Reducing Costs in a Tight Economy with Grassroots Process Improvement

With the economic recovery at risk, organizations continue to look for ways to reduce their costs. However, just cutting cost doesn’t help you compete more effectively, unless you’re also looking for ways to deliver more value to your customers. One way to do so is through process improvement.

When some hear the words “process improvement”, they think of massive multi-departmental projects requiring a lot of time, and unfortunately, money. However, for many organizations, the path to continued success many not be through “command and control” top down initiatives so much as grassroots programs to simplify and streamline overly complex and manual processes.

In order to start, pick a problem process—one that is small enough to not require months of analysis, but important enough to have an impact on your customers and your bottom line. Get the process to a state where its performance can be measured, to be able to show how well the continuous improvement effort is working. It might require physically following the process through its path multiple times to get a sense of how long it takes from start to finish, how long individual tasks within the process take, and when the participants in the process pick up their work. It will show where delays and gaps occur in the process which can be improved.

Once you’ve taken a baseline of the current performance, gather a group of stakeholders together and have them brainstorm on ways to improve what’s being done. You can get creative on ways to reward employees with good ideas—but for many just including them in such a project can be reward enough. It sends a message that the organization values their “in-the-trenches” knowledge, and their opinion on how to make things better.

As always, look for the fat that can be trimmed. Are there multiple approval steps? Perhaps there’s potential to consolidate them—or remove a few entirely. Are we requiring extra steps by scarce specialists when generalists could handle the work with good training and a knowledge management system? An organization could devise a checklist of standard improvement opportunities, and add to it as the continuous improvement projects work through a variety of departments and processes. Think of it as a process improvement blueprint.

If you can automate some of the steps, you may find ways to significantly improve productivity, and/or reduce the time to complete the process which could provide greater benefit to your customers. For instance, you may not be able to change whether or not you’ll approve them for a loan. But reducing the time necessary to find out whether they qualify could be of great value to one of your potential customers or members.

Once you’ve trained everyone on the new process, and deployed it,  the key is to build in a method of measuring performance over time to ensure the process stays at its improved level, and doesn’t fall back to the old way of doing things as soon as the team moves on to the next area. Automation may also provide the ability to measure performance automatically. Even better—it might provide the ability to check in on the status of a process and how the work has been distributed.

Focusing on improvement that ultimately provides more value to your customers will not only help reduce your costs, but will also foster greater loyalty within their ranks. If the economy doesn’t improve any time soon, it may be these small, continuous improvements that help your organization prosper and grow while others fall by the wayside.

Have you implemented a process improvement program in your company? What benefits have you seen as a result? And what would you recommend to those looking to start such a program?

Thanks for reading,

Rachel Wentink