Standardization: How your company will succeed

What even is Standardization? Why can it make such a huge difference between your company being successful, and failing miserably?

Think about it!

What are huge companies such as Amazon doing? Why are they successful at something which seems rather simple to most people — Buying and selling anything and EVERYTHING!

Amazon like many, many, other companies has a story. In Amazon’s HBS case written in 2008 (revised 2013), its struggles are outlined. They weren’t able to make a profit for quite a while actually, until they realized that they can’t really do everything on their own. Jeff Bezos used to go to a factory in Redmond everyday, pick out books which people had ordered on the website, and hand-deliver them by himself. Sure, for a small amount of orders everyday, that’s not difficult work. But what about when you scale? Can you do that for 50,000 books? What about 100,000? What about 100,000,000? Hell no. You need a better process. You need a process that can be repeated millions and millions of times over, hence STANDARDIZATION.

Why is Standardization important?

  1. It’s cost-efficient.

Why do you think chains such as McDonalds can sell you a burger for about $1.50? Think about it. What’s their process at the nearest location to your home? What about the one nearest to your work? What about the one you visited on that trip abroad? You probably noticed something, it’s almost identical everywhere! Having an easily replicable process cuts costs.

2. It’s time-efficient.

Same reasoning as above. Time is the most valuable thing you have. Have a machine / automated supply chain = less employees = less costs = increased profits.

3. Creates routine.

It creates a routine that managers and employees can follow to complete any tasks. Standardizing steps in processes helps to reduce the chance that someone will omit or brush over aspects of the process. Since employees won’t have to stop and consider the best way to complete assigned tasks, this keeps labor flowing to maintain productivity and efficiency. It also helps ensure uniformity so that final products and services are consistent.

In conclusion, focus on the process in your startup. How can this made more efficient? How can output be increased with our current resources? What are our roadblocks? How can you get over these roadblocks? Once you standardize as much as possible, there’s no stopping you from getting to your target audience.