Your business processes paint a clear picture of not just how your organization works, but thinks too.
They are an expression of your basic operating principles.
For a group to be effective, they need clear pathways to distribute information, communicate, and ultimately do the work.
With effective internal operations and processes, it becomes so much easier to keep everyone on the same page, whether that’s providing a specific answer or updating the team on best practices.
“Streamlining intercompany processes isn’t just an interesting idea,” says Michael Hammer in the Harvard Business Review, “it’s the next frontier of efficiency.”
That was more than 20 years ago. And most companies are still struggling with those processes.
If the famous saying about chains and weak links is anything to go by, business owners, department heads, and team leaders can get immense value from reviewing their everyday process tasks.
What is an Internal Process?
An internal process is a business step that takes place without the influence of any external partners. They don’t require any extra helping hands aside from those within your own business. You’ll find them everywhere in your company.
As internal processes are simply those that happen without outside factors, you’ll find them everywhere in your company. This includes the day-to-day running of your business and much of the effort spent to improve on your operation.
Examples of Internal Processes
In order to make the best improvements, it’s helpful to identify and categorize your processes. Here are the kinds of business processes that you’ll find inside your organization:
1. Operation Management Processes
Operation management is all to do with the systems and tools leveraged to create, deliver, and streamline your product or service. Internal processes that fall into this category include:
- Investment Strategy: figuring out how to get the most out of your capital
- Resource Productivity: determining how best to use available resources
- Production Rate: boosting the rate at which materials/resources are processed
- Risk Mitigation: taking precautions against marketplace volatility
Say, for example, you’re running an e-commerce site. How you process orders, how quickly they’re fulfilled, and how you adapt to shifting market trends are all very significant business operations.
Operation management processes are also the regular actions an organization completes in order to deliver a product or service to their customers. Internal operational processes dictate employee responsibilities and so they have a huge effect on how efficiently (and profitably!) the company runs.
2. Customer Management Processes
If you run a business, you’ve got customers.
Keeping them happy is the key to long-term success, so it’s no surprise that a big chunk of internal processes relate to customer management. The aim here is to better understand your clientele so that you can establish and maintain long-lasting relationships with them. This applies to all kinds of actions, such as:
- Customer Selection: determining target audience, collecting information on customer perspective/preference, and connecting individuals to your most related products or services
- Customer Acquisition: selecting suitable first-time purchase options, marketing, generating leads, and communicating with potential customers or users
- Customer Retention: providing effective customer service, collecting and responding to customer feedback, dealing with requests, and strategizing to keep loyal customers
- Customer Depth: managing existing customer relationships, producing complementary materials like niche-specific articles, FAQs, how-to guides and product tutorials, communicating with customers, and social media efforts
If you want to see the far-reaching effects of optimizing customer management processes, look to fashion retailer Nordstrom. Their customer-focused approach devotes considerable resources to gathering feedback, supported by the Innovation Lab.
“The goal of the lab,” says data scientist Erin Shellman, “is to deliver data-driven products to inform business decisions internally, and to enhance customer experience externally.”
If you get your customer management processes right, you communicate to your customers that you are reputable and authoritative player in your field. This is just one way in which internal process improvement changes an organization for the better.
3. Innovation Processes
When an organization is trying to enter a new market, or find a creative solution to expand their influence in their existing location, it’s time to talk about innovation processes. These include:
- Coming up with totally unique product in your field
- Setting up alternatives to your current catalog
- Creating an entirely new line of products or services
- Venturing into a new product or service category
- Tracking sales targets for new products and services
Innovation processes are integral for long-term growth, helping to keep your organization relevant in a shifting marketplace by adopting new technologies and strategies.
Take software leader Adobe, for example, and their kickbox initiative. It’s just a small, red box but it contains everything an employee needs to generate, prototype, and test an idea. Now an immensely popular innovation framework used by thousands of organizations, it gives employees the opportunity to contribute towards the internal innovation process.
