A while back, I got an email from a subscriber to my weekly newsletter who is an employee of a construction company. Laura's rather lengthy, humorous, but distressing email began with the statement, "I can't take it any more!" Laura continued: "I want to work for a company that has the beliefs you do. Is this possible? Are they out there? I guess what I am asking you is... Are there companies who actually have your way of thinking? I would love to find one."
During my years as a small-business owner and coach, I have discovered that many business owners and managers are often stressed, ineffective at getting consistently good results, and spend much of their day putting out fires. They need help to understand the underlying principles for developing a smooth-running and profitable company.
Quite frankly, every small to mid-size business would greatly benefit by implementing the Box Theory™ methodology and software—the laws, principles and best practices for creating high-performance business systems and processes.
If you've ever thought you might like to help others as a small business coach, you may want to consider becoming a Box Theory™ Business Systems Advisor.
As an Advisor, you will teach most of your clients powerful strategies and techniques they have never been exposed to before. You will help them experience dramatic improvements to their business operations. And, you will add great value to their business at a comparatively low cost. It's a win-win, and everybody makes money!
The tools and training are now available for you to become a business-operations expert and trusted advisor in a short period of time. And I will help you get started.
If you have a love for business, enjoy helping people succeed, and would like to earn money by teaching others the Master Skill, please take a look at our program for becoming a Box Theory™ Small Business Advisor. Most small to mid-size businesses need this valuable service, and YOU could be just the right person to provide it.
Plus, if you sign up in May, I will throw in an extra software license beyond what the program currently indicates. That will put an extra $400 in your pocket. So, let me help you get started. Go now to: Box Theory Small Business Adviser. And be sure to send me an email if you have any questions.
Wishing You Prosperous Times,
Ron Carroll
The Best Is Yet to Come...
In the Deep Space Nine episodes of the American television series, Star Trek, we become acquainted with an extraterrestrial race known as the Ferengi. These shrewd and ultra- capitalist traders are obsessed with profit, and will use any means to get a financial advantage over others.
The Ferengi business philosophy is contained in a set of guiding principles known as “The Rules of Acquisition.” Some of their more benign rules include:
- #13 - Anything worth doing is worth doing for money.
- #80 - If it works, sell it. If it works well, sell it for more. If it doesn't work, quadruple the price and sell it as an antique.
- #84 - A friend is not a friend if he asks for a discount.
- #107 - A warranty is valid only if they can find you.
- #124 - Friendship is temporary, profit is forever.
- #126 - A lie isn't a lie, it's just the truth seen from a different point of view.
- #141 - Only fools pay retail.
- #155 - What's mine is mine, and what's yours is mine too.
- #187 - Borrow on a handshake; lend in writing.
- #208 - Give someone a fish, you feed him for one day. Teach him how to fish, and you lose a steady customer.
Quark, the memorable Ferengi bartender, after attending the funeral of a friend, remarked, “They gave him the highest tribute you can give to a person; he was a good customer.”
We all love good customers. They are the life-blood of our business. And we could all use more of them (no Ferengi pun intended).
However, the brutal reality is this: “Every sale has five basic obstacles: no need, no money, no hurry, no desire, no trust” (Zig Ziglar). At any one time, only about 10% of people are open to the idea of buying your product or service, and just 3% are ready to buy. So you have to have great marketing and sales systems to find and win over those few prospects.
Here are eight of Ron’s Rules for Customer Acquisition:
# 7 - Know well your most probable customer. Know who they are, where they are, what they buy and why they buy. How can your products or services take away their pain or fears? How can you improve their business and/or personal life? Do you know exactly what they want and expect from your company? Ask them if you don’t know.
#11 – Focus only on your target market. Your target market is the only market that matters to you. Seek to become remarkable and to dominate it! Don’t try to be all things to all people. Concentrate selling activities on the market segment that has the highest probability of purchasing your product or service. Position your offering with laser precision so that you are clearly the best option they have.
#14 - Differentiate your company. What is your unique selling proposition or competitive advantage? Can you set yourself apart with any of the following: exclusive products, features, or benefits; exceptional quality or performance; innovative solutions or technology; extraordinary service; distinctive sales, marketing, or advertising methods; special pricing; extra-fast distribution or delivery; “killer customer care;” strong guarantee or warranty, or perhaps financing or leasing. Find some way to “stand out like a purple cow in a field of brown cows?” (Seth Godin)
#19 - Send the right message. Communicate a clear, powerful message that shows why you are unbeatable. There is great power in specifics. Quantify, compare, or demonstrate your advantage or claims. Avoid the mindless fluff. Jim Rohn describes a three-step process to be a master communicator. "First, have something good to say. Second, say it well. And third, say it often." Focus on customer’s emotional needs and wants (benefits) and use logic (features) to support it. Discover the essential message that resonates with your potential customers. In a noisy world, your ideal customers with hear your call.
