The brain of a business is its set of business processes: the structured, repeatable activities that turn work into a product or service for a customer. Owners set direction, but processes such as sales, fulfilment, payroll and customer service decide how well the company runs. Keeping them documented, measured and continually improved keeps that brain working.
Key Takeaways
- A business process is a collection of related, structured activities performed by people or equipment that produces a service or product for a customer.
- Business process management (BPM) is the discipline of discovering, modeling, analyzing, measuring, improving, optimizing and automating those processes.
- The PDCA cycle (plan, do, check, act) is a long-established method for continual process improvement.
- Software helps at different levels: robotic process automation repeats rule-based tasks, while machine learning finds patterns in data, such as product recommendations.
- People remain central: standard operating procedures, KPIs and a continuity plan keep processes working when staff or circumstances change.
Every business needs a brain, and you might think that it’s going to be you. But we think of business owners as more of the heart of a business. Once they get it off the ground, they’re only there to nurture it and deal with any issues. The different processes of a business are what we think makes up the brain of it.
Without all of them working together alongside technology, we don’t think half of the businesses would be where they are today. So, if the brain of a business is all of its processes, how do you think you can work to make sure the brain is always functioning properly to deliver the best outcome for your business?
If you have not thought about it before, this guide sheds some light on it. Because the processes of your business are what you should be relying so heavily on, and you can’t do that without first making sure they’re all working perfectly. Let us expand…
1] Always Growing & Moving Forward
You should always make sure that you’re growing and moving forward as a business, and there are processes that can help you do just that. There is now software that can help a business learn from its own data, including its past mistakes, by finding patterns in previous results.
This is machine learning (ML), a field of artificial intelligence built on statistical algorithms that learn from data and generalize to data they have not seen, without being explicitly programmed for each task. Its results are only as useful as the data and the goals a business gives it. One common use is a recommender system: when a customer is about to make a purchase, the system suggests other items the customer might want, based on the behavior and choices of other customers.
Two related techniques are used for this, machine learning and deep learning (a branch of machine learning built on multilayered neural networks); visit this comparison to see what the difference is between the two, and how they could help with your business.
As for the other systems that work together within your business, you need to be actively looking for ways that you can keep them growing if you want them to work with your business, especially as it grows as well. You have to, as a business owner, be able to adapt your processes to the changes that your company might face!
2] How Can They All Function Properly
If you want all of your processes to function properly, we think the employees that you hire are going to be the key. Without employees, much of the practical knowledge a company holds about how its own processes work would not exist.
As you get bigger you start to realize that they are the glue that holds your company together. Hiring the right employees does not make processes run perfectly on its own, but it is the foundation: documented processes still need people who understand and follow them.
Even if you don’t have specialist roles that require trained people, you still need to make sure that you’re hiring people who know their job well, and know how to problem solve the issues that you might face. You can also use system management software that can keep things in line.
Pretty much every process of a business now has a piece of software that can make life so much easier. For example, if you’re thinking about the process of paying your employees, which can actually be a nightmare as your team grows over the years, you need to use software to make it all so much easier.
Payroll software can calculate pay and withholding and keep payment records automatically, which cuts manual errors and saves time. It still needs correct setup and regular checks, because in the U.S. payroll is subject to federal, state and local rules on employee exemptions, record keeping and taxes.
3] Using Your Brain For The Business
It’s not fair to put all of your problems onto the business, and expect it to be able to run itself. If you do this, you’ll only have a shock when something goes wrong, when in reality you should have systems in place to make sure you have something to fall back on when things do go wrong.
We think this system should be you. You should know everything about your company and how it works, and you should know what to do to problem solve if anything does ever go wrong. It could be something as simple as a customer complaint that you might expect your employees to deal with.
If they’re under pressure from the customer and can’t deal with it, you should be able to step in, rather than taking a step back. That is just the simple process of pleasing customers that should be able to rely on you, so think about the other areas that might as well!
What Is a Business Process?
A business process is a collection of related, structured activities or tasks, performed by people or equipment in a set sequence, that produces a service or product for a particular customer, according to the standard definition summarized on Wikipedia. Processes exist at every level of an organization, and many are invisible to customers.
A business process is usually drawn as a flowchart: a sequence of activities with decision points in between. Process-oriented companies use these maps to break down barriers between departments and avoid functional silos, so work flows from one team to the next instead of stopping at each handover.
Examples of core business processes
- Order to cash: taking an order, delivering it, invoicing and collecting payment.
- Hire to pay: recruiting, onboarding and running payroll for employees.
- Customer service: receiving, routing and resolving complaints and questions.
- Procurement: choosing suppliers, ordering stock and paying invoices.
Tools often follow these processes. A CRM system supports sales and customer service, while ERP software connects finance, inventory and production.
How Do You Keep the Brain of a Business Working?
