During one of Houston’s typical winter days, when Sam Carr, who has over 30 years of experience over internal controls and process improvement, was sitting in his office and enjoying the warm winter sunshine shining into his office after a long meeting, he received a call from an old friend. The old friend recently had become a VP of Operations for an advertising campaign company in Chicago (let’s call the company as ACC in the article). The old friend had known Sam for years and engaged Carrtegra to successfully help his pervious company where he was the CFO. Now he needed help with the new company he had just joined.
Problems Lead to Opportunity for Improvement
Four days later, Sam and I left shinning Houston and landed in Chicago. By the time we landed, Chicago was windy and snowy. On the way to ACC, we experienced the famous slow traffic in Chicago. Sam and I were joking that all the signs showed the project would be a hard bone to chew.
Struggling with traffic around two and a half hours, we arrived at an old and three-floor warehouse building in downtown Chicago. Sam and I looked at the building, then looked at each other. “It did not look like an office building”, our faces said. However, when we stepped into the office, we were surprised. As consultants with many years of experience, our professional habit was as soon as we were in the office, we observed. Unlike most companies, ACC had wide open office spaces. There were no cubicles and no walls, and the background colors in the office were red, orange or yellow. We immediately felt energy in the office.
We were led to a meeting room with glass walls to meet Sam’s old friend. The old friend gave us a warm welcome and soon started to introduce the company. ACC was a new company and started several years ago. They run online advertising campaigns for clients. The revenue of the company was based on impressions received for each ad campaign. An impression in the context of online advertising is when an ad is fetched from its source, and is countable. The company started from 20 people and had gorwn to over 200 people in past seven years while the number of office locations had expanded from one office in Chicago to multiple offices throughout United States. Most of the employees were young people who had just graduated from collages. The average age of the employees was 25. Professional instinct told us a company with a group of young people usually was full of energy and passion but lacked adequate training and guidelines. Later, as the project progressed, we were proven right.
During the next two days, Sam and I me several people from operations. They were the Operations Director, the AE’s (Account Executives), the AM’s (Account Managers) and the AC’s (Account Coordinators). During the meetings, Sam and I were trying to understand their business in more detail and listened to them describe their job duties.
After two days of meetings, Sam and I flew back to Houston. Once back in Houston, we started to put together all information we had heard, saw and asked for into a memo. In this memo, we described the nature of business, the operation cycles and the issues we observed and listened to. Generally, the major issues were:
- ACC focused on their main personnel titles, Account Executive (AE), Account Manager (AM), Account Coordinator (AC) rather than the processes, which means ACC still kept the mom-and-pop way to manage the business.
- Lack of defined accountabilities. For example, AE’s were sales but during the campaigns AE’s had the override power to make decisions without reporting.
- Lack of company policies, guidelines and trainings.
- Employees rushed to finish tasks but no controls and review process in place ensured they did it right.
- There were communication gaps among processes and departments.
Soon we sent the memo to the old friend and followed up with him with a phone call. After describing the issues, we summarized the issues to the old friend, “You need processes and internal controls.” The old friend could not agree more, so two weeks later, Sam and I flew to Chicago and formally started the operation improvement project.
We used our five-step approach on this project:
- First step: we gathered information. In total, we visited Chicago three times. Every time, we interview employees from different teams and departments to collect information.
- Second step: we documented what the current processes were and we followed up with questions after interviews.
- Third step: we analyzed the gaps and identified issues.
- Fourth step: we developed the future processes with improvement and recommendation to resolve identified gasp and issues.
- Fifth step: we coordinated with the management to implement the new processes and train employees.
For example, in the second step, we focused more on the process itself rather than who performed the process. The original processes were AE, AM and AC. To more clearly define the work flow and the process, we identified five (5) sub-processes from the receipt of a request through its delivery and reporting. The five (5) sub-processes include:
- ACC01 Client Request
- ACC02 Execution
- ACC03 Launch
- ACC04 Campaign Monitoring
- ACC05 Reporting
These five processes were confirmed with management.
When we delivered the final future process documentation to the old friend, the winter was leaving and the spring was coming. The old friend was very happy with our work because the process documentation clearly defined the processes and the responsibilities; it also improved efficiencies, the quality assurance and the communication among teams and departments. Several months later, Sam called the old friend to follow up with the process implementation. Sam received the positive feedback as the management of ACC had been implementing the new processes, and trained the employees with the new processes.
Friend, if your company grows fast and you still manage your company as a mom-and-pop shop, contact us, we will help you to improve your operation as a big company should. In order to help you get started, we have prepared a simple checklist you can download for FREE to help you improve your business processes.
Emma Zhang is an experienced audit professional, with more than six years of internal audit & Sarbanes Oxley (SOX) compliance focusing on operations, accounting, internal controls and process improvement. Competencies include operational auditing, accounting, management consulting, Sarbanes Oxley (SOX) compliance, audit planning and risk assessments, operational/financial planning and analysis, and data analysis. Emma is a resourceful, creative thinker and analytical problem solver with demonstrated ability to independently manage tasks from planning through execution in dynamic, fast-paced, and time-sensitive environments. Emma is a CPA with a CFE certificate. Emma is also a Blackline Certified Implementation Professional and helps clients to implement Blackline system.