#21 - Advance the relationship by building trust. When working with possible buyers, be yourself— interested, curious and engaged. Have a real dialog, and seek the best solution for your customers. Deliver on your promise, consistently and dependably. Show integrity and professionalism. In short, follow the Golden Rule. Also, be especially attentive during the initial window of opportunity—low pressure and strong follow-up. And don’t be afraid to ask for the sale if it is in the customer’s best interest.
#24 - Meet the four basic customer demands. Whatever your business, customers always seek four things: quality, speed, value, and a pleasurable buying experience. Make sure they get it or risk losing them to your competition. “The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed” (Henry Ford).
#28 – Make an offer they can’t refuse. When your prospect has heard your persuasive message and is ready to buy, make an offer so compelling they would be crazy to buy from anyone else. The simple formula is given by Rick Shefren, online marketing authority, “Create an irresistible offer. Present it to a thirsty crowd. Sell them a second glass” (The Irresistible Offer pdf).
#30 - Become a passionate Ferengi marketer. You must have the "pig-headed determination” to be a successful marketer. Create good marketing systems and commit the necessary time, effort, and financial resources over a sustained period of time. Be patient. The momentum will build. Consistency equates with familiarity. Familiarity equates with confidence. Confidence equates with sales.
If you follow the above tips, and incorporate them into your business processes, you will attract and acquire more and more customers. And remember Ferengi Rule #97 - Enough… is never enough.
The Best Is Yet to Come...
Within our free-enterprise system, we are all looking for the same thing—the “best deal.” When we buy goods, services, and even when we hire employees, we want to get the greatest value we can for the time, effort and money spent.
It should be no surprise that our customers and employees are also looking for the best deal from US! However, the best deal may not be what you think.
What is the Best Deal?
Many people equate the “best deal” with the “best price.” Business owners are often committed to having the “lowest price in town.” Many of these owners also struggle to survive because their operating margins are too low. What they fail to realize is that customers looking for the best deal are not necessarily insisting on the lowest price.
Customers reward companies that serve them best, and allow the others to fail. It is how the customer feels about your business as a whole that matters most. Everything about your business—advertising, cleanliness, return merchandise policy, courtesy and knowledge of employees, product selection, price, location, delivery time, and so forth—is what they are choosing. Your entire business is your product, and it must shine throughout. When it does, YOU become the “best deal!”
High Value is Better than Low Price
Sometimes pricing does play a role in helping companies become the best value to their customers. Legitimate price advantages do happen. I am acquainted with a landscaper who is the owner of a local rock quarry. He has a significant price advantage over other landscapers who must transport boulders a greater distance.
However, the cry, “We have the lowest price," is often a sign of weakness. Translated, it usually means the business has not invested in marketing, quality people, killer customer care, and other expenses incurred by well-run companies. Remember, everything about your company is what makes it the best deal—OR NOT.
When I grab a quick lunch during the day, I sometimes go to a sandwich shop that is close to my office. I can get in and out quickly. The prices are relatively low, and no tip is required. At that moment, the sandwich shop is the best deal for me.
On the weekend, I take my wife out to dinner at a steak house restaurant. I will pay three or four times as much for a meal there as I did at the sandwich shop. This popular uptown restaurant has a nice ambiance, provides an unrushed full-course meal, and I am able to court the love of my life. At that moment, the steak house restaurant is the best deal in town.
On our wedding anniversary, I took my wife to an exclusive restaurant in Salt Lake City. I paid an outrageous price, but it was a night she will never forget. Of the three restaurants, this one provided the greatest value of all: a lifetime memory.
So, the best deal in this case is not related to price. Instead, it is the highest perceived value based on my current need. At each restaurant, I wear the hat of a different customer with different needs, and I have a different definition of what is the best deal.
Since no business can serve everyone well, it is important to define your target customer and then provide real, quantifiable, and compelling reasons to buy from you. You want your target customers to see you as the best choice available to them. If you own the exclusive dinner restaurant, you don’t care about the guy who wants a cheap chicken sandwich. No other customer matters except your target customer!
Remember, if your competitor offers a greater value than you, customers will buy from him or her. And don’t think you can make up for the value deficit by trying to “out-sell, out-trick, out-technique, out-cold call, out-persist, and out-luck all your competitors” (Rick Harshaw, Monopolize Your Marketplace). Today’s consumers know value when they see it. You simply must be the best in your target market. Period!
Innovation Can Set You Apart
You become the best by constantly innovating. Innovation is the process of figuring out how to offer more value than your competitors. Innovation is not doing something cool that your competitors also do. It is not giving your customers what they have come to expect as the status quo, or offering a gee-whiz promotion from time-to-time.
Innovation is not necessarily a new invention or business concept. It may just be as simple as outrageous customer care (Costco), or delivery times that amaze (FedEx), or an exceptional warranty (Hyundai).
