Cracking the Strategic Planning Code – Ideas from the Experts

By Larry Cassidy, Marc Emmer, Diana Ho, Brian Oken, Steve Phillips & Paul David Walker

When the topic of strategic planning comes up, some individuals get very excited about the planning process while others consider it just a waste of time. With so many different styles and approaches, we thought that we’d ask a number of experts for how they approach this topic and the top three key points to think about before your next strategic planning meeting.Team activity

Larry Cassidy

Strategic Conversation

My view of so-called “strategic planning” is that today it is less an event and more an ongoing conversation. The most effective organizations are evolving, and for me that moves viable strategic thinking away from being an annual event and toward an ongoing conversation.

The idea that we can somehow nail down where and how things are (and, projected, where and how they will be into the future), and then craft a lasting response, is ineffective. The world in which we operate is constantly changing; thus, we too must participate in that same game, which requires a continuing and continuous conversation.

As that applies to crafting strategy, I recommend frequent sessions in which the “team” comes together to discuss the future. For each session, step one is to identify the most important questions which must be answered; step two is to arrive at agreement on the answers; and, step three is to define action steps based on those answers (what, why, who, how, when, resources and milestones). As you prep for these ongoing sessions, consider:

  1. Inviting more of, rather than less of, your management and supervisory team. Interesting ideas often come from the “less likely” participants. And participation invites a sense of “ownership.”
  2. Requesting from the attendees, in advance, the questions they feel are the most important to the firm’s future. You may be surprised at what you get.
  3. Building each session around a few key questions, using multiple breakout groups to discuss each question, and mixing people and functions within breakout groups for each topic discussion (thus creating fresh energy and different chemistry around each question).
  4. And, inviting a few key outsiders to participate in each session (good strategic thinkers, creative types, folks who will challenge and “stir the pot”). You will find their input tends to raise the bar for those on your team.

Marc Emmer

Strategic Planning: The Entrepreneurs Dilemma

There is one thing that almost all entrepreneurs have in common; they want to grow. Yet determining where and how to grow can prove elusive, even to the most savvy strategists.

Which wayOften, management teams face gut wrenching strategic choices. While growing a core business incrementally offers a high probability of success, companies with a singular focus are subject to concentration risk that inhibits enterprise value. The more the company grows, the bigger the problem becomes. A diversification strategy reduces concentration, but growth far afield from one’s core competency, increases the probability of failure.

Often, entrepreneurial companies also lack the talent to focus on transformational business model innovations that could drive competitive advantage. Unfortunately, many companies create a 12 month forecast within their core business, and pass it off as a strategic plan. A well thought out vision balances the short term and the long term and clarifies the company’s value proposition and strategic priorities.

Here are some success factors to consider before engaging in strategic planning:

  1. Market Analysis-A thoughtful review of trends in the industry that will impact future demand.
  2. A level of preparedness on the part of the participants so that they are in a position to make fact-based strategic decisions.
  3. A process that enables execution on strategic objectives.

As we approach the time of year when many companies formalize their business strategies, it is important to structure a framework that ensures that management takes the time to think, both about the core business and potential disruption. Great companies weave strategic thinking into their management DNA and then convert strategies into actionable measurable tactics that drive results.

Diana Ho

The Art of Strategic Planning

Strategic planning has fallen in and out of favor numerous times since my earliest days as a planning facilitator. While my experience base and process toolbox has grown over the years, so has my “beginners mind.” Rather than bringing a methodology that works for all, I approach each planning engagement as a blank slate, pay attention, listen deeply and design each process based upon the unique characteristics of the client organization.team mtg

Every organization has a strategic plan whether they know it or not. The opportunities embedded in a “strategic planning process” include a) making the plan explicit, b) aligning expectations, c) leveraging resources and d) building a skilled planning- and accountability-minded team. The process of planning is equally as important, if not MORE important, than the resulting “plan;” and the effectiveness of any planning process is directly correlated to the extent that it is aligned with the leadership/power structure of the organization. So design the process well, Grasshopper!

