Reduce Cost and Increase Profit by Doing This One Thing

Any business or organization can benefit from this opportunity. The only requirement is that people perform work. If work is done, a workflow exists, whether documented or not. Opportunities come from workflow issues. A workflow defect occurs during work when something didn't go as planned. This leads to delays, rework, extra unplanned tasks, or impacts the quality of the finished work. As we discussed earlier, the main causes of workflow problems are complexity and change. In simple terms, the more complicated the workflows are, the more likely errors are to occur. Similarly, the more change that occurs, the more defects arise. Leaders have an opportunity to shine by eliminating these defects, thereby reducing costs and increasing profits.

Every workflow has defects, and they cost money and potentially reduce revenue. The more time spent on a task, the higher the cost. If work must be redone, the cost is higher. Defects lower profit because people have to spend more time overcoming workflow design issues. As issues arise, activities are usually added to address them. A meeting starts here, a working group kicks off over there, a review is initiated to pull leaders in for guidance, then, over time, there can be so many band-aids that the overall design becomes cumbersome and slow. Additionally, the added stopgap activities may not address the root cause of the problem. Workarounds are worse: when nothing changes, people find ways to move work along with some ad hoc quick fix, don't tell anyone, and then the teams keep running into the same challenge with each execution cycle. In this environment, handoffs between teams become more fragile. Delays become more prevalent and can lead to missed revenue opportunities or allow competitors to beat your company to market with a similar product, capturing the initial profit margin on an innovative product or service. There are a multitude of ways workflows break down and reduce ROI or return on investment = profit / investment cost. Workflows need constant attention and focus, just like many aspects of the business, but these tend to be neglected in current leadership thinking.

The key is to identify and fix these workflow defects as they occur. A key part of a good workflow design is to put checks, tests, criteria, and monitors in place so that issues that arise are seen and recorded. The best way to fix them is to create a workflow map showing what happened when the defect occurred. Different teams will have different views on what happened, and so will leaders. Only by gaining a deep understanding of the current work process can one uncover the real root cause of the defect, which should be determined before making any fixes or changes to the work process.

Workflow defects have various root causes, and their impact can differ. When you do this work for a while, you start to notice patterns of defects as processes are mapped out and analyzed. Here are some examples:

Handoffs: This is the biggest bucket of workflow defects, and here are some categories and examples from the product development world.

• Work that crosses team boundaries:
  • Handoffs from marketing to architecture, architecture to design, design to testing, testing to manufacturing, manufacturing to supply chain, supply chain to finance, finance to human resources, top leadership to middle managers to first line managers, the list is almost endless.
  • Application engineers assisting customers in ramping their products send a summary of an issue back to design so they can address it, but many times, engineering doesn't have the data they need to begin root cause analysis.
  • A firmware team didn't know the logic design team had changed an address for a configuration register, thus incorrectly configuring the device which can impact functionality or performance.
  • Manufacturing was surprised when a design change ended up doubling the process time for a step in the factory flow.
• Work that moves from one activity or task to another:
  • Work is delivered, but it does not match what is needed for the next activity to perform its part. A downstream activity requires A, B, and C to complete their part of the workflow, but the upstream activity delivers A, B, and D.
  • Work is finished in one step, but the person who does the next step gets pulled into a product issue and becomes unavailable and the work stops.
  • A team debugging a product issue can’t access a tester because they are all in use now, so a customer issue lingers unresolved.
• The interactions between tools and people:
  • A formula changes in a spreadsheet, and the next person working on it can't understand why it looks different.
  • A software update introduces a new field to a form that users find confusing to fill out.
  • A chatbot cannot answer your question after multiple frustrating attempts.
    
  • IT pushes an operating system update during work hours, which unexpectedly restarts your computer, causing you to lose the work you were doing when it happens.

Delays: Work is slowed down or stops for some reason.

• There is only one person capable of performing a certain task, and they are either on vacation, unavailable, or, worse, have left the company.
• Design must halt work on a new product because of an issue with a previous product involving a customer.
• A team is overwhelmed by incoming work, and the number of tasks they must handle triples in a single day.
• A tool used to gather data for a quarterly report stops working two weeks before the company is scheduled to present it, so the report is late.
• An unexpected bug was found in a new product that stops shipments to customers, and the team that needs to fix it is already working on the next project and is unavailable.
• Work is delayed because the person responsible has not been trained on how to do it.

Product to product: Unplanned work arises, leading to delays, quality issues, or missed opportunities due to poor communication or implementation.

• An issue discovered during customer onboarding for a product is not communicated to the new product in development, causing the same known issue to reappear at launch.
• A team added a feature to Product A but not to Product B because the team leader working on the feature forgot to include those requirements in other relevant products, resulting in customers purchasing only Product A.
• Coupling is a major problem: a test resource supports three programs, and if one program encounters a lines down issue or factory halt, support for the other two programs is reduced as the team addresses the urgent problem that takes weeks to fix. One product issue now impacts three programs at once. This happens much more than leaders think.

Overburden: Goals, plans, and processes can cause work to pile up, leading to significant delivery delays. Problems are often hidden because people can't see issues that sit in a work queue, only to find them when they start working on them. Furthermore, overburdening employees can lead to burnout and disengagement, reducing output.

• A company reorganization disrupts existing workflows as roles and responsibilities change.
• A headcount reduction initiative cuts 10% of staffing, but the work volume remains the same, and employees were already overwhelmed.
• Leadership created a product roadmap based on desired revenue growth, but the scope exceeds the development team's capacity by double.
• A program manager sets an aggressive schedule without fully understanding the workload, as the number of changes to this product is four times the usual.
• An annual business objective is set well beyond what the team can achieve, causing an all hands on deck approach and unintentionally leading to missed other goals as resources are diverted.

I could go on and on about workflow defects; they exist because work is complicated, and nothing stays the same. How we worked a year ago is always different from how we work today. I am sure you can think of many more defects from your experience at work.

Another great aspect of this work is that it’s uncommon, creating opportunities for leaders who want to advance, improve work-life balance, or simply enhance the business. The transactional leadership style that dominates corporate America today often doesn’t focus on where the actual work happens; they tend to lead from the top of the organizational hierarchy. A transactional leader focuses on organizing, planning, and controlling. They drive structure, policies, monitoring, metrics, efficiency, and rules. They value stability, order, and develop deterministic plans. They often care about “What” is delivered, but not “How” it is delivered. Workflows are the “How”, and grading the results of financial quarterly objectives or OKRs is an example of a “What”. Their focus is an opportunity for you to stand out in a good way.

Removing workflow defects boosts profits and cuts costs. Sometimes, you see an increase in return on investment from both the numerator, profit, and the denominator, investment cost. Removing defects can speed up time to market, lessen employee workload, improve work quality, shorten product development cycles for growth, scale, and adoption, and keep competitors at bay. If you're interested in delivering more value with less effort, then explore workflow design and lead that work.

Do something today to improve your work-life balance. You won’t regret it. Have a great day and good luck in your work-life journey.