Your value may simply be a result of your well-crafted business systems—the distinct and remarkable way you do things from end-to-end. By the way, when your people, products and processes work together in a unique and memorable way to make you the best deal, you have a brand.
Ask yourself one simple question: If I were a customer of my business, what would compel me to buy from me instead of my competitors? If you don’t know the answer to this question or aren’t willing to pay the price to get it, your business could be in danger. Get in the Zone today and figure it out.
Become Remarkable
Because there is a cost to becoming the best, the customer actually pays a premium for the privilege of doing business with remarkable companies. However, customers must think it's OK because they keep coming back.
Remember, your business as a whole is what makes you the best choice. It’s the little things that count.
Be clean.
Be prompt.
Be consistent.
Be courteous.
Be knowledgeable.
Be dependable.
Be responsive.
Be innovative,
Be systemized.
Be remarkable.
And you will be the BEST DEAL!
The Best Is Yet to Come...
“You are surrounded by simple, obvious solutions that can dramatically increase your income, power, influence and success. The problem is, you just don't see them” (Jay Abraham, marketing consultant).
Let’s talk about a simple strategy that will help you harvest an abundant crop of new ideas that are sure to motivate employees, give customers a better buying experience, and increase financial results and rewards.
Though perhaps unnoticed, the people around you possess a wealth of experience, talent, insight, and creative ideas that are just waiting for the right opportunity to be shared.
Sadly, many useful and innovative thoughts that could improve your business are never expressed. Why? You don’t have a system to tap into the collective intelligence of workers who are intimately involved with your business operations; this includes the average everyday folks that rarely speak up.
Everyone in your organization is potentially a problem-solver and an innovator. If you have an idea-rich culture of continuous learning and improvement, your employees are always thinking: "How can I do this easier, faster, better or less expensively.” Researcher Alan Robinson says ideas are "free" and employees will gladly make improvements as part of their job if the environment you create is right.”
So what kind of system can you create to harness the knowledge, imagination and renewable energy of your employees?
Some companies have tried putting up a suggestion box. Employees write suggestions on a form and drop them in a special box. Managers (sometimes) read the suggestions and implement the ones they think will work. However, suggestion boxes typically aren’t very effective. They allow anonymity leading to frivolous suggestions or mean-spirited remarks. They focus on problems but not necessarily solutions, and solutions are not always feasible. They often suggest more work for other people who are already busy, and thus no action is taken. And this old-style system usually doesn’t reward successful implementation and sustained results stemming from the suggestion. There is a better way!
Your Employee Involvement Program
Here are some ideas to implement a business system that will solicit real improvement ideas, generate enthusiasm from employees, and save or earn your company thousands of dollars over the coming year.
- To begin, let’s get rid of the “suggestion box” and replace it with a filing system by worker name. After all, we expect every person to submit many suggestions (see #2)—often small ones— over the course of a year. It’s also a good idea to review the employee’s file of suggested improvements during evaluations or other interviews.
- Next, how about giving the system a new name—something that emphasizes solutions instead of merely suggestions. You could call it the “business improvement program” or the “employee ideas program.” If those sound a little lame, have a brainstorming session or contest to name the system. Let me know what you come up with.
- The person with a new idea for a solution or improvement completes a brief form (get a sample form in The Zone) and hand delivers it to their supervisor or someone who could provide the time and resources needed. Good ideas might help with cost savings, productivity, process improvements, revenue-generation, and so forth. A brief plan to implement the proposal is also included. The merits of the idea are discussed, and an action plan generated.
- Ideally, the submitter of the new solution should be responsible for its implementation. Ownership increases the likelihood of success. Active participation by the submitter removes one of the major complaints with the old suggestion box: “I gave the company a good idea, but they didn’t do anything with it.” Lack of action kills the motivation of any improvement program.
- Always thank employees for their time, effort and feedback. Positive reinforcement will keep the good ideas flowing. Create a reward system for people whose ideas are successfully implemented. Frequent acknowledgment of small improvements is more effective than occasional recognition of a few. Consider a gift card, day of vacation, or tickets to a sporting event. When others see that good ideas are rewarded and appreciated, they will join in. If appropriate, give financial compensation, perhaps some when the solution is first implemented and the rest over time with proven results. The reward system helps the submitter maintain ownership and a vested interest in assuring that the new solution is understood, accepted, and practiced by everyone.
- If you want to create a little healthy competition, do something visible like posting a chart that shows the number of ideas submitted by each person, team or department. Be creative. Recognize winning ideas in your weekly Business Improvement Workshop. Celebrate achievements with something like a pizza party.
- Maintain a simple log of new ideas presented, the person’s name, and date implemented. This helps the supervisor know what is going on at a glance and allows for a frequent review of progress. Again, talk it up at the Business Improvement Workshop.