When considering external resources, decide where your needs lie along the continuum of “expert” (who will tell you what your process and strategy ought to be) and “facilitator” (who will leverage your organizational resources, ask questions, provide options, build capacity and hold your feet to the fire).

Three things to consider before having a strategic planning meeting:

  1. What is the organizational “appetite” for planning; should we be thinking in terms of a “planning meeting” or a “planning process and mindset?”
  2. Who needs to be at the table?
  3. What are the organizational and personal rewards and consequences for planning or not planning?

Brian Oken

Strategic Planning for the Rest of Us

If you’re like most of us, you’re leading a small to medium-sized business with limited resources, no time and a million things you need to get done. To get the best results, I believe you should narrow your focus, engage your team and make your efforts count.

But before you proceed with any group planning activities, you should:

  1. Be clear about what you want for your business. Do you want to grow market share, sell in the near future, build a legacy…?
  2. Have a competent management team in place.
  3. Decide whether you’re going to use an outside facilitator or Do-It-Yourself.

Here’s my approach to strategic planning:

Be focused and realistic. It’s impossible for any group to successfully accomplish more than 1 or 2 strategic goals a year because of all the associated projects and tasks. If you global-teamtry to do too many things at once, it will dilute your focus and compromise your results. Remember, you want to actually achieve these goals.

Generating great financial results is a team effort. Your plan and strategy (and the reasons for them) must be presented in such a way that everyone in your company can easily understand them. The plan must also connect daily activities to company goals. This is the only way your employees will feel connected to your overall vision. People need feedback and need to know their efforts are making a difference. Be transparent about your results and celebrate your successes!

Implementing a strategic plan is a methodical approach and an ongoing process to help you and your team work smarter and get better results. But in order for this to happen, your plan must drive the agenda of your staff meetings and be referenced and updated on a regular basis. Once you see how an effective plan can help you achieve your goals, I doubt you will ever operate without one again.

Steve Phillips

The Strategic Planning Meeting – Turbo charge your approach!

Strategic planning is by its nature, time consuming and hard! Assessing the environment and the company and then positioning and aligning resources takes tons of effort. So much effort that many Fortune 500 companies just don’t do a good job. And… it’s these companies that rarely hit their potential. But true strategic planning, (like what McKinsey or BCG does) can easily cost $1M or more. So what is the answer? How does a company do great planning at a small fraction of the cost? I think a turbo charged approach meets most everyone’s needs. It’s quick, uses your best people, gets everyone bought in to the implementation of the plan, builds-in an accountability system, and gets it mostly right. Think of it as a leveraged approach.

So what is the process for a turbo charged approach? It’s easy! I find it most useful to use a third party (not the CEO) to organize the process, collect and analyze the data, set the objectives and outcomes for the meeting (with the CEO) design the agenda, and to facilitate the meeting. In this way, people can do their work and the third party can do all the leg work. Then when it’s most important, everyone can meet and use their time together wisely.

So how to approach turbo charged strategic planning?

  1. Pick a third party to organize and drive the process. It can be a senior level consultant (like me 🙂 ) or an internal specialist but it should not be the CEO or President. They have much better things to do than the leg work that it will take to make the meeting effective.
  2. Collect valid data. Some folks like to collect both external data and internal data but some are fine with just picking the brains of their top folks on what we really need to do next to be most successful. (Remember, this is a leveraged “turbo charged” approach). I suggest the third party personally interview participants for about 60 minutes each. This should be plenty of time to assess what should be done next year.
  3. Create a specific and detailed agenda based upon what you learned from your data analysis. This should also include the specific outcomes and objectives for theteam lightbulb meeting and detailed agenda items. Too many times people just put topics on the agenda without ever fully considering: the type of item, the champion of the item, the outcome of the item, the process for the item, the time line for the item, the pre-work needed to be ready to efficiently use time, etc. Creating a great agenda is an art and time consuming. There are many considerations and it often takes much longer than anyