With the economy climbing from the abyss onto dry land it appears that the new mantra, at least it sounds new, is more with less and greater efficiency. While that phrase has pervasive in 2007-2009 as a means of survival it is now about profitability. Now with most every article I pick up or webinar I attend, there is a new widget to make my business better, more efficient and much more profitable.
With the sea of constant commercial stimulation for better both in the operations and in the back office, how is one to discern which new snake oil will add value. I could easily see how this constant attack against one’s enterprise could send leaders into a shutdown mode. Recently I attended a webinar on streamlining the accounts payable process. With the big leaders on the panel I was sure that I would be able to come away with some magic remedy that would cut cost and increase AP efficiency. What I did come away with was, through the licensing of some cloud based technology my AP operation would be better. It still puzzles me how this is possible without someone doing a more in depth analysis of what we do in AP and how best to achieve better results through removal of redundant work. Sorry panel – more technology is not what I need!
Recently in a prominent financial magazine, I happened upon an article that espouse the merits of adopting a ‘best practice’ approach to AP and AR management. Wading through paragraph after paragraph of ‘best practices’ I came to the realization that my AP and AR departments are probably the post children for best practices. Which I know is not the case!
Regardless of where one’s organization is on the continuum of ‘best practices’ there is always room to achieve gains in revamping processes. So often managers get so bogged down with the day to day activities of keeping their department going that either they are too exhausted to seek means of gaining efficiency or there is no benefit to gaining efficiency.
Without a strong visionary leader, finance departments can settle into the doldrums of doing the same thing the same way as they have always done it. To break out of this vicious cycle, there has to be several elements: the need to change, the desire to change and knowing how to change. For many stayed mangers they are batting 0 for 3. It is for this reason that senior management must hold finance to the same metrics as all other production departments. There are many improvements that finance can undertake to derive greater efficiency; not all of which are tied to purchasing something.
The most difficult step in developing an operation rooted in efficiency and innovation is to change the culture. The cultural shift must encourage and promote innovation. Mistakes should be embrace for the value they teach and successes shared by all. Moving from a petrified environment to one of innovation, may require new talent if innovation isn’t part of the current genome. Should new talent be procured, then there is the settling in phase and eventually the resistance to change.
To effect real change, leaders must build the environment that encourages change. People must feel they are part of something bigger than themselves and it must align with their goals and objectives for career growth. This is where they leadership team must have a strategic vision for the organization, and then sell it to the teams. People need to see their place in the vision. Once established, acceptable performance must be based on a relevant contribution to the organizational goals. Through my career, this has been called ‘skin in the game’. Contrary to Kohn’s organizational compensation models explained in Management by Rewards, employees need to be challenged both in efficiency and productivity.
Recently I participated in a roundtable dialogue of efficiencies gain in a primary care practice. For several on the panel, old techniques were the fare of their operation. Most practices called their patients to remind them of the appointments, scheduled patients according to their requests and some maintained either a standby list or allowed walk-ins. The most progressive practice did all of these, with a twist. Firstly, patients were called several days earlier with an auto dialer that required the listener to hit a key to confirm the appointment. Failing which, the patient would be contacted personally in the even a rescheduling of the appointment was required. Secondly, the practice realizing they had a certain level of ‘no-shows’ they maintained a standby list. In addition, they had a triage nurse that would assess the severity of the situation. Finally, having skin in the game – motivating providers! Provider compensation was built up based on several criteria: patient visits per day, sufficient documentation for billing and most importantly, peer review. These changes working in unison positioned the practice head and shoulders over other similar practices.
The question remains, how does one get there? It isn’t through some new software or technology. It is through innovation. How does one seed innovation? When examining a function or department, say like AP. One must ask, what three or five things MUST be accomplished otherwise this area is considered to be non-functioning. From there, one builds a new paradigm to complete the task or build a department.
Without beginning with a must have list, one cannot affect great change. In a recent blog Seth Godin, Skeumorphs = Failure, explains that so many designs are made to look like something else. The theory is it flattens the learning curve, as users are more familiar with the antecedent. This may be the case when designing, but true innovation must start from a clean slate because – no one size fits all!