The Systems Thinker Blog

Murphy’s Law: How to Crush Murphy with Better Business Systems

Posted byRon Carroll

On the eighth day, God said, "O.K. Murphy, you take over!

We all smile when reminded of Murphy’s Law. Who hasn’t been a victim? The stories people tell are funny in hindsight, not so humorous when they are happening. The most common variations of Murphy’s Law include:

  • If anything can go wrong, it will.
  • Left to themselves, things tend to go from bad to worse.
  • Everything goes wrong all at once.
  • Things are damaged in direct proportion to their value.
  • It is impossible to make anything foolproof because fools are so ingenious.

When I was showing my house to some very interested buyers a few years ago, a rare microburst struck and rain overwhelmed the roof gutters. It left large unnatural ponds around the house. The excuse, “this has never happened before (I promise),” didn’t help much.

Before retiring, I almost made a fortune with significant ownership in a profitable start-up oil refinery. As Murphy would have it, a small fire developed in a critical area that closed the refinery down for an extended period. Cash ran out, and we were forced to sell to a vulture capital group anxious to take advantage of our misfortune.

Recently, a videographer told me she was shooting the bride’s vows in a backyard wedding when a low-flying plane killed the once-in-a-life-time sound track. Don’t you hate it when that happens?

Murphy's Law

Everyone has an encounter with Mr. Murphy at some time, especially when things matter most. Have you ever uttered the words, “give me a break” (or worse), when the unlikely happens, or when you encounter “a series of unfortunate events”?

Maybe you’ve experienced a few of these:

  • The item you are looking for is always in the last place you look.
  • Machines that are broken will work perfectly when the repairman arrives.
  • A dropped item falls in the least accessible place.
  • Whatever line or lane you get in will be the slowest, especially if you are in a hurry.
  • Any time you put an item in a "safe place," it will never be seen again.

Murphy’s Impact on Your Business

Of course, Murphy ’s Law isn’t really real because it supposes that inanimate objects have “will” or that the universe is plotting against us (I’m trying to be logical here, but sometimes I do think they are out to get me).

In your business, you likely see Murphy’s Law at play. The truth is—borrowing from the Pareto Principle—about 20% of the things that go wrong in your daily operations are random occurrences that you can’t do much about. Stuff just happens in our imperfect world.  However, 80% of the things that go wrong—often attributed to Murphy’s Law—are within your ability to control! (see “10 Reasons Why Your Business Systems Fail”)

Now, you could “eat one live toad in the morning so that nothing worse will happen to you the rest of the day,” or you could take steps to eliminate frustration and lower the painful cost of Murphy’s mischief and mayhem.

The Antidote to Murphy’s Law

Unfortunately, if you don’t have a thoroughly systemized business, things are going wrong all the time. They’re often not noticed, ignored, excused, or explained away. Maybe fixing the problem gets added to your to-do list or New Year’s resolutions, only to eventually disappear off the radar.

The cost of repeated operational mishaps is usually not even considered. After all, to error is human. It’s just part of doing business, normal, to be expected, part of life—C'est la vie!

But hey, besides being your passion, did you get into business to make money or what?

In a competitive marketplace, you have to reduce errors, mistakes, waste, and rework to a minimum. Your success—and take-home-pay—depend upon your ability to manage operational details and protect your company from Murphy’s persistent assault on customer satisfaction, employee morale, and business profit.

Without good business systems and processes, you are the hopeless victim of Mr. Murphy’s minions and their dastardly deeds.

  • If anything can't go wrong, it will anyway.
  • If there is a worse time for something to go wrong, it will happen then.
  • You never run out of things that can go wrong.
  • If anything can go wrong, it will happen to the crankiest person.
  • If everything seems to be going well, you have obviously overlooked something.

The Box Theory™ Way

With the Box Theory™ Way, you don’t blame fate or people, not even Murphy. You look first at your systems for getting work done. Things go wrong due to one of six basic causes: human, process, policy, equipment, materials, or environment. The question is:  what can you do—what business systems can you create or improve—that will put an end to the recurring problems?

For example:

  • Do you have checklists to ensure work gets done right every time?
  • What is your system to monitor and maintain equipment?
  • What is your routine for teaching and reinforcing safety measures?
  • What is your backup system for computer files, critical processes, and emergencies?
  • What is your procedure to monitor and control the quality of your business activities (to shut down the fix-it factory)?
  • What is your practice to turn customer problems into opportunities that WOW?
  • What is your business system to train people and help them become proficient at their jobs?

Murphy’s Law (if anything can go wrong, it will) and the Law of Unintended Consequences (actions have effects that are unanticipated or unintended) are crushed by the Law of Cause and Effect (things happen for a reason).  Once you look for the underlying cause of a problem, you can implement measures to improve or control the result.

YOU are in command of your fate. YOU determine how many mistakes, errors, or problems are acceptable.  The average small or midsize business allows 3% waste—far too much. You should strive for less than one percent (see Six Sigma).

For example, one error in a hundred opportunities should be the standard for invoices processed, widgets made, goods shipped, and services performed (simple with Box Theory Gold Software). Murphy’s influence will all but vanish when your business systems and processes are running smoothly.

So, In Conclusion

If you still want Murphy as a silent business partner, then plan for stress, frustration, and lackluster earnings.

However, my recommendation is to replace Murphy’s Law with laws from the Systems Thinker.

  • Effective systems and processes are the essential building block of a successful and profitable business.
  • Creating good business systems is the practical application of laws, principles and best practices—the Master Skill of the entrepreneur.
  • Constant improvement of business processes is the key to customer loyalty, profitability, and growth.
  • The true value of a business is found in the maturity of its business systems and processes—their ability to consistently produce desired results.
  • And last but not least, the Box Theory™ Way is the best way to build an organization of excellence.

