In this post, I’ll address at a very high level what I believe is one of the most important elements to Business Process Excellence: Core Competencies.
Business Process Improvement has been my field for over 14 years, and in that time, I’ve worked with hundreds of companies, from small mom & pop shops to Fortune 1000 firms, helping to streamline and improve various back-office business processes.
The things that make a small company a great one are the same things that make a large company a great one. Think about it; there is a reason that either company got off the ground in the first place, right? Usually, it’s because they are very good at producing a particular product or delivering a particular service. THIS is their Core Competency.
When companies engage me for a business process analysis, its usually because they’ve hit a growth plateu and can’t seem to clear it, or some area of their business is strugging, or some function has become unweildy and has become a drain on the organization. I would confidently say that in 85 – 90% of the cases I’ve seen, the areas that are struggling are outside the realm of the organization’s core competency. Many times this happens because of inadequate planning during an explosive growth phase of the business. Here’s an example I’ve run into many times:
ABC Fictional Trucking comany starts out with 2-3 trucks and one or two really good customers. Their customers grow, and thus the freight demand for ABC Fictional Trucking grows. In order to maintain the relationship with the customer and keep competition at bay, ABC Fictional Trucking hires more drivers and purchases or leases more trucks. This cycle continues for a couple years, and the next thing you know, ABC Fictional Trucking has 50 Trucks and 10-15 customers, but the same people running around in the back office like chickens with their heads cut off. They are on the verge of bankruptcy or a shutdown by the FMCSA.
Why are they failing? Because in addition to Dispatching and Customer Service, those same office personnel are now focusing on AR, AP, Document Management, HR, Safety, Sales, Marketing and Maintenance. More often than not, they are struggling in these areas because – you guessed it – it’s not their core competency.
In many cases, people are assigned a role and expected to figure it out as they go, thus distracting them from their primary role, and yet at the same time, not giving enough attention to the important deails of the new role. You see, just as an organization has a core competency, so do individuals. I hate to use the worn out cliché of “Jack of All Trades, Master of None”, but there is some real truth to the concept. Proper planning during the growth phase, including moving personnel into areas of their core competency, and hiring to fill the gaps would have allowed the key players to focus on the business’ Core Competency – Moving Freight. It would have kept the business from stalling out, not to mention lowered the stress level of the principals.
This same scenario plays out across the spectrum: Manufacturing, Limousine companies, Builders, Roofers Software Developement Companies, Martial Arts / Dance Schools, Gyms / Fitness Centers, Physicians, Dentists, Chiropractors, Landscapers, you name it. Any business is suceptible. The good news is that in most cases it can be corrected. (if stakeholders are open to change) Effective Change Management is a whole other post.
This all probably seems obvious, and the funny thing is that if I’d shared the above scenario with the principals at ABC Fictional Trucking and changed the names and industry, they probably would have identified the problem right away. Unfortunately for them (fortunately for me) they have been running so hard, so long that they (here comes another cliché) can’t see the forest from the trees and need an outsider with a 10,000 foot perspective to identify it and show them.
This probably sounds like an advertisement for outsourcing, and there certainly are scenarios where that makes sense, but the point is for business owners to take an honest appraisal of their enterprise and to make sure that every team member is focused on their core competency so that the business can do the same.