data deletion process.

You should also add context as to why employees must carry out the procedure and how it contributes to the value chain.

Going back to the example above, performing the data deletion process ensures the company stays compliant to stringent privacy and data laws while making sure that consumers stay in control of their information.

  • Set the scope of the process. Provide more detail on the start and end points of the process. Set expectations. List down the inputs – the necessary resources and tools to perform the steps. Identify the output or end-product of the process.
  • List down the activities involved. You will require the input of the team or employees responsible for the process for this step. With the key people present, brainstorm and write down the activities necessary for the process

Keep things simple and action-oriented. Use a verb + object format (ex: “email customer” and “update CRM records”) when creating the list.

At this point, you need not worry about putting the activities in a sequence. The goal is to put all of the steps in the process in writing. You can use digital flashcards in the listing phase, but post-it notes make for a low-tech and effective solution.

Simply add one activity to a post-it note. Put the note on a board. Rinse and repeat as many times as necessary, and proceed to the next step.

  • Sort the list in sequential order. When rearranging the list of actions, see if any of the items have more than one verb. Chances are, that action item requires two steps. You should also consider using subheadings depending on the length of the process.

While you’re at it, be sure to identify the people responsible for every step, from start to finish. Add their job titles in the post-it notes and describe their role in completing the activity.

Review the steps of the process and add other necessary information such as potential hazards, common issues, and links to troubleshooting information. Just make sure extra information is truly necessary to the step, or you may clutter or obscure the step.


Process Improvement Best Practices To Take Away

We mapped a process from start to finish in the previous section. But a process document is of limited value if we treat it simply as a checklist or reference when performing jobs. Here’s how to get more out of your business process documentation.

  • Analyze the process. To find improvement opportunities, we need to analyze the steps. Process improvements fall under three categories: reduces cost, improves productivity, and improves the customer’s experience.

The first thing to check is the number of steps in the process. If a process seems significantly longer than others, you want to review if all of the action items involved are essential.

You should also track the time taken for every step of the process, identify the most time-consuming steps, and check if any of them take longer than it should. You will also want to list down which steps have the highest impact on output quality.

And lastly, determine how much each step costs you in terms of labor, resources necessary, and everything else.

You will also want to look into the cost of the process and action items in it.

  • Ask why’s. You’ve found inefficiencies and sources of wastage within the process. But how do you fix the problem? Simple. You find the root of the problem, and you get there by asking “why” multiple times.

Let’s say:

Sending a post-sale survey is part of your delivery process, and customer satisfaction ratings are an important output of the process. Looking at the survey responses, you found that customer satisfaction levels are low. Why?

Because deliverables came with damaged packaging and parts. Why?

Because our new courier mishandled the shipments. But why did we require a new one?

Because our former courier increased their prices by 20%.

Based on the findings, we need to calculate the cost of low customer satisfaction and sending replacements, and compare it with the 20% increase in the previous company’s prices. If the price of the former is higher, then we should consider switching back to our tried and tested courier.

  • Start small. Most likely, you will find plenty of opportunities to streamline your procedures. Some require significant resources, while others may be implemented in an instant. When spoilt for choice, go for the latter. The small fixes won’t take much to get going and the gains, while small, tend to last permanently.

Nathan Sharpe is the entrepreneur behind Biznas, a blog where he serves practical business advice and tips to readers. Learning and helping others learn is his passion.

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