What are complex operational processes in businesses? Why are these processes essential for a mature company?
To create complex operational processes, Hamilton Helmer suggests you develop interconnected systems that enhance efficiency. This enables you to enhance product quality and reduce costs—making it possible to offer better value to customers while maintaining high profit margins.
Learn more about why these operational processes are important and how to create them.
Create Complex Operational Processes
Creating complex operational processes in business insulates your business from competition. Helmer explains that complex operational processes are difficult for competitors to replicate because they evolve organically through years of incremental improvements, rely on intricately interconnected operational elements, and embed tacit knowledge within your company’s culture.
(Shortform note: While Christensen (The Innovator’s Dilemma) agrees that complex operational processes can provide a competitive advantage, he cautions that they can also make it difficult for companies to adapt to industry changes. He argues that as processes become deeply ingrained in a company’s culture, they create a form of organizational inertia that can blind companies to emerging threats or opportunities, especially when these new developments don’t align with their established processes. This suggests that companies should balance process optimization with maintaining the flexibility to respond to market shifts.)
How to Create Complex Operational Processes
Helmer recommends four methods for creating complex operational processes:
1) Keep improving: Make continuous, incremental process improvements to enhance efficiency over time. For example, establish a dedicated R&D team to continually refine your plant-based formulations, or regularly seek ways to reduce waste and improve ingredient freshness.
(Shortform note: Josh Kaufman (The Personal MBA) offers advice for making ongoing process improvements. First, outline all of the tasks involved in running your business. Then, consider what steps you can take to save time, effort, and money. This might involve automating some tasks or eliminating unnecessary tasks, cutting intermediaries or changing suppliers, or investing in resources such as equipment or employees. Finally, Kaufman suggests prioritizing the improvements that will make the biggest difference to your efficiency and profits.)
2) Develop integrated processes: Design interconnected systems where improvements in one area amplify the benefits in others. This creates a web of mutually reinforcing activities that’s difficult for competitors to disentangle and emulate. For example, create a closed-loop system where waste from your plant-based meat production is used to fertilize crops for future ingredients, enhancing both sustainability and cost-efficiency.
(Shortform note: How can you develop integrated processes? According to Peter Senge (The Fifth Discipline), you first need to understand how all of the different parts of your business interact with and influence each other. This involves mapping out all your internal processes and identifying how they interconnect. Then, look for ways to make changes that can improve multiple business processes. For example, improving your customer feedback system could enhance both customer service and product development, creating a ripple effect of benefits across all areas of your business.)
3) Cultivate specialized expertise: Embed critical knowledge and best practices into your company’s culture to foster expertise that competitors can’t replicate. For example, implement a mentorship program where experienced staff guide newer employees in mastering the nuances of plant protein texturization techniques.
(Shortform note: Some business experts suggest that instead of cultivating specialized expertise internally, companies can operate more efficiently by outsourcing specialized tasks to specialized companies. They explain that companies that focus on optimizing one single activity have advantages over businesses that need to divide their resources among multiple priorities. Businesses that then leverage the capabilities of specialized companies gain resources without investing in the development, ongoing management, and integration of different departments and processes. This enables them to focus their resources on increasing productivity and decreasing unnecessary overhead costs.)
4) Encourage employee input: Harness the collective intelligence of your organization by empowering employees at all levels to contribute ideas that may lead to breakthroughs in efficiency or quality. For example, implement a reward system for production line workers who propose modifications that improve the manufacturing process.
(Shortform note: Daniel Pink (Drive) adds to this advice, suggesting that employees who have autonomy over their work are more motivated to contribute valuable ideas. Giving employees control over aspects of their work fosters a sense of ownership and engagement. This increased engagement naturally leads to more innovative thinking and problem-solving, as employees feel personally invested in improving processes they interact with daily. Additionally, autonomous employees are more likely to voice their ideas, knowing their input is valued and could potentially influence their work environment.)
