Maximizing your Business: Business Improvement Groups

By Peter DeHaan

Peter DeHaan, Publisher and Editor of Connections MagazineLast month, in part one of this article, we discussed Benchmarking. The premise was that there is value in being able to statistically compare your call center with other centers. Taking that concept to the next level, there is the more intense and equally more valuable Business Improvement Group.

Business improvement groups, sometimes called profit clubs, also have as their basis a quantitative element. Typically, the primary focus of these numbers is financial in nature. Operational metrics, sales numbers, and human resource outcomes can also be considered, but are generally secondary in nature.

While benchmarking benefits from a large number of participants, business improvement groups can only function successfully in small groups. Generally, four to six members are ideal, although seven to ten can be workable in the right situations. The group will meet on a regular basis to review their financial reports, exploring ratios for different cost areas, profits or losses, and may even consider upper management compensation. This delicate level of private disclosure does not happen easily. The participants must be carefully screened and selected to ensure compatibility and concurring business objectives. They will need to patiently strive to establish a rapport and build a consensus. Finally, they must be committed to the process and maintain strict confidentiality in all respects.

The Life Cycle of Business Improvement Groups

Also, be aware that business improvement groups have a life cycle. There is the start-up phase, establishing a rapport, mutual disclosure, decreased interest, and dissolution or coasting:

Start-up Phase: The start-up phase is critical for a successful group. It includes finding members, agreeing on the need for the group, and establishing basic rules and policies. Once the group is formed, additional members should not be added; this will only break the free flow of information and disrupt the dynamics of the group.

Establishing Rapport: The next step is establishing a rapport. Although some of this will have been done in the start-up phase and may have existed prior to that, it will need to be taken to a higher level. Social activities are ideal for this as it allows members to learn about each other in a safe and non-threatening environment. Even better is one of the many weekend team-building opportunities that exist. This often takes the form of presenting an intense challenge to the group, which can only be successfully resolved through teamwork and mutual trust; close personal bonds are the result. Certainly, the requisite rapport can be developed without either of these optional exercises, but it is done so at the expense of time. During the rapport step, the rules and policies are fine-tuned and must be brought to unanimous consensus.

Disclosure: The middle stage, mutual disclosure, may follow immediately after a group rapport is established or can build slowly over time. This stage is the key objective of the group, where all of the useful business data is shared, explored, and discussed. This phase can last for a year or as long as four to five years. It is unusual for it to last much longer. During this phase, some members may lose interest or develop diverging business goals and drop out of the group. It may be tempting to add new members in order to maintain a workable group size. This impulse should be resisted as the ongoing viability of the group could be compromised.

Decreased Interest: Following the disclosure stage is decreased interest. Here the members’ commitment and attention to the group decline. This could be a result of increased interpersonal tension, a loss of group cohesiveness, decreasing results, or a host of other outside influences. Some members will respond by dropping out of the group, but most will continue, if only for appearance sake.

Dissolution/Coasting: The final stage is dissolution or coasting. Dissolution is when the group concurs that no substantial progress is being made or will likely be made in the future; all work is stopped and no more meetings are scheduled. Coasting results when members continue to go through the motions, though with less vigor and frequency and/or allow meetings to deteriorate into a social assemblage. The benefit of coasting is that the group is still loosely held together and can quickly be resurrected if the situation warrants and the group wills it to happen.

The Process: Like benchmarking, business improvement groups can benefit from a facilitator to guide the process, smooth out the rough spots, and head off trouble. Generally, this guide will be involved in phase one, active in phase two, kick-off phase three, and fade into the background, being available as needed, for the remaining portions of the group’s life cycle. This person needs to be an objective and dispassionate observer with no stake in the results of the group’s work or with any conflict of interest. A knowledge and understanding of the call center industry is useful, but not required.

As mentioned, the basis for a business improvement group is financial. This, however, is not all that is covered. Using financial analysis as a foundation, considering other numerical measurements often follows, similar to those identified with benchmarking. In fact, any benchmarking metric can be used in business improvement groups, though it is common for the group to delve deeper into the numbers, share more thoroughly, and probe more intensely than is possible or appropriate in benchmarking.

As business improvement groups progress, the agenda can (but doesn’t have to) evolve beyond numerical considerations. It becomes more holistic and covering subjective issues such as hiring and firing, business strategy, marketing plans, acquisitions and mergers, and exit strategies. Close and cohesive groups can on occasionally progress still farther, pursuing cooperative buying, group marketing, joint ventures, collective investment or acquisition, and even consolidation of their businesses. This is rare; only the best of groups can handle this extreme and then only at some risk. However, if successful, the rewards can be great. It is important to state that these results should never be the original stated purpose of forming a business improvement group, but know that they can be an eventual outcome.

A Caution: There are possible concerns with business improvement groups, especially if it involves direct competitors. These concerns include the perceptions, whether real or imaged, of price-fixing and collusion. Therefore great care should be taken to avoid these areas of impropriety and illegality. It is recommended to consult with an attorney to learn what specific activities and discussions should be avoided, as well as how to protect oneself.

Conclusion: Benchmarking and business improvement groups are both valuable mechanisms to bring in outside experience, knowledge, and results into a business. With this input, business goals become more defined and realistic; direction, clearer; and focus, sharper. Benchmarking is easier to get started and quicker to produce tangible results, though the benefits and value are not as significant. Business improvement groups can produce a wealth of valuable information, likely unavailable from any other source or at any cost. However, they take more effort to get started and require more time. Using the above information can serve as a guide for getting either effort started, though benefits do abound when independent outside assistance is available and used.

[See part one of this article, about Benchmarking, in the May issue.]

Peter DeHaan PhD is the publisher and editor-in-chief of Connections Magazine and a passionate wordsmith. Connect with him on his personal blogs, social media sites, and newsletter, all accessible from peterdehaan.com.

[From Connection MagazineJune 2004]

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