5 Ways To Increase Transparency Over Your Operations

Full Transparency

Growing your company means figuring things out as you go and just making things work. It’s the magic of an early company. But to grow it further, it’s necessary to build a stable basis for your operations.

Before you can improve operational efficiency, everything starts with transparency. This may sound simple, but I found that this step of creating transparency can be pretty overwhelming.

Here are five things you can do to create transparency over your performance and business processes. 

Capture the status quo of your processes

Especially if you have a capable team that’s able to figure things out on their own (good for you), you or your team leads may only have limited transparency on how work is being performed. Most of the process knowledge will be in peoples’ heads. The benefits of institutionalizing this knowledge:

  • The exercise of writing things down alone creates transparency
  • Your team can agree on a common way to do things
  • You build the basis for later improvements of operational efficiency

In this first step of creating process transparency, it is critical to just document without trying to achieve process improvement at the same time. (Of course, once you have that transparency, a next step can be to optimize your operations.)

Before you start creating this process documentation, take a moment to define why and for whom you want to build that documentation. If it’s for onboarding new teammates, your documentation might look different than one created for process improvement.

There are many different tools you can use to capture your processes. A simple and visual tool is to use a swimlane diagram: It shows all steps involved in a process, sorted by responsibility.

Next to the simple flow of things, it will also show you the number of handoffs. I’ve used PowerPoint, Lucidcharts or Miro to create swimlane diagrams.

Swimlane Diagram

Once your team has created a swimlane diagram, all collaborators in that process need to sign off on it to confirm that this is the current way they do things. This will make sure everyone has a common understanding.

Of course, if you want to do this full-scale, you want to write standard operating procedures. These operational manuals include detailed step-by-step instructions for your process.

Documenting your processes can also mean to define how decision-making works in your company. Sharing this information will help your organization to understand and predict decisions and has the potential to take work off your plate as the founder.

Implement a KPI System 

WHAT DOES KPI STAND FOR?

KPI stands for Key Performance Indicator. Now, what is a KPI, and why do you need such performance metrics?

You might have a good feeling over your operational efficiency and effectiveness, but measuring it and monitoring it on an ongoing basis gives you the transparency you need to take managerial action.

Key Performance Indicators do just that: They provide a quick snapshot of how your organization is performing. Use them to compare performance over time or to define thresholds that trigger certain actions. Anyway, they will give you transparency over your organization’s performance. 

Examples for KPIs include Customer Churn Rate for an e-Commerce business or Utilisation Rate for an agency.

So how to set up a KPI system? 

STEP 1: ASK YOUR TEAM WHAT THEY USE TO MEASURE PERFORMANCE.

Your team will have implicit performance measures already in place. Whether they track them or not: They will have a good feeling over what makes their performance good.

So the first step is asking them. E.g., the account management team will know that upselling existing clients is a good thing, even though they might not be measuring it. Collect all that implicit knowledge.

STEP 2: QUALITY CHECK KPIS

A really useful KPI system should follow some rules. Check the KPIs you have collected against these criteria.

THE 3MS

Ask yourself these questions:

  • Is this KPI meaningful? Why is it important for my business?
  • Can I measure it? It doesn’t make sense tracking something that you can’t measure.
  • Is it manageable? Monitoring indicators you have no control over will only stress you out.

LEADING VS LAGGING

You want your metrics to be as early in the process as possible and that they are causing outcomes, not depending on inputs.

E.g., revenue, in most cases will not be a good KPI. However, measuring new incoming orders or customer acquisition would be better as they predict the future revenue.

OUTPUT, NOT ACTIVITY

You want to measure output, not activity. After all, you want to achieve results and not just keep people busy.

STEP 3: SORT THE KPIS YOU COLLECTED INTO A MATRIX OF STRATEGIC GOALS AND STAKEHOLDERS.

This step ensures that you are measuring the things that are defining your business success and are relevant to your strategic goals.

Strategy Stakeholder Matrix for KPIs with KPI examples

Decide on your strategic goals for your company. What you measure highly depends on where you want to go. If you want to increase sales by increasing your retention, you will measure different things than as if you wanted to enter new products.

Making sure all stakeholders are covered has proven valuable in designing a 360° KPI system that considers all parties relevant to your business.

It’s not necessary to have a KPI for every strategy/stakeholder combination. It would be sufficient to have at least one for every strategic goal and every stakeholder. However, filling every combination will give you a super-comprehensive KPI system. Add KPIs as needed. Also, make sure all teams have KPIs they can work with. If you can’t come up with KPIs for one of your teams, ask yourself why that is.

Also, take a look at industry standards. It might make sense to include some KPIs that are common in the industry to benchmark.

STEP 4: SET UP THE PROCESS OF KPI MEASUREMENT AND A KPI DASHBOARD

Define a person responsible for collecting KPIs, usually in the controlling department.

Define where the data is coming from, who collects it how often, and where and how the KPIs are calculated. Create a visual representation of the numbers, as visuals are so much more powerful than numbers alone. Such a KPI dashboard can be a powerful tool.

Numbers vs Visuals – same data, different quality of insight

You also have to decide if you want to calculate the KPI manually or automatically. That depends on the frequency you want to look at them. Automated data retrieval and calculation has the benefit of having data available at no time and effort, any time.

If there’s somebody who is manually compiling data or at least documenting the KPI, let’s say for the weekly meeting, I’ve found that this is a super valuable exercise as people need to spend time looking at their performance.

“Sometimes, creating a report is more valuable than reading it.”

Also, you want to look into using BI tools. But don’t confuse Business Intelligence with KPIs. One allows you to look at different measures of your business from different, dynamic angles.

The other directs your energy and sets your focus onto the measures you deem critical for your business.

Optimize culture and meetings for transparency

Design your meeting landscape to support transparency. Hold daily shop floor style meetings. Use these meetings to go through visual displays of your team’s KPIs. 

Make sure you have open communication that allows people to speak up. There can be barriers that keep your team from bringing problems to your attention, such as ambiguity, asymmetrical power dynamics and social pressure.

Work towards a culture and team norms that support speaking up. Make giving and asking for feedback often a habit to foster a frequent flow of positive and negative information.

Make sure your team has transparency over strategic goals and the business. And most importantly: If one of your team members opens up about something negative, react constructively and don’t kill the messenger.

Use phrases like “Thank you for bringing that to my attention.”, even if the message is very negative. Transparency needs to become one of your core values, and you as the founder have to lead by example.

If the leadership style of your company is transparent, this will increase engagement for your team. In addition, will set the right framework for operational transparency in your internal processes.

Make sure you have the right meeting structure in place to share relevant information with all the relevant people.

“Don’t kill the messenger.”

Also, use Gemba walks to stay on top of things. Management by walking around is a powerful tool that enables you to see what’s going on in your company.

Establish a continuous improvement mindset

Try to establish a continuous improvement mindset in your company. Ask your team members to collect continuous process improvement suggestions in a shared spreadsheet or another place. Go over this collection every week.

Assign the task of managing the continuous improvement efforts to one of your team members, making him or her continuous improvement manager. And stay on top it.

Showcase improvements and what they meant for your business. Seeing what earlier measures resulted in will give a sense of appreciation to your team and show that their effort is worth it. Establish all those things in a defined continuous improvement process.

Implementing these continuous improvement measures will create a steady flow of information, of problems and possible solutions in your organization and give you a good feeling of what’s going on.

Get outside help

You might already have a feeling that you lack transparency and also know which areas you would like to tackle first. But you still don’t take any actions. There are several possible reasons (I’ve personally experienced all of them):

First and foremost, many CEOs and Owners just don’t have the time to look into these topics; daily operations keep them too busy to set aside time for these improvement efforts.

Also, you just might not be familiar with how to implement a KPI system or a shop floor meeting. This doesn’t mean that you can’t do it; it’s a central trait of an entrepreneur to figure out things they don’t know. It just raises the bar of getting started.

Studies have repeatedly found that many entrepreneurs tend to wait too long to get outside help.

Getting outside help from a consultant can be the solution here. You gain bandwidth, methodical know-how and an outside view on your company.

After years of building your company, this outside view can add real value. Check out our best-practice on how to hire a remote consultant here.

When choosing the consultant, make sure you bring someone in that will support you with the implementation of the above measures.

A fancy slide deck on what would be best to do will not help you. Also, don’t judge by price alone but rather use an ROI-based approach where you compare the cost of a consultant with the bottom line improvements they can generate.

Read more about choosing the right consultant here.

One step at a time

Transparency is the necessary basis for making informed decisions about your operations. Effective management is all about focus, so treat creating transparency and taking action based on it as two separate tasks. Otherwise, you might end up doing neither of the two right.

Also, bringing in an operations manager might facilitate transparency.

All the best for your transparency implementation efforts. As always, let me know your thoughts in the comments section.

Best

Benjamin

Asamby Consulting

We help you make sure everybody in your company knows what their role is, has the right processes and the best tools to deliver great outcomes consistently. Add a layer of excellent strategy execution and situative leadership and the success is yours.

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