Never Stop Improving
Get connected with your knowledgeable, imaginative, inspired, resourceful, eager-to-contribute employees who are quietly working in their cubical or on a production line. Capitalize on this great hidden treasure you are already paying for.
Every little improvement—hundreds a year— will make your business better and better, until one day, you have a smooth-running, people-pleasing, money-making system!
P.S. - Get the "Business Improvement Suggestion Form" in The Zone.
The Best Is Yet to Come...
I confess, your company does not really need to have great business systems and processes. The truth is, most organizations don’t—and they get by, for a while. Some owners and managers are believers, but they just can’t seem to get anything done. Still others find the whole topic of business systems boring to even think about. (It pains me.)
So, today I’ve decided to write about the UPSIDE of keeping your rudimentary, undocumented, low-grade, ever-changing, mistake-ridden, inefficient, frustrating, profit-stealing, seat-of-the-pants business systems and processes. You know, the ones that are sputtering along every day just keeping your company out of the bone yard, or at best, preventing you from becoming remarkably prosperous. Yeah, those are the business systems I’m talkin’ about!
Reasons to Celebrate
Well, cheer up! I now present you with 16 compelling reasons to celebrate the UPSIDE of having lackluster business systems and processes.
- The UPSIDE of not squeezing the maximum profit out of your business is that you will have fewer taxes to pay.
- The UPSIDE of not meeting customer expectations is more opportunities to get to know them up close and personal.
- The UPSIDE of inefficiency and low productivity is that you will need more employees to get the work done, thus adding jobs to the economy.
- The UPSIDE of owning a business totally dependent on YOU is that you feel needed, irreplaceable, busy, and important.
- The UPSIDE of having chronic customer or employee frustration is that they will eventually leave you alone and go somewhere else.
- The Upside of having rudimentary business systems invented by workers on-the-fly is that you don’t need to spend much time and money on training.
- The UPSIDE of ineffective marketing and sales systems is that you don’t have to deal with so many demanding customers.
- The UPSIDE of not creating unique and remarkable business systems that set you apart in the marketplace is that competitors won’t knock you off.
- The UPSIDE of having higher operational costs than necessary is that others get more of your money, and you will have done your patriotic duty to spread the wealth.
- The UPSIDE of having an undisciplined business culture and low employee morale is that you have a higher turnover of people, thus bringing fresh new faces into your company.
- The UPSIDE of excessive mistakes, defects, returns and repairs is that workers get more practice doing the task, and we all know that practice makes perfect. Upside Bonus: you also have more “seconds” to sell at the always popular discounted prices.
- The UPSIDE of not focusing on business and process improvement is that you are spared the brutal facts about what is wrong with your business.
- The UPSIDE of crisis management is that there is never a dull moment.
- The double UPSIDE of not having written policies and procedures is that you don’t get bogged down writing policies and procedures. And you avoid the taskmaster of accountability.
- The UPSIDE of a cluttered, disorganized workplace is the addition of fun—Hide and Seek.
- The UPSIDE of not holding people and systems accountable for results is peace of mind that all is well (probably…maybe…sort of...).
Are You Upside Down?
It turns out there are so many UPSIDES to having second-rate business systems and processes, I myself could be tempted to go back to the old ways.
On the other hand, I’m a sucker for doing things right. I admit it; I like happy customers and employees, making money, and creating a business I can one-day have someone else run. But that’s just me. I’m a little UPSIDE DOWN.
How about you?
The Best Is Yet to Come...
After World War II, business leaders in Japan developed a strategy to become more competitive and profitable. Since then, “Kaizen” (change for the better) is widely practiced in businesses around the world. It is commonly referred to as “Continuous Improvement.”
Kaizen is a deeply held belief that every day managers and staff can turn problems into opportunities and find ways to become better for customers, employees, vendors and stakeholders. It is a compelling desire to achieve operational excellence.
"Traditional Western philosophy may be summarized as, 'if it ain't broke, don't fix it.' The Kaizen philosophy is to 'do it better, make it better, and improve it even if it isn't broken, because if we don't, we can't compete with those who do'" (Steve Hudgik, Graphics Products, Inc.).
Continuous Improvement—Kaizen—is an idea whose time has come for the small to mid-size-business community!
So, What Exactly Is Kaizen?
Kaizen is the ongoing, systematic, incremental improvements in the way things are done. It is a relentless attempt to eliminate the unnecessary activities, delay, waste, and variation of business processes that add cost without adding value. Kaizen results in improved lead-time, efficiency, quality, productivity and customer loyalty.
The goals of Continuous Improvement are simple: 1) make things easier 2) better 3) faster and 4) cheaper” (Shigeo Shingo, pioneer of Lean Thinking). It is the new "best solution"—from the customer’s point of view (five customer types).