 I invite you to learn more...

 

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Tags: Laws/Principles, System Failure

Business Systems: Your TOOLS for Greater Productivity and Profit

Posted byRon Carroll

When I was a little fellow, my father was a carpenter. To apply his craft, he wore a tool belt that contained an assortment of tools for hammering, cutting, fastening, and so forth. The right tools made his job easier and faster, and he kept them in good repair to get the maximum benefit. By making hard tasks easy, he could be more productive and earn more money for our family. As a little boy, he would occasionally let me wear his tool belt. Throughout my life—including in business—I have always appreciated having the right tools to get work done as efficiently and effectively as possible.

Wikipedia describes a tool as “any physical item that can be used to achieve a goal. . . .  Informally, the word is also used to describe a procedure or process with a specific purpose” (http://en.wikipedia.org/wiki/Tool).

Smart Creatures Use Tools

“For years there was a running debate concerning whether humans are the only animals that use tools. When scientists watched chimpanzees sit next to an anthill and place a stick in the entrance hole as a way to gathering ants—without having to dig—they decided that these creatures, with whom we share almost 95 percent of our DNA, were also using tools. So we now have our answer. Smart creatures, including Homo sapiens, use tools. Why? Because smart creatures do their best to find a way to make hard things easier” (Influencer, Joseph Grenny, 275; italics added).

Monkey Using a Tool

We all know that much of the work people do is boring, tedious, stressful, unpleasant, and for some even dangerous.  However, like the chimpanzee, we can make tasks easier, faster, and more enjoyable for workers by providing them the right tools.

Have you ever tried to do something difficult without a tool, like removing a staple without a staple remover? Or performing a task with the wrong tool, like trying to dig a hole with a square-point shovel? Or how about using a tool that hasn’t been maintained, such as cutting with a dull blade? Wouldn’t you agree that not having good tools can be very unproductive and frustrating?

We often hire professionals to work on our home or vehicle because they have the right tools, even specialized tools. In your target market, YOU are the professional. Your job Mr. or Ms. Business Owner is to provide the most effective tools (systems and processes) for  employees to get work done better, faster, and cheaper than your competition.

Business Systems and Processes are Tools

Business systems—lead generation, hiring, order fulfillment, customer service, and many others unique to your company—are the customized tools you create to get things done in an easier and more excellent way. Consider some of the advantages of having the right system tools.

  • Business systems incorporate the skills, behaviors, or tasks that you need done the right way every time (less oversight and supervision required).

  • Good Systems ensure that quality is achieved in products and services (happier customers).

  • Effective systems increase efficiency and productivity, and lower costs (more profit).

  • Exceptional business systems and processes make you a remarkable company (a standout, and the obvious choice of your target market).

  • Well-designed systems make work easier and more pleasant (higher employee morale, better performance, and less turnover).

  • Effective business systems and processes allow for measurement and frequent feedback to workers (the key to continuous improvement).

Sales-generating, customer-pleasing, waste-removing, profit-boosting business systems and processes are your tools to create an outstanding company. There is no other way!

And one final thought, the component parts used in your business systems are also tools: the checklist, the brochure, the contract, the order form, and so forth. Each of these tools has an important purpose, and the “sharper” the tools, the better your result.

Get the Right Tool

In my humble opinion, Box Theory™ Software is the best tool devised for owners and managers of small to mid-sized businesses. With this amazing desktop tool, you can plan, create, document, manage, store, and print everything pertaining to your company’s systems and processes—sort of like a QuickBooks accounting tool, but for business systems.

Last weekend, I purchased a tool chest at COSTCO to store the many hard-to-find tools scattered around my house. What a difference this handy organizer makes; I should have bought it years ago. I think you will have the same feelings about Box Theory™ Software. You’ll wonder how you ever got along without it.

Related Article:
Systems Thinking: What We Can Learn From the Legendary MacGyver!

 

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Tags: Business Systems, Laws/Principles

Problem Solving: Zero In on the Root Cause and the Vital Few

Posted byRon Carroll

Success in any business depends a great deal on how well you manage the details. I like to say the "dollars are in the details."  However, many business owners and managers are overwhelmed by the minutiae of daily business life. They haven't discovered where to focus attention to accomplish the most good for the least amount of time, effort and cost.

Focus on most important details

 
So, what details in your business operation are most critical to success? The simple answer: those that propel you to achieve your business goals and those that obstruct you from reaching your business goals. Let's focus on the latter.

Most operational details causing frustration and hindering results are not obvious; if they were, you could quickly fix them. So how do you uncover the obstacles, weak links, bottlenecks, waste and delay buried in your daily business processes? More importantly, how can you spend your valuable time solving the most important problems—the ones with the greatest impact on customer satisfaction and your bottom-line profit?

The Root Cause

With business problems, we often tend to focus on symptoms such as excessive product returns or unproductive employees, and fail to discover the true source of the problem—the "root cause."

By definition, a root cause "is the most basic cause that can reasonably be identified, and that management has control to fix. The fix will prevent (or significantly reduce the likelihood of) the problem’s recurrence" (Mark Paradies, TapRoot).

In a business setting, the job of the Systems Thinker is to drill-down and pinpoint the exact step within a business process that is under-performing and preventing expected results. Drilling-down is like looking through a microscope to examine the details and discover the underlying cause.

