You surely know the “bottleneck”?
Let’s go with an example:
The company starts with its owner, the only employee, and he wants to progress as quickly as possible. He invests hours and hours every week. Finally he can not do more: he is the “bottleneck”, right ?
He hires employees and collaborators. He must show how things work, the processes (which are not yet described), … and at the same time he must keep up the momentum. He still misses time in his week … he is always the “bottleneck” !
Employees and collaborators begin to understand how things work, and in turn, they start to create value. The owner, as a “bottleneck”, gets a little rest, and the business continue to grow.
The processes are getting better, but we must always train the new ones. While we train the new ones, everyone then suffers the fate of the “bottleneck” while being very busy.
Now, because of the fast and random training, people are more or less familiar with WHO does WHAT and HOW (the processes). Everyone is doing their best…in their own way. The mistakes begin to appear and the team must spend hours to correct them while maintaining current operations. Each one becomes a “bottleneck”. It becomes more difficult for the morale!
There is also the turn around of some employees, which must then be replaced by new ones. These employee replacement costs may represent, say, 40% of the first year salary. Here again, everyone must invest a considerable amount of time to hire and train, even if everyone is already a bottleneck.
In the end, what is the % of time spent on adding value, VA (VA = Value Added doing the right things), and % NVA (Non-Value Added), or waste ?
The answer for Quebec or Canada is on average: VA = between 40% and 80% with an average of 60%. So there is an average of 40% NVA!
Imagine this cost of 40% NVA of your payroll! Let’s say 40% x 50 employees x $ 40,000 = $ 800,000 NVA!
It is then time to move to another level of organizational maturity with a good description of the key processes.
Now imagine that with these improvements, you make a 10% payroll gain, and this is possible! Let’s say a gain of 10% x 50 employees x $ 40,000 / year = $ 200,000 gain!
The description of key processes is the basis of process improvement, and everyone can contribute by participating.
The BPMN (Business Process Modeling and Notation) visual method and the use of user friendly and affordable software technology can make quick wins.
As long as the key processes are well described and known, WHO does WHAT and HOW, there are fewer mistakes and therefore there is more time to spend adding value. at all levels of the organization. This has positive impacts on the finance as well as the morale of the team!
The “bottleneck” can be then transferred to sales 🙂 so they can bring bring even more water to the mill!