Watch Honda’s 30 second commercial that captures the spirit of Kaizen
Kaizen is a mindset and practice that encourage reflection, teamwork, standardization, mastery of the process, experimentation to find better ways, comparison to baseline accomplishments, incremental and ever-evolving change, and the ongoing improvement of results. It asks the simple question, “How can I do this better?” Kaizen is the everyday quest for perfection!
Masaaki lmai, father of Continuous Improvement, teaches, “Kaizen means ongoing improvement involving everybody, and without spending much money. You can't do Kaizen just once or twice and expect immediate results. You have to be in it for the long haul.”
Many larger companies have adopted one or more formal methodologies to achieve Continuous Improvement” (e.g., Six Sigma, Lean Thinking, or the Theory of Constraints). However, these powerful strategies are rarely considered by small business owners—a fact we hope to change!
Things Can Always Be Better
Daily improvement applies to every area of your business—a shorter lead-time attracts more customers, modified words on a web page induces more visitors to buy; bottled water in the reception area pleases guests; an improved business form or application reduces errors; a more compelling radio ad boosts sales leads; and so forth. There are hundreds or even thousands of possibilities for improving within every organization.
Below are 10 ways to help the philosophy of Kaizen—Continuous Improvement—take hold in your company.
- Start with Yourself – Many entrepreneurs are so busy “sawing” they have little time to step back, read, ponder, analyze, plan, and essentially “sharpen the saw.” Get connected with your numbers (leading and lagging indicators), and with customer, employee and vendor feedback. Read skill-based business books and articles. Spend time in the Zone working on your business (Michael Gerber). Seek ways to improve your own personal performance, and encourage those around you to do the same. Your company—people, products, and processes—will improve at the rate you improve. Lead by example!
- Involve Everyone – Kaizen is a strategy that involves every employee, from management to the cleaning crew. Hold business improvement workshops at the company, department or team level—perhaps even at the location of the business system you are attempting to improve. Challenge employees to routinely submit suggestions for positive change. “In Japanese companies, such as Toyota and Canon, a total of 60 to 70 suggestions per employee per year are written down, shared and implemented" (Steve Hudgik).
- Challenge the Status Quo – Throw out all your old fixed ideas on how to do things. Replace “sacred cows,” personal opinions, and “it’s the way we’ve always done it” with performance facts and data. Numbers are the language of improvement. Avoid the emotional traps of blaming people or making excuses that prevent you from discovering the real problem. Once you have established the new best way of doing something, stick with it until a better way is found. When confronting old ideas and traditions, apply the Rules of Engagement.
- Get Specific – The dollars—made or lost—are in the details of your business systems and processes. Drill down. Use a 5 Whys Analysis and keep asking “why” until you get to the root cause of the problem. Improve specific steps or components in your business systems and processes; there is no other way! Get defects to less than 1%. Cut lead-time in half. Do little things to WOW customers or employees. Pennies earned from small improvements add up fast.
- Keep It Simple and Inexpensive – Ideas for incremental improvements that bubble up from workers are usually easier to implement and less expensive. Like our friend MacGyver , apply creativity and craftiness before cash. Following the 80-20 Rule; do the twenty-percent of things that get you eighty-percent of improvement results. And do it NOW! Don’t wait to achieve perfection.
- Focus on the Right Things – Improve the core business systems that enable you to find and keep customers, and earn more money. Find ways to provide customers greater value and a better buying experience. Zero in on removing the obstacles, bottlenecks, and weak links in your business processes that slow lead-time, order completion, and collection of cash. Fast throughput of products and services produces happier customers and more profit. Remember: Quality plus speed equals low cost. Put emphasis on improving business systems that drive your Balanced Scorecard goals or that improve a line-item number on your financial statement.
- Provide Training – Kaizen involves setting performance standards for your business systems and processes and then continually improving those standards. Good training and supervision help employees to meet those standards on an on-going basis. Continuous Improvement requires ongoing development of your most important asset—PEOPLE! Tom Peters, business management author, teaches, "If your company is doing well, double your training budget; if your company is not doing well, quadruple it!” As process changes are made, face any resistance by employees head on—Listen-Thank-Consider-Decide.
- Look for Breakthroughs – Up to this point, we have focused on small incremental changes. However, Kaizen will sometimes produce breakthrough improvements—a moment to celebrate! What’s a breakthrough? Chet Holmes, sales and marketing guru, says, “Let me explain a breakthrough. It's when you find a method of doing something [system] that dramatically accelerates your ability to accomplish your goals (“The Ultimate Sales Machine”).
- Never Stop Improving – Stop immediately to fix quality or customer-related problems. Don’t let them accumulate for later handling. Reflect daily (in the Zone) on your opportunities for improvement and innovation. Make business improvement workshops a weekly habit. Implement a suggestion-box type of system that calls for employees to submit so many improvement ideas per month or year. And be sure to compensate them appropriately for implemented solutions. Just one improvement a day is 260 improvements a year!
