Top Companies Know What Affects Them
ABJ ENTREPRENEUR Thursday, July 1, 2010.
By Sam Thacker
Entrepreneurs need to balance fostering creativity and establishing structured processes that build companies. The two objectives often clash, but they don’t have to.
Business process and organizational expert Karen McGraw, co-owner of Cognitive Technologies Inc., has some advice on how to keep these ideas in harmony.
McGraw talks about what separates high-performing companies from others. In her model, such companies understand and incorporate certain concepts.
Outcomes of the job
Tasks and key work processes yield outcomes that enable — or fail to enable — an organization to meet its goals. Business leaders should identify the measurable outcomes that produce value, and focus on how the outcomes from each job mesh to produce the overall outcomes they desire.
One company McGraw worked with, a large logistics company, was having problems meeting its goal of a near-perfect record of shipping packages within 24 hours of order receipt. Management incorrectly assumed the company’s low shipping rate stemmed from flawed processes for picking inventory, packaging it and finally sending it.
McGraw discovered, however, that any glitch in authorizing payment would halt a packaged order’s shipment until the credit department could resolve the issue. So to improve the company’s 24-hour shipping rate, McGraw helped streamline the credit card approval process, including more rapidly correcting problems that impede credit approval.
Managing influence
Strong companies actively manage the major influences on performance. Managing influence doesn’t mean controlling people; it is about working hard to get all stakeholders in a venture to contribute and feel like a part of the team, and ensuring all influencers share in common goals.
Influences include managerial support, such as feedback; workplace or structural support, such as ergonomics and office layout; tools and technologies; skills and knowledge; and personal motivation.
When examining how much each factor influences performance, “You may be surprised to learn that a tool purchased to enable better performance has actually become a barrier,” McGraw said.
For example, she was consulted to help a newspaper reduce data entry errors in processing classified ads. She quickly discovered that errors were not due to lack of skill, but instead to a new user interface whose data fields were in a different order than those on the input form that the staff retrieved data from. This data field mismatch clearly influenced outcomes detrimentally. Similarly, managers who effectively match tasks with individuals’ skills and interests will positively influence outcomes.
Key work processes and critical tasks
High-performing organizations pay attention to the way work gets done — your key work processes and critical tasks.
These can be informally agreed on processes or written compulsory procedures. In either case, McGraw said, “Each key work process can be examined further by looking at the critical tasks that [constitute] it and the barriers that get in the way of doing it correctly or within the target time.”
Having appropriate processes and tasks in place is critical, McGraw said.
“Put good performers in a bad process, and the process will win every time,” she said.
Entrepreneurs who incorporate these ideas are far more likely to create high-performing organizations than those who don’t understand how to implement them.
Sam Thacker is a partner in Austin-based Business Finance Solutions.