Business operations become more complex and scaling effectively becomes challenging due to the existence of workflows. If the process of running a business were linear, it would be easier to grow it. However, business growth follows a complex and interrelated web-like pattern, with each strand representing a crucial workflow.
What exactly does the term “workflow” mean? And what are some ways to enhance your workflows in order to optimize your business’s productivity and avoid inefficiencies in resource allocation?
However, there is more to it than just cutting costs and improving employee efficiency. Failing to identify workflows and identify areas that can be improved may have a detrimental impact on your business. Use this guide to gain a better comprehension of the workflows within your business and learn how to optimize these processes.
What Is a Workflow?
In every organization, there are two distinct types of work being done, namely tasks and workflows. A task refers to an individual assignment that an employee finishes before proceeding to the next task. On the other hand, a workflow entails a sequence of tasks that must be accomplished, often on a repetitive basis, in order to accomplish a task.
As small businesses increase in size, the once straightforward workflows gradually evolve into intricate patterns resembling an interconnected web.
Here are some areas you can find workflows:
- Employee Onboarding
- Invoicing
- Supply Chain Management
- Purchase Approval Requests
- Vendor Relationship Management
- IT Change Management
- Content Marketing and SEO
- Web Development
- Sales Prospecting
- Customer Onboarding and management
Why Do You Need to Understand Workflows?
In order to optimize your processes, it becomes more challenging for you to do so if you lack comprehension of how workflows operate in your business, preventing you from mapping them out and identifying weaknesses in your systems.
If you’re finding that your profits are decreasing despite being more successful, it’s important to examine your workflows. By understanding how your business handles them, you can enhance them and expand your growing business.
How Do Organizations Manage Workflows?
Managing workflows in smaller organizations is typically uncomplicated. Generally, a single employee is responsible for executing the workflow or supervising a team, manually monitoring progress and validating tasks when necessary.
As an organization expands, the complexity of its workflows also increases. Regrettably, many organizations fail to establish scalable workflows. The initial manual processes and legacy systems often get expanded upon as the company grows, thereby creating a substantial burden over time.
Even more concerning is the fact that organizations increasingly depend on the tools and systems they previously used to handle linear systems with more intricate workflows. For instance, a developing company that utilized spreadsheets to monitor employee training and work hours persists in doing so despite experiencing rapid growth in their workforce.
Typically, such inefficient systems indicate that expanding companies tend to depend excessively on their managers, executives, and even employees for workflow management.
What Are the Different Types of Workflows?
Workflows are processes that involve multitasking and depend on data. However, there are different kinds of workflows. Some of them address straightforward problems that can be resolved with a few steps. On the other hand, there are more intricate workflows that deal with complex issues spanning multiple levels. These types of workflows necessitate integration with other workflows in order to exchange data.
Case Workflows
These workflows are less clear in terms of their starting point and involve a process that requires gathering data beforehand, as seen in an insurance claim, for example.
Project Workflows
The systems in place to help the project begin and guide it to completion vary from project to project. Each project is unique, so no two projects are alike.
Process Workflows
To ensure a smooth progression from start to finish, it is necessary to establish systems for handling predictable and recurring workflows such as HR and Procurement.
It is crucial to distinguish between tasks and workflows as there is a distinct difference. Workflows are part of a larger system and include data, while tasks (and therefore, task management) do not. Tasks are individual or mostly individual tasks that just require completion.
Businesses that are in the process of growing may find it overwhelming and intimidating to handle the complex network, almost resembling a brain, formed by the simultaneous operation of various types of workflows.
If you want to optimize your business, you’ll need to overcome this aspect of workflow management.
3 Generic Examples of Workflows
To gain a deeper comprehension of a business’s workflow, let’s examine three pertinent examples: inventory management, employee onboarding, and customer relationship management.
1. Inventory Management Workflow
When it comes to inventory management, the first step in your workflow is to keep track of your stock. It is essential to be aware of the items in your warehouse, how quickly they are being used, and the lead time for ordering to avoid any wastage. As you delve into the requirements for effective inventory management, you will rapidly identify the sequential stages involved.
This is the appearance of that workflow.
- Inventory reaches low stock
- Goods are ordered
- Management approves the order
- Vendor is contacted
- Goods are Delivered
- Goods are reviewed, sorted, and stored
- Inventory levels are updated
In addition to what can be seen, there are also other related tasks happening in the background: Order Management, Inventory Control, and Forecasting, Purchase Order Creation, Submission, and Collection, along with various data analysis processes in between.
