How Business Processes Impact Growth

Very few SMEs are ‘small’ through choice – it just happens to be the current stage in their evolution. They want to sell more, expand and become a bigger and better business. But last year, only a third of SME employers reported turnover growth. According to the Enterprise Research Centre’s State of Small Business Britain Report 2018, the most common obstacles to growth are:

• Competition in the market (51%)
• Regulation (46%)
• Staff recruitment and skills (37%) 

But overcoming these common obstacles is within your control if you have the right business processes in place.

Why process is key

You might not think in terms of process, but it’s process that sits at the core of everything you do, and it’s process that can either enable you to succeed or hold you back. The three key reasons small businesses struggle are: 

1. Growing pains

Research from Harvard Business Review revealed that 86% of business owners believe their processes and decision-making had become so complex that they were stunting growth. Processes that involve lots of people all working from memory doesn’t work well at scale. Communications breakdown, people don’t do things when they should and the business ends up just getting by. 

When a company scales, this becomes even more complicated. Without defining processes and agreeing ‘who does what’ and ‘who tells who when things are done’, the ability to move the business forward slows down.

2. Process erosion

Adding to this is the fact that without adequate management, processes will inevitably erode over time. Employees either move on or find other ways to performs tasks. So the way that the founder initially wanted things to be done has changed or got lost along the way and the process becomes ineffective.

3. Business-as-usual

It’s easy to get comfortable and stuck in a cycle of business-as-usual. But it’s just not feasible to blindly continue doing what has always been done – it’s important to move with the times. In the corporate world, change and continuous improvement is necessary to survive today’s ever-increasing competitive landscape and keep your company one step ahead of the competition. 

The impact of failing to act

If an entrepreneur fails to change the way they work as the business grows, they will struggle to achieve their overall vision and the impact will ripple throughout the organisation. There are several implications of this:

1. Tighter control

Having invested a lot of time nurturing and growing a business, it’s understandable that a founder feels like they know what’s best. There will be times where they think, ‘I’ll just do it myself’, because it’s quicker. But this is not scalable as a business grows, and the entrepreneur ends up micromanaging the clever people they hired to help. 

2. Poor employee morale

People hate feeling controlled. Tell them to do something in a certain way, and they’ll find a way to get around it. Now your processes aren't being performed in the same way (if at all), and the staff are demotivated and disengaged.

The negative attitude of an unhappy employee is like poison to an SME. The impact is immediately visible on employee productivity and the organisation’s overall performance, and in time it will affect the bottom line. 

3. High staff turnover

In the dawn of the millennial, no-one can afford to be complacent about the way they work. These fresh-faced graduates are the future of many businesses, and they want employers to focus less on profits and more on people, products and purpose. Fail to deliver and they'll job hop, because they know there’s a skills shortage, and therefore another company up the road will hire them.

4. People vs process

People are key to making processes work. People can comprehend the context of a situation, apply the necessary logic and reach an informed conclusion. Many minds are also smarter than one. An entrepreneur may have an appreciation of lots of different aspects of the business, but they are not necessarily a specialist in any particular area.

The people that they have hired as specialists should be able to identify where a process doesn’t work and why, and they’ll also know what to do to make improvements.

Empower your people

You need to give your staff the freedom to do things in the way they know best. By empowering them to just get on with the job, they feel important, valued and like they make a difference. Empowering people is simpler than you may think if you follow these five steps:

1. Clarify your role: you shouldn't need to micromanage your staff. You shouldn't also sit back and do nothing. It's your job to guide them, point them in the right direction, give them the tools and the environment to do their jobs to the best of their ability so that they can add value to your organisation.

2. Create processes: when people join your organisation you want to show them your way of doing business. By capturing your processes and training people, this knowledge can be shared. The system you use must encourage people to get actively involved otherwise they'll feel it's only a one-way street.

3. Then allow people to ignore them: how will you ever find a better way of doing things if you don't let staff explore different options? Empower the clever people you hired and give them the freedom to tell you that something doesn't work.

4. Capture the feedback: don't let process fail your people. Once you know why something isn't working, change it so that the process improves next time.

5. Make change stick: once employees know you are listening and making improvements based on their recommendations, they'll feel valued and more likely to contribute again.

Recognising how faulty processes are stunting business growth is just the first step to making long-term change. Empowering your employees and encouraging them to take responsibility for their role, along with ensuring your processes are watertight will make the world of difference to your SME. 

About the Author

Alister Esam is the founder and CEO of Process Bliss. Alister has invested in, and set up numerous businesses. His biggest success was eShare, which has a presence in over 30 countries, employs 70 people and counts some prestigious brands among its clients. Selling eShare earlier this year, he set up Process Bliss to change businesses through the power of process.