3 Steps to Saving Your Small Business from Disastrous Mistakes
My “rule of two” kicked in this morning. The rule is triggered when I read two news stories on the same day about the same business issue. When the rule takes effect, I write a blog post.
The two stories couldn’t be more different. One harmless, the other fatal. First, the harmless one.
You may recall that in December, there was a kerfuffle among lovers of Hershey’s Kisses. It seemed that consumers were unwrapping their holiday Kisses and finding the tips missing. If you’re like me, that’s actually a good thing, because you save two calories or so by not eating the missing tip. But for millions of Kisses fans, this was a huge deal.
The second story is deadly serious. Last October a Lion Air Boeing 737 crashed into the Indian Ocean killing all 189 people on board. Investigators have been working to determine the cause of the crash.
Two divergent stories, but with a common issue: A breakdown in process. In the Hershey’s case, a company spokesman told the New York Times, “After we heard from Hershey’s Kisses fans during the Holiday Season, our operations team looked closely at our complete Kisses manufacturing process and made adjustments to the process for shaping the tips.” While the fix will not be in place by Valentine’s Day, it will be solved within a few months.
In the case of Lion Air, the process problem is, of course, much more complicated. But the essence of the problem, according to the Times report, is that a software change was made to accommodate a new engine design. The Times said that neither the plane’s manufacturer, Boeing, nor the F.A.A., informed pilots of the software change. The pilots’ lack of knowledge about how the plane would respond to a particular set of circumstances contributed to the disaster.
You may not be in the airline or chocolate-making business, so why should you be interested in these two dramatically different outcomes of process-related problems? Because any business, even small businesses, can suffer costly consequences by not having good processes for their most essential functions.
Large companies have detailed, voluminous process documentation, but small businesses often have—nothing. You might think a business that employs only a few dozen people or which has a few million dollars in annual sales doesn't need written processes. If you’re a business owner who has invested your life savings and time in your business, that omission is unforgivable. Why don’t most small businesses have written processes followed by everyone? Often, it's because they think it’s too complicated and there’s not enough time to do process-creation properly.
A solution: Document the 20 percent of every core process that gives you 80 percent of the value of the process. Here’s a simple 3-Stop Process Documenter methodology created by EOS Worldwide.
With your leadership team, identify your handful of core processes (about three to seven or so, not 17).
Make a list of the processes (like HR, Marketing, Sales, Operations, etc.)
Give each process a name
Write down the major steps of each core process
Use a linear, chronological approach
Each process point should have somewhere between one and five sub-points to further explain the process step
Keep it short – each process should be no more than five pages (and one page is better)
Review each process with your entire leadership team and make sure everyone approves
Combine each simplified and documented core process into a binder or online folder that everyone can access
Turn your list of core processes (from Step 1) into a Table of Contents
Give your overall process library a name
This might seem overly simplistic. It’s simple, but not simplistic—there’s a difference. And the fact is that many privately-owned small companies don’t have sufficiently documented, regularly reviewed processes that all employees follow for their most critical operations.