2. Employee Onboarding Workflow
The process of hiring new employees entails multiple workflows that frequently extend across various departments. HR transfers information to the teams and executives, guaranteeing that the suitable candidate is chosen for the position. However, the process does not conclude with the hiring phase. New employees encounter several stages they must go through before they are fully integrated into their new roles.
This is the appearance of that workflow.
- Submit new position to HR
- Draft job description for approval
- Get approval for job description
- Post job description on relevant job boards
- Assess candidates based on requirements
- Select candidates for interview
- Hire the best candidate for the job
- Remove job vacancy
- Collect and store relevant data securely
- Ensure new employee completes relevant training
3. Customer Onboarding Workflow
In order to prevent customer churn, it is necessary to actively involve your customers and lead them towards recognizing the worth of your product. Additionally, implementing systems to upsell and cross-sell various goods and services is crucial for improving your profitability. Nonetheless, it is important to ensure customer satisfaction throughout this entire process.
This is how the workflow appears.
- Send a welcome email
- Walk customers through product setup
- Point out relevant features
- Provide additional support/opportunities to learn more about the good/service
- Share regular reports/data with customer illustrating the value they get from your product/service
- Check in with your customers regularly to see how they’re doing and ask for feedback
- Celebrate their achievements on the platform
- Offer additional services and products that can further meet their needs
What Is Workflow Optimization (Process Optimization)?
Workflow optimization, also known as process optimization, involves the use of automation and integration to streamline workflows by connecting different systems. This results in an efficient system for performing tasks that eliminates unnecessary human involvement and reduces risks, costs, and bottlenecks.
If every time a request is made, a member of your team needs to manually evaluate every purchase, directly hunt down employee documents, or research vendor data, it creates a bottleneck and results in wasting time and resources.
By optimizing workflow, robots can perform their strengths in managing data, allowing individuals to concentrate on their strengths in critical thinking. Consequently, a streamlined system is achieved, capable of scaling with business growth.
Benefits of Workflow Optimization
In order to remain competitive and achieve long-term success, it is important for businesses to optimize their workflow. By reducing the time spent on error correction or non-essential activities, organizations can allocate more resources towards enhancing customer satisfaction and enhancing their products and services.
According to David Singletary, Founder and CEO of DJS Digital consultancy, technology is leading to changes in business, the workplace, and the workforce. Businesses must find ways to minimize waste in order to meet the growing demand for quick results and adapt to customer requirements. While customer satisfaction remains the ultimate objective, the fast-paced nature of business necessitates the efficient management of time as a valuable resource.
Some of the benefits of specific workflow optimization include:
- Improved Customer Relationships: Customers appreciate consistent and timely responses to inquiries and concerns. By eliminating workflow problems, you open up time to focus on increasing customer satisfaction.
- Reduced Bottlenecks: A bottleneck is a congestion point in a workflow. Bottlenecks slow down production; waste time, effort, and resources; and impact profitability. Workflow optimization helps to eliminate bottlenecks.
- Decreased Waste: Activities that can be removed from a workstream without negative impacts on productivity are wasteful. Workflow optimization aims to identify and eliminate waste.
- Increased Productivity: When organizations remove bottlenecks, team members can accomplish tasks more quickly. For manufacturers, a higher level of productivity results in lower inventory and higher profitability.
- Greater Agility: Clunky, inefficient workflows make it difficult to adapt to change. Streamlined workflows better position an organization to adapt when opportunities and challenges present themselves.
- Increased Consistency: Optimized workflows provide clarity and enable all employees, including new hires, to meet a consistent standard of efficiency and quality.
- Improved Multitasking Capabilities: As a company grows and processes become more numerous and complex, optimization helps multiple workflows operate simultaneously. Workflows, from hiring to social media to product manufacturing, are easier to manage when managers streamline processes.
- Enhanced Work Culture: When all processes are well-documented and streamlined, employees spend less time correcting errors and completing nonessential tasks and more time managing and completing successful projects. In this way, workflow optimization creates a more positive work culture.
- Reinforced Compliance: Standardized processes help organizations control internal policies and meet government-mandated compliance regulations.
