Understand Your Processes

By: Alex Marcy on October 28, 2014
Tagged: Educate Information

The first step in measuring your performance is to understand what you are measuring. By learning and documenting your processes you can easily identify key results to use in your performance monitoring efforts.



What is one of the first things Warren Buffett, one of the world's most successful investors, does when he buys a company? If most of his purchases are anything like some companies he recently purchased at which we know a lot of people, it is to understand and document their existing processes.

The goal behind this is two-fold. First it is to understand what the company has done to make it successful enough for him to want to purchase in the first place. The second is to see where the company's processes need to be streamlined or replaced with his own processes.

There is another benefit to this method as opposed to going into a company and revamping their entire workflow from the beginning. It makes it easier to get everyone's buy-in on the restructuring.


Defense

For people who are passionate about what they do, restructuring can be hard to swallow. They may have some personal investment in the processes themselves, having developed or influenced them along the way. Ripping out those processes and putting in new ones can immediately put someone in their position on the defensive. This isn't a bad thing or a character flaw, it is a normal reaction to hearing your way of doing things might not be the best way out there.

Instead if the processes are documented and understood they can be assessed on a level playing field with a different way of doing things. This can lead to fruitful discussions with the stakeholder in the original process feeling like they are being heard and can dramatically increase their level of buy-in.

First and 10

Once discussions about the old and the new methodologies have taken place incremental changes can be made. This is not unlike American football in that the goal every play isn't to score a touchdown, it is to move the ball 10 yards down the field to maintain possession on the path to scoring a touchdown.

This approach breaks down the final result into small, easily digestible, and complete-able chunks. It also makes it easy to track progress and understand what is working and what needs to be adjusted along the way.

Two-Point Conversion

In addition to obtaining buy-in, the other benefit to the incremental approach to change is the ability for there to be learning in both directions. Every so often there will be an idea Warren Buffett might adopt from one of his subsidiaries that can change how his other companies are run. To keep to the football analogy this is like the introduction of the two-point conversion to make the game a little more interesting to watch. This isn't necessarily going to be a complete overhaul of the system, just a subtle tweak to make it better overall.


Post-Game Wrap-up

The first step in implementing a performance monitoring strategy isn't to dive in and build a system with a dashboard and some metrics. The first step is to understand how your business operates and the processes used to run it day to day. Once you know those you can easily identify what you can and should measure to begin improving things.

Someday you might make it to the Superbowl but first you need to be able to make it 10 yards down the field.


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