Business Process Improvement Continuous Improvement Cycle

After you have improved a business process, can you simply relax and move on to the next process? Not if you want to retain the strategic gains you achieved.

Continuous improvement (CI) can seem like a theoretical concept unless you have experience working with business processes. But, this is far from the truth. You should make sure that you do not move too hastily to improving the next process until you have created a CI plan for the process you just finished. Otherwise, you will find that the process works fine for a while. Then you will see it starting to slip backwards a little, then a little more, until it becomes outdated and you are back where you started.

This step is similar to losing weight. If you lost 20 pounds and never weighed yourself again, you will probably find the pounds slowly creeping back. The "maintenance phase" of a business process is just as important as that of a weight loss program.

There is plenty written about continuous improvement and you should think about the four steps in the improvement cycle: (1) evaluate, (2) test, (3) assess, and (4) execute.

Identify what you want to evaluate on a recurring basis - did your customer needs change, are the internal controls still working, or are you measuring the most important items? Try the changes out on a limited basis (test), determine if they worked (assess), and deploy them across the organization if successful (execute).

It helps to identify the following before you leave a process you just improved:

• the key topics you will evaluate
• how often you will revisit each topic
• the time frame when you will revisit topics

For example, you may choose to validate the customer needs every 12 months and plan to conduct that analysis in the second quarter of each year. Putting a plan and schedule in place will help to keep an improved business process at the forefront of your mind and make certain that you routinely look for improvement opportunities.

Developing a continuous improvement plan and schedule is the tenth step to improving the effectiveness, efficiency, and adaptability of your business.

The Value of a Business Process and the Consequences Without One

I have often found myself at odds within the real estate industry. As a top salesperson, I completely understand the perception that Realtors have of themselves and their industry. This view is one of optimism, perception of success and the necessity to deliver true value to customers.

However, it's when I put my business owners' hat on; that I have distinctly different views of what I need to do to be successful. I believe hard work will pay off. I must continually communicate with my customers. Without a long term business plan, I will become a statistic of failed businesses.

When I started in this industry in 1985, there were over 220,000 real estate firms nationwide. Today there are less than 28,000 real estate businesses nationwide. This is a visible reminder to me of all those real estate companies and agents that say "I'm okay". I don't need to think about a business plan.

Realtors as business owners rarely look at the longer term picture for their company. This picture is impacted by business processes that take time and people- each cost dollars and effect customer satisfaction.

Business processes can be found by simply looking for data integration within the various business activities. One primary reason is owners/brokers purchase technology solutions to only solve the specific problem. This approach yields non-connected sets of data.

To demonstrate this, simply follow the path of data entry. For example look at the number of times you use the listing address or selling price. Selling price is recorded in the M.L.S., the franchise system(s) if applicable, your company website, the agents' websites, on-line listing pages on realtor.com as well as hundreds of transaction documents at the time of closing. This data is used in commission calculations, processing commission checks, and historical data tracking for business performance reviews.

In my two decades in this industry, I can recall only few owners/brokers taking an initiative to create streamlined business processes. It was not until 2008 when the broker looked out his/her office window and realized for the first time the empty real estate offices that were once competitors were "not okay". This is when the owner/broker recognized that if they did not change their old ways, they, too, would become a casualty like other failed businesses.

It is a difficult series of tasks to look a business steps, think about their value and then brainstorm to figure what steps are critical to my business performance and then look at ways that can reduce excess staffing to create an efficient "streamlined" office through business process changes.

The number of closed real estate offices in the U.S. cannot be explained simply by the recent housing crisis alone. A more realistic explanation and cold hard reality is the consumer has found less value in the services of the Realtor. Here are some facts. The real estate industry is a service based industry. Their value to the consumer is only as good as the service they provide. A prominent complaint sellers have with their real estate agent is the "lack of consistent communication". This gap different between what a seller expects and what an agents deliver is the core of the industry problem. Real estate companies are the causality because they rely on the agent to communicate to the seller rather than making this a company responsibility.

When real estate companies realize and take action to have consistent real estate software that can delivery a business processes to meet the demands of service expectations of the consumer; then they will become more successful instead of another failed business.

I liken the real estate industry to the travel industry about ten years ago. You used to have local travel agencies on every corner, but where are they today? Consumers found more value in companies like Expedia.com, Priceline.com, Orbiz.com and Travelvelosity.com. These "new travel agencies" were the ones who could deliver the value the customer expected at a price the customer was willing to pay.