Process improvement is a key element in the successful operation of any small business, and getting employee buy-in is crucial to getting the most out of it.
This is particularly important for Acquisition Entrepreneurs (AEs) as they transition into ownership during the post-acquisition period.
Process improvement refers to the ongoing effort to identify, analyze, and improve existing business processes within an organization.
The goal is to increase efficiency, effectiveness, quality, and overall performance while minimizing costs, waste, and errors.
It involves a systematic approach to improving a process that includes identifying the current state of the process, analyzing its performance, identifying areas for improvement, and implementing changes to achieve the desired state of the process.
Process improvement can be applied to any aspect of a business, including operations, customer service, finance, and human resources.
Let's look at a brief overview of process improvement through the lens of an HVAC business looking to improve its sale process before moving on to how Acquira approaches it during the transition from one owner to the next.
For this example, process improvement may involve the following steps:
- Define the Problem: The first step is to define the problem with the current sales process. This may involve analyzing data related to sales, such as the number of leads generated, conversion rates, and revenue generated.
- Map the Current Sales Process: Next, map out the current sales process, from lead generation to closing the sale. This will help identify any bottlenecks or areas of inefficiency that can be targeted for improvement.
- Analyze the Data: Use data analysis to identify the root causes of problems with the current sales process. For example, low conversion rates may be due to ineffective lead nurturing, poor sales skills, or inadequate follow-up.
- Develop an Improvement Plan: Based on the analysis, develop a plan for improving the sales process. This may involve changes to the sales approach, training for sales staff, or improvements to lead generation and nurturing processes.
- Implement the plan: Once the plan has been developed, it should be implemented in a controlled manner. This may involve piloting changes with a small group of sales staff before rolling them out to the wider team.
- Monitor and measure results: Finally, monitor and measure the results of the process improvement effort. This will help determine whether the changes have positively impacted sales and whether further improvements are needed.
Overall, process improvement in an HVAC company's sales process aims to increase efficiency and effectiveness, leading to higher conversion rates, increased revenue, and improved customer satisfaction.
What Are You Doing Now? What Needs To Change?
There are a variety of approaches to process improvement – Six Sigma and lean manufacturing, to name a few –. Still, you can create your approach to find a fit for you and your business, says Brian Stoh, Director of Integration at Acquira.
“What it distills down to is looking at what you're currently doing,” says Brian. “And then trying to get a view of what you hope to achieve and what needs to be changed to get there.”
A small business comprises many overlapping processes that can all be subject to process improvement – from finding new customers to selling products to fulfilling orders to getting paid.
As part of the ACE Framework at Acquira, Brian aims to look at the most important elements of a business and focus on the processes that power those elements alongside the new acquisition entrepreneur.
“Whether it be plumbing or countertops, or electrical or hardscaping, or pool design or whatever it is we're doing, there are a series of interrelated and interconnected processes that happen,” says Brian. “And so we want to sit down and identify really what those core processes are.”
The first step in Brian's process is to get together with employees and review what they do for the company.
He wants a complete picture and will often ask follow-up questions if he feels something is being missed.
“At times, you'll get people that jump over big steps,” he says. “But I don't know anything about this job, so I'll say, ‘Is that really what we do? Do you not do something else in between?' ‘Oh, yeah, we do.' ‘Okay, well, let's write that out,'” he says of the interaction.
It's common for employees to suggest how to change while still laying out what they do, but Brian always asks that they hold off. He wants a complete picture of the process as it is now before turning to how it could be improved.
Brian will ask the employees how they would do things differently after this process is complete.
99% Of The Time, They Say ‘It Sucks'
His first question is always, what do the employees think about the process as it is?
“About 99% of the time, they'll say, ‘It sucks,'” he says with a laugh.
They understand the pain points in the process and almost always have an idea of how to improve.
Brian will then ask how they would do things differently, going right back to the beginning of whatever process he wants to improve.
“I have 100% buy-in at this point because I have demonstrated to them that I'm not here to tell you what to do,” he says. “I'm here to facilitate supporting you to make the changes. You know what needs to be done.”
Getting buy-in by listening to the people who complete the tasks is a crucial step in process improvement and a key tenet of Acquira's approach.
There will certainly be room for input from Brian or the new owner, but that is always taken into account from the perspective of the suggestions given by the employees.
The next step is to implement whatever the new process is and ultimately circle back to see if it's working by relying on the people doing the jobs to tell you what's working and what's not.
“We'll check in whether this is the best way to do it by having some metrics in place and some things we track to validate how it is, how it happens, or how it is moving forward,” says Brian.
Tackle A Core Process Within The First 90 Days
As a new owner, it's important to tackle at least one of the core processes within the first 90 days of ownership to make that specific process more efficient and institute a culture of examining choke points in the operation through this lens.
“It's much more than the specific exercise than the net result. It is the validation that they are the experts. And we are asking what they think should be done, and they make the changes. And we serve just to support that,” says Brian.
However, there is a risk in implementing too much change too quickly, even if it's well-intentioned or driven by employee suggestions.
It's too much to change processes in production, sales, operations, accounting, and human resources all at once because they are all interrelated.
It's best to choose one core process to improve.
“What is that low-hanging fruit? What can we take care of first? What's going to have the largest net effect quickly? What's going to validate for them that this is a good thing,” says Brian.
Post-Acquisition Transition Is Perfect For Process Improvement
Sometimes, employees resist process improvement from an outside consultant, especially if it is not the first time they've gone through the process. It can be hard to get employee buy-in.
However, there is a prime opportunity to focus on process improvement after an AE has acquired a new business because people are much more receptive and willing to listen, says Brian.
In part, this is because many will worry about whether they'll keep their jobs post-acquisition and expect change.
“It's different because you have an engagement at a different level because there is no getting around the fact that there's a change that's happening,” says Brian, “And it's going to affect everybody; you can't step out.”
It's important to explain that this process is designed to help them.
“We are looking to find ways to support them to improve the business and their life within the business,” says Brian.
Conclusion
Ultimately, process improvement is an ongoing effort that involves continuous evaluation and refinement of business processes to achieve optimal results.
It is a gradual process but that doesn't mean tearing down every business aspect.
As a new business owner, looking at all the processes is important, but don't make too much change too quickly.
The business was profitable and successful to begin with – that's why it was purchased.
“There may just be some places that will need immediate help, and that's what you're trying to pick off early,” says Brian.
If you're a new business owner looking for help completing a successful process improvement, consider contacting Acquira's experts and enrolling in our ACE Framework. Our change management system will provide the tools to bring an owner-run operation to a management-led company in less than a year.
Acquira's Accelerator Program will help you acquire a business quickly and efficiently if you're just beginning your acquisition journey. Our data shows that if you signed up to work with Acquira today:
- Within three months, you'd have brought a deal to the Investment Committee and learned the equivalent of a $25,000 ETA MBA program
- Within five months, you'd have an LOI issued and actively visit a business with an integrator.
- Within nine months, you'd own a $1MM/year cash-flowing business.
To learn more about the Accelerator and how Acquira can help you acquire a business, schedule a call with us through the form below.
Key Takeaways
- There is no one-size-fits-all approach to process improvement.
- Listening to employees is crucial to getting buy-in
- Don't change too much, too quickly.
- Remember that process improvement is an iterative, ongoing process.
Acquira specializes in seamless business succession and acquisition. We guide entrepreneurs in acquiring businesses and investing in their growth and success. Our focus is on creating a lasting, positive impact for owners, employees, and the community through each transition.
