7 Fundamental Business Processes for an Autonomous Company
Autonomous organizations must be sustainable, which means that the systems and processes continue and are maintained over time. A sustainable process must have the capacity to absorb disturbances and still retain its structure and ability to deliver results. It must be able to deliver long-term vision while being responsive to immediate events.
To create an autonomous business model, the seven basic processes shown below must be considered, identified, and tracked.
The Customer Acquisition Process
In the customer acquisition process, the company determines how it will attract leads and prospects. Leads are people or companies that have the potential to do business with you. Prospects are people or companies that have indicated an interest in doing business with you. In other words, prospects are leads who have responded in some way to your requests for engagement and action. Mature organizations that have become stagnant or plateaued have often lost the will or ability to generate new prospective customers on a consistent and reliable basis.
The Revenue-Generation Process
In the revenue-generation process, leads and prospects are converted into candidates and customers. Candidates have put themselves in a decision-making position and will either choose your offering or an alternative, or they are deciding between several options you have offered them. This decision point is sometimes referred to as FMOT—the first moment of truth—when the buying decision is made at a website, a retail shelf, or through acceptance of a proposal. Every successful company must have a reliable and predictable process to convert prospects into customers and, in turn, generate revenue.
Cash and Financing Process
When a prospect has said “yes” to the offer and is ready to do business, sales convert to cash. The cash and financing process evaluates how sales convert to cash to meet the current and future cash needs of the organization, so it can meet its financial obligations and make capital investments. This process considers the amount of cash that can be generated to meet the current obligations based on current sales volume, margin, and costs. It also considers and anticipates the need for outside financing or investment and matches that need with appropriate resources.
The Operational Execution Process
The operational execution process focuses on making, delivering, or producing the product or service that generates revenue. It involves planning, organizing, coordinating, and controlling all the resources needed.
Managing operations involves managing people, equipment, technology, information, and all the other resources needed in the production of goods and services. Operations processes are at the center of the other processes of every company. This applies to companies of all sizes and industries, and to manufacturing, distribution, and service companies. It applies as well to both for-profit and not-for-profit enterprises.
The Human Resources Process
The human resources process is focused on attracting and hiring great people and then developing and retaining them. The administrative functions typically involve payroll, benefits, and conflict resolution. The HR unit also plays a key role in instilling the values and culture in the organization and provides ongoing learning and development opportunities to improve employee performance and cultivate future leaders.
The Digital and Information Technology Process
The digital and information technology process is an ever-evolving part of any business. In years past, this process was focused on what hardware the company should invest in; more recently, the focus has turned to the software needed to run the business. With the introduction and subsequent reliance on the Web, these processes came to include websites, software-as-a-service, and e-commerce.
The digital and information technology process is also responsible for creating and building the brand presence online and then maintaining and supporting the brand through data acquisition, website development, and social media platforms. This process sorts out how the brands will follow two strategies:
The tell, talk, teach, or train processes
The sell, show, source, and search processes
Tell, talk, teach, or train processes inform and communicate, and they apply internally and externally. Internally, this process specifies how to communicate your brand vision and promises, and it provides a platform to teach and train your people. Externally, you must assist customers with new or different uses for products and services.
Sell, show, source, and search processes help prospects and customers find, understand, and choose the products or services that meet their needs.
The Administrative Support Process
Administrative support covers both internal and external support processes. Internal support may include traditional administrative support of individuals or departments through clerical support, calendar scheduling and management, correspondence and reports, meetings coordination, and travel arrangements. It can also include maintaining a front desk or phone switchboard. Larger organizations may provide support in the form of legal or purchasing.
Externally focused administrative support processes include customer service and technical support and, in public companies, regulatory and shareholder support.
Optimizing the Processes
To optimize these processes, focus first on increasing the effectiveness of making, delivering, or producing your product or service. After that, you can refine and improve the efficiencies of making, delivering, or producing the product or service to maximize margin and volume.
Too often companies get that backward. They find a problem with margin or profit and try to improve efficiencies to cut costs. This can easily backfire because it can stress a system that doesn’t operate effectively. Sometimes you have to slow down to speed up. Effectiveness is about doing the right task, completing activities, and achieving goals. Efficiency is about doing things in the best possible way, which might include doing it faster or with fewer resources.