- Get Box Theory Products – Forgive me if this seems a bit like a sales pitch. I seriously believe that applying the Box Theory™ Way and software tool is the most important thing you can do to get Continuous Improvement going in your company. It is a one-of-kind product based upon decades of proven principles—not too hard, not too basic, but just right for the small to mid-sized-business owner.
Continuous Improvement Forever
In Japan, Kaizen is a system of improvement that not only includes business but every aspect of personal life. Like Systems Thinking, it becomes second nature.
[fname], Continuous Improvement of people, products and processes should be the endless quest of entrepreneurs, business owners, and managers. Wouldn’t you agree?
In short, Continuous Improvement of common tasks produces an uncommon organization! Now, what improvement could you make today?
The Best Is Yet to Come...
While attending a defensive driving class ten years ago (don’t ask why), the instructor mentioned that the typical motorist breaks the law every three minutes. Surprised? As you become a Systems Thinker, you won’t be. Here’s why.
Our daily lives are filled with unintentional mistakes, and your business is no exception. Each mistake or error robs your company of the money that could be used to hire, increases wages, buy needed equipment, or give bigger dividends to owners and stakeholders. You probably don’t’ see most of this hard-earned cash disappearing into a black hole.
Keep It Simple with Lean Six Sigma
In any business there are hundreds, perhaps thousands of ways for mistakes to be made. However, from Lean Six Sigma, you’ll be happy to hear that you only need to focus on preventing or eliminating three bad boys from your business operations.
- Delays – Delay is the idle time between steps in a business process—the waiting time. Typically, the actual time required to produce a product or deliver a service is 5% of the total elapsed time (George Stalk, “Competing Against Time”).
For example, it only takes about three minutes to actually process your photos at a One-Hour Photo Store. Likewise, a printer may say your job will be ready in five days even though it takes just two hours once the print-job is started. In most businesses, there are many opportunities to reduce idle work-in-process, and increase overall cycle speed.
Customers also care if you meet your commitment to deliver on time, on schedule, or as promised. FedEx delivers packages overnight—guaranteed! They have built a large following by keeping this promise. Delay is a frequent reason for the loss of customers and valuable referrals.
- Defects – Defects are mistakes that render a product or service unacceptable to one of your five customers. Good or bad, pass or fail, the product either meets a quality standard, or it doesn’t. For example, a prescription is filled incorrectly; a steak is overcooked; a travel bag is lost by the airline, or a part is missing in a product to be assembled.
Customers want things according to specifications or expectations. If you fail to deliver what is “critical to quality” in their minds, they will shop elsewhere.
- Deviation (excessive) – Neither people nor systems turn out a consistently exact result. Deviation focuses on how far you can stray from exact specifications or expectations and still have an acceptable product or service.
For example, if a furniture store promises delivery at 11:00 a.m. and delivers at 11:30 a.m., they have not kept their promise, and the customer is unhappy. However, if they commit to deliver between 10:00 a.m. and Noon, and deliver at 11:30 a.m., the customer is pleased. A two-hour window—time deviation—is acceptable to everyone.
In another example, an Internet service provider promises speeds up to 30 mbps. If Internet speed is too slow, too often—speed deviation—customers will change providers.
And finally, a machined part may have a tolerance—size deviation—of .003 inches. If machined outside the tolerance limits, the part will not fit or work properly.
Don’t wait for customers to report excessive deviation. Establish your own internal controls to make sure deviation stays within bounds. This can prevent the build-up of bad inventory, a product recall, damage to a reputation or brand, and so forth.
You Can Be Perfect
For fun, let’s look at an easy example from the game of football. A field-goal kicker has only 1.25 seconds to kick the ball after the snap. Any delay, and the kick has a good chance of being blocked; the team will fail to score. If the kicker does get the ball off, and it goes outside the goal posts, the kick is defective—again, no score. However, the goal posts are eighteen feet, six inches apart. The airborne ball can deviate nine feet, two inches left or right of center and still be good for the score.
I once heard John Madden (football coach and announcer) describe a ball that was just inside the left goal-post as a “perfect” kick. Why, because it earned the team three points. It was good enough!
Are your business systems GOOD ENOUGH to be considered PERFECT by your customers? To reduce the many little mistakes and errors in your business systems and processes, start looking for Delays, Defects and excessive Deviation.
Let me know of what you find.
The Best Is Yet to Come...
A Frenchman, count Gaston de Chasseloup-Laubat set the first land speed record December 18, 1898 at a dizzying 39 miles per hour. Recently, an Austrian daredevil, Felix Baumgartner, jumped from twenty-four miles above Earth, breaking the speed of sound, and free-falling at 833.9 miles (1,342 kilometers) an hour before releasing his parachute.
