Processes are the core of any successful retailer

People or processes – what is more important? In any business, including retail, this question is often a key driver for outcomes.

Well, the fact is that both processes and people are crucial. Once you have addressed ‘how’ (processes) things can be done, you can decide ‘who’ (people) can execute these the best. An organisation which is process-oriented will be saved from the catastrophe that strikes when people leave.

Having said this, what exactly is a process? It is a set of steps undertaken to achieve a desired outcome – it defines who, when and how of a step. It evens out the rough edges in an organisation and lays out a course of action to do things right, consistently and in a systematic manner.

Processes are the internal locus of control through which an organisation can set things right - even when it does not have control on the external factors. They streamline various functions such as purchase, store ops, inventory, logistics, sales, customer service and others from beginning to end. To put it simply, when your processes are right, the right outcomes will follow on their own.

Organisations which build new processes and continuously improve on existing ones can expect constant and successful outcomes – happy customers, profitable sales, increased revenues and so on. In spite of processes being the star element of an organisations, they are often overlooked.

Statistics show that 94 per cent business failures result from process failures. Organisations tend to focus more on outcomes rather than fixing their processes. Generally, there are five reasons for process failures:

• The outcome of the process is not defined – What goal would an organisation achieve by implementing this process?

• The process is not written and documented – How will the organisation ensure that the process runs smoothly and consistently with changing of hands?

• The process is not explained to people – Have the people in the organisation understood their role in the execution of this process?

• The process has outcomes, but not measurable ones – how would the organisation know that the process is delivering the results as expected?

• The process is not reviewed at regular intervals – Does the process require redesigning or reengineering due to the changes in the market or the goals of the organisation?

It has often been observed that silo mentality affects the efficiency and effectiveness of the organisation. But when processes are put in place, organisations can identify gaps and weak points of control between people of different functions and departments. When these gaps are bridged and appropriate supervisory checks are implemented, organisations can naturally break the ‘silo’ barrier.

Processes become even more critical when organisations expand and grow. Let’s take the example of the retail giant, Walmart, here. It has 11,000 stores across 27 countries. It stocks products made in more than 70 countries.

It manages an average of $32 billion (Dh117.50 billion) in inventory. How does Walmart do it successfully year after year? The key to its phenomenal success lies in its ability to innovate and integrate its processes of purchasing, operations and distribution across all its stores. These processes result in lower costs, the benefits of which are passed to the customers in the form of lower or discounted prices.

Processes also define the architecture of the organisations. It becomes easier for organisations and its people to understand the framework they need to work in and take sound decisions to prevent deviations from goals as far as possible.

The implementation of business processes requires support and commitment from the top management. It should be integrated and flow from enterprise level to the lowest in the organisational hierarchy. What is more important is that people know and understand the processes that give the desired results repeatedly and consistently over a period of time.

Or else, people will not know how to repeat the success. For instance, a restaurant serves a new chicken dish to its customers and they absolutely love it. They visit the restaurant again, hoping to relish that chicken dish once more.

But, the chef, who invented this dish, forgot the recipe! Had he documented the recipe (process), he would have been able to repeat it without any delay and make customers happy.

Processes are designed and executed by humans. And humans make mistakes. A fail-proof process is the result of various trials and errors. It does not become successful overnight. But, when this happens, it can work like magic.

Processes implemented today can become outstanding outcomes of the future. All you need is to get your process right.

— The writer is CEO of Thought Leaders Middle East.