The Systems Thinker Blog

What is a Process Improvement Manager and Why You Need One?

Posted byRon Carroll

It is essential that someone in your company is responsible for sales. Somebody needs to do the accounting or bookkeeping. Someone oversees hiring, customer service, and order fulfillment. No matter what industry you are in, or the size of company you have, YOU—or assigned employees—perform these and other basic business functions.

However, there is one essential job position that is rarely talked about and almost always ignored by entrepreneurs and small-business owners.

Laura’s Bad Experience

Consider this email—and cry for help—I received from a frustrated newsletter subscriber. Laura was the only person in her company to recognize this rarely thought about but important job responsibility. Could she be one of your employees?

Help is Needed for Bad Business Processes

Laura wrote:

“I can't take it anymore! Chaos, pure unadulterated chaos. You could imagine myself (with the personality of a dragon) sitting down to convince owners we have to sort out all the tasks that people do into a logical workflow!  So I created a Business Systems Department with the understanding they would know what it meant... uhmmmm no. I thought I was absolutely alone in the world until my assistant found your web site. Ahhhhh ...  there are people out there that actually think the way I do! I work for a company that is in denial. I want to work for a company that believes in having good systems. 

“I am honestly tired of trying to convince this company that they should invest in their Business Systems, Best Practices, etc. If chaos is not enough to make them reconsider, if poor employee morale is not enough to make them reconsider... Well, you can quote me as a crazy lady who thought she could make a difference and become an asset to the company because I love this crazy world of Business Systems thinking... Anyhow, sorry for the long winded email but BOY that felt good to get it off my chest!” (This was about 25% of the actual email.)

The Invisible Job

Whether you have thought about it or not, your entire business operation is carried out with the help of systems and processes that come about formally or haphazardly through the years. These business systems are the way in which work gets done, and they are the building blocks of your organization. Their effectiveness determines your profitability and success.

Your systems and processes might include lead generation, sales conversion, production, order fulfillment, customer service, accounting, purchasing, hiring, and many others unique to your company.

So, what is a business system or process? Consider this down-to-earth definition:

A business system is a “recipe” for consistently getting a predetermined and desired result. The ingredients of a good business recipe may include materials, people, data, forms, checklists, tools, equipment, software, and so forth. The precisely followed step-by-step instructions, or procedure, ensure that the expected result is achieved every single time.  Great recipes for getting routine work done in an efficient and effective way increase customer loyalty, employee performance, profitability, and growth.

 Create Favorite Business Recipes

So, who in your company is responsible for developing, monitoring, and maintaining the business processes that make your company run smoothly and profitably—even when you’re not around? Who in your company understands the underlying principles for creating effective systems and processes? Who in your company wears the hat of the “Process Improvement Manager”? Is it YOU, or someone else?

Wait, What? A Process Improvement Manager?

In a small business, the owner is the first “Systems Czar” (Philip Beyer) and usually begins documenting processes so that he or she fully understands how the business operates from start to finish.

Whether it is YOU, a manager or employee (full or part-time, and not necessarily a new hire), someone in your company needs to fill the essential role of a “Process Improvement Manager.” This person’s responsibility is to maintain efficiency and quality in the workplace. They evaluate current business practices, looking for ways to improve productivity and customer service, reduce costs, and make the best use of company resources.

Specifically, the process-improvement person develops, monitors, and elevates the performance of the company’s vital business systems and processes. Ongoing system development is the key to continuous learning, growth, and improvement of individuals and organizations.

A Process Improvement Manager is something of a “business engineer.” He or she is both logical and creative, able to identify and diagnose problems and find low-cost and innovative solutions. As you implement effective systems and processes, your company will stand out in a competitive marketplace, give customers a great buying experience, and improve operational quality and efficiency for a healthy profit margin.

Become a Business Engineer

So, What Exactly Does A Process Improvement Manager Do?

1. Develop and Reinforce “Best Practices”

While most people in a company see the business operation in terms of departments, functions, and activities, the Process Improvement Manager is focused on how efficiently and effectively the work is being completed. This person sees the details beneath the surface, where dollars are earned or lost, and operational success is determined. The Process Improvement Manager has a vested interest in:

Best practices
Cause and effect
Root-cause of problems
Performance standards and goals
Measured results and data
Employee motivation, training, teamwork, and incentives
Improvement and innovation
Getting the right people in jobs
Promoting growth and development of workers
Increasing quality and efficiency of business processes
Eliminating bottlenecks, mistakes, delay and rework
Lowering costs

 Persue Best Practices

The Process Improvement Manager is always asking “WHY?”  Why do we do this task at all? Why do we do it this way? Why are things not getting done on time? Why are there excessive mistakes or rework? Why are customers or employees unhappy?  Why are we not reaching our goals?

“A relentless barrage of ‘why’s’ is the best way to pierce the clouded veil of thinking caused by the status quo. Use it often” (Shigeo Shingo, Toyota Lean Manufacturing).

The Process Improvement Manager seeks to find the best way to get the work of the organization accomplished with the highest quality and the lowest possible cost.

(“Management is doing things right; leadership is doing the right things” — Peter Drucker, renowned business consultant and author).

2. Apply the Master Skill

"If you can't describe what you are doing as a process, you don't know what you're doing" (W. Edwards Deming, Total Quality Management).

All best-practices are arrived at by refining and improving daily operations, the company’s core business systems and processes. This is the primary focus of the Process Improvement Manager. His or her mandate is to create a smooth-running and profitable organization by taking the unwanted deviation, defects, and delay out of work processes. It is to ensure that customers are happy and desired results are consistently achieved. 

W. Edwards Deming also said, “94% of all failure is a result of the system ... not people. A manager of people needs to understand … that the performance of anyone is governed largely by the system that he works in, the responsibility of management” (Total Quality Management).

 Create Effective Business Systems

Effective business processes significantly reduce sub-standard performance, wasted resources, customer dissatisfaction, employee turnover, excessive costs, weak sales growth, inadequate cash flow, low profit margins, and daily frustration.

Your ability to create and refine the vital systems and processes of your organization is what I call the “Master Skill.” All business functions—marketing, finance, and operations—fall within the scope of this single skill mastery.

Most companies have one or two exceptional business systems that separate it from the competition. What innovative and remarkable business process makes your company stand out "like a purple cow in a field of brown cows"? (Seth Godin, Purple Cow)

(“No institution can possibly survive if it needs geniuses or supermen to [run] it. It must be organized in such a way [with effective systems and processes] as to be able to get along [with] average human beings” — Peter Drucker).


3. Recognize and Solve Problems

A two-word definition for “business” is “problem solving.” The Process Improvement Manager asks, “What problems do we need to address? What parts of our organization could improve? What obstacles do we need to overcome? What invisible termites are eating away at our customer loyalty or profit? Any core business activity that is falling short of its purpose or goals is a problem to be solved.

Business problems are usually observed up-close as mistakes, scrap or rework, delay or missed deadlines, excessive costs, and people having an unpleasant working or buying experience. Repetitive problems are made apparent by financial statements, performance reports, customer or worker feedback, and expressed complaints, frustration, or even opposing viewpoints.

Systems Thinking makes problems more transparent and solutions more obvious. A well-framed statement of the problem by the Process Improvement Manager will often provide immediate ideas for change. Data—the brutal facts—influence and direct all improvement efforts.

 Seek Ideas for Improvement

The Process Improvement Manager is always looking for the simplest and least-expensive way to solve a problem or improve a process—to take waste out of the business. Any problem-solving efforts may include prioritizing projects, budgeting for upfront costs (e.g., a new piece of equipment), and determining the ongoing operational costs of the new or improved system. It is often helpful to calculate the return on investment (ROI) by completing a cost-benefit analysis.

The Process Improvement Manager chooses the system-improvement projects that are the easiest to implement, or have the greatest financial impact, or that support company goals, or that will remove a weak-link, bottleneck, or frustration from business operations. They target a completion date and get buy-in, authorization, and financial support of decision makers before beginning a project. Focus plus prioritization equal fast results.

Care must also be taken when deploying any new system or process and training the people involved. Good preparation will reduce resistance to change. Workers who do not recognize the better way of doing things will produce a new set of problems.

(“If you want something good, you have to stop doing something bad” — Peter Drucker).

4. Encourage Learning and Growth in People

The best Process Improvement Managers are constantly learning, and they promote learning and growth in others. Whether by experience, mentors, books, performance reports, or feedback from customers or workers, they are always looking for clues, evidence, data, ideas, and strategies to get work done in a more efficient and effective way. They continually seek excellence in business operations.

