Concentration on the essentials: efficient processes and standards increase output


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Many entrepreneurs are firefighters by profession: they put out fires all day, rushing from one disaster response to the next. They do their actual work in the evening. It would make more sense to establish functioning fire protection so that there is no fire.

Concentration on the essentials: efficient processes and standards increase output

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Philip Semmelroth Philip SemmelrothPhilip Semmelroth helps companies become more profitable.

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Clear recipes instead of vague concepts

When you eat out in a good restaurant, you expect consistent quality. You don't want the sole to be limp today and too salty tomorrow. That doesn't happen either because professional chefs follow a clear recipe. You do not work with vague concepts that are implemented one way today and differently tomorrow, depending on the day, mood or personal preference.

Many entrepreneurs do it differently: They only do the actual work when their employees have gone home, or at the weekend if their family would rather have them to themselves. But fire protection would make much more sense so that the numerous large and small fires do not even arise.

That is the basic mistake of many Company: There is an approximate concept of how to answer a customer inquiry, write an offer or organize a project. But these “concepts” leave a lot of leeway for individual decisions and personal failure. Something is always forgotten, other things are done twice, interfaces do not work, schedules are doomed to fail, which provokes queries or angry customer calls - and thus creates all the everyday crap with which one can annoy as an entrepreneur and damage limiter from the service.

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You don't have to put out fires that don't start

Processes and standards are elementary for a successful company because they ensure the quality of the work results, make it possible to plan the implementation of orders in terms of content and time, accelerate processes and significantly increase the company's efficiency. Clear standards and processes enable reliable calculations, binding fixed prices and make processes scalable. If everyone on the team doesn't approach things their own way, new employees can also be trained more quickly. Vacation replacements also work smoothly.

Developing flowcharts, checklists and similar instruments for important, repetitive tasks naturally costs time, but this effort pays for itself very quickly. There are fewer breakdowns, the number of queries is rapidly decreasing, and employees can solve problems independently. Functioning standards and processes are created when you jointly distill the best solution from individual ideas from various participants, write them down and commit everyone to it (including yourself!).

Quality saves money. This applies to both process quality and result quality

Many entrepreneurs believe that more quality means more costs. The opposite is the case when you are well organized and your processes are right. Greater efficiency saves money. Fewer errors and delays save money. Convincing results bind customers and generate recommendations. Better quality makes higher prices enforceable and thus brings money. Especially with service-focused service portfolios, it is advisable to define clear standards because you can then do such work with higher quality.

In addition, you can make reliable statements about how long something will last, what it will cost and what restrictions are to be expected. This also solves the problem if you only have one or two top employees that every customer wants to work with. Standardization enables everyone in your company to deliver consistent quality. This creates enthusiasm among new customers. They often said goodbye to a competitor because it was too chaotic for them.

Exercising won't help if you're constantly changing disciplines

Standards and processes enable employees to have steep learning curves, make your company highly efficient and maximize sales and profits. Once processes have been developed, you can communicate company-wide and continuously improve them through observation and training. But that only works if you don't constantly develop new offers on an ad hoc basis - because an individual customer may ask for them or because you were inspired at a trade fair.

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Innovation is important, but companies that are on the move without a clear strategy and constantly implement new concepts are wasting many opportunities. Instead of constantly developing new offers, it makes more sense to think like a franchisee. Simply ask yourself how you would have to define work processes so that they can be conveyed to new employees within a very short time so that these employees also achieve identical results in other places without your direct involvement. This is how you create the basis for scalability.

Loyalty is dangerous

Often it is not even clear in the company who is doing what and whether the division of work is expedient. Many employees were never fully instructed in their work tasks and have come to terms with having to improvise over and over again. People who need clear guidelines and structure leave the company, the others stay. Over time, this creates loyalties between the entrepreneur or boss and employees. Over the years you get to know each other better and you also tolerate personal quirks.

For this reason, employees are often promoted who the entrepreneur sees as "loyal". What is underestimated is that loyalty alone is not enough to do a good job. New tasks require new skills. This is why it is important to get an overview of what skills individual employees have and what skills and in what form are required for which tasks in the course of process focusing. According to this, employees should be deployed appropriately, namely where they have the best qualifications for a task or can easily acquire them through training. The fact that someone “has been with us for so long” must not be a qualification criterion.

More success with objectivity

Only a successful company that increases sales and generates excess profits can pay solid salaries, secure jobs and nurture committed employees. The most important lever for the company's success is a clear sales focus. If the thinking in the company is geared towards acquiring lucrative customers, serving them efficiently, satisfying them as best as possible and retaining them permanently, the company's success cannot be avoided at all. Sales is the only function that causes customers to bring money into the company.

Of course, entrepreneurs can still optimize thousands of other details. However, you will get the greatest effect if you focus on maximizing a company's sales power. Ideally, you should start from the results you are aiming for. If these are clearly defined, the necessary measures can be developed backwards, which are required as a foundation to achieve these goals.

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Where are you losing customers?

If you want to increase your company's sales success, you need to make sure that you have a clear picture of where you are pissing off customers. You then consistently eliminate the cause. The indicators used are complaints, the non-commissioning rate and the number of offers that need to be improved.

The devil is in the details. Systematically tracking it down seems a nuisance, but it leads to a significant reduction in your transaction costs, i.e. all those costs that arise in the initiation and execution of transactions without being billed. To put it simply: the more complicated it is and the less you concentrate on really lucrative customers, the higher your transaction costs.

For example, the organizational effort involved in initiating a large order hardly differs from the bureaucratic effort involved in a far less lucrative small order. Acquisition, negotiations, offers, contracts and invoices are the same for both. Many entrepreneurs wear themselves out with "small cattle".

Only deals bring cash

In addition to low transaction costs, the ratio of offers to orders is a key factor in success. Some employees in sales seem to have set themselves the goal of becoming world champions in quotations. They neglect, however, that only deals bring you cash. In fact, it comes down to writing fewer offers and more order confirmations.

A well thought out sales strategy filters out less promising prospects early on. An early no from the customer is always better than a late one. Sales talks should be conducted with a focus on the conclusion. Complex consultations and concepts should never be created free of charge, but made subject to a fee. If you appear convincing, your customer will pay for it too. If a prospect wants in-depth know-how free of charge before he signs an offer, he is not a customer for you, but a transaction cost accelerator.

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All of this is unfamiliar to many entrepreneurs, but can be easily implemented as soon as you know the right levers. An "offer" is usually free of charge. If you name the same document “project planning” and give your customer the option of implementing this planning with another provider, you can bill for your services sooner. With the latter, you kill two birds with one stone: A fee-based consulting service can be more detailed and convincing than a non-binding offer. And a customer who has already invested in you and got to know your quality will most likely also place the order with you.

“Bigger” is not necessarily more profitable

The result of the “Processes” module is a lean, efficient and highly profitable company that generates high sales with a manageable number of employees. It is wrong to assume that in order to make a lot of money, you inevitably need a lot of people. Many companies have far too many employees who then have to be managed by additional managers. All the staff increases the size of the company, and in the end also the risk, but not necessarily the profitability.


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