June 10th 2013

Process management for high-growth companies

Processes – isn’t it this bureacratic monster that kills all freedom with forms and unflexible procedures? Isn’t it the “it does not work this way, you first have to send an application to colleague X”?

BPMN for Startups

Especially young companies often do not spend much time thinking about processes. First, you have to develop the product. First, you have to win customers. First, you have to survive before your cash runs out.

Starting a young company does not work if you try to plan everything in advance. In the beginning you are finding creative solutions for situations you have never been in before.

Over time, you will realize that certain things repeat themselves. At some point you will have sold your product ten times. And every time, your customer expects the delivery on time and an excellent service. Every time, an invoice must be issued and incoming payments must be tracked.

For the first couple of times, you will find the best way to solve a situation in an ad-hoc manner. These first times you will actually have fun reinventing it again and again. There are so many ways to handle the purchase order, so many new and creative ways to issue invoices and take care of them in accounting.

But with the third misunderstanding, the fifth delay and the tenth customer complaint, you will ask yourself why things don’t run smoothly.

Time for processes

Now, it is time to stop reinventing the wheel. It is rather time to define a repeatable procedure and to continuously refine and improve it. Make it faster, deliver better results, increase customer satisfaction.

This is where processes come into play. A process defines how I get from a starting point such as a purchase order to a desired outcome, such as receipt of the money. The process includes steps to be performed, the roles involved, information required and decisions that have to be taken.

A process only describes the repeatable stuff. It specifically leaves room for freedom, for finding creative solutions, as it leaves all that stuff, that only rarely happens, undefined.

Scalable processes are the core for every high-growth company

Many companies start with the ambitition to become big. This requires constantly high growth rates for many years.

Growth is only possible if the business model is scalable. This means that a great number of customers can be served with the same product or the same service in the same way.

Growth is only possible if good quality can be delivered in a repeatable way. You want to deliver at least double as much output with double input. In order to achieve this if you can keep your productivity at the same level during growth.

Her is an example to make it concrete: If you are scaling from one support person to five support people, you have to ensure that all five people can actually work productively.

And here is where processes come into play. The knowledge about how to deal with typical situations are consolidated in a process. That way, not only the first employees can benefit, but also colleagues number ten to hundred and number hundred to 1,000.

You will be able to handle typical cases even faster and better if you continuously improve your processes.

It is common sense in the startup scene that an innovative business idea is a good starting point for a company, but that excellent execution, i.e. translating your business model into scalable structures, is of equal importance.

Scalable processes as differentiator

New technical possibilities, such as cloud and mobile, enable a dramatic improvement of many processes. Sometimes, entirely new business models are created around highly optimized processes.

flightright is a wonderful example. The idea behind flightright is pretty straightforward: Every traveler has the right to redeem up to 600€ for delayed flights in Europe. flighright takes care of getting the money back from airlines and gets a 25% fee in case of success.

The company addresses a typical problem: Travelers save the effort to fight their rights – and airlines are very reluctant to grant the money. Using flightright, getting your money back is only a matter of a few mouse clicks. And there is no risk for the traveler: Flightright only earns a success fee.

The process behind claiming air travelers’ rights is extremely complex. It is an extensive interaction with the airlines. Many cases even end up in court.

flightright’s business only works if running the process costs far less than 150€ per case. A completely manual procedure would not get you anywhere close to that. Only a high degree of automation yields the desired cost structure.

Efficient and continuously improved processes are the core of flightright’s business. But also e-commerce and other Internet companies have processes as a centerpiece of their business model.

When should I start with process management?

As soon as cases happen in a repetitive way, you will automatically start developing initial rules or guidance how to handle them. Check lists or structured notes that are distributed in documents or emails, are typically the first artefacts.

Process models are a more structured form of capturing process knowledge. By following the standard notation, the most relevant information about a process will come together automatically. Tools like Signavio allow you to link or upload additional information such as check lists or textual hints. That way, the process model becomes the starting point for navigating to more detailed process information. Signavio’s collaboration features also allow you to collect feedback from your colleagues and get everybody involved in process improvement.

Marek Janetzke, Managing Director at flightright, is a big fan of Signavio: “We are using the Signavio Process Editor since the very beginning of flightright. At first, we were only looking at our core process. Now, we are also improving all other processes continuously.” Other high-growth companies such as Aerohive and Rocket Internet’s Zalando are using Signavio for their process management.

You cannot start early enough with tools like Signavio. As young companies typically do not have separate budgets for procuring process management tools, we are offering a special deal for startups. This is the ideal starting point for creating scalable processes in your organization.

You can find more information about the startup edition HERE.