Keep in mind, however, that a symptom may have more than one cause. For example, lack of sales conversions from a website (symptom) may be from an overpriced product, a confusing sales message, or too many "hoops" for the customer to jump through in the buying process (causes). In addition, a single cause can create more than one symptom. An untrained worker could cause customer complaints and frustrated co-workers.

Finding the root cause of business problems is a skill that must be mastered by all business owners and managers. Understanding the Theory of Constraints will help you do just that. Once the true cause—the root cause—of a business problem is identified and fixed, all other dependent systems and processes are simultaneously improved.

Vital Few vs Trivial Many

When picking business improvement projects, it is important to prioritize and focus efforts where they will do the best good and help you achieve fast results. A few targeted improvements can be leveraged to create significant benefits to your organization.

In their book, "Six Sigma for Dummies," the authors write:

"The law of the 'vital few versus the trivial many' comes from the work of early 20th century Italian sociologist and economist Vilfredo Pareto. You may also know his law as the 80-20 Rule, where twenty percent of the inputs in any system account for eighty percent of the influence on that system.

"Pareto determined mathematically that, while a great number of factors are connected to a given outcome, only a few carry the weight to change that outcome in a significant way. In a business, system, or process, a few key variables are the cause of most performance problems. When you look for leverage in business, you search for the minority of variables that provide the majority of power in solving problems in manufacturing, assembly, distribution, accounting, finance, customer service and so on.

"There are more factors, contingencies, and dynamics to manage than possible when trying to break through to new levels of performance and success. The natural tendency is to try and manage and control every detail, but this is a slippery slope. The trivial many will bury you in a pile of unnecessary cost, trouble, worries, wasted energy and valueless action. No one, and no company, has the luxury or reason to manage all the details. Instead, the right path is to manage only those that are critical to producing the outcomes you desire. Focus on the inputs that really matter. All the rest, leave alone unless they become significant" (Craig Gygi, Neil DeCarlo, Bruce Williams, 39).

Getting to Work

Focus on the vital few details that will provide the biggest bang for your buck. What systems and processes can you improve that will help you reach company goals? What can you fix to eliminate road blocks, waste and inefficiency? What improvements will provide the largest financial payoff? How can you reduce frustration for customers or employees? What tweaks can you make quickly and inexpensively? 

Once you pinpoint the vital few areas to focus on—your priorities—the best way to drill down to the root cause is by asking the right questions to the right people—a 5-Whys Analysis. 

And please don't forget, The Box Theory™ Way—software and methodology—is also the best tool around to help you identify the root cause of problems and elevate your business systems and processes for high-performance results.
 

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Tags: Systems Thinker, Improvement, Laws/Principles

Theory of Constraints: 6 Limiting Factors to Your Business Success!

Posted byRon Carroll

Every businessperson with a vision of where they are going, and specific strategies and goals to get there, will face obstacles or barriers that hinder them from achieving success. Frequently, when confronted with solving problems or making improvements, business owners or managers feel overwhelmed. They lack the time, money, or resources to correct the problems they are experiencing. They often feel like their hands are tied, and they don't know where to begin.

Hands tied when solving problems

You can start by confronting the brutal facts about your business operations—the problems that are staring you in the face. For example: from customer or employee complaints, discouraging financial or performance reports, or just plain gut-level frustration, you have a general idea of your weaknesses and challenges. As discussed earlier, these symptoms are the result of unhealthy and under-performing business systems and processes.

In 1984, Dr. Eliyahu M. Goldratt, in his book The Goal, introduced the Theory of Constraints (TOC), a management philosophy based upon the application of logic and scientific principles, to help organizations achieve their goals. The principles of TOC will provide you the shortest distance between two points—where you currently are, and where you want to go.

What Is the Theory of Constraints?

The Theory of Constraints is based upon the assertion that: “Every real system, such as a business, must have within it at least one constraint (limiting factor). If this were not the case then the system could produce unlimited amounts of whatever it was striving for, profit in the case of a business. . ." (Dr. Eli Goldratt).

In other words, every business operation has something inhibiting it from reaching its full potential.  Some condition exists that limits sales or production output. This limit or constraint determines the maximum capacity of the system. By removing or improving the single constraint, the system is elevated to a higher level of performance.

Below are six types of constraints that can hold back an organization. The solution to your problems can be found in any or all of them; some may overlap.

  1. A Logical Constraint - Faulty thinking or assumptions can block success (e.g., believing people are the problem when ineffective systems—hiring, training, and so forth—are the real problem).

  2. A Process Constraint – The output of work processes is reduced by a weak-link or bottleneck in the process (e.g., work piled up in an in-basket; inventory waiting to be processed).

  3. A Physical Constraint – Physical components of a process often have limitations (e.g., capacity of a machine; available space or time; capability of a person; physical obstacles such as clutter or travel distance, and so forth).

  4. A Self-inflicted Constraint – A company's culture, rules, or policies can have a detrimental effect on results (e.g., lack of accountability, not hiring older people; sticking with the "sacred cows" of work practices).

  5. A Personal Constraint – Personal traits of an owner or manager can hinder performance (e.g., disorganization, procrastination, perfectionism, indecision, fear, incompetence, lack of time, or failure to face problems). Do you have any beliefs or behaviors that are holding back your business?

  6. An External/Market Constraint – Obstacles can exist that you have no control over (e.g., market size; customer attitudes; competition; the economy). You can often adapt to these external constraints over time by adjusting your business strategy.

As with a medical diagnosis, the symptoms of a business problem don't always point directly to the cause of the problem. In fact, most of the time, the problem you experience is not the real constraint. Just as a cough is only a symptom of an unhealthy system within the body, the pain or frustration you feel about your business is likely the effect of a deeper problem. Some constraints (e.g., physical) are more apparent than other constraints (e.g., logical).

Consider this: While there can be a variety of problems within a business system, only one step of the process at a time is the constraint on the entire system—the weak link and true cause of restricted output.

You can only improve the results or output of that system by eliminating the weak link or elevating its performance. Time, effort and money spent to strengthen the other links in the chain—the other steps in the process—will not improve the system output. The weak link governs the performance of the whole system!

Bottleneck of a Process

 (Answers: Step 4; 14 per hour)


Once you have strengthened or elevated the weak link, another link or step in the process becomes the weakest and may deserve your attention. Thus, by always focusing efforts on the weakest part of the system, you get the maximum benefit from your business improvement efforts.

Because only a few core systems or processes drive your business results—and each has just one constraint at a time—you can now focus your energy on the few problems that really matter the most. Make the necessary improvements and then tackle a new constraint. Watch your business take off!

Theory of Constraints: Performance = Full Potential – Constraints

Throughput

The Theory of Constraints assumes that a system has a single productivity goal. The challenge is to increase the output, or "throughput" of the system by managing the constraint that blocks your ability to reach that goal.

For example, the throughput of a marketing and sales process is measured by the dollar-value of orders written. The throughput of a production system is the dollar-value of products shipped. For a business as a whole, the measurement of throughput is the final cash collected from the sale of its products or services.

Many company owners mistakenly think they need to optimize all of their business systems and processes (logic constraint). They often measure individual processes and reward performance independent of overall business results.

Surprisingly, the improvements of quality or efficiency, as important as they are, do not always lead to a corresponding improvement in total throughput. In fact, an optimized system or process can create a negative effect on the next system in a line by overwhelming it with too many inputs.

Improving any but the weakest step within a process creates excess output that piles up in front of the weak step, often called a bottleneck. Bad things happen when work piles up, when you overfeed a process. Don't create any more inventory or work-in-process than is necessary to maximize throughput!

Remember: The key is not just to eliminate the bottleneck-step of a particular system, but to elevate any complete system or business activity that constrains the throughput of the entire business. All of your core business systems and processes must work in synchronization to achieve the optimum result. While efficiency and cost cutting are important, the best measurement of real improvement is increased throughput—revenue and profit.

In my experience with small businesses, insufficient sales are usually the major constraint on the throughput of the business. No matter how efficient the operation, without a steady flow of sales into the pipeline, the output is always disappointing.

By the way, your cost of goods plus overhead expenses create a monthly sales break-even point for your business. Throughput should cover those costs as early in the month as possible. You only make a profit on orders shipped after you reach the break-even point!

TOC in Action

Kid's Korner manufactures and distributes a unique line of children's furniture and accessories through five retail stores located in shopping malls. Owners want to double annual sales from three to six million dollars without the cost of adding more stores. They also want to preserve the margin in their product by staying in the retail market. They decide to put their available resources into Internet marketing.

The first constraint the owners face is that not enough people visit their sorry website. They hire a person skilled at search engine optimization (SEO) and Google Ads to improve online traffic. With more people coming to the site, their constraint is now the low percentage of visitors who become paying customers.

The owners hire a professional copywriter to improve their message and add an irresistible offer of free shipping. To their surprise and excitement, product sales start to take off! Sales throughput, however, does not increase as expected. They soon discover the next constraint, their inability to fulfill all the orders on a timely basis. The company adds another person to their bottleneck shipping department, and the problem is solved; sales throughput goes up.

The results from the website continue to exceed the owner's expectations, but now they can't keep all of their products in stock—a new constraint to overcome. For example, they have a line of lamps that come in twelve different styles. Production is hampered because they must break down and set up the production line for each style.

A review of sales data shows that four lamp models account for 75% of their lamp revenue (see 80-20 Rule). They make a difficult decision to trim the models to four. A miracle occurs! While they lose a few sales, production is much more efficient and the throughput on lamps dramatically increases—overall business throughput also jumps.

Lamp production has improved enough that sales again become the constraint for this item. The owners decide to take advantage of the productivity and warehouse the excess inventory. This proves to be a costly decision. It ties up needed cash. Demand drops drastically on one of the stocked lamps, and a production flaw, not caught during the inventory buildup, causes a significant amount of rejects and waste.

The owners revise their strategy and begin to pace lamp production with sales—no inventory buildup of potentially obsolete items, no cash sitting on shelves, no hidden production flaws. They discover that more profit is made when sales and production flow through an evenly paced business system.

By applying the Theory of Constraints, the owners of Kid's Korner focused on the critical systems and processes that would increase throughput and help them reach their six-million-dollar goal.

While you may have a different business model, these TOC principles also pertain to your company.

Now, go find the constraints—weak links, bottlenecks, obstacles—that are hindering the throughput of your business!

 

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Tags: Laws/Principles, Efficiency/Speed

Employee Productivity: 7 Tips to Harness the Power of Urgency!

Posted byRon Carroll

With some people (like owners and managers), everything seems to be urgent, pressing, dire, critical, serious, or top-priority. With others—employees who are laid-back, casual, carefree, lackadaisical, or even unconcerned—nothing is urgent.

In business, a general sense of urgency is a good thing, but it usually doesn’t happen automatically.

My mother recently fell and broke her pelvic bone. She recovered in a rehab facility. Never-ending patient demands at the care center kept staff on-the-run all day long. Urgency, and the resulting productivity, is built into the culture. The business owner just smiles as he watches people scurry around getting their work done.

