Most businesses don’t understand, really, the exact process they use to create value for their customers. While some business types will lend themselves to understanding this better than others, I think there is a valuable and repeatable process to understand the activities and steps your business engages in to create value for your customers. There are software products available, but I use Visio 2013 from Microsoft. I use the Basic Workflow Diagram chart type.
Essentially, you start at the end and then reverse engineer your way back to the beginning. So, start by asking this basic question: “What must happen in order for us to have profit in the bank?” Don’t generalize this question – leave it as is. In Visio, you’ll create your first box:
So, the next question is the most logical one: What must we do to possess profit in our banking accounts? Well, the obvious answer is that you make a deposit into the bank. Be sure to add an arrow, as illustrated. Hence, you’re diagram will now look like this:
Now, what must you do to make a deposit? You need to receive a payment from the customer. What did you do to receive payment? You invoiced the customer. Why did you invoice the customer? Because you completed the project and ensured that the customer was happy. And perhaps you gained a referral as well. Take a look at the diagram now. You can start to see the penultimate activities that must take place in order to create profit for your organization.
Now, there will be loops and more loops and arrow going all over the place. And you’ll need to work at this iteratively with your team. But as you work on it, you’ll start to see gaps in your process that are being unfilled or not finished properly. This exercise will surface weak processes that need to be matured or “fat” processes that could be “leaned” up (Six Sigma terminology). You’ll be ruthless in asking tough questions: “In order to get X, what must we do?” Be specific and focus only on the penultimate action to “X”. Keep asking questions until you run out of penultimate actions to perform. For example, if you have a box for people driving to work – you’ve gone too far. J
You’ll need a large format printer to print out the entire diagram – which will become huge.
Consultants cannot build this for you because they won’t know your business at a level deep enough to produce it for you. But they can add value by knowing which questions to ask. I personally have done this for my company and would be happy to assist you in your effort to build your Value Creation Process.
Bill English, CEO