Although change is constant, the Process Improvement Manager always has an eye fixed on the long-term mission and goals of the organization.

 Inspire Learning and Growth

Knowledge is fleeting unless it is incorporated into behavior, into “best practices.” It is said that knowledge is power, but the real power to improve a business only comes when knowledge is applied to a specific system or process. The Process Improvement Manager tinkers with the procedure or the system components until the people and the process are getting acceptable results. Patience and persistence through obstacles and challenges yield a big payoff.

While workers do the “cooking and serving," the Process Improvement Manager’s job is to step back, study, ponder, analyze, evaluate, plan, test, and keep improving the company’s unique and valuable business “recipes.”

(“The purpose of information is not knowledge. It is being able to take the right action” — Peter Drucker).

5. Hold Business Improvement Workshops                 

The Process Improvement Manager is on the move, working with others to elevate business operations. He or she does not try to solve every problem independently, but to become immersed in business processes, observe what is working and what is not, learn from those who have hands-on knowledge, and consider what improvements would yield better results.

The best way to benefit from the collective wisdom and experience of those involved in day-to-day operations is to “work ON the business” (Michael Gerber, “E-Myth”) in a weekly business improvement workshop.

During this one-hour meeting, the Process Improvement Manager, team leader, or other manager guides a discussion on specific business activities, systems, processes, or policies that need improvement. They whiteboard the process and consider each step along with the components or “ingredients” required for its success (e.g., materials, tools, checklists, etc.).

Hold Business Improvement Workshops

Those attending the workshop counsel together to achieve consensus on best solutions and practices. The leader reinforces the vision, strategy and goals of the organization, and gets buy-in and support for doing things in a new and better way.

Keep in mind that deployment of a changed system or process requires careful orchestration of people, resources, and timing. It is important to get a new system off to a good start.

Every little improvement uncovered in a business improvement workshop will serve to transform your company into a smooth-running, customer-pleasing, money-making business system! One-hour a week is all it takes!

(“Most discussions or decision making assume that only senior executives make decisions or that only senior executives' decisions matter. This is a dangerous mistake” — Peter Drucker).

6. Document “the Way We Do Things Here"

I repeat W. Edwards Deming: “If you can’t describe what you are doing as a process, you don’t know what you are doing.” To which Michael Gerber adds: “If it’s not in writing, it’s not a system!” (“E-Myth Revisited”).

The Process Improvement Manager oversees the documentation of core business systems and processes and keeps them updated when changes and innovation occur. His or her job is to understand and describe in writing the best way to accomplish the routine work of the organization. However, documentation must be better than just a dust-gathering operations manual.

Write Policies and Procedures

Preparing written systems and processes is the proper way to establish desirable work patterns and habits. These detailed “recipes” are of value to train new employees, and as ongoing references for experienced workers. They describe the required system components (ingredients) and the best procedure to follow.

This important “how-to” information remains constant, not haphazardly passed along by word-of-mouth or changed as people come and go from the job.

When processes are written and accessible to workers, less supervision is required. If a business is replicated or sold, documented business operations are of immense worth to those starting new.

(“Unless commitment is made [in writing], there are only promises and hopes... but no [action] plans” — (Peter Drucker).


7. Get the Right People, Leaders, and Teams

The Process Improvement Manager is not the Human-Resource Manager. However, he or she recognizes that people are the most important (and expensive) component of most business operations.

Therefore, the Process Improvement Manager is concerned with 1) how jobs are defined (job descriptions), 2) company policies that affect workers, 3) fitting the right person to the job, 4) making sure people understand their responsibilities and are properly trained, 5) establishing team leaders and teamwork for increased productivity, 6) meeting performance standards and goals, and 7) promoting accountability and work incentives. All of these items affect performance—the quality, efficiency, and cost of doing business.

Get the Right People

Though often unnoticed, workers possess a variety of experience, talent, insights, and creative ideas that are just waiting for the right opportunity to be shared. A good Process Improvement Manager cultivates relationships and is always listening for useful suggestions and bold ideas to improve business processes. They love to give credit, recognize contributions and exceptional achievement, and celebrate success. Getting thought-leaders and exemplary workers behind a new idea will encourage others to follow.

Continuous and unrelenting effort to improve systems and processes is the only way to develop excellence in people and organizations.

“Reward those who Do, Train those who Can’t, Replace those who Won’t” (Henn’s Creed). The Process Improvement Manager is interested in two major factors that affect how workers perform—Desire and Capability. They find ways to elevate both.

(“Only three things happen naturally in organizations: friction, confusion, and under-performance. Everything else requires leadership. … The key [is] to … look for people's potential and spend time developing it” — Peter Drucker).


8. Speak Numbers, the Language of Improvement

“Without data, you're just another person with an opinion” (W. Edwards Deming).

The Process Improvement Manager relies heavily on data or numbers in their pursuit of truth and best practices. Their personal success is largely determined by the company’s ability to show measurable improvement of its core business activities. Numbers are the language of improvement.

However, the daily work of the Process Improvement Manager is not just to focus on outcomes, but instead to improve the behaviors and processes that lead to better outcomes or numbers.

Many operational problems are revealed in performance reports or financial statements such as the balance sheet or the profit and loss statement. These numerical indicators will point to weak or faulty business processes.

The Process Improvement Manager is interested in common business measures, including performance standards and goals, break-even points, and the key numbers that drive the success of the organization. Knowing the sometimes-dreadful facts is essential to making effective changes.

Workers also excel when they receive frequent performance feedback, and by always knowing where they stand in relation to established goals or standards. Properly viewed, numbers provide the critical foundation for all business intelligence.

Speak Numbers, the Language of Improvement

"You cannot manage what you cannot measure" (Peter Drucker). "Anything that can be measured can be improved" (Michael Dell, Dell Computers). When performance is measured and reported, the rate of improvement accelerates" (Thomas S. Monson, business and religious leader).

The time and effort of the Process Improvement Manager is a financial investment that must have a beneficial return. This is accomplished by focusing on the systems and processes that improve the customer experience and reduce costs (waste). The larger the company, the greater the opportunity there is for financial gains.

Before beginning any improvement project, the Process Improvement Manager determines the initial cost of implementation as well as the annual recurring costs. A preliminary analysis may include a budget, expected savings or earnings, and the estimated payback period.

Owners or managers approve new projects before proceeding and receive regular status updates, especially the good news of financial gains. Well-designed and executed business systems pay for themselves many times over.

(“Leadership is defined by results not attributes. … Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information” — Peter Drucker).


9. Never Stop Improving and Innovating

Kaizen, a Japanese term for continuous improvement, is the ongoing, systematic, incremental improvement in the way things are done. It is a relentless attempt to eliminate the unnecessary business activities, delay, waste, and variation within processes that add cost without adding value. Kaizen results in improved lead-time, efficiency, quality, productivity and customer loyalty. 

Every organization has unlimited possibilities for improvements that lead to happier customers and higher profits. The Process Improvement Manager is focused on bettering people, products and processes, turning problems into opportunities, and achieving operational excellence in a never-ending quest for perfection.

Most improvements in an organization come from ongoing innovation to its internal systems and processes (e.g., reducing errors or cycle time). Some improvements are incremental—tweaking what already works. However, breakthrough improvements can dramatically elevate the customer or worker experience and reduce operational costs in a BIG WAY.

Seek Continuous Improvement

“The goals of a Process Improvement Manager are simple: 1) make things easier 2) better 3) faster and 4) cheaper” (Shigeo Shingo, pioneer of Lean Thinking). They continually ask, “How can we do this better? How can we raise the standard?”

Daily improvement is accomplished by measuring and monitoring core business activities and providing constant feedback to workers and managers. Suggestion boxes, done the right way, and business improvement workshops (discussed above), are also sources for new ideas and input from workers.

Improvement methodologies such as Six Sigma, Lean Thinking, and the Theory of Constraints provide big-league principles and strategies for even the smallest of companies (see “Four Improvements Methods You Should Know About"). Small daily improvements—hundreds each year—are the key to extraordinary long-term results.

(“Knowledge has to be improved, challenged, and increased constantly, or it vanishes. … Not to innovate is the single largest reason for the decline of existing organizations” — Peter Drucker). 