The Power of Urgency to Increase Productivity

You may not be so lucky. Most owners and managers have to be more creative to infuse their company culture with a sense of urgency. If done successfully, however, the payoff includes motivated employees, happy customers, lower costs, and increased profit.

An Example of Urgency

When I was a young man going to college, I worked for a company that had a “hot product.” We were three weeks behind in production and shipping. Customers were constantly calling to have us trace their order, thinking it must be lost. A picture hung on the wall with a chimpanzee dressed as a shipping clerk. To a customer over the telephone, the chimp declared, “Trace it! We haven’t even shipped it yet.” That was our story.

Every shipment was urgent to prevent orders from being canceled. One day, I decided to pack an extra twenty cases of product and process a few more orders after my regular shift was over. It took me another twenty minutes. Continuing each day, I packed an additional hundred cases in the week and about 450 cases in the month. My shipping buddy decided to join in, and we completed nearly a thousand extra cases during the month for our employer. It was urgency that drove us to it. (And truthfully, we wanted to avoid being yelled at by angry customers or a grumpy-pants boss.)

Bad Urgency vs. Good Urgency

Urgency that comes from “putting out fires” is not good. It is the result of poor planning and execution of business operations. This kind of urgency is very stressful and a real downer for everyone.

However, when the energy is properly harnessed, urgency can elevate business performance and produce amazing results (motivated employees, happy customers, lower costs, and increased profit).

Simply put, urgency will increase productivity and accelerate the sale of goods and services. Employees are motivated by a sense of accomplishment (and sometimes incentive pay). Customers love to receive products fast. Higher sales-throughput enables a company to reach its break-even point earlier in the month, and that sends profits soaring. Everyone wins!

Dos and Don’ts

Before you try to introduce urgency into your business operation, keep in mind there is a RIGHT WAY and a WRONG WAY to go about it.

Here are three things you don’t want to do to add the element of urgency:

  1. Don’t set goals to motivate people that are unrealistic. Goals that are too hard to reach kill motivation and cause resentment (especially when there is a financial incentive involved).

  2. Don’t skip steps in a proven business process. Skipping steps such as a preparation step or a quality-control step for the sake of urgency will create problems that nullify any gains.

  3. Don’t turn up the speed on the conveyor belt. People can only work so fast and still maintain quality. Efficiency is better achieved by eliminating speed bumps and system busters than by pushing people beyond a reasonable work pace.


Now, here are four legitimate things you can do to create a sense of urgency:

  1. Let customer expectations drive the urgency. Tell customers you have next-day shipping or one-week lead time, or a specified completion date. Employees will do what it takes to fulfill the company promise.

  2. Set daily, weekly and/or monthly goals. Speed and urgency naturally increase as people get closer to a deadline. For example, employee productivity accelerates to meet a shipping goal by the end of the week (e.g., number of boxes, orders, or dollars). It is a good idea to post results and hold people accountable for achieving the stated goal.

  3. Create financial or other incentives. Self-interest is highly motivating for most people. A good incentive system—financial or otherwise—will lift employees, speed processes, and drive down unit costs.

  4. Declare an emergency. This infusion of urgency can only be used once in a while and should be substantially true (e.g., you may lose an order). Proclaiming an “emergency” too often is an indication of weak management. Declaring emergencies that are not real is like the boy who cried, “Wolf.” The plea for help will eventually be ignored.

Keep in mind: a high-level of urgency cannot be sustained. People have peaks and valleys of energy and productivity. They can’t stay in top-form all day, every day. You have to accept that. However, you can have higher and longer-lasting peaks and shorter-shallower valleys by adding one or more of the urgency triggers described above.

Where Do You Start?

Infuse the power of urgency into the weakest of your core processes for selling and delivering products and/or services. Watch as surrounding workers and processes catch the fever. Keep an eye out for the physical bottlenecks that may be holding people back, and elevate those constraints.

Oh, and one more thing: kick your business into high gear with Box Theory™ products.

 

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Tags: Efficiency/Speed, Cost Cutting, Laws/Principles

Great Customer Service: 50 Quotes From People Who Know! (slideshow)

Posted byRon Carroll

We can't learn too much about our customers—who they are, where they hang out, how they think, and what they want. Most of us don't have enough customers and would like to get more.

Stating the obvious: Happy customers translate to more sales. Increased sales enable your business to hit the break-even point earlier in the month. After reaching the sales break-even point, profit margins go up dramatically. With more profit, everything gets better, and you have a prosperous enterprise.

Are your customers as happy as they could be? Do you have "killer customer care?"

Four Things Customers Want

Customers all want the same thing—the best deal they can get on desired products and services. They want high-quality. They want it fast or on time. They want it at a good price. And they want a pleasurable buying experience.

Bad Customer Service

Photo credit: Wordpress.com  

Learn from the Experts

Many lessons have been learned over the years about how to serve customers well. The slideshow below will provide you with some great insights. These profound statements are from people who truly understand the principles of customer care:

Walt Disney
Sam Walton (Walmart)
Mother Teresa
Ray Kroc (McDonald's)
Bill Gates
Mahatma Ghandi
Zig Zigglar
Steve Jobs
J. C. Penny
Benjamin Franklin
Dale Carnegie
Aristotle
Stephen Covey
John F. Kennedy
Albert Einstein
and others

Your Customer Care System

Keep in mind, the informative statements you are about to read won't help your business one bit unless you incorporate them into a business system or process. There is no other way!

Review the slideshow. Make notes. Then, go apply some of these profound principles to elevate your customer-service systems today.


