Standardizing businesses since 1760
If there is a period in which Western society experienced an explosion in productive capacity and quality of life, it would be the period of the industrial and technological revolutions. We’d all love to grow our businesses the way the economy grew back then. And while there were many factors at play contributing to the improvements of that time, there are some universal lessons that hold true to this day. In this article, we’ll look at some of those lessons and how they can be applied to your office today, in the form of workflows.
Back before Samuel Colt introduced the world to the Colt revolver in the mid 1800s, most guns, watches, locomotives and other mechanical devices were not mass manufactured. One of a kind pistols are nice, but people felt more confident buying a Colt whose standard parts insured a lower risk of jamming at inopportune times.
In the same light, standardizing your business processes into workflows reduces the risk your clients assume when buying from you. To do this, search your business for any process that could seem inconsistent to clients or that could run smoother. Then outline how the process should run ideally. If there is someone on the team who does this job particularly well, consider using their process as a baseline. List out all the steps and ask yourself:
- Who should do each step?
- Are the steps in optimal order?
- How much time should each step take?
- Are we currently doing any unnecessary steps?
- Are there variants to any and how should they be handled?
All these should be formalized and embedded into a system that makes sure they consistently get done on schedule (we’ll talk about systems later). Not only does following standardized processes reduce error and allow you to build a reputation and brand, it also lays the groundwork for specialization, interchangeability and automation.
One of the first to try to explain the industrial revolution was the grandfather of economics, Adam Smith. Core to Smith’s explanation to the substantial increase in productivity was the theory of “division of labour”. This roughly stated that people were more efficient if rather than being Jacks of all trades they were a master of one. The master is able to focus on perfecting one small element of production and then cooperate with others who were specialized in different areas to complete a final product at higher efficiency levels. This was perhaps most famously illustrated in the early 20th century by Henry Ford’s assembly lines.
To take advantage of specialization, try to identify what each of your employees might be good at and might like. Then try to match that with different tasks you’ve identified in your workflows. If you manage to match the right person with the right kind of work, you can expect that they’ll be more fulfilled and they’ll actually be able to identify improvements that you didn’t think of. For a quick way to figure out who might be good at what, lean on the theories of Karl Jung and give them a Myers Briggs test to identify their personality and natural aptitudes. They will likely find it fun and learn insights about themselves and their co-workers.
One of the big benefits of standardizing products is that there was a steady stream of parts being built for each one. Some parts were fairly generic, like springs or gears in a watch. This availability of parts lowered the bar for innovation of new products and allowed for a new level of efficiency. With less need for vertical integration, not only could I start a business that solely produced only watch parts, I could also choose to open a business that simply assembled watches from parts produced by someone else. The value chain was much more flexible and resilient, because if one of your suppliers increased prices or went out of business, you could replace it with another. This same principle applies to your business in a couple ways:
First, by breaking your processes down into smaller steps, the likelihood of someone on your team being able to perform a given step increases. For instance, perhaps you have a long and complicated sales process, which only one senior employee is qualified to perform. Let’s say the first step in that process is qualifying the lead and that that step is fairly easy and could be performed by a number of other staff. So if senior employee is busy, someone else can jump in to push the process along.
Another advantage of interchangeability is that it magnifies specialization. Time that staff invest in honing a skill in one area of their business can get reused in another. Someone who was once marginally productive in one area of your business can become hyper productive in 2 or 3 areas.
Before it was replaced by the internal combustion engine, steam power was the engine that drove productivity years ago. Today automation takes its place.
While steam was actually one of the first things to be used in the industrial revolution, automating your processes is ironically one of the last things you should do. Just like the Sorcerer’s Apprentice, you may be tempted by the promise of magical machines performing your work, but just like in that story, you should be cautious. While I’m not warning against an Elon Musk style AI Apocalypse, I’m more concerned that before you duplicate your processes, they should be as consistent, efficient and flexible as possible.
To plan your automation, look for anything in your business that needs to get done over and over, that takes up human time and energy and that is error prone. These are great candidates for automation. For example, you may have emails that are getting sent out manually that could be done automatically. Reminder and notification systems may not automate the work, but they automate the timing of it with ruthless accuracy, something with which humans struggle. There are also workflow automation systems like Zapier which look for process triggering events in one system and spark a workflow in another.
When I speak with clients, I’m always amazed at how much money is being left on the table through non-standardized processes. And it’s rarely because they aren’t aware of the opportunity, it’s almost always because they simply haven’t had time to spend on it. If this sounds like you, take a look at my article 28 Tips for Setting Up Workflows which guides you through the process of standardizing and automating your business, one small step at a time.
Mike McNulty has been helping small business implement Solve since 2010. He loves summer and hates Brussels sprouts, no matter how good they are for him, and he saw a blimp once.