10. Inspire a Culture of Excellence

The Process Improvement Manager has great influence on the culture of the business, and culture drives results more than any other factor.

Develop a Culture of Excellence

"An organization's purpose and goals set the direction. Measures focus the energy on the outcomes. Processes create habits, and habits drive the culture. You can teach skills and concepts. You can even create momentum (and a few smiles) through inspiration. But investing in skills and inspiration is a waste of money if there are not processes to reinforce your purpose and principles. The creation and continuous refinement of work processes is a mandatory practice in the Results Rule! organization, regardless of the industry" (Randy Pennington, “Results Rule!”).

The Process Improvement Manager—owner or employee—is responsible to help the company break through to a high-performance culture, a culture of discipline, a culture of excellence. This is the natural consequence of creating effective business systems and processes. There is no other way!

 (“Culture eats strategy for breakfast” — Peter Drucker).

 Nate’s Amazing Experience

Ten years ago, a young man sat quietly in one of my workshops. He was an entry-level employee of an attending customer. Little did I know how much he was paying attention, and that he caught the vision far beyond the business owner he was working for. Years later, and unexpectedly, I received an email from Nate. In part, he wrote:

"I am now working for a fortune 1,000 company and am currently in the business intelligence sector, and I am a Business Process Engineer. I go in, evaluate, look for waste, streamline processes and identify projects. I am then tasked with implementation, setting up control reports, forecasting results, and mapping out potential financial gains. I have been in the job for four months now and things are going so well they are throwing all kinds of projects at me that span many departments. I gained trust quickly and pretty much have a free rein. I have already identified over $10 million in gains from process improvements that I am putting in place.”

The Process Improvement Manager

Nate made a career of process improvement and landed a great job with a big company. However, the principles that guide his work are much the same for companies of every size. YOU CAN AND SHOULD DO THIS FOR YOUR COMPANY! As with Nate, the payoff can be quite substantial.

Laura (quoted above) and Nate, have had very different experiences in the companies they work for. All customers and employees, including yours, have similar feelings, one way or the other. Is your company organized, systemized, smooth-running, efficient, and profitable, or is it seat-of-the-pants, frustrating to do business with, and struggling to make money? Perhaps it is in between, but could it use some improvements?

Again, Who is Your "Business Systems Czar”?

The primary purpose of a Process Improvement Manager is to help engineer a remarkable business operation. This person has proven leadership and communication skills (oral and written), is a problem-solver with sound business understanding, works well with people and teams, and is performance driven.

The Process Improvement Manager spends most of their day designing, developing, overseeing, monitoring and evaluating the systems and processes that help an organization effectively find and keep customers, run an efficient and profitable operation, and differentiate itself in a crowded marketplace. 

Workers run the systems, and systems run the business. People may come and go, but the systems and processes remain constant. (see Michael Gerber, “E-Myth Revisited”). Like a fine restaurant, the key to success is developing and executing the precise and proven “recipes.”

(Oh, and by the way, the Process Improvement Manager should also document the “recipe” for their own role and improvement activities.)


Why Should People Want to Do Business with You?

Customers and employees alike want to work for or do business with the best companies. In a competitive marketplace, expectations are rising.

“Customers … are demanding from companies in many industries a radical overhaul of business processes. Intuitive interfaces, around-the-clock availability, real-time fulfillment, personalized treatment, consistency [across locations], and zero errors—this is the world to which customers have become increasingly accustomed. It’s more than a superior user [or buying] experience, however; when companies get it right, they can also offer more competitive prices because of lower costs, better operational controls, and less risk.” (Shahar Markovitch and Paul Willmott, McKinsey & Company).

So, just like sales, accounting, and customer service—essential business functions—you also need someone to develop and refine the business processes that are humming along every day in your large or small organization.

Incremental and occasionally breakthrough improvements will dramatically increase your customer loyalty, employee performance, profitability, and growth. There is no other way!

(“The best way to predict the future is to create it” — Peter Drucker).

P.S. - Download and print this article for your reference or to give your designated Process Improvement Manager. Go through the article and highlight everything your company can and should do. (Owners of small businesses will be surprised by the possibilities.) These ten principles will get you off to a great start! (Click Here to Download Printable PDF File)

The Next Step...

Tags: Business Leader, Culture, Improvement, Business Systems, People

Business Systems: I love It When a Plan Comes Together!

Posted byRon Carroll

Colonel John "Hannibal" Smith is a fictional television and movie character and one of four ex-Army Special Forces. Near the end of the Vietnam War, the four soldiers were convicted of a crime they did not commit and managed to escape from the military police. As fugitives, this group, known as the A-Team, worked as soldiers of fortune, using their military training to fight oppression or injustice.

Hannibal, the oldest and most experienced of the group, frequently came up with a strategic plan to accomplish the team’s objectives and win the day. At each moment of victory, Hannibal was heard to say, “I love it when a plan comes together.“

  

    

There’s a Plan in Everything

I, too, love it when a plan comes together. Every time I complete a business system or process that performs as expected, I feel exhilarated, and a great sense of accomplishment.  You can, too!

And we’re not necessarily talking about big plans (BHAGS). Small improvements carried out each day have a significant cumulative effect. Below is an example of a quick little plan or system created by a client during the busy holiday season.

“I walked into one of my retail stores unexpectedly on a Saturday during the Christmas rush and was shocked by the deplorable appearance of the store, inside and out. Shopping carts were scattered throughout the parking lot. Restrooms were filthy. The front of the store was a disorganized mess. Having been exposed to Systems Thinking, I avoided confronting employees on the spot. (It took everything I could muster to smile and remain calm). However, on Monday morning, I brought the staff together, and we created a checklist to solve the problem. Now, on busy days when normal custodial service isn't adequate, the store workers complete the five-minute cleaning checklist every two hours. The store always looks tip-top, and I don’t have to worry about it anymore.”

An Amazing Plan That Came Together Perfectly

After years of preparation and seven months of space travel, a NASA team successfully landed the robotic rover “Spirit” on the surface of Mars, January 4, 2004. Over time, Spirit accomplished far more than its expected mission and became one of the most successful space projects ever.

The incredible video below is an illustration of what can happen “when a plan comes together”—when a system is designed and executed with such precision that it generates astonishing results.

    

    

What We Learn from This Video

  • Ordinary people can do extraordinary things with a good plan and attention to detail.
     
  • Business systems that consistently deliver on their promise are what create world-class organizations.
     
  • The unique business systems and processes YOU create reflect ingenuity, hard work, and desire for excellence... AND THEY TOO CAN BE REMARKABLE!


You may not have a budget like NASA, but you can create business systems that will cause people to stand up and cheer. (The last scenes of the video could be YOUR customers!)

Like Hannibal Smith, you may occasionally be heard declaring, "I LOVE IT WHEN A PLAN COMES TOGETHER!"

 

The Next Step...

Tags: Business Systems, Video, Business Leader

Business Turnaround: 10 Threats that Can Kill Your Business!

Posted byRon Carroll

Many business owners wait too long before facing the brutal facts that their business is in trouble. Then they discover—like a bug in a flushed toilet—it’s nearly impossible to escape the downward spiral.

Downward Spiral

We begin our business filled with hope and optimism. Before long, forces start into motion to test our grit. Getting sufficient sales and good employees is harder than expected. We face government regulations, slumping economies, cost increases from vendors, customers who pay slow or not at all, cash flow headaches, burdensome paperwork, tax pressures, unproductive workers, stiff competition, obsolete inventory, and constant customer demand for new and better products. (It wears me about just thinking about it.)

However, this is the profession we chose; the above challenges come with the territory. So, we suck it up, we adapt, we improve, and we work diligently to overcome the unrelenting forces trying to put us out of business.

Furthermore, not all problems we encounter are equal. Some have the power to kill our business if we fail to remedy those threats without delay. Our survival depends upon it!

Below are ten business killers that, if not addressed, can bring about the big flush and send your business spinning out of control and down the proverbial drain.

Sales Killers

  • Killer #1 Low Market Demand  – Your business and revenue model break down quickly when people aren’t very interested in buying your products or services. Perhaps your offering doesn’t solve problems or reduce pain as well as expected. Maybe it is getting old or outdated—running out of steam. Your message could be unappealing and doesn’t attract interest. Customers may be staying away because you don’t have a great reputation for delivering on your promise. Whatever it is, without sufficient product demand, you really don’t have a business.