The discipline behind this is business process management (BPM): using methods to discover, model, analyze, measure, improve, optimize and automate business processes. BPM treats processes as organizational assets that must be understood, managed and continually improved to deliver value to customers. The ISO 9000:2015 quality standard likewise promotes a process approach to managing an organization.
A step-by-step method for improving one process
- Pick one process that customers or staff complain about, such as late invoices or slow refunds.
- Map it as it really runs today: list who does what, in which order, and where decisions are made. Business process mapping defines what the business does, who is responsible, to what standard and how success is judged.
- Choose two or three KPIs. A key performance indicator measures how well a process meets a defined objective, such as error rate, cycle time or customer satisfaction.
- Write a standard operating procedure (SOP): step-by-step instructions that make the work uniform and reduce miscommunication.
- Run a PDCA cycle: plan a change, do it on a small scale, check the KPIs against the plan, then act by adopting, adjusting or dropping the change.
- Automate only once the process is stable, so software repeats a good process rather than a broken one.
The PDCA cycle has a long track record. It is also called the Shewhart or Deming cycle: it originated with physicist Walter Shewhart at Bell Telephone Laboratories in the 1920s, and W. Edwards Deming modified it in the 1940s and applied it to management practices in Japan in the 1950s.
Which Technology Fits Which Process?
Not every process needs artificial intelligence. Robotic process automation (RPA) uses scripts that mimic a person working in an application’s interface, and it follows a predefined workflow, so it should not be confused with AI. BPM tools automate whole workflows, RPA automates individual repetitive tasks, and machine learning makes predictions from data.
| Technology | What it does | Typical business example |
|---|---|---|
| Business process management (BPM) software | Models and automates end-to-end workflows | Routing an expense claim through approval steps |
| Robotic process automation (RPA) | Repeats rule-based tasks by copying human actions in the user interface | Reading an emailed invoice and typing the data into a bookkeeping system |
| Machine learning | Learns patterns from data and generalizes to new data | Forecasting demand or flagging unusual transactions |
| Deep learning | Machine learning with multilayered neural networks | Speech recognition, image analysis, language processing |
| Recommender system | Suggests items relevant to a particular user | “Customers also bought” lists in an online store |
Payroll is a good first candidate for software because it is rule-heavy and repeats every pay period. The steps are covered in this guide to setting up payroll for a small business, and these tips for choosing payroll software help compare providers. A company can run payroll in-house or outsource parts of it to a payroll processing company.
Automation also changes jobs, which is why staff often resist it. This explainer on why people fear automation covers that side of the change.
What Happens When the Brain Fails?
The owner acting as the fallback, as described above, works for a small team, but it does not scale. Business continuity planning is the process of creating systems of prevention and recovery so a company can keep delivering products or services at pre-defined acceptable levels after a disruptive incident.
- Document critical processes in SOPs so more than one person can run them.
- Name a backup owner for each critical process, such as payroll, billing and customer support.
- Decide the minimum service level the business must keep during a disruption, and how it will be restored.
- Test the plan by having the backup owner run the process for one cycle.
Common Mistakes When Managing Business Processes
- Automating a broken process: software repeats the errors faster. Map and fix the process first.
- Measuring the wrong thing: poorly designed KPIs can create unintended incentives or miss meaningful outcomes.
- Keeping knowledge in one head: if only the owner or one employee knows a process, it stops when that person is absent.
- Treating AI as an automatic benefit: machine learning depends on the quality of the data it learns from.
Frequently Asked Questions
What is meant by the brain of a business?
The brain of a business is a metaphor for its business processes: the structured, repeatable activities that decide how orders, payments, staff and customers are handled. The owner sets direction, but the processes carry out the daily work.
What is the difference between a business process and an SOP?
A business process is the sequence of activities that produces a result for a customer. A standard operating procedure (SOP) is the written, step-by-step instruction for carrying out a task within that process. One process may be described by one or more SOPs.
What is the PDCA cycle?
PDCA (plan-do-check-act) is an iterative management method for the control and continual improvement of processes and products. It is also called the Shewhart or Deming cycle, after Walter Shewhart and W. Edwards Deming.
Is robotic process automation the same as AI?
No. Robotic process automation follows a predefined workflow, copying the steps a person takes in an application’s interface. Artificial intelligence techniques such as machine learning instead learn patterns from data.
How do machine learning and deep learning differ?
Machine learning is a field of AI in which statistical algorithms learn from data and generalize to new data. Deep learning is a branch of machine learning that uses neural networks with multiple layers, ranging from three to several hundred or thousands.
Which business process should a small company improve first?
Start with a process that repeats often and causes visible problems, such as invoicing, payroll or handling complaints. Map it, set two or three KPIs, write an SOP, and run one PDCA cycle before investing in software.
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