Throughout history, people have been fascinated with speed—and so should YOU!
Increase System Throughput
Speed of business operations translates to dollars—increased sales capacity, higher productivity and worker satisfaction, lower unit costs, quicker turnover of inventory, faster billing and collection cycles, accelerated cash flow, and happy, loyal customers. What’s not to like?!
In Old English, “sped” meant “success” or “thriving.” In business, it means much the same thing. The speed at which a company churns out products and services—its throughput—has much to do with its success.
So maybe we should get our employees track shoes and start cracking the whip…
Not so fast!
Creating a speedy business—high throughput—has much more to do with removing time-waste and delays in business processes than it does with how fast people work.
Focus on Cycle Speed
The true speed of a business system or process is the total elapsed time it takes to go through one system cycle—the first step to the last step—including idle time. For every 25% reduction in elapsed process time, productivity doubles and costs drop by 20% (George Stalk, “Competing Against Time”).
Whether applied in the workshop or the office, here are seven strategies that will accelerate the throughput of your business operations, and lower your overall costs.
- Create Smooth-running Business Systems – Get rid of steps in your business processes that don’t add value to customers such as inspection, rework, and unnecessary movement. Avoid overproduction and inventory buildup. Eliminate the idle time that work sits around on pallets or in in-baskets. Pace your business systems with sales orders. The steady tortoise, not the hare, wins the race.
- Improve Quality – Don’t waste time on redo's, repairs and reprocessing. Create high-yield and low-defect business systems (less than 1% errors). Stop and fix systems that produce frequent mistakes. This prevents accumulation of problems for later handling. Use a 5-Whys Analysis to get to the root cause of errors quickly. (They may not be coming from where you think.)
- Elevate Bottlenecks – Look around your operation and notice where things are getting bogged down—the bottlenecks. Find ways to elevate the constraints to non-constraints. Your system and your entire business are only as fast as the slowest point. Bottlenecks and weak links in a chain of tasks kill throughput!
- Reduce Process Downtime – Plan better. Downtime is very expensive. Avoid stop-start work-flows. When people switch back and forth between tasks, there is a great loss of concentration and momentum. Worker errors rise. Performance is hard to measure. Throughput drops dramatically (see more detail, System Busters).
- Keep It Clean and Simple – Reduce the physical path, clutter, barriers and distractions. Minimize complexity, customization, and exceptions in making and delivering your products and services. Eliminate uncertainty and excessive employee discretion caused by inadequate policies or procedures.
- Lift Your People – Improve employee performance with training, accountability, performance standards, reporting, recognition and incentive. Inject the fun-factor. Provide a safe and pleasant work environment with good communication systems.
- Focus on Speed – At your weekly Business Improvement Workshops, discuss specific ways to create fast business systems and processes. Start with systems that touch customers. At future meetings, report results, and celebrate improvements.
Customers Love Speed
Customers—both internal and external—want things fast, or at least on time, as scheduled, or as promised. Strive to to provide a quality product faster than your competition (lead-time) in order to differentiate yourself and become the best in your target market. Remember: Shorter lead-times also increase sales capacity, billing cycles, customer loyalty, and profit.
You don’t need a lot of analysis to make significant improvements. Simple observation and reasoning can help you quickly reduce delay, boost speed, and cut costs..
For a more in-depth analysis to get your systems in high gear, you need Box Theory™ Gold software. I predict that a little speed improvement to just one of your business systems will offset the cost of this powerful product. So, what do you say, let’s get going today!
The Best Is Yet to Come...
It’s that time of the year for business planning and setting goals. Some do it. Most don’t. Of those who do it, some follow their plan, but many eventually lose interest. Of those who do pursue their plan, some reach their goals; however most plans don’t go as expected. So why have a plan?
Consider the wisdom of the Cheshire cat in the story of Alice in Wonderland:
"Would you tell me which way I ought to go from here?" asked Alice. "That depends a good deal on where you want to get," said the Cheshire Cat. "I really don't care where" replied Alice. "Then it doesn't much matter which way you go," said the Cat. (Lewis Carroll, “Alice's Adventures in Wonderland,” 1865).
Here are Some More Brainy Quotes on Business Planning
- “He who fails to plan, plans to fail, so plan your work and work your plan” (unknown).
- “Reduce your plan to writing.The moment you complete this, you will give concrete form to your intangible desire” (Napoleon Hill, author of "Think and Grow Rich").
- “A good plan is like a road map: it shows the final destination and usually the best way to get there” (H. Stanley Judd, American author).
- "Good plans shape good decisions. That's why good planning helps to make elusive dreams come true" (Lester R. Bittel, “The Nine Master Keys of Management”).
- “Plans are only good intentions unless they immediately degenerate into hard work” (Peter F. Drucker, business author and coach).
- “Proper preparation prevents poor performance” (Charlie Batch, football quarterback).
- “Adventure is just bad planning” (Ronald Amundsen, Norwegian explorer of Polar Regions).
- “If the ladder is not leaning against the right wall, every step we take just gets us to the wrong place faster” (Stephen Covey, business author and coach).
- “Good fortune is what happens when opportunity meets with planning” (Thomas Edison).
- “Planning is bringing the future into the present so that you can do something about it now” (Alan Lakein, author on personal time management).
- “The man who is prepared has his battle half fought” (Miguel de Cervantes, author of “Don Quixote").
- “Every minute that you spend planning your goals, your activities, and your time in advance saves ten minutes of work in the execution of those plans. Therefore, careful advance planning gives you a return of ten times, or 1,000 percent, on your investment of mental, emotional, and physical energy.
“It takes only about 10-12 minutes for you to make up a plan for your day. This investment of 10-12 minutes will save you time of approximately two hours per day, or a 25 percent increase in productivity and performance. The very act of planning forces you to think better and more accurately about everything you do. Perhaps, the most important rule of all is for you to 'think on paper!'
“A clear vision, backed by definite plans, gives you a tremendous feeling of confidence and personal power” (Brian Tracy, business author and coach).
- And my personal favorite:
“Everyone has a plan—until they get punched in the face” (Mike Tyson, Boxer).
I’ve Got Just the Plan for You
The Box Theory™ Way includes planning with a purpose. You first create an Organization Blueprint so that your business systems and processes propel your company to achieve its mission, vision, strategy and goals.
Within Box Theory™ Software, you address ten important areas of business planning to complete your Organization Blueprint.
- Mission Statement (Why do you exist?)
- Values Statement (What are your core values?)
- Vision Statement (Where do you want to be in five years, and beyond?)
- Voice of the Customer (What do your customers expect from you?)
- Voice of the Employee (What must you do to retain your best employees?)
- SWOT Analysis (What are your organization strength, weaknesses, opportunities and threats?)
- Strategy (What is your unique game plan for success?)
- Balanced Scorecard (What are your specific measurable goals?)
- Organizational Structure (What business activities are you engaged in?)
- System Framework (At what systems and processes must you excel?)
While the type of business plan required by venture capitalists may not be necessary for your company, planning is still essential. Throughout Box Theory™ Software, you create meaningful Action Plans that, when carried out, will enable you to produce a smooth-running, profitable, and even remarkable business.
As your New Year’s resolution, why don’t you give Box Theory™ Software a try? I believe this will be one of the best business decisions you have ever made. And it will pay for itself many times over!
The Best Is Yet to Come...
It was Christmas Eve, 1914. The German soldiers had just retreated from another futile attack. The day was cold and wet. The trenches were filled with mud, blood, and the bodies of friends and enemies. A heavy snow began to fall. The wounded left behind would surly freeze during the night. The survivors had to prepare for the counter-attack that was to come the next morning.
As usual, the nightly canons belched their deadly bombs. In spite of the noise and death that surrounded them, the men reflected on the many friends who were lost. Despair and hopelessness increased as the soldiers' thoughts turned to Christmas, family, and home. Tomorrow would be Christmas Day. Rather than looking forward with hope, the soldiers prepared themselves for death.
Then along toward the mystic hour of midnight, with deep snow on the ground, a moon in the sky, and stars shining down in the icy night, an incredible thing happened. The noise of the rumbling guns began to grow faint, and then the sound ceased altogether. Silence lay over the Western Front. The noise of battle gave way to a heavenly peace.
Deep in the German trenches, one young recruit, homesick for his family and aching for the joy of Christmas, began to sing, "Stille Nacht! Heilige Nacht! Alles Schalft, einsom wacht...."
His reverent voice pierced the silence and was heard by soldiers on both sides. Quickly, the thoughts of countless soldiers turned from the despair of war to the hope of Christmas. Soon the same song rose from the trenches of the French.
Next, the Dutch soldiers added their voices.
And finally, the British and Americans joined the angelic choir, "Silent night, holy night. All is calm, all is bright."
Some of the German boys became so excited that they burst up out of the trenches. Their officers tried to restrain them, but nothing could hold them back. They ran across “no man's land” (the ground between enemy trenches), reaching out their hands to greet the British. For two or three hours they fraternized. They were no longer soldiers. They were German boys from the Rhineland; they were Scottish boys from the Highlands, and they were English boys from the cities and the green fields. "Let the war stop," they said, “it is Christmas Eve!"
This miracle on Christmas Eve, a brief pause from the horrific suffering of war, was one of the greatest events during World War I. It was one lonely night when humanity turned to love, and God whispered the comforting words, “Peace on earth, good will toward men.”
May our troubled world embrace this same sweet message of hope, “Peace on earth, good will toward men.”
The Best Is Yet to Come...