Mini-Course Day 2: “Fast Start to Systems Thinking”
If you now believe that systems are the essential building blocks or your business, then you must believe that your primary task as a business owner is overseeing their development.
Michael Gerber, in his book “E-Myth Revisited,” teaches that you have to work on the business, not just in the business. Creating high-performance systems and processes is how you work on your business. It is the primary responsibility of owners and managers.
You begin by improving your business systems that will provide the biggest payoff—the systems that make you money and directly benefit customers.
Keep in mind that your customers all want the same thing. They want your products and services better, faster, and cheaper than your competition. They want:
- Low Cost
Quality Plus Efficiency=Low Cost
A quality product or service means that it has few or no defects. It does what it is supposed to do. It is as good as or better than the competition. It meets customer specifications and often exceeds their expectations. Whether in the factory or the office, you take cost out of your business when you eliminate the waste and rework that come from poor-quality business systems and processes.
Speed means delivering your product or service fast or on time, according to a schedule, or by a deadline. There is little delay or downtime. System cycle-speed is more important than employee speed. Employees can only work so fast, and if pushed, create more quality problems.
To increase speed without losing quality, focus your efforts on reducing idle time—the time things are sitting around waiting to be worked on. Bad things happen when work sits around. Merchandise becomes outdated and damaged. Information becomes old, obsolete, and hard to remember. Momentum is lost. Products and services can’t be billed.
Reduce your operational costs by getting things done right the first time, and out the door as quickly as possible.
Remember: A process that makes errors cannot keep up its speed. High-quality makes it possible to attain a fast speed. Low-quality and slow-speed are what make business processes—and the resulting products and services—more expensive.
Therefore, if you want to be competitively priced—if you want to offer customers the best value—you must improve the quality and speed of your business systems and processes. Quality, speed, and low cost are interdependent, and you have to work on them simultaneously.
|“If you need a new process and don’t install it, you pay for it without getting it” (Ken Stork).|
A recent phenomenon in my town is a restaurant called Café Rio. They serve fast-casual Mexican food and are rarely without a long line. The selection is limited, but every food option is a proven winner at a cost of about eight dollars. Quality is outstanding because the food is fresh and moves quickly through the system—no heat lamps. The customers’ orders are prepared in front of them to their exact specifications. The assembly-line approach moves hundreds of people through per hour—customers never wait very long. The Café Rio system produces a high-quality product, with lower than average labor costs, and continually delights customers. The result of Café Rio’s high-quality, fast-speed, and low-cost formula is a large base of repeat customers, a good profit on each meal, and a significant number of meals delivered each day. It has become a fast-growing franchise operation.
The only way to consistently offer the lowest possible price—and still make a profit—is to improve your quality and speed, and to eliminate waste—the defects and delay buried in the systems and processes of your business operation.
Increase Cash Flow and Profit
Effective systems and processes will give you an efficient and smooth-running business with maximum cash flow and profit. My eCourse, “Box Theory™: Double Your Profit with High-Performance Systems and Processes,” is now FREE and will provide you with many powerful principles to dramatically lower your costs and thrill your customers. Download the eCourse and FREE Box Theory™ Gold software today.
Tomorrow we will talk about the importance of innovation from a Systems Thinker’s point of view. It may not be what you think.
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Mini-Course, “Fast-Start to Systems Thinking”