4. Regulatory Processes
Regardless of how a business runs, there are still rules to be followed. Enter regulatory processes, actions taken to ensure an organization is complying with industry regulations and licensing standards. Regulatory processes are concerned with:
- Health and safety standards
- Environmental compliance
- Licensing and certification
- Community involvement
- Social responsibility
They may not be the most glamorous, but regulatory processes are there to make sure an organization is upholding best workplace practices, keeping employees safe, and generally behaving well.
Measuring Internal Process Performance
It’s important to track how well an organization completes their internal processes, and that’s precisely what such performance measures do.
Some basic examples include how long it takes to manufacture your product/deliver a service, or the timeframe for bringing new products/services to market.
Evaluating the organizational interior in terms of business processes is so effective because it allows you to isolate specific actions, and better understand their impact on your final product/service. This opens up lots of opportunities for improvement as you can make precise, actionable changes to your operation.
Monitoring your internal process performance identifies essential steps and uncovers their larger influence on your operation. That’s exactly why you’ll find it in leading performance-tracking tools like the balanced scorecard (BSC), which utilizes four perspectives: financial, customer, innovation, and (you guessed it!) internal.
Here are the Signs that your Internal Processes are Failing
The trouble usually starts when a process becomes outdated or obsolete. It’s far more common for organizations to implement tweaks, repairs and add-ons instead of major process improvements. Organizations have competing priorities and finite resources so it’s understandable that the very nature of their internal processes gets overlooked.
Years of this reactive approach, however, leads to disorganized and ineffective “spaghetti platforms,” a phrase coined by senior MIT research scientist Peter Weill. He describes it as the “state of having complex processes, systems, and data associated with extensive infrastructure organized in silos.”
Here are some tell-tale signs that your organization has a failing process in the mix:
1. Day-to-day work
- You’re not hitting your KPI goals
- Simple tasks require extensive effort
- Time is wasted tracking irrelevant metrics
- There are procedural or departmental bottlenecks
2. Structures and systems
- Certain processes are not clearly delegated
- Systems don’t interact well with one another
- An outdated IT system is slowing things down
- Employees don’t understand the division of labor
3. Information
- Employees cannot conveniently access information
- Information and records are needlessly duplicated
- You use multiple platforms that seem to jar with one another
- You are reliant on paper-based information processes
If you’ve spotted a few problems that apply to your organization, it’s very likely that you need to spend some extra time on internal processes improvement.
Failing processes can have major implications when left unresolved, even if they at first appear insignificant. In fact, internal business processes that seem unimportant are often the best to look at first. If they’ve been largely ignored up to now, who knows how long they’ve been causing inefficiencies.
Improve your Internal Processes: 5 Ways
Here’s precisely how you can start your business process improvement:
1. Conduct an Audit
Considering that internal process improvement is all about what’s happening inside your company, the best first step to take is an audit. Look at how you deliver your product or service to customers. You need to be particularly interested in how each worker’s responsibilities relate to one another and the overall operation.
You should also look at how you store your information, and whether or not you’re centralizing your data in a reliable repository like a business wiki. You may have to dig a little deeper into your knowledge management strategies to discover the major inefficiencies in your current internal processes.
2. Refine Current Processes
Once you are clearer on the state of an inefficient process, it’s time to define how you are looking to refine them. Now is a good time to take a look at your standard operating procedures (SOPs). These are detailed instructions that outline how processes are completed, part of an organization’s ‘implicit’ knowledge.
- See how to use Tettra as your SOP software
Focus on the larger problems of congestion and inefficiency, but also the more specific problems relating to your organization or team.
Consider how work is delegated and the effectiveness of structures currently supporting your processes. Think also about the kinds of tasks that prove most challenging for your team, especially when there’s no obvious reason why.
3. Set Clear Process Improvement Goals
Like any business objective, process goals should be specific and measurable. With internal processes, a good place to start is the Six Sigma framework, which has two main data-driven methods. Existing processes are improved following the steps ‘define, measure, analyze, improve and control’ (DMAIC), while new processes are formed with final steps ‘design and verify’ (DMADV).