 

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Tags: Business Systems, Laws/Principles, Customer Retention

Kaizen: Ten Ways to Achieve Continuous Improvement!

Posted byRon Carroll

After World War II, business leaders in Japan developed a strategy to become more competitive and profitable. Since then, “Kaizen” (change for the better) is widely practiced in businesses around the world. It is commonly referred to as “Continuous Improvement.”

Kaizen is a deeply held belief that everyday managers and staff can turn problems into opportunities, and find ways to become better for customers, employees, vendors and stakeholders. It is a compelling desire to achieve operational excellence.

"Traditional Western philosophy may be summarized as, 'if it ain't broke, don't fix it.' The Kaizen philosophy is to 'do it better, make it better, and improve it even if it isn't broken, because if we don't, we can't compete with those who do'" (Steve Hudgik, Graphics Products, Inc.).

Continuous Improvement—Kaizen—is an idea whose time has come for the small to midsize-business community!

Kaizen Continuous Improvement

So, What Exactly Is Kaizen?

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

"The goals of continuous improvement are simple: 1) make things easier 2) better 3) faster and 4) cheaper” (Shigeo Shingo, pioneer of Lean Thinking). It is the new "best solution"—from the customer’s point of view (five customer types).

Watch Honda’s 30 second ad that captures the spirit of Kaizen

 

 

Kaizen is a mindset and practice that encourage reflection, teamwork, standardization, mastery of the process, experimentation to find better ways, comparison to baseline accomplishments, incremental and ever-evolving change, and the ongoing improvement of results. It asks the simple question, “How can I do this better?” Kaizen is the everyday quest for perfection!

Masaaki lmai, father of Continuous Improvement, teaches, “Kaizen means ongoing improvement involving everybody, and without spending much money. You can't do Kaizen just once or twice and expect immediate results. You have to be in it for the long haul.”

Many larger companies have adopted one or more formal methodologies to achieve Continuous Improvement” (e.g., Six Sigma, Lean Thinking, or the Theory of Constraints). However, these powerful strategies are rarely considered by small business owners—a fact we hope to change!

Things Can Always Be Better

Daily improvement applies to every area of your business—a shorter lead-time attracts more customers; modified words on a web page induce more visitors to buy; bottled water in the reception area pleases guests; an improved business form or application reduces errors; a more compelling radio ad boosts sales leads, and so forth. There are hundreds or even thousands of possibilities to improve any organization.

Below are 10 ways to help the philosophy of Kaizen—Continuous Improvement—take hold in your company.

  1. Start with Yourself – Many entrepreneurs are so busy “sawing” they have little time to step back, read, ponder, analyze, plan, and essentially “sharpen the saw.” Get connected with your numbers (leading and lagging indicators), and with customer, employee, and vendor feedback. Read skill-based business books and articles. Spend time in the Zone working on your business (Michael Gerber). Seek ways to improve your own personal performance, and encourage those around you to do the same. Your company—people, products, and processes—will improve at the rate you improve. Lead by example!

  2. Involve Everyone – Kaizen is a strategy that involves every employee, from management to the cleaning crew. Hold business improvement workshops at the company, department or team level—perhaps at the location of the business system you are attempting to improve. Challenge employees to routinely submit suggestions for positive change. “In Japanese companies, such as Toyota and Canon, a total of 60 to 70 suggestions per employee per year are written down, shared and implemented" (Steve Hudgik).

  3. Challenge the Status Quo – Throw out all your old fixed ideas on how to do things. Replace “sacred cows,” personal opinions, and “it’s the way we’ve always done it” with performance facts and data. Numbers are the language of improvement. Avoid the emotional traps of blaming people or making excuses that prevent you from discovering the real problem. Once you have established the new best-way of doing something, stick with it until a better way is found. When confronting old ideas and traditions, apply the Rules of Engagement.

  4. Get Specific – The dollars—made or lost—are in the details of your business systems and processes. Drill down. Use a 5-Whys Analysis and keep asking “why” until you get to the root cause of the problem. Improve specific steps or components in your business systems and processes; there is no other way! Get defects to less than 1%. Cut lead-time in half. Do little things to WOW customers or employees. Pennies earned from small improvements add up fast.

  5. Keep It Simple and Inexpensive – Ideas for incremental improvements that bubble up from workers are usually easier to implement and less expensive. Like our friend MacGyver, apply creativity and craftiness before cash. Follow the 80-20 Rule; do the twenty-percent of things that get you eighty-percent of improvement results. And do it NOW! Don’t wait until you can achieve perfection.

  6. Focus on the Right Things – Improve the core business systems that enable you to find and keep customers, and earn more money. Find ways to provide customers greater value and a better buying experience. Zero in on removing the obstacles, bottlenecks, and weak links in your business processes that slow lead-time, order completion, and collection of cash. Fast throughput of products and services creates happier customers and more profit. Remember: quality plus speed equals low cost. Put emphasis on enhancing business systems that drive your Balanced Scorecard goals, or that improve a line-item number on your financial statement.

  7. Provide Training – Kaizen involves setting performance standards for your business systems and processes and then striving to elevate those standards. Continuous Improvement requires ongoing development of your most important asset—PEOPLE! Tom Peters, business-management author, teaches, "If your company is doing well, double your training budget; if your company is not doing well, quadruple it!” As process changes are made, face any resistance by employees head on—Listen-Thank-Consider-Decide.

  8. Look for Breakthroughs – Up to this point, we have focused on small incremental changes. However, Kaizen will sometimes produce breakthrough improvements—a moment to celebrate! What’s a breakthrough? Chet Holmes, sales and marketing guru, says, “Let me explain a breakthrough. It's when you find a method [system] of doing something that dramatically accelerates your ability to accomplish your goals (“The Ultimate Sales Machine”).

