Team members deliver your service but they won’t stay for ever. Even in the most settled and contented team people move on. If this year has taught us anything it is not to take anyone or any circumstance for granted. For this reason, your business should consider process management.
I want you to think about your processes, the systems by which your business runs. Consider information about service suppliers; equipment maintenance; induction processes; team member appraisals; customer service expectations and production processes.
Where is your process knowledge?
Who is the repository of this information? Is there a team member who has an encyclopaedic knowledge of your business? Maybe it’s you. What would happen if that person was to leave or fall ill? What happens to that knowledge and those processes? We call this loss of knowledge ‘corporate amnesia’ and it can have serious consequences for a business when it occurs.
At the very least your business becomes less efficient for a time while new or remaining employees muster together a replacement process. This takes time and costs you money. At the worst it will lead to a reduction in quality of service, potentially a catastrophic one.
How can you protect your business with process management?
The best way to protect your business against this is to ensure your processes are locked in to the business. Process management software will enable you to do this.
However, a word of warning, the processes need to be up-to-date and maintained as part of your routine management of the business. It needs to be part of the culture of the business to ensure that processes are revised as they develop. There should also be a routine reviewing of processes to ensure they are up-to-date. This is all second nature to companies who follow ISO9001 but will be of huge benefit for any business – even (and especially) to small businesses where loss of just one team member will significantly weaken the knowledge base of the business.
Can process management add value?
Another time when locked-in processes are invaluable is during the sale of the business. Your purchaser wants to know that the business will continue to maintain a profit and run efficiently after the sale, whether or not you remain in place.
In addition, often the sale of a business, no matter now gently handled can precipitate a churn in the workforce. Jane in accounts may decide that this is an ideal opportunity to move on. All her knowledge and understanding of the accounts processes will leave with her, unless they are locked in to the process management system. Savvy purchasers know this, so a lack of process management has a detrimental effect on purchase price.
Laurie Smith, Broker at Transworld had this to say ‘When you are looking to sell a business, the prospective buyer will look at many things including; turnover, profit, intellectual property and personnel to name just a few. But, one thing often overlooked and definitely underestimated is the value in having well thought out and robust processes in place for training and procedure.
Personnel change often occurs after a business has been sold and a great deal of value can be lost if a team member leaves, taking their knowledge and experience with them.
Ensuring you have a system which sets out the business processes and ensures all team members are training consistently according to the processes locks a much greater value into your business and certainly contributes to a successful sale.
A business which is using a training and quality management system, such as Training-Progress, will be a better prospect and attract a greater purchase price than one where knowledge is sequestered away by team members leaving the business.’
Direct and indirect benefits of process management
The benefit of process management to the value of the business at sale are twofold. Directly, the purchaser will benefit from the fact that the processes are in place and not reliant on specific team members. Indirectly, the business will already be benefiting from consistently trained staff. This means the business will already be benefitting from the efficiency and quality of service that brings.
If you are considering your exit strategy or simply wanting to protect your business from the ebb and flow of team members, then consider investing in a training and quality management system such as Training-Progress and lock in your knowledge.