    I remember when Blockbuster Video closed their last store—demand for rented movies moved to Netflix and digital delivery.  Question: What is causing the lack of demand for your product or service, and can you fix it?
     
  • Killer #2 Hard to Reach Target Market – Are you having difficulty finding an easy and cost-effective way to get your message in front of your ideal customers? Maybe they don’t have obvious hangouts for you to find them, or there isn’t an effortless way for them to find you. Do you have a bad physical location? Are you not easily found on the Internet? Could too much competitive noise be drowning out your message?  Is your reach to prospective customers about as effective as a billboard in the desert? 

    Business philosopher Jim Rohn teaches how to be a master communicator: "First, have something good to say. Second, say it well. And third, say it often." I repeat: Do you have a clear and cost-effective channel to deliver your message often to large numbers of people in your target market? If not, can you fix it?
     
  • Killer #3 Superior Competition – Your potential customers are always looking for the best deal, not necessarily the lowest price. If your competitors are bigger, better located, have superior products or services, provide better customer care, shorter lead-times, more knowledgeable sales people, and so forth, you will lose business. It’s hard to get customers to beat down the door if you are second best, unless you do it like Avis Car Rental.

    “The phrase
    We Try Harder’ has gone down in advertising history as one of the longest-lasting and respected taglines (50 years). The origination of the slogan was not to create a cute, gimmick, but instead it was a business philosophy that every Avis employee adhered to. ‘We Try Harder’ helped Avis earn a reputation as one of the most admired businesses in the world.”

    You don’t have to be the biggest, but you must strive to make your business so good that people would be crazy to buy from anyone else. What can you do to inspire this kind of loyalty?
     
  • Killer #4 Undifferentiated Strategy – In this day and age, you have to stand out like “purple cow in a field of brown cows” (Seth Godin). You must constantly promote your unique selling proposition (USP)—your main selling advantage. Perhaps you can be better, faster or cheaper than your competition, or you can provide “killer customer care.” 

    What makes some of the big boys stand out: UPS (logistics), COSTCO (value), Amazon (convenience/ease), Coldstone Ice Cream (quality) or Wal-Mart (low price). What compels YOU to buy from specific stores in your area? Follow the successful strategies of others.

    You must have some way of doing business that makes the customer remember their experience, feel that
    WOW thing, and tell their friends. If you are like everybody else, then it is only luck that that determines your sales. What makes your business strategy —your game plan— a winner? Can you adjust your strategy to dominate a niche market?

Cash Flow and Profit Killers

  • Killer #5 Not Managing by the Numbers – If you aren’t sure how well your company is performing or why you are losing money, you have a serious problem.  It is critical that you understand your leading and lagging indicators, the numbers that tell you where to focus your business improvement efforts.  Maybe you are in denial about what the numbers reveal. Remember, the longer you wait to address the problem, the worse things get and the harder it is to recover. If necessary, find  someone to help you understand what the numbers on your financial statements are trying to tell you.

    In 1891, a British scientist named William Thompson, also known as Lord Kelvin, said, “When you can measure what you are speaking about, and express it in numbers, you know something about it. But when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind.” 

    Are you aware of the 
    numerical clues that expose the problem areas of your business operation? When you find the under-performing systems or processes that are causing those numbers, can you fix them?
     
  • Killer #6 Inadequate Margins – There are very few problems in an established business that can’t be solved with good margins—gross margin, operating margin, and net profit margin.  Avoid the temptation to be the lowest price in town unless you have a legitimate cost advantage or operate on a very high-volume business model. Instead, focus on giving your customers the best overall value and buying experience.

    To improve margins, you have to raise your prices, reduce the cost of your products and services, and/or lower your overhead expenses. Which solution is best for you to increase operating margins? Without adequate margins, you’re just working hard
    for the fun of it.
     
  • Killer #7 Insufficient Working Capital – If not remedied, cash flow cancer is a deadly disease that will eventually kill any business. You have to have enough money to buy goods, cover payroll, and meet your monthly financial obligations. Borrowing money to do this is a bad idea if you have not resolved the underlying business killers discussed above. However, borrowing can be OK to support growth when you have good profit margins.  As you dig out of a cash hole, consider the tips in this article, “A Business System When the Wolf is At the Door.

    Caution:
    Beware of excessive inventory and accounts receivable that suck cash and make you feel poor even when you are earning a nice profit. Do you know where all your profit has gone? What can you do to move more of it into working capital? If you have little or no profit, you better focus on lack of sales and/or insufficient margins—PRONTO!

Business Operations Killers

  • Killer #8 Lack of Innovation – If you are not coming up with new ideas for improved products, services, and business processes, you will be left behind. Your company will become stale, undifferentiated in your target market, and ho-hum boring.  Competitors that are innovating will surge ahead. Innovation is essential to stay on top.

    Business expert, Peter Drucker teaches, “A business has two purposes: marketing and innovation.”

    What new things could you do to draw more attention, serve customers better, and create higher quality and more efficient business operations? You have endless opportunities. Make innovation a part of your daily routine.
     
  • Killer #9 Weak Business Systems – Without good business systems and processes, you have a disorganized, seat-of-the pants operation that is frequently in crisis mode (every crisis is a system breakdown). Putting out fires is your daily routine. There is never-ending frustration for customers and employees. It’s time to end the madness. What grade would you give your business systems?

    Good systems will increase sales, customer loyalty, advantage over competitors, and profit margins. They are essential to a smooth-running and prosperous enterprise. Every business turnaround I have been involved with required drilling down into the operations to find ineffective systems and processes with excessive
    mistakes, inefficiency and waste.

    In a mature company with adequate product demand, reducing waste is the key to rescuing the business. What core systems in your organization drive its economic engine? What improvements could you quickly make? 
    Where might you turn for help?

  • Killer #10 Uninformed or Ineffective Management – Poor management can drag your business down in a hurry. You have to “get the right people on the bus and the wrong people off the bus” (Jim Collins, “Good to Great”).

    You need people who are Systems Thinkers (a learned skill), results-oriented, and who can help you create a culture of excellence.

    Furthermore, managers must be in-the-know about the challenges your company is facing. Tap into their unique talents and insights. And remember: good managers get the best possible results with the least amount of resources.

    Finally, a frequent cause for business failure is that owners and managers do not create
    business systems and processes to effectively carry out the mission, strategy and goals of their organization. Do you currently have top-notch people? Are YOU an effective leader?

Turning Your Business Around

When an established business enters hard times, it has a lot more staying-power than might be expected. I have seen companies struggle for years before going out of business or turning themselves around. They are able to live off of the good-will they have earned with vendors, customers and employees. They find needed cash from shrinking inventories and accounts receivable. They get support and softened terms from banks and vendors.

Struggling business owners who exhibit high integrity, courage to face the truth about their challenges, and who forge ahead with pig-headed determination, are often able to swim upstream to safety. And everyone will be cheering them on!

However, you can’t just hope for a better day. You must have a game-plan to solve the killer problems we’ve talked about. You have to get real, and get going—AND THE FASTER THE BETTER!

In my experience, most attention should be focused on either of two things, getting more high-margin sales or eliminating inefficiency and waste. Simply put, you have to focus on the right things, drill down into the details of your business systems and processes, identify the weak links, bottlenecks, obstacles and problems, and fix them. (See some examples of this.)

Hiring the right turnaround consultant might be helpful, but it is usually expensive and not always the best solution. Paying out more money that you cannot afford also adds to your burden and risk.

You know your business better than anyone else. Maybe YOU can do it! Becoming a Systems Thinker and following correct principles is the key to success. If you do it yourself—with your team— you will be forever stronger from the experience. You will become the master of your own fate.

 

The Next Step...

Tags: General Business, Improvement, Business Leader, System Failure

Solve Problems and Prosper with Exceptional Business Systems

Posted byRon Carroll

The essential task of every business owner or entrepreneur is to overcome daily problems, obstacles and challenges in the quest to serve customers better and make a profit. I want to discuss some of the specific challenges faced by small-business owners, and then drill down to the underlying causes of those problems. This will also lay a foundation for understanding the solutions offered by the Box Theory™ methodology.

Solve Problems with Better Business Systems

 

The Small Business Challenge

The Small Business Administration reports that over 500,000 businesses are born every year and about the same number die. Of startups, 33% are no longer in business after two years, and 50% are gone by four years. (SBA Frequently Asked Questions).

The Box Theory™ Way can prevent you from becoming one of these dismal statistics, behind which are broken dreams and financial devastation.

