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For many of us, change is hard. Change also is inevitable. Eventually, if businesses don’t evolve and change, there will be opportunity lost. This article will discuss the idea of process improvement and how embracing some change and challenging the status quo can go a long way.  

Why Should We Consider a Process Improvement Initiative?

One main benefit from embarking on a process improvement initiative is identifying inefficiencies. This is apparent for companies that have experienced growth but still use the same processes and procedures because “that’s the way we’ve always done it,” without much further explanation or thought as to whether that is still the best way. Think of it this way: as we grow and change as humans, we need to right-size our wardrobe or replace worn-out shoes. The same applies to growing, changing businesses. Inefficiencies identified can be the result of manual or redundant processes or procedures. By focusing on these areas, you can usually find small changes that make big impacts.
  
Automating a process can save hours worked on that task indefinitely, which when costed out at that employee’s hourly rate, usually outweighs the investment cost of new technology (app, software, or hardware). For example, entering manual time sheets can take a lot of time and resources in the field and in the office. If this process is automated, it saves on resource time, makes information available closer to real time, and can save on payroll costs. Let’s say it takes two people 20 hours per week to enter time sheets into the ERP system (in addition to other daily responsibilities). They each have an hourly rate of $15 per hour, so it costs the company $600 per week just to get payroll hours into the system. If time entry is done in an app and imported, it takes five hours per week for one person, costing the company $75. By automating this process, the company benefits in the following ways: 1) payroll cost decreases by $27,300 annually ($525 per week saved for 52 weeks), 2) one payroll clerk has 20 additional hours of availability and another clerk has 15 additional hours of availability, and 3) job cost data is available in almost real time.
  
Process redundancies also should be reviewed to determine if they are necessary. Many times, software evolutions have replaced the need to manually review multiple times or have developed new ways to take a shorter path to the same result. Sometimes, more resources have been added to the team and duties are now properly segregated. Whatever the scenario, it never hurts to assess the environment.

How Do We Know Where to Start?

Where to start will depend on your goal or needs. Some companies have specific issues that need to be addressed. For example, if management identifies a large, uncharacteristic adjustment at year-end, they may want to focus strictly on processes surrounding that financial statement area. If lead times on gathering reporting information seem to be increasing, this might be an area to research to address any bottlenecks or disconnects that exist. Other companies may just want or need to evolve due to significant growth or a change in management philosophy. In this case, a collaborative decision should be made on what areas to analyze and the priority given to each area.

Who Should Be Involved?

Overall, management needs to buy in at a global level. They do not necessarily need to be involved in the day-to-day aspects of the project, but they should set the tone so the direction for positive outcomes is clear. Identify a champion—someone who can continue to drive the project with purpose and passion. Ideally, this person would have a pulse on the various aspects of the organization and have a credible relationship with those involved and expected to facilitate the changes. Most importantly, those ingrained in the day-to-day process should be on the front lines. These “super users” are most familiar with the quirks and heartburn of the daily activities and typically have ideas on how to make improvements but are never asked. Involving all levels creates a message of value and can help reduce resistance to change.

When Is the Right Timing?

There is never a right time, just right now. The challenge is finding the benefit amid the laundry list of competing priorities. Whether it is dealing with supply chain issues, labor shortages, rising or declining backlogs, or revenues, construction companies are already spread thin. Recession is approaching (or here) and spending is tightening. After many years focused on growth, companies may need to consider what levers to pull if they need to downsize. If process improvement changes are made, could costs be analyzed in more real time to increase margin and help maintain the bottom line? Could changes help manage overhead by reducing overtime worked to complete the tasks? Can efficiencies help maintain work-life balance for employees given the difficulties in attracting talent?

The timing of tackling a process improvement initiative also can depend heavily on the company culture. A reactive culture will look to process improvement as a search for solutions to a specific issue or event, such as the large financial adjustment mentioned earlier. Conversely, a proactive culture will seek the initiative as part of strategic planning. Proactive management will anticipate growth hiccups and look to smooth that transition as much as possible.

Change is inevitable. We cannot control that. It will likely be uncomfortable, and it can be easy to find reasons to delay. However, we can control how we react to change. Process improvement initiatives are an excellent way to do this. Whether proactive or reactive, they are a systematic way to address change, and taking a top-down, all-in approach can help employees feel valued and part of the change, creating some ease in tension down the challenging path.  

For more information, reach out to a professional at FORVIS or submit the Contact Us form below.

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