December 2005

todd herman web

Everyone's heard the joking definition of insanity – doing the same thing over and over, yet hoping for different results.

This definition goes a long way toward explaining the concept of Process Inertia – people come and go, technology moves forward, but processes seem to have their own special staying power.

What does Process Inertia sound like?

Imagine hearing yourself say:

  • "My controller never seems to have time to work on projects to improve my business – she's always closing the books."
  • "I've sunk a lot of money in that new customer relationship management software, but our sales reps have not increased their productivity."
  • "My information systems manager keeps promising to review the security of our systems. My banker would feel better about increasing our credit limit if that were done, and I'd sleep better, myself."

The law of inertia reminds us that something at rest or moving will remain at rest or keep moving unless it is acted upon by a force. So, if you want to overcome process inertia, you have to apply a "force". In the case of a process, what force is required? It ultimately comes down to this: a decision to change, along with the daily actions to make the change stick.

What are these actions?

  • First, face reality – you are likely in denial about the existence of process problems in your business.
  • Second, acknowledge the problem and its effects. When a process is not functioning properly, it is unpredictable – cost, cycle time, and quality all fluctuate. Inefficiency and ineffectiveness result, which lower productivity and profits, and increase staff frustration.
  • Third, find someone to help you. You're the expert in your business – find someone whose experience in process improvement can help you identify options and solutions to ease your pain.
  • Fourth, work with your advisor to inventory your processes, determine and estimate business effects, and triage them by difficulty to improve outcomes. Prioritize!
  • Fifth, set concrete improvement goals for the processes having the greatest potential business benefit.
  • Finally, devise a plan of improvement and implement it with patience and persistence. Overcoming inertia requires constant force – the longer the process has existed, the harder it is to change it.

The first step is the most painful...

Why? As leadership consultant and author John Maxwell described, denial is easy to slip into because we don't want to admit that our past decisions or policies are now a problem. One solution: work with an advisor who can help you face reality quickly.

What are some improvement goals that you want to make? Be specific! Here are some goals set by our clients:

  • Reduce monthend closing by 2 business days.
  • Increase the number of meetings for each sales representative by 15%.
  • Assess the security, availability, integrity, and maintainability of your Information Systems environment.

The first step is the toughest. I sympathize with everyone reading this – I've had to face the same issues in my own business, too. But getting the results you truly want makes it worthwhile.

Reflecting on 2005, many members of the firm – including me – realized how fortunate we are to be able to work with, learn from, and be supported by each other. May your personal and professional lives thrive in 2006, just as ours have in 2005!

Sincerely,

toddsig

Todd L. Herman


Client Project Update:

I am pleased to provide you with an update on our client projects. Projects we have completed over this period are...

Identify Additional Franchise Tax Due

Analyzed the address records of a county against those of the area's cable company to identify additional franchise tax due, resulting in greater revenue for the county.

Automated Various Queries and Reports

Automated various queries and reports to better analyze and report payroll costs and inventory usage, helping this healthcare provider make better use of its limited accounting staff.

Conducted a Post-implementation Review

Conducted a post-implementation review of a new accounts payable system’s processes and transactions, recommending and implementing changes to reduce complexity and simplify financial analysis.

Analyzed Requirements for an Overhaul of a Value Statement System

Analyzed and outlined the requirements for an overhaul of a manufacturing company's value statement system, allowing the client to accurately associate the value added offshore with the appropriate cost classifications for reporting to US Customs.

Reviewed Ledger Accounts That Were Not Aligned With ERP Systems

Reviewed several ledger accounts that were not aligned with the underlying ERP system for this university, identifying the nature of reconciling items and devising techniques to detect and address interface problems.

Future projects we are planning include...

Accounting Integrity & Enhanced Management Analysis

Design and develop the systems interface between an industry-specific business system and a financial accounting system, allowing this insurance company to integrate these two systems, providing accounting integrity and enhanced management analysis.

Secure Internet E-Mail

Implement X.509 certificate security for secure Internet e-mail between key users of two companies, allowing our client and one of its major customers to securely share confidential and proprietary technical information and business plans.

Lotus Notes Performance Appraisal System

Enhance the Lotus Notes performance appraisal system of this pharmaceuticals firm, allowing performance plans and reviews to be conducted multiple times and on staggered schedules during the year.

Lot Tracking System

Extend a lot tracking system to better schedule development lots with production lots, allowing for accurate planning and sharing of limited capacity between production and product development.

Convert to New Inventory & Purchasing Modules

Help a medical testing company convert to new inventory and purchasing modules by providing overall project management, interface design, and custom report creation, using our process and systems knowledge to cost-effectively implement this software.

Out-of-Office Workflow Request & Approval System

Develop an out-of-office workflow request and approval system, allowing personnel to efficiently review and track requests for vacation, personal leave, training, jury duty, and similar paid time off (PTO) categories.

Train Professional Personnel

Train the professional personnel of this investment management firm on advanced spreadsheet techniques, improving the efficiency of preparing client analyses and enhancing the integrity and reusability of their spreadsheets.