The Seven Workflow Optimization Strategies
High-level strategies for optimizing workflows have the goal of enhancing efficiency. The seven most prevalent strategies include Agile, business process improvement, business process reengineering, Lean, Six Sigma, Theory of Constraints, and total quality management.
- Agile: An Agile workflow is a visual, step-by-step representation of a workflow that emphasizes interaction, collaboration, and adaptability. Initially favored by software developers, Agile workflows have become popular in many other sectors. To learn more, see our guide to Agile project management workflows.
- Business Process Improvement: Business process improvement (BPI) is a method of optimizing workflows by identifying parts of a process that are less efficient, effective, or error-proof, and addressing them continually.
- Business Process Reengineering: Business process reengineering (BPR) is a strategy for redesigning workflows from scratch. After conducting a thorough analysis of existing workflows and reviewing customer input, managers who implement BPR will chart entirely new workflows that better achieve an organization’s goals.
- Lean: Lean is a method of optimizing workflows by repeatedly identifying opportunities for eliminating waste. Wasteful, inefficient practices include unnecessary meetings, tasks, and documentation processes, all of which decrease with proper implementation of Lean strategies.
- Six Sigma: Six Sigma is a method for identifying and removing the root causes of process deficiencies. Trained Six Sigma experts use empirical and statistical quality management methods to determine the Sigma rating of a process. This rating determines the likelihood that a process will produce a defect.
- Theory of Constraints: The Theory of Constraints (TOC) is a workflow optimization technique that helps identify and address the factors that limit or prevent an organization or team from achieving its goals. Learn more about this methodology and its history in our guide to the Theory of Constraints.
- Total Quality Management: Total quality management (TQM) is a method of refining processes continually to eliminate inefficiencies and errors. With roots in manufacturing, TQM is a flexible tool that managers can adapt to the specific needs of their team or organization.
Workflow Optimization Techniques
Managers have the ability to utilize workflow optimization techniques in order to consistently discover and eliminate wasteful practices. By employing these techniques, managers are able to pinpoint inefficiencies within processes, create visual representations of new workflows, and promote uniformity among team members. This ultimately results in making clear, objective decisions that effectively benefit the organization.
Singletary explains that his client, who was a CEO involved in real estate development with operations spanning multiple states and locations, felt overwhelmed by the substantial paperwork and the sluggish pace of progress. However, the CEO was receptive to exploring a different approach.
Once his business process had been mapped, it became evident where the issue lied: invoicing and payments. The entire accounts payable process was conducted manually, with invoices being sent by FedEx for approval and payment. Upon identifying this delay through mapping, we introduced automation to the process. This led to increased efficiency, reduced wastage, and improved relations with vendors and customers. The key takeaway is that, as your business expands, or even prior to that, it is necessary to abandon traditional approaches.
How to Prepare for Workflow Optimization
To optimize workflows effectively, it is essential to pinpoint the aspects of a process that are functioning well and those that are not. Utilize all available information and data to evaluate which parts of the process require improvement.
To effectively prepare for optimizing your workflows, follow these four crucial steps:
- Review Your Goals: Why are you considering changing or refining workflows? Having clarity about your end goals will help you identify and prioritize the most essential components of your workflows.
- Conduct a Thorough Review of Your Current Workflow: What parts of your workflows produce the most errors or inefficiencies? Work through current processes, or interview the team members who are most familiar with them, and organize all of the steps into a comprehensive, chronological list.
- Determine Constraints: What’s holding you back? Consult team members and review processes to determine the most common limitations in current processes.
- Identify Bottlenecks: Where is the congestion in your current workflows? Once you’ve identified bottlenecks, you can strategize with managers and team members to eliminate waste and ease congestion.
Document Your Workflows
Improving visibility for the entire team can be achieved by adequately documenting workflows, which in turn facilitates the identification of areas where improvements can be made.
According to Singletary, the importance of documentation lies in the tendency of people to skip it and thereby evade commitment, leading them to develop their own informal procedures. Furthermore, the absence of documentation and formal workflows tends to create silos, which hinder efficiency. Singletary emphasizes that documentation aids in assessing future workflows and promoting employee training.
How to Document a Workflow
In order to properly document your workflow, it is important to first carefully analyze your existing processes. Once you have created a comprehensive outline, it becomes simpler to identify areas that can be improved, substituted, relocated, or eliminated.
When documenting a workflow, it is crucial to consider the following steps carefully:
- Never Lose Sight of the Goal: Each step in a workflow should lead to a clear goal.