  9. Never Stop Improving – Halt the process immediately to fix quality or customer-related problems. Don’t let problems accumulate for later handling. Reflect daily (in the Zone) on your opportunities for improvement and innovation. Make business improvement workshops a weekly habit. Implement a suggestion-box system that calls for employees to submit so many improvement ideas per month or year. And be sure to compensate people appropriately for implemented solutions. Just one improvement a day is 260 improvements a year!

  10. Get Box Theory™ Products – Forgive me if this seems a bit like a sales pitch. I seriously believe that applying the Box Theory™ Way—and software tool—is the most important thing you can do to get Continuous Improvement working in your company. It is a one-of-a-kind product based upon decades of proven principles—not too hard, not too basic, but just right for the owner of a small to midsize business.

Continuous Improvement Forever

In Japan, Kaizen is a system of improvement that not only includes business, but every aspect of personal life. Like Systems Thinking, it becomes second nature.

Continuous Improvement of people, products and processes should be the endless quest of entrepreneurs, business owners, and managers. Wouldn’t you agree?

In short, Continuous Improvement of common tasks produces an uncommon organization! Now, what improvement could you make today?

 

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Tags: Improvement, Laws/Principles

Small Biz Owner: Do You Have a “Scarcity” or “Abundance” Mindset?

Posted byRon Carroll

During challenging economic times, it is important for most small-business owners to run a lean business operation—cost conscious and careful with financial resources. However, a mindset of “scarcity” can be harmful while a mindset of “abundance” may be just the ticket to more prosperous days. Let me explain.

Scarcity and Abundance Thinking

The Scarcity Mindset

If I have a scarcity mindset, I tend to see winners and losers. Look, there is only so much to go around, and if you get more, then I will naturally get less, right? It’s a dog-eat-dog world. By carefully holding on tight to everything I have, I will be more secure, prosperous and happy. It’s not about wishing ill-will on other people. It’s just a way of thinking to protect what I have worked so hard to earn and accumulate.

The Abundance Mindset

If I have an abundance mindset, I tend to see everything in terms of win-win. There are unlimited resources and I am genuinely happy for the success, well-being, achievements, recognition, and good fortune of other people. I love to contribute to and celebrate the accomplishments of my friends, associates, and even competitors. The better they do, the better I do. Success generates more success. In my way of thinking, there is plenty to go around. I win. You win. We all win!

The Scarcity Organization

It is very easy to get into a scarcity mindset when a business is struggling and every penny counts. The normal instinct of many owners and managers in financial stress is to cut costs to the bone. But like dieting, this can be unhealthy if taken too far. For example, cutting corners to marketing activities can create some immediate and short-term financial benefits. However, profit margins are eventually eroded by severe cuts to core business systems such as marketing, accounting, or even hiring and employee compensation.

The Abundance Organization

It is a misunderstood notion that when the rich get richer, the poor get poorer. The truth is that when the rich get richer, the poor generally get richer as well. We prosper most when we help others prosper, when everyone in our network is doing well. 

In a nearby community, a reputable fast-food restaurant stood alone with no competition. They “owned” the neighborhood. Unfortunately, the store went out of business. A mile down the road is a cluster of twelve fast-food restaurants competing side by side. The parking lots are always full, and even the weaker stores are thriving. That’s abundance thinking!

Zig Ziglar, the great motivator, taught, “You will get all you want in life if you help enough other people get what they want."

With a mindset of abundance, the business owner should always be looking for the best value he or she can get when purchasing goods and services. However, getting the most value from vendors or employees does not necessarily mean paying the lowest price, just as giving the most value to the customer does not always mean being the cheapest in the marketplace.

As my outlook matured over the years, I paid more money for fast service and superior quality rather than less money to a questionable vendor with a lower price. I paid employees above the market rate because they “made things happen” that created value in my business. I put more money into my business systems and processes because the payoff far exceeded the out-of-pocket expense.

In my former world of accounting, I often gave clients ideas that saved them thousands of dollars. I sent them new customers and even became one of their good customers myself, only to have them mumble about a few hundred dollars in accounting fees I charged. They did not put a value on the significant non-accounting elements of our relationship. They had a scarcity mindset.

Which Describes You?

Compare some characteristics of the scarcity mindset to those of an abundance mindset. How do you think about and relate to your vendors, employees, and customers?

Scarcity Abundance
Not enough resources to go around
More than enough resources to go around
I Need to win/succeed I Need to be fair/we all succeed
I have the answers We learn from each other
Relationships of suspicion/doubt Relationships of trust
Adversary Partner/Ally
Expense Investment with a return
Focus on costs/tasks Focus on results/systems and processes
Buy time/hours from people Buy desired outcomes from people
Expect minimum required performance Expect high performance
Micromanagement Stewardship
Low morale High morale
Worry/Stress/Frustration Confidence/Peace

The outcome of an abundance or value-oriented mindset is the maximum utilization and development of people. The outcome of the scarcity or cost-oriented mindset is the maximum control of people. Over the years, I have learned that I want to control business systems and processes, but I want to develop people as valuable partners.

According to Brian Tracy, business author and teacher, the Law of Abundance is this:

“We live in an abundant universe in which there is sufficient money for all who really want it and are willing to obey the laws governing its acquisition.”

Achieving the more productive mindset of abundance requires a leap of faith for many of us. It is a counter-intuitive principle. Come to think of it, isn’t this the great lesson learned by Ebenezer Scrooge? (Charles Dickens, "A Christmas Carol," 1843)

 

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Tags: General Business, Culture, Laws/Principles, Business Leader, Financial Systems

Discover the Hidden Gold in Your Business Systems and Processes!

