The Process:Profit Paradigm

Process control systems are critical for optimizing profits

By Andrea Hill

(Originally Published by MJSA August 2023)

I became a process geek out of necessity. I started my career and parenthood at the same time. My most precious commodity was time, and I couldn’t figure out how to juggle a baby, full-time job, preparing healthy meals, cleaning my apartment, and endless (endless) piles of laundry. Something always suffered for lack of attention, and everything suffered from lack of quality. But through my interfaith group I met Maureen. Maureen had a house full of kids and ran her own business. She came by my apartment one afternoon and proclaimed, “Sweetheart, you need a system.”

The most precious commodity in your business is profit. To increase profits, you too need a system. No matter how much you raise prices, cut costs, or increase sales, if you don’t have a process control system in place, you cannot optimize profits.

Building a System

Your business is a collection of processes, from the simplest tasks to the coordination and management of functional areas. Picture your business processes as a Russian doll—all nested from micro to macro.

• Macro processes: Typically reviewed or updated annually in relation to big projects or annual strategies. Serve as the foundation for creating plans that are executed as middle and micro processes.
• Middle processes: Ongoing. Tend to be managed over weeks or months and are occasionally reworked or updated.
• Micro processes: May be repeated from beginning-to-end every day or many times each day.

For example, in your production department, you have:

This nesting example exists in every functional area of your company, from accounting to customer service to purchasing to warehousing, and every one of these processes is repeatable. The individual raw materials, finished products, marketing campaigns, sales events, and customer inquiries will change, but the processes to manage them should not.

The master key that unlocks profitability in your business is process control.

Every repeatable process in your business should be documented, which includes:

• Defining the objective of the process
• Mapping the process steps
• Identifying opportunities for improvement
• Codifying the final process as a standard operating procedure (SOP), project plan, or playbook
• Training to understand and follow each process

You might think that process controls will inhibit creativity, but the opposite is true. Your SOPs ensure that processes are done in a consistent way across your organization. They provide the foundations for continuous improvement, ensuring your business continues to evolve with new technologies, changes in customer expectations, and competitive pressures. Process controls guarantee faster starts, minimize errors, and eliminate wasted time and rework. And all this increased efficiency releases capacity to focus on innovation and quality, which drops straight to the bottom line as profit.

In one conversation Maureen introduced me to the concepts of meal planning and prep, laundry organization and batch processing, and clutter management. It took several months to master, but by controlling processes from the beginning, I reclaimed precious hours of my life every week. And as my family grew, my processes kept improving.

The same will be true for you. Tackle one process at a time and eventually you will have an entirely documented business. The time will go by either way, right? Might as well have greater profits to show at the end of it.