Even in today’s digitisation-obsessed world, many organisations struggle with inefficient processes. This is hugely problematic because they end up losing 20-30% of revenues which then translate into weaker profits.
So if your organisations’ processes are inefficient, you’re likely bleeding revenues. Inefficiencies also affect your ability to deliver high-quality customer experiences, hinder your time-to-market, and slow down innovations. They also confuse and frustrate your staff, lower their engagement, add to their stress, and even contribute to burnout. Consequently, employee turnover increases, which increases your human resource costs, and again impacts your revenues and profits. All these outcomes are detrimental to your organisation’s growth and success.
So what is the best way to deal with the efficiency conundrum? Add more human resources and hope they make the inefficient process more efficient? Many organisations think this is the right answer. But we beg to differ.
Same Action, Poor Results
“Insanity is doing the same thing over and over again, but expecting different results.”
— Albert Einstein
These words do make sense in the context of organisations and inefficient processes. And even though the choice to do the same thing over and over may not be “insane”, it is a trap that many organisations fall into, and then struggle to get out of.
For one, they continue to use poorly integrated legacy applications and systems even if they are no longer effective for meeting new challenges in a changing business landscape. This creates sub-optimal functional silos and workflows that adversely affect enterprise-wide communications and collaboration. It also forces the org to continue with tedious and time-consuming manual tasks that lower productivity, increase errors and burden resources. Finally, since many legacy systems don’t “talk” to each other, employees are constantly shifting between disparate information sources, resulting in higher costs, lower productivity, and greater turnover. At a broader level, outdated systems make it virtually impossible to maintain a competitive advantage, satisfy customers, earn their long-term loyalty, or achieve consistent growth.
Another common and traditional approach to address the inefficiency problem is to simply add more resources to the process. However, not all old ideas are necessarily wise, and this one of them. Simply adding more people to a broken or sub-optimal process does not address the problem’s root cause. Also, people are not always – or the only – reason for process inefficiencies, so simply increasing the size of the workforce is akin to treating a disease with the wrong medicine.
The Real Reasons for Process Inefficiencies
“Effectiveness is doing the right thing; efficiency is doing things right.”
–Peter F. Drucker
One of the biggest causes of process inefficiencies is improper planning with available resources. A failure to identify operational interconnections, contingencies, and risks is also a cause. As is a lack of clarity and transparency regarding responsibilities, accountability, and expected outcomes and SLAs. Inconsistent or inadequate feedback, and poor communications also lower efficiency. Furthermore, when processes are the result of operational inertia (“if it ain’t broke, why fix it?”), they often lead to bottlenecks, redundancies, misalignment, and rework, all of which lower process efficiency and productivity, and also affect profitability and turnover – and not in good ways!
Now, if more people are required to cater to increased throughput or growth in a particular process, it indicates that the process is growing and that the business is likely to earn greater revenues from it. Both are obviously good outcomes for the org. However, adding more people to a growing process, or worse, an inefficient process, could also affect its profitability and lower its ROI – which are not good outcomes by any means.
By not understanding the true causes of process inefficiencies and their real costs, you’re functioning in the dark with no idea where you are, and equally important – where you’re going. This simply exacerbates your inefficiency problems, creating a vicious cycle of high costs, low competitiveness, and poor financial results that will not be resolved by simply adding more people to your workforce.
The Secret to Improving Process Inefficiencies
Consider companies like Nokia, Blackberry, Kodak and Yahoo – once all considered leaders in their sectors, and poised for years of growth and success. Even with huge and growing workforces, these organisations managed to fall off the radar, and mostly disappear into the abyss of inconsequence. One major reason for these outcomes was the firms’ failure to innovate. Another was their failure to quickly understand and adapt to changing market realities. Consider Kodak that missed the digital photography revolution, or Nokia that failed to re-focus its attention on Smartphones and Smartphone software. Similarly, Blackberry ignored touch-screen based technology, and Yahoo did not capitalise on key opportunities that would have had the world of today Yahooing instead of Googling.
These four, along with many other companies that have also faded into obsolescence could have benefited by keeping a finger on the market’s changing pulse, embracing new technology, and automating existing processes. These choices could have freed up their human resources, and allowed them to focus on more high-value tasks that might have generated better results for their processes and business.
Intelligent Process Automation (IPA), Robotic Process Automation (RPA), Artificial Intelligence (AI), Machine Learning (ML), and Computer Vision – all these new technologies can add speed, simplicity and efficiency to your processes. By automating repetitive, boring, or laborious tasks, you can achieve such amazing results without adding more resources. If anything, you can repurpose part of your workforce so they can perform other important tasks, and deliver greater strategic value to your org. Automation can also help you increase your speed-to-market, minimise errors, streamline workflows, and deliver better customer and employee experiences.
Einstein was right. Doing things the same way (add more resources) and expecting different results (more efficient processes) is a huge folly with serious long-term consequences. This is especially true in today’s radically changing economic landscape. Want to improve your processes? Stop focusing on expanding your workforce, and start thinking about automation and technological innovation. The optimal solution is within reach. Make sure you grab it!