- Know Your Scope: One workflow might be confined to a single team, while another might be cross-functional or company-wide. Understand which team members or resources are relevant to a specific workflow.
- List the Workflow Steps: Work through or interview team members familiar with the process. Compile all steps into a single, comprehensive list.
- Audit Your Workflow: Review each step, determine if each step is relevant to the project, note any repetitive tasks, and work to streamline and refine the overall process for maximum efficiency.
- Map Your Workflow: Workflow maps are helpful visual tools that clarify what is or isn’t working in a given process. Include directional arrows that indicate how a workflow should progress when creating your map. Learn how to develop your process visually with our guide to workflow mapping.
- Workflow Analysis: The process of breaking down workflow performance and identifying trends is called workflow analysis. By studying workflow at the task level, you can hone techniques for more effective and efficient execution. For more tips, see our guide to workflow analysis.
- Consider Variables: Customize your workflow by incorporating input from team members and key stakeholders.
- Estimate Time Frames: Estimate how much time each process, decision, or review round will take.
- Determine Roles and Responsibilities: Add the names of team members responsible for each task in the workflow.
- Refine and Finalize: Review the document with your team and acquire necessary approvals to implement your new documenting process.
Workflow Optimization Best Practices
When companies properly optimize their workflow, they become more competitive and increase their chances of building positive, long-term relationships with customers. Managers can reduce the risk of errors, unnecessary costs, and bottlenecks by understanding and implementing best practices.
To enhance the effectiveness of workflow optimization efforts, it is recommended to incorporate the following practices.
- Learn the Five Focusing Steps: According to the Theory of Constraints, any complex system of linked processes will have areas where bottlenecks are more common. Identify, Exploit, Subordinate, Elevate, Repeat.
- Reduce the Number of Simultaneous Processes: Productivity tends to decline when too many processes are happening simultaneously. Dr. Lang suggests reducing the amount of work in progress and allowing constraints, or bottlenecks, to set the pace of production.
- Identify Which Industries Can Benefit from Lean: Dr. Lang notes that although Lean is very popular as an improvement strategy in machine shops, it is not the answer in that environment for on-time delivery. That’s because Lean relies on process, products, and workload remaining stable for long periods. That may work in the automobile or aerospace industry, where change is costly and occurs slowly, but businesses such as machine shops need to adjust daily to meet customer needs.
- Minimize Multitasking: Productivity tends to increase when team members focus on one task at a time. Workflows that encourage a focused, step-by-step approach to task completion will be more efficient and manageable.
- Regularly Reassess Priorities: Repeatedly assess your competitive situation, task sequences, staffing, and goals to keep apprised of current priorities. Doing so will help you streamline operations and avoid wasting resources addressing problems that are no longer relevant.
- Commit to Constant Improvement: Lang maintains that workflow optimization is not a one-and-done situation. Workflow optimization requires refinement and iteration over time. Learn more about the incremental process of improving workflows with our guide to workflow management.
“Review workflows at least once a year,” Singletary recommends, “but quarterly may make sense for companies in fast-moving industries or organizations that need the flexibility to remain competitive.”
- Seek Fresh Perspectives: Familiarity can encourage complacency and resistance to change. Bringing in someone from a different division or group to offer insight might help you identify new areas for improvement and find novel solutions to inefficiencies in your workflows.
- Exercise Patience: Avoid proposing a solution too early in the optimization process. Prioritize collecting information at first. Doing so will ensure that the solutions you eventually design are based on evidence rather than intuition.
- Delegate: Micromanagement discourages efficiency and creative problem-solving. “Higher-level managers need to relinquish control,” recommends Singletary. “Delegate and empower decision-making. Team members who take ownership are more likely to help sell new optimization concepts. A lot of blocks exist because top management won’t let go.”
- Hire a Consultant: If a project feels overwhelming, bringing in consultants may help bring issues into focus and save time and money in the long run.
- Have Workflow, Rollout, and Communication Plans: Create a document that details your forthcoming process changes. Include a rollout plan that details the steps and time it will take to achieve your optimized workflow. Ensure that you communicate these details before implementing any change, so your team is sufficiently prepared.
- Consider Visual Aids: Workflow designs that visually depict process steps from start to finish will help teams stay on track. If you’re new to visualizing work processes, check out our guide to designing workflows.