As entrepreneurs, we all start with a similar vision. We want to be independent and earn more income than we might earn by working for others. We have an idea, talent or product we hope the marketplace will demand. Sometimes we borrow money from family, mortgage the house, or risk everything to “live the dream.” Then, like every other entrepreneur, we discover that owning a business requires all the intelligence, discipline and hard work we can muster. To start, grow and sustain a successful company is likely to be the most difficult thing we ever attempt.

From day one, unrelenting forces begin to work against us. We face slumping economies, cost increases from vendors, customers who pay slow or not at all, government regulations, increasing taxes, unproductive employees, stiff competition, insufficient sales, obsolete inventory, cash flow headaches, never-ending demand for new and better products, and many other challenges.

If you haven't had some of these brutal experiences yet, it's only a matter of time. They will come with changing market conditions, government leadership, and business cycles. So be prepared.

I believe it takes as much skill to be a business owner as it does to be a medical doctor. The difference is this: Doctors prepare for ten to twelve years before starting their medical practice. Most entrepreneurs learn on the fly, resulting in critical errors and frequent casualties. The requirements of continuous learning, self-discipline and long hours are no less for a budding entrepreneur than they are for a doctor. Are you willing to pay that kind of price?

Your Primary Purpose

A business enterprise is made up of people, products and processes organized to profitably find and keep customers. Companies are in trouble from the get-go when they face superior competition, low market demand, under-capitalization, difficulty reaching their target market, undifferentiated strategy, ineffective management, or a weak revenue model. Assuming those things are in order, the most likely reason for failure is that owners do not create business systems and processes that effectively carry out the mission, strategy and goals of their organization.

As an entrepreneur, your primary purpose is not to sell, make products or provide a service, but to be the chief architect of your entire business enterprise.

On a typical day, you design, develop, oversee, monitor and evaluate the systems and processes that make your organization run efficiently, create value for customers, and produce a healthy profit. If you want to be an artist, machine operator, sales agent or technician, you should get a steady nine-to-five job. Building a business is a different vocation altogether. If you don't have the personality, skill-set, or desire to do this, you should get a partner or hire someone who does.

Your primary role as a business owner is to get the best people you can on the team, create innovative products for your target market, and develop operational excellence (systems and processes) that will attract and keep customers. When you can do this profitably, you will have the foundation for a lasting company.

Customers buy from companies that serve them best. Without concern, they allow all others to fail. It is how the customer feels about your business as a whole that matters most. Everything about your operation—advertising, cleanliness, courtesy and knowledge of employees, return merchandise policy, product selection, location, delivery time, price, and so forth—is what they are choosing. As chief architect, your entire business is your product, and it must be exceptional throughout. When it is, YOU become the “best deal!” Creating effective business systems and processes will make your organization exceptional, and keep your customers coming back again and again!

Problem Solving

Let's dig a little deeper. Do you run a perfect business? If not, what problems would you like to eliminate? What parts of your organization need to improve? What obstacles must you overcome? What is eating away at your profit or preventing you for reaching your full potential?

Your business weaknesses and problems will surface from three primary sources:

  1. Customer or worker feedback/complaints   
  2. Financial reports and performance data/brutal facts
  3. Personal frustration/symptoms of deeper problems

You will experience frustration when there are recurring events over which you feel little or no control—problems that can often be eliminated by installing an effective system.

How many of the business problems, obstacles or frustrations below do you have?

Customer or Worker Dissatisfaction
    * Our customers complain about quality or timely delivery.
    * Our customer service is not as good as it could be.
    * We don’t have customer loyalty or get the re-orders we expect.
    * Our competitors are taking business from us.
    * Orders are processed incorrectly; too many returns.
    * We can’t seem to hire or keep good people.
    * Our people aren’t productive or motivated.

Financial Indicators
    * We don’t have accurate or timely financial information.
    * We don’t know our true costs.
    * Profit is lower than it should be.
    * Accounts receivable collections are too slow.
    * The company has missed filing deadlines or tax deposits.
    * Cash flow is poor, hard to manage, and stressful.
    * Labor costs are high.
    * We don't have enough working capital for needed people, equipment or inventory.

Other Frustrations
    * We don’t have enough sales.
    * Our advertising isn't working.
    * The business is unorganized and chaotic.
    * I'm the only one who can do some of the work.
    * There is too much waste and inefficiency.

Every day, these and other frustrating business problems take hard-earned money out of your pocket. Amazingly, they all reflect the same underlying problem—a problem that you can easily fix!

Start, Grow, Fix or Franchise

Each business is unique and at a different stage of development, with different goals. However, every business owner is either trying to start, grow, fix, or replicate their business. Effective business systems and processes play a major role in each of these endeavors. Box Theory™ methodology and software can also help you in the following ways.

When you start a new business, you build everything from the ground up. You create and organize all your business systems and processes to produce sales, deliver products and services, and accomplish your mission, strategy and goals. The Box Theory™ Way is a unique "system" to help you lay that critical foundation and get results that will impress customers right from the start.

If your company is growing, you face hazards of a different kind. Many organizations fail because they grow too fast. The primary problem is that existing systems and processes cannot meet the increasing demands. They begin to break down. Customers become unhappy. Cash flow dries up. Frustration begins to dominate daily life. An organization experiencing rapid growth can be at risk of collapse unless it re-orders itself to a higher level of performance. Box Theory™ enables you to elevate your systems and processes to accommodate the otherwise exciting increase in demand for your products or services.

The majority of business organizations have a great deal of hidden waste, most of which can be prevented. Half-baked business systems and processes rob business owners and stakeholders of thousands of dollars every year. Box Theory™ methods enable managers to fix broken or ineffective business systems, getting them to run smoothly and profitably.

Finally, if you have any ideas about franchising your business or replicating it in other markets, the most important thing you can do is systemize it like a McDonald's Restaurant. When you buy a franchise, you are primarily buying tested and proven business systems. Systemizing is the essential requirement to replicate any organization. Box Theory™ software will enable you to create a business model that can be used repeatedly to multiply your financial opportunities.

By now, I hope my point is crystal clear. Business owners frequently fail because they do not create effective systems and processes that profitably find and keep customers. Additionally, most do not realize the underlying waste of time and materials that seriously erode profit and prevent them from meeting the high expectations of their customers.

By understanding that effective business processes are the essential building blocks of a successful and profitable organization, you can now embark upon a journey of systematic improvement.

The Box Theory™ Way will enable you to eliminate the most common problems that small and mid-size business owners face:

  •  Weak sales and growth
  •  Customer dissatisfaction
  •  Waste and inefficiencies
  •  Underperformance and turnover of people
  •  Poor cash flow
  •  Low profit
  •  Over-dependence on owners

Systems Thinking is a concept that will change the way you run your business. Effective business systems are the logical and practical solutions to your daily problems, and they are just waiting to be discovered!

The Next Step...

Tags: Business Systems, General Business, Business Leader

Box Theory Business Systems: A Journey of Discovery

Posted byRon Carroll

When I started my business career fifty years ago, life was much simpler. The rules for running a successful company were also simpler. Customers were glad to get products and services and didn't fret the details too much. All of that has changed. Customers now have many choices and very high expectations. If companies do not execute with precision, the customer silently vanishes.

Today, you shouldn't start a business unless your you have fire in the belly, a drive to be the best at what you do, and a willingness to pay the price for success.

I retired from my accounting and consulting practice a few years ago—and truthfully—I just wanted to rest for a while. My entrepreneurial career left me with some battle fatigue and a diploma from the school of hard knocks.

However, in the last few years of my career, I stumbled onto something—something quite amazing—that now gets me out of my rocking chair each day.

I am somewhat of a quiet accountant type, not prone to a lot of hype. I like plain truth. In fact, I am a seeker of truth and have little patience for the bloated advertising and misinformation that fill our digital world. I wrote an ebook, Box Theory™: Double Your Profit with High-Performance Business Systems and Processes, that contains many truths that are little-known but essential for business owners to understand. I'm going to give it to you for free. Please keep reading.

In The Beginning

Several years ago, I began to teach my accounting clients how to use financial statements to pinpoint the under-performing areas of their business. This led to an interest in business systems and processes that grew into a passion. I eventually developed a two-day workshop that generated a lot of interest.

One evening while vacationing in Carlsbad, California, I watched a program on the Discovery Channel entitled, "String Theory—the Theory of Everything." I was intrigued to learn that scientists now believe that very tiny strings of energy, far beyond our ability to see through a microscope, are the foundation of all matter.