Managers, team leaders, and stakeholders should frame improvement goals in a positive way that puts emphasis on benefitting employees, rather than berating them. It’s good to provide tips and advice on how members can transition to new processes and have a plan for any foreseeable problems.
4. Automate Processes
Whatever size of organization, there are tasks that need to be repeated: payroll, invoices, emails, data entry, backups, support, content, social media, and so on. In many cases, a large proportion of these different processes can be automated – eg., automating invoice processing for clients, payroll processing for employees etc.
Yes, it’s true that you’ll need to spend money to set those automations up, but it’s an investment that increases long-term efficiency. It eliminates any human error that comes with completing menial tasks and frees up your team to work on more valuable and inspiring pursuits.
5. Keep Track of Processes
As an organization goes through life, it picks up vital knowledge for the successful running of things. Whether its individuals sharing expertise or insight gained through collaboration, every organization learns more about itself as time goes on. Knowledge management strategies help teams to gather and structure this process info.
When an organization lacks a centralized knowledge base, team members are likely to be working in information silos, which can slow internal processes. It’s important to have knowledge protocols in place that help you to collect, index and assess information on current processes. This gives you valuable insight on productivity, accountability and immediate areas for improvement.
How Internal Process Improvements Affect Your Company
Gaining insight into how your organization operates can seriously speed things up. There’s really no limit to where internal process improvements can take you because small adjustments can quickly snowball into major developments. Though, you’re most likely to see business process improvements do the following:
1. Reduce Errors and Associated Impact
Taking a fine-tooth comb to your business processes means that you can spot errors far more easily. When you standardize your procedure, you are effectively automating your team. As you systematically improve these day-to-day processes, you resolve issues before they get the chance to disrupt work.
At the same time, clear internal processes give you a greater chance at reducing the impact associated with errors that do occur. This means you can minimize losses like the time and resources spent fixing things. Improving your internal process is a proactive step towards the more consistent operation of your organization.
2. Raises Efficiency and Productivity
If a task isn’t completed as quickly or efficiently as expected, the easiest thing to blame is the employee. In reality, there can be all sorts of issues with the underlying processes to which workers are bound. This means that team members can only be as effective as the internal processes themselves.
When you improve internal processes, you are essentially empowering your employees to make the best use of their skills and expertise. In turn, this will grant you much higher productivity, job satisfaction, and retention. Small process improvements will even influence the larger company culture.
3. Happy Customers and Bigger Profit
When you’re really focused on the internal workings of your organization, don’t forget that there’s a customer waiting at the end of all these processes. Although the specific improvements you make to your operation remain unknown to them, their effects are certainly felt.
When process improvements of an organization reflect a genuine interest in fantastic customer experience, you keep your clientele happier and drive greater profits as a result. As long as the end goal is the customer, you’ll have a good chance at success.
The Takeaway for Internal Process Improvement
As well-oiled as an organization may seem, there’s always room for process improvement. Any redundancies and inefficiencies that go unnoticed will limit your productivity and jeopardize your competitiveness. Dedicate time to how you do your internal processes and you can seriously boost your efforts.
Look at how your organization is currently gathering, distributing and using knowledge. If you haven’t already, establish a knowledge base that promotes Q&A workflow, indexes process documentation, and integrates with chat tools. This is a natural first step that can give you a good indication of the most suitable improvements to handle next.
How Tettra Helps with Internal Processes
Your company’s processes are how your employees get their work done on a day-to-day basis. This governs everything from their schedules to how they manage the books to how they respond to customer inquiries.
To make this happen, internal documentation can save you a lot of headaches and although your customers may never see it, it is one of the most important parts of your business.
If you need an easy knowledge management system, then check out Tettra.
Tettra offers a full suite of tools for sharing knowledge. With Tettra, you’ll get:
- Instant answers and improved search with AI
- Q&A workflow to capture questions
- Knowledge base to document docs, procedures, and policies
- Knowledge management features to keep content up to date.
- Integrations with chat tools to make sure your team actually uses Tettra
It integrates with Slack, Google Workspace, MS Teams, Github, Notion, and Zapier. Your whole team can utilize Tettra without any clunky interfaces.