Posted byRon Carroll

What your customers and employees think of your company, and how much profit your company generates, are the result of small and simple things—mostly unnoticed—that go on every day in your business operation.

A Valuable Lesson

In 1849, a young merchant from Massachusetts was caught up in the excitement of the California gold rush. He sold everything he had to move west and seek his fortune. He was told the gold nuggets were so big that a person could hardly carry them.

Largest Gold NuggetThe world’s largest Gold Nugget ever found.
Discovered in 1872 and called the Holtermann Nugget.
It was 630 lbs in weight.

Day after day, the young man dipped his pan into the river and came up empty. All he had was a growing pile of rocks to show for his efforts. Discouraged and broke, he was ready to quit. Then, late one afternoon, an old experienced prospector happened by and said to him, “That’s quite a pile of rocks you’ve got there, my boy.”

The young man responded, “There’s no gold in this river. I’m going back home.”

Walking to the pile of rocks, the old prospector said, “Oh, there is plenty of gold in this river. You just have to know where to find it.” He picked up two rocks and smashed them together. One of the rocks cracked open, revealing several flecks of gold that sparkled in the sunlight.

The young man noticed a bulging leather pouch tied around the prospector’s waist. He said, “I’m looking for gold nuggets like the ones in your bag, not just tiny flecks.”

The prospector opened his pouch and extended it toward the young man. He looked inside, expecting to see a handful of large nuggets, but was shocked to see that the pouch was filled with thousands of tiny flecks of gold.

The old prospector said, “Son, it seems to me, you are so busy looking for large nuggets that you’ve missed filling your pouch with these precious gold flecks. The gradual accumulation of these little flecks has brought me great wealth.”

Discover the Gold Flecks in Your Business Processes

The tiny flecks of profit in your business are found at the detail level of your business operations. Like the rock, you may have to crack open and examine your business processes to find them. Small changes to eliminate waste—deviation, defects, and delay—will fill your pouch with the gold you seek.  Daily innovation and improvement will gradually make you wealthy.

Remember: “By small and simple things are great things brought to pass."

 

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Tags: Business Systems, Improvement, Laws/Principles, Cost Cutting

Business Improvement: Some Ideas that May Disturb Your Thinking!

Posted byRon Carroll

Occasionally, I like to ponder on the words of people who truly understand the “nuts and bolts” of business operations, and how to get exceptional results. I especially like statements that bring new insights to Systems Thinking. Below I have included a few quotations that might give you a big idea to improve your business.

Keep It Simple - Einstein

“The most effective way to improve productivity is to eliminate [unnecessary] work” (Bill Conway, self-made billionaire), and similarly, “There is nothing so useless as doing efficiently that which should not be done at all” (Peter F. Drucker, management consultant and author).

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency” (Bill Gates).

"Continuous improvement is not about the things you do well—that's work. Continuous improvement is about removing the things that get in the way of your work. The headaches, the things that slow you down, that’s what continuous improvement is all about” (Bruce Hamilton, continuous improvement educator).

“Where there is no standard, there can be no improvement. For these reasons, standards are the basis for both maintenance and improvement” (Masaaki Imai, father of continuous improvement).

“Four goals of improvement: 1) make things easier 2) better 3) faster and 4) cheaper” (Shigeo Shingo, pioneer of Lean Thinking).

“There are two reasons why we change. We learn enough that we want to, or we hurt enough that we have to” (Shigeo Shingo).

“A relentless barrage of ‘why’s’ (see 5-Whys Analysis) is the best way to prepare your mind to pierce the clouded veil of thinking caused by the status quo.  Use it often” (Shigeo Shingo).

“You are surrounded by simple, obvious solutions that can dramatically increase your income, power, influence and success. The problem is, you just don't see them” (Jay Abraham, marketing consultant; ...unless you're a Systems Thinker - Ron Carroll).

“The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed” (Henry Ford).

“Failure is only the opportunity to begin again more intelligently” (Henry Ford).

“If management is not removing the obstacle, management is the obstacle!” (Author unknown).

“If your business depends on you, you don’t own a business—you have a job! The business owner should be devoted to business development, not doing business” (Michael Gerber, E-Myth Revisited).

“Customers always seek the ‘best deal.’ They reward companies that serve them best and allow the others to fail. It is how the customer feels about your business as a whole that matters most. Everything about your business—advertising, cleanliness, return merchandise policy, courtesy and knowledge of employees, product selection, price, location, delivery time, and so forth—is what they are choosing. Your entire business is your product and it must shine throughout. When it does, YOU become the “best deal!” (Ron Carroll)

“Real waste lurks in places that don’t look like waste” (Shigeo Shingo).

“One thing you can’t recycle is wasted time” (Taiichi Ohno, considered father of Lean Manufacturing).

“Tell me and I will forget, show me and I may remember, involve me and I will understand” (Chinese Proverb).

“Reward those who Do, Train those who Can’t, Replace those who Won’t” (Henn’s Creed).

“In God we trust. All others, bring data” (W. Edwards Deming, Total Quality Management), and similarly, “Without data, it’s just an opinion!” (Author unknown)


One good idea—IMPLEMENTED—could soon put more money in your pocket! Which idea above can you leverage for greater success?

You can read some other thought-provoking statements about business systems and processes at www.BoxTheoryGold.com/quotes-about-business-systems.

 

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Tags: Systems Thinker, Improvement, Laws/Principles