Think about your processes, the systems by which your business runs. Consider information about service suppliers; equipment maintenance; team member appraisals; customer service expectations and production processes.
Where is your process knowledge?
Who is the repository of this information? Is there a team member who has an encyclopaedic knowledge of your business? Maybe it’s you. What would happen if that person quits or falls ill? What happens to that knowledge and those processes? We call this loss of knowledge ‘corporate amnesia’ and it can have serious consequences for a business when it occurs.
At the very least your business becomes less efficient for a time while new or remaining employees muster together a replacement process. This takes time and costs you money. At the worst it will lead to a reduction in quality of service, potentially a heavy one.
How can you protect your business with process management?
The best way to protect your business against this is to ensure your processes are locked in to the business. A process management software can be a great tool to enable you to do this.
Worth mentioning that setting up processes doesn’t mean the end of the road. They need to be up-to-date and maintained as part of your routine management of the business. Best if you make it part of the culture of the business to ensure that processes are revised as they develop and a routine reviewing of processes to ensure they are up-to-date as well. This is all second nature to companies who follow ISO9001 but will be of huge benefit for any business – even (and especially) to small businesses where loss of just one team member will significantly weaken the knowledge base of the business.
Can process management add value?
Another time when locked-in processes are invaluable is during the sale of the business. Your purchaser wants to know that the business will continue to maintain a profit and run efficiently after the sale, whether or not you remain in place.
In addition, often the sale of a business, no matter now gently-handled, can precipitate a churn in the workforce. Savvy purchasers know this, so a lack of process management has a detrimental effect on purchase price. Personnel change often occurs after a business has been sold and a great deal of value can be lost if a team member leaves, taking their knowledge and experience with them.
Ensuring you have a system which sets out the business processes and ensures all team members are training consistently according to the processes locks a much greater value into your business and certainly contributes to a successful sale.
Direct and indirect benefits of process management
The benefit of process management to the value of the business at sale are twofold. Directly, the purchaser will benefit from the fact that the processes are in place and not reliant on specific team members. Indirectly, the business will already be benefiting from consistently trained staff. Bottom line is, you can only gain from focus on your processes and manage them carefully, your business will benefit from this now and in the future, too.