Wherever there is some task being done, there is a way to improve HOW it’s done.
It’s been called by many different buzzwords over the past several decades, with the latest and greatest name being Six Sigma. Whatever you call it, the process of reducing mistakes and increasing efficiency is a worthwhile objective for any practice, no matter how big or small. Even solo practitioners can benefit from implementing process improvement programs, and you don’t need a Black Belt in anything to do it.
From the standpoint of an accounting practice, there are two things I consider important for making process improvements:
1. Systemize everything. In other words, create written checklists for the completion of all tasks.
2. Adopt a “continue and never-ending improvement” (CANI) mindset.
Longtime readers of my articles already know that I’m big on the use of checklists. I personally believe that everything you do in your business needs to have a checklist associated with it. Why are checklists so important?
Checklists ensure that everything that needs to get done, actually gets done, and it gets done the right way. Also, checklists give you a structured process that can be analyzed and altered for improvement. Without the system of checklists, there’s nothing to examine, nothing to improve.
Creating checklists is pretty simple. Just write down all the steps that you currently take to complete a task. Also, create a hierarchical series of checklists that apply timelines for those specific tasks to get done. For example, have a Weekly Marketing Checklist, listing the marketing you are committed to each week, and referencing the exact day of the week each marketing task gets done. Then, you’ll have a sub-checklist for accomplishing that particular marketing task.
Checklists are great because they give you some to analyze, and improve. Once you’ve written down how you’re already doing something, it often becomes readily apparent that there is some way to do it better. Not only that, but checklists allows you to easily guide how your staff completes tasks, and you can improve how that task is done over time. Input from the people doing the actual work, plus experimenting with ideas that you obtain through courses, seminars, books, and other resources allows you to tweak, hone, and always be improving how your firm functions.
Six Sigma, Total Quality Management, and other methodologies taught over the years create a cycle of CANI through a logical process that looks like this:
1. Define the problem to be fixed or the goal to be achieved.
2. Identify quantitative ways to measure the process, and collect current metrics.
3. Analyze your data to find cause and effect relationships and help you make sure all factors have been taken into account.
4. Implement specific methods to fix the problem or reach the goal, either through best practices adopted from other firms or even other industries, or through trial and error.
5. Measure the outcome of the new methods, and tweak as you go to work towards incremental improvement.
Those five steps explain Six Sigma in the broadest nutshell possible. This process can be applied to just about anything, from your new client intake process to your payroll processing system to how you conduct your marketing. Remember how rattle on incessantly about testing, tracking, and measuring everything in your marketing? This the reason why. In short, you can’t improve something you don’t measure.
Tomorrow, we’ll take a look at applying this process to a specific marketing example, and Friday we’ll discuss how to apply it an accounting process example.