Do you remember from chemistry class that matter is made of molecules, molecules are made of atoms, and atoms are made of atomic particles (protons, electrons and neutrons)? Since I took chemistry, they have discovered quarks inside the atomic particles. Now, physicists have mathematically proven that these energy "strings" are the basis of everything in our universe.

It struck me that big things in our world contain important small things, which are made of even smaller things—all interdependent. If anything goes wrong with the smaller thing, the effect is felt all the way up the line. Cancer cells can destroy an organ. Organ failure will shut down a system within the body. And a system shutdown can cause the body to die.

The concept reminded me of a poem quoted by Benjamin Franklin in Poor Richard's Almanac.

For want of a nail, the shoe was lost,
For want of the shoe, the horse was lost,
For want of the horse, the rider was lost.
For want of the rider, the message was lost.
For want of the message, the battle was lost.
For want of the battle, the kingdom was lost.
And all for the want of a horseshoe nail.

Often, we don't realize the influence that seemingly small things have on events and outcomes in our lives. This includes our business. Consider this:

For want of a minute, a phone call was lost,
For want of a call, a conversation was lost,
For want of a conversation, a relationship was lost,
For want of a relationship, an order was lost,
For want of an order, the revenue was lost,
For want of the revenue, a business was lost.
And all for the want of a minute to make a phone call.

This poem won't be published anytime soon, but you get the idea. In business, we must pay attention to the details—the small things that affect the important things.

Consider for a moment what you are reading right now. The alphabet is a system of twenty-six symbols or letters used for communication. By arranging the letters in a certain order, I create words with meaning. By grouping words together, I can form a sentence that expresses a complete thought. Several sentences form a paragraph. Linked paragraphs create a complete story. Letters, then, are my building blocks for writing this article. If they get out of order, I will fail to communicate with you. How I arrange the letters is what sets me apart from all other writers.

Drilling down on a written document might look something like this:

Cascading Boxes Writing Diagram

 The big idea from this is that we live in a world of systems, the components of which are smaller systems and subsystems, all working together for the good of the whole. Important activities are going on at every level down to minutest detail. To improve the outcome of a higher-level system (sentence), you must fix or improve the flaws of a lower-level system (words or letters; e.g. misspelled word).

One day in a business improvement workshop, I was flowcharting a system on the whiteboard—creating boxes for each step with the arrows between. In a momentary flash, I realized that an entire organization is made of flowchart boxes that are connected, and, which influence one another. In the days that followed, the concept of Box Theory™ emerged, a unique way of looking at the structure of any organization.

Box Theory™ has taken me on a journey of discovery far more important than I ever imagined. It has literally changed my life, not just my business career. I have a new and inspired view of the world—how things work together and affect each other—that makes it possible to see solutions to problems clearly and quickly, and how to improve any task or process for maximum results. It's really quite extraordinary!

My Gift To You

My purpose for writing the Box Theory™ ebook is to give business owners and organization leaders a new way to look at their business—in high-definition—that will enable them to compete in a crowded and unforgiving marketplace. Box Theory™ is not weird science, but natural and intuitive. It is not based on strange new techniques, but upon rock-solid and proven principles that are used every day by successful organizations (see more about Box Theory™).

Truthfully, Box Theory™ is the way you already do things, without realizing it. Now, your effort will be planned, systematic and far more effective. You will have a powerful "system" for creating your business systems.

The timeless truths that you learn in this course will provide the foundation for a life-long business career. Perhaps like me, you will see the application of Box Theory™ in every aspect of your life.

Now, as a gift to those who read this article—which is also the foreword to the ebook—I want to give you a free copy of Box Theory™: Double Your Profit with High-Performance Business Systems and Processes. It is on my website and sells every day for $19.95. If, after reading it, you have time to tell me what you think, I would greatly appreciate it.

All you have to do to get the ebook is sign up for my weekly newsletter (upper right column) and other free items for creating better business systems and processes. Then, shoot me an email—rcarroll@BoxTheoryGold.com—and tell me you want a copy of the free ebook. I will send you the link with no strings attached.

My only hope is that with this powerful information you will become a Box Theory™ enthusiast and practitioner, and can create a truly remarkable business enterprise!

The Next Step...

Tags: eBook, Business Leader, Getting Started

10 Tips for a Great Business Presentation!

Posted byRon Carroll

I'm a bit of an introvert. While I love teaching, I don't like giving business presentations. How about you?

According to Toasmaster's International:

"Every day, employees of various companies around the world find themselves in career-defining speaking situations. Presentations like these often involve high stakes and are presented to busy people with the power to influence careers.

"Business presentations can make or break your career. The technical briefing, a straightforward presentation to inform, can cause trouble if you lose your audience. For the proposal, you must advocate an idea, product or course of action, and convince others to agree. You may have to present complicated material to a nontechnical audience."

Are Your Presentations Memorable?

I've given presentations in my career where everything was on the line. After a sleepless night, and with tennis-ball mouth, I stood before an audience of skeptcal judges. Quietly, I prayed that the technology would work properly, I wouldn't say anything stupid, and the outcome would be favorable. But as they say, "some days you get the bear, and some days the bear gets you."

Presentations are Business Systems

Like everything else, a business presentation is a  "system." The success of the presentation relies heavily on following correct principles for preparation and delivery.

When creating your business presentation system, you may appreciate a little help from the experts. Today I've included a slide presentation that I think you will enjoy. In five minutes, you will learn the following, and more:

  • 10 lessons from the world's most captivating presenters.
  • How to give presentations that go from yawn inspiring to awe inspiring.
  • Tips for creating presentations that get results.
  • How much time to spend in preparation and practice.


Check Out these 10 Tips from the World's Best Presenters

 

The Next Step...

Tags: Business Systems, Business Leader

10 Easy Steps to Grow the Perfect Business

Posted byRon Carroll

"10 Easy Steps to Grow the Perfect Business"

An Entrepreneur’s Guide

By Ron Carroll


Whether launching a business startup or running a mature company, every entrepreneur should become a student of business and continually strive to discover and apply proven principles for success. There are thousands of books written by business experts that can inform and inspire. This ebook is brief, but packed with many rock-solid principles derived from personal study and forty years of hands-on experience. If you take each chapter to heart and apply the principles discussed, you will become an exceptional business leader and grow a remarkable and prosperous organization!

CONTENTS

                        Preface:                 Hats Off to the Entrepreneur

                        Step 1:                  Get Off the Treadmill and Into the “Zone”

                        Step 2:                  Blueprint Your Business

                        Step 3:                  Systemize Everything

                        Step 4:                  Manage by the Numbers

                        Step 5:                  Become an Obsessed Marketer

                        Step 6:                  Differentiate or Die

                        Step 7:                  Convert with “Killer Customer Care”

                        Step 8:                  Get the Right People

                        Step 9:                  Turn Your Business Into a Game and Keep Score

                        Step 10:                Pay the Price  (Plus a Recommended Step 11)


Optional Format: Download "10 Simple Steps to Grow the Perfect Business" as pdf file.
(Bookmarks to each chapter are available by clicking on "Bookmarks" icon in Adobe Reader.)











The Next Step...

Tags: General Business, Business Startup, Business Leader

Business Improvement: Pay the Price!

Posted byRon Carroll

Doctors prepare for 10 to 15 years before starting their medical practice. Most entrepreneurs learn on the fly, which is why eighty percent of small businesses fail within five years. Many more business owners struggle to survive. The requirements to become a successful entrepreneur are no less than to become a doctor. Are you willing to pay that kind of price?

Pay the Price


At my college commencement, thirty-some years ago, a soon-to-be graduate declared a familiar message from the podium, "You can achieve anything in life you desire!" As radio host Paul Harvey use to say, "Now here's the rest of the story."

Know What You Want

You can achieve anything you desire, if you know exactly what it is you want, and if you are willing to pay the price to get it. Most people don't have a clear vision of their goal or aren't prepared for the sacrifice required to attain it.

After a stirring performance, a man said to the concert pianist, "I would give half my life to be able to play the piano like that." To which the pianist responded, "Good, because that's exactly what it takes."

Many people start a business with romantic notions, generally unaware of the price they will have to pay to achieve success. By sheer will, the best somehow survive and succeed, making our nation the most advanced and prosperous on earth. With the odds of failure so great, however, the wise entrepreneur has a healthy respect for the mountain he or she is about to climb.

Accept the Risk

First, the business owner knows he has a high risk of losing the value of all the time, energy and money he or she has put into the business. As mentioned, this real and painful loss comes to eighty percent of business owners (and their creditors) in the first five years.

Risking personal or business resources to create even greater value in the business is the repeated sacrifice asked of the entrepreneur. Whether buying a new piece of equipment, putting an ad in a magazine, or hiring a sales manager, there is always some degree of uncertainty as to whether the gamble will pay off. It is a natural part of business life. We have to get used to it.

Muster the Will

Second, we must also have the "will" to follow proven laws of success. Our desire and internal drive must become so intense that we can overcome all obstacles put in our path. AND, we must commit enough resources (time, energy, money) to our goal so that we can continually beat down the unrelenting forces trying to drive us out of business.

For example, business owners make a big mistake when they are not willing to pay the price to have remarkable business systems and processes. Successful owners budget for quality marketing or customer care programs, or an accounting system that will enable them to "manage by the numbers." Owners who won't pay the price, but instead cut corners in critical business areas, will not compete over the long run with companies who do muster the will to become remarkable.

Finally, we must have the passion and the grit to become the best at what we do. We have to be financially strong enough to survive both setbacks and sudden successes. We must continually invest time in developing personal knowledge and skills, persevering until we have grown the perfect business: one that runs itself profitably and gives us personal and financial freedom.

Work Hard and Intelligently

Business success does not come by accident. Things happen, or don't happen, for a reason. For every effect there is a specific cause.

Most breakthrough success is preceded by a long period of hard work and persistence toward a single, clearly defined purpose. How high we rise is largely determined by how high we want to climb. Persistence in the face of setbacks and disappointments reflects our unyielding belief in ourselves and our ability to succeed.

According to Jim Collins (Good to Great) the best companies never transform to greatness in "…one fell swoop. There is no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment.

"Sustainable transformations [to greatness] follow a predictable pattern of build-up and breakthrough. Like pushing on a giant heavy flywheel, it takes a lot of effort to get the thing moving at all, but with persistent pushing in a consistent direction over a long period of time, the flywheel builds momentum, eventually hitting a point of breakthrough."

The longer and harder I intelligently work, the faster I create value in my business. When that value becomes great enough, I can cash in by selling, franchising, or hiring someone to run the business for me. Hard work pays off, and interestingly, the harder I work, the "luckier" I get.

Beware!

Most businesses fail because:

Most people who read the above list will see their weaknesses. Sadly, most will think, "Yes, that is something I must do...TOMORROW." And that is why they will become part of the eighty percent failure club, or why they will stumble along with a mediocre business that will never reach its full potential.

Those who do make it to the winner's circle will pay the price! It is a law of life.

"The most important principle of personal or business success is simply this: You become what you think about most of the time" (Brian Tracy, Laws of Business Success). Get in the Zone. Devote time to study the business literature and learn from the experts. Pay the price in your mind first! Then go make your business remarkable.

These 10 steps will help you grow the perfect business. The next step is optional, but it could make all the difference! (Back to Table of Contents)

 

Recommended Step 11 - Discover Box Theory™!

Okay, by now you’ve thought “this guy must be kidding about the 10 steps being easy. To do everything described in this ebook is a pretty huge undertaking." I agree. But this is what successful companies do— one step at a time! Remember, this is the life you chose, and you can do it, too—if you have the will. You also need a good system; you need Box TheoryTM!

I heartily recommend that you take our eCourse, Box Theory™: Double Your Profit with High-Performance Business Systems and Processes. You will learn how to create powerful systems that eliminate waste, inefficiency and frustration, while dramatically improving your customer loyalty, profitability and growth. Box Theory™ is a unique method that transforms complex and expensive process-improvement techniques of Fortune 500 companies into a painless solution for busy entrepreneurs. You can expect a return of 10, 100 or even a 1000 times the incidental cost of this course. In fact, you are probably losing at least that amount every day you wait to get started.

Please read more about the Box Theory™eCourse and Box Theory™ Gold Software. Then try it at No Risk! I think this will be one of the best business investments you ever make. Put me to the test.                                                                                          (Back to Table of Contents)

 Or Take

The Next Step...

Tags: Business Startup, Business Leader

Business Improvement: Get the Right People!

Posted byRon Carroll

A business organization is a group of people brought together for the purpose of finding, serving and keeping customers. The best organizations invariably hire the best people to achieve this purpose.

In his book, Good to Great, Jim Collins writes, "Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people. GET THE RIGHT PEOPLE ON THE BUS FIRST, AND THE WRONG PEOPLE OFF THE BUS, THEN FIGURE OUT WHAT DIRECTION TO DRIVE THE COMPANY."

Get the right people on the bus

 

Who are the right people and how do you get them?

There are essentially two types of people that most entrepreneurs will hire at some time. I would characterize them as "plow horses" and "race horses." The plow horses are the people that you can count on to follow the established systems of your business. From planting to harvesting, they perform the routine work in a consistent and remarkable way.

The race horses are the leaders and innovators who set the course the company will take. They are hard charging thoroughbreds with an eye on the winner's circle. A growing business needs both types of people.

The entrepreneur often begins as a race horse with a plow attached. If he creates a successful business model and not just a job for himself, his company will grow. He will soon need to hire other people.

Plow Horses Excel At Routines

Smart business owners blueprint their business and begin establishing business systems that produce consistent and measurable results—financial systems, marking systems, customer care systems, and so forth. They understand that good systems run the business and they can hire non-expert and less expensive people to run the systems—the plow horses.

Plow horses are easy to train. You can quickly teach them to follow the rows—your documented systems and procedures. If performance is lacking, you tweak the system or replace the individual, with little effect on your business.

Without systems, you must employ higher-skilled and more expensive people. Job satisfaction also tends to be lower, resulting in costly turnover. Using business systems, plow horses are able to produce desired results every single time, even when you are not around. Your business runs profitably, efficiently, and flawlessly, all by itself!

Race Horses Get You Into the Winner’s Circle

The race horses are a special breed of people: they are executives and managers who are born to excel at anything they do. They are inspired leaders and system innovators. They are fiercely loyal, deeply committed to the company's success, and have high moral character. They focus on specifics and measured performance. They apply 80% of their effort to the 20% of tasks—customers, employees, business systems, and so forth—that accomplish the most good. Give these “finishers” something they love doing and then get out of their way.

"The right executives will do everything in their power to build a great company, not because of what they will get in terms of incentives and compensation, but because they simply cannot imagine settling for anything less. Their moral code is 'excellence for its own sake'" (Jim Collins).

Race horses cost more. They are worth it. They will do the right things and deliver the best results. Pay the most to individuals who have a proven track record doing exactly what you need done. Don't compensate to motivate the right behaviors from the wrong people. Compensate to get and keep the right people in the first place!

Finally, race horses are not always employees. They can serve on your board of directors or advisors, or they can be outsourced service providers or consultants. The entrepreneur who tries to do it alone has a fool for a boss! Don't become "the genius with a thousand helpers," because when the genius leaves, the company falters. Be smart! Surround yourself with a strong management team—with people even smarter than you!

One caution: Beware of "wild stallions." They are powerful and charismatic superstars that you may think will save the day. Often their free spirit or aggressive nature makes them difficult, unpredictable or unsuitable for your team. They are usually expensive and have personal ambitions that are not aligned with the business. They may one day become your competitor.

Hire the best

Make certain you have your people in the right job positions where they can bloom. Be sure they have a clear understanding of what you expect of them. If you need to make a change, act quickly. Letting the wrong people stay around is unfair to all the right people. You will first feel it in your gut when a change is necessary. Think to yourself: Would I hire that person again? If he or she left, would I be disappointed or relieved? Terminating employees is one of the hardest things a business owner does, but take courage and do it for the sake of the team.

Job candidates are looking for a great place to work. Like customers, they too are seeking to find the best deal. Find and keep great employees in the same way you would find and keep great customers: apply the golden rule. Treat them as you would want to be treated.

(Note -The top ten desires of employees based on needs, fears, and goals are: job security, financial security, preparing for retirement, saving for a child’s tuition, saving for a home, retiring early, making more money, furthering education outside of work, staying healthy, having more time with family (Kevin Klinvex, Hiring Great People).

