Business Owner Mistakes: The Backroom isn’t Operating Efficiently


What is the backroom?

I consider most of the business process other than the sales and production/distribution processes the backroom.   I generally consider IT, Accounting and Finance, and Human Resource departments the prime backroom departments, and you could include some administrative positions in the backroom as well.

The backroom isn’t seen by the public a whole lot. The processes in practice there can have the appearance of adding little actual customer value, therefore they are frequently ignored. It’s not unusual for the backroom to live by the mantra, “That’s the way we’ve always done it.”

Many business owners I’ve worked with don’t appreciate the backroom at all.  Their attitude is “We are a sales and customer service organization.” But the most efficient companies look at their backroom as value add (if it’s not, they may consider outsourcing many of its functions.) When I consult,  I look at each department in detail–including the backroom–to determine if they are being organized in the most efficient and customer service oriented fashion as possible.

I like to flowchart all the backroom processes using the value map approach with yellow stickies and a white board, noting everything from the receptionist to cash receipts.  I use a checklist and document the current state and then develop a future state.  This exercise always makes things more efficient, but even more importantly gives an opportunity to evaluate if the process adds value and if we need to continue it all.

For example, when I call my doctor’s office, the entire auto-attendant process is ridiculous. “If this is an emergency, call 911.” No kidding. The attendant takes five minutes to get to the right person in an office of only three to four.  Does this “efficient” system really add value to the patients?

Some backroom processes are obviously necessary–keeping the general ledger up to date, processing payroll, paying vendors, producing financial statements, etc.  So when you consider the efficiency of your backroom, be aware that you may not be editing out a lot of tasks–just a few that really don’t add value to the overall business. Then you’ll want to make the remaining processes efficient as possible using simplification and (maybe?) technology (unless it complicates things like the above-mentioned example.)

As you evaluate your backroom processes, this is a good time to compile an operations manual. This can help dramatically over time with training and quality control.  Some companies create an electronic repository of policies and procedures instead of the standard tangible notebook. A secure online version can make it easy for all employees to find, and simple for leaders to update. I  highly recommend including recorded instructions (screen casts) for routine tasks. These videos can be a huge help in training new hires and eliminate some of the need for current employees to do hands-on training for each new person that comes on board. They also help to ensure a consistent, identical process. This improves accuracy and clear expectations. (You know I’m a big fan of checklists, and that is why.)

I just worked with a manufacturer that implemented a 100% final checklist for each production item. It was simple, but effective. Product quality based on customer feedback increased 30%, which in tern helped him increase his gross margin! All because he was attentive to the processes in the backroom.

I’m offering a free Alignment and Backroom Survey below. Take one process in your business or department, work with those involved with a white board and stickies, and simplify it!

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