Keep in mind: You always pay for the "A" employee, so hire the best. Why? The lesser cost of a "C" employee plus the hidden cost of lower performance, poor decisions, and costly mistakes is equal to or greater than the higher cost of the "A" employee. Replacing "C" employees with "A" employees is essential to the success of your business.

“A” employees are people who have a history of getting results. They aren’t afraid of accountability and scorekeeping. They are self-confident and can see how past successes can apply to new assignments, but they are also teachable and eager to learn new things. They are a good fit for your organization because their personal goals are in line with your company’s goals.

"Great companies place greater weight on character than education, skills, or experience when hiring. The reason: you can teach skills, but character, basic intelligence, work ethic, and dedication to fulfilling commitments are values that are ingrained in a person. Like a professional sports team, only the best make the annual cut, regardless of position or tenure" (Jim Collins).

Research has shown that the cost of hiring the wrong person is astronomical! Your hiring system must do a superb job at getting "the right people on the bus" the first time. The cost of turnover and low performance is always more than the cost of an effective hiring system.

Good companies have a structured, well planned "hiring system" that helps them attract and choose the best candidates. Below are some tips to get you good hires.

Prepare For the Interview

Determine the key competencies required for the job before you interview a candidate. Write a job description. Create a list of questions for the interview that are specific to that job and will help determine if the person's personality and skills are a good fit for the organization.

If possible, plan well in advance of your need. Cast a broad net in your advertising. Interview as many qualified candidates as possible. Don't rush the process and end up hiring the wrong person.

Conduct telephone interviews to screen out inappropriate candidates. Schedule your staff members who will work one-on-one with the candidate to also interview your top choices. Get their feedback.

Work the Interview

Dig deep to find out whether the candidate is more comfortable with details or the big picture. Are they a self-starter or an order-taker? Are they a plow horse or a race horse? Create questions that will give you the answers you need. Ask focused questions, and then listen carefully. Take notes. Be sure to understand what questions you are legally prevented from asking (e.g., Are you married? Do you have health problems?).

After conducting interviews, use a grid to help choose the best candidate. Simply put the names of each candidate horizontally and put the job requirements or key competencies vertically. "As a rule of thumb, entry level positions require 5-8 competencies, intermediate level 8-11, and senior level positions 10-14 competencies" (Kevin Klinvex). Rate each candidate from 1 to 5 on each of the job requirements or competencies. The person with the highest ratings, coupled with a positive gut feeling, is probably your best choice. Gut instinct alone only works 10% of the time (Kevin Klinvex). Trust in the collective judgment of all interviewers.

Set your minimum standard and don't settle for less because you will regret it. Over-recruit, over-interview, and over-hire in order to find the very best people that you are looking for. When in doubt, keep looking.

Your Most Valuable Asset

A company should limit its growth based on its ability to attract enough of the right people. Remember, "People aren't your most important asset, the right people are" (Jim Collins).

Create a vision of what your business will look like when it is finished. Have an effective system to "get the right people on the bus." Hire ordinary people with basic competencies to run your business systems and a strong management team to get you to the finish line.

In the Zone you will create your system for hiring and developing a great workforce. Great companies always have great people!  Never forget that.

Now, the magic really begins to happen as the right people come together with remarkable business systems to create a culture of discipline, enthusiasm and high-performance results. The people and systems, working in harmony, produce the sweet music of a full-piece orchestra. Read on to take the next big step!

Step 9: Turn Your Business Into a Game and Keep Score
Back to Table of Contents: 10 Easy Steps to Grow the Perfect Business

 

 

 



The Next Step...

Tags: Business Systems, People, Culture, Business Leader

Business Improvement: Blueprint Your Business!

Posted byRon Carroll

In the solitude of the Zone, a panoramic view will open up, allowing you to see your life more vividly than ever before. In the absence of noise and commotion you will almost immediately come face-to-face with the most fundamental questions. Who am I, really? What is my life purpose? How can this business help me achieve my life purpose? Where do I begin?

One Way or Another Sign 

Define Your Life Purpose

Your success depends on two things—knowing exactly what you want and paying the price to get it. You must begin by clearly defining your life purpose. What would you do if you had all the time and money you needed? How might you leave the world a better place than you found it? What do you want people to say at your funeral service about your life and accomplishments?

For each person this will be different. However, many people are drawn to a life of purpose—a life of service, of building, growing, or improving something important to them. Real purpose and motivation spring from a deep love of someone or something, and it is usually not the business. What is your soul’s desire? What is your life purpose? Write it down. Begin now!

The true purpose of your business, then, is to help you achieve personal and financial freedom so that you can accomplish your life purpose. How much money must the business pay you and how will it run itself when you are gone? Perhaps you will want to sell the business. How much must you sell it for to accomplish your personal goals?

Put your business vision statement in writing. Describe what the business will look like when it is “done.” What is its size, scope, and operation, and how much money will it generate for you and other stakeholders? Paint the picture in as much detail as possible.

Develop the Master Skill

Successful entrepreneurs are intensely goal-oriented. They always achieve more than those without goals. They know what they want and are focused single-mindedly on getting it—every day. “The ability to set goals is the master skill of success” (Brian Tracy, Goals!).

Goals set the direction, the distance, the pace, and the point of completion. In the game of work, the goal must be clear and the "coaches" must use every intelligent stratagem to achieve it. They adapt the game plan to changing conditions, but continually keep their eye on the goal line. As with all good teams, they have the determination to overcome obstacles and adversity and are willing to pay the price of victory. Setting and reaching goals is a fundamental part of winning in business and in life.

Victory starts in the mind of every great athlete. This is also true for the entrepreneur. Everything in our man-made world began as a thought or idea in someone's mind before it became a reality. There is a common understanding in science, philosophy and religion: “As a man thinketh, so is he” (Proverbs 23:7). You become what you think about most of the time.

While in the Zone, creative thinking is stimulated by the intense desire to reach goals and solve business problems. Your mind generates ideas and solutions consistent with those goals. The business begins to transform first in your mind and then on paper. Through a step-by-step process of implementation, your ideal business becomes a reality.

Once you know your life purpose and have a vision of what the “finished product” of your business will look like, you roll up your sleeves and get to work on the specifics. Focus on the key areas of the business first, where there is the biggest payoff. “Plan your work and work your plan.” A small amount of time developing a business plan will save a huge amount of time in implementation. To avoid coming up short, a deadline must be a part of every push toward your goal.

In the Zone, you confront the brutal realities pertaining to your business shortcomings and operational weaknesses. You identify specific areas for improvement and then go to work to create processes and systems that produce a more desired outcome. You put in writing the policies and procedures that employees must follow to get the best result every time. You evaluate performance and modify for improvement.

Remember, a "wish" is a goal that hasn’t been written down. When creating your goals, make sure they are (1) specific, (2) measurable, (3) achievable, and (4) time specific.

In a business, planning and goal setting ultimately become financial in nature. Good financial statements let you know where you’re at and how you’re progressing. Focus on specific line items of the statement. You may need to reduce labor, defective merchandise, or overhead. You may want to increase sales, profit margin, or cash flow.

Every problem has a solution. Every solution can be found in a business system. The pieces of the puzzle begin to fit together — every piece in place gets you closer to the final picture. Remember, the completed picture is always shown on the outside of the puzzle box. You know before you begin exactly what the puzzle will look like when it is done, and you refer to it often along the way.

You should also set non-financial goals, such as increasing units sold, contracts signed, clients acquired, tonnage processed, and so forth. Get buy-in from team members by reviewing goals in sales meetings, displaying posters that show progress, awarding achievement with prizes, and other forms of feedback or incentive.

Put Your Vision in Writing

“In more than 3300 studies of leaders conducted over the years, there is a special quality that stands out, one quality that all great leaders have in common. It is the quality of vision. Leaders have vision. Non-leaders do not” (Brian Tracy).

With a clear long-term vision, leaders make decisions today that are consistent with where they truly want to end up. Their vision, planning, and goals are part of an organization blueprint—a detailed description of how their business will finally come together. It is this vision of the future that arouses emotion and motivates everyone in the organization to give their best.

Begin today. Get in the Zone and get inspired. Create a vision, focusing on specific measurable goals. Start thinking “progress to goal” and communicate your vision to others.

Then keep reading to learn why business systems are the building blocks of every successful and profitable business.

Step 3: Systemize Everything
Back to Table of Contents: 10 Easy Steps to Grow the Perfect Business

 

 

 

 

The Next Step...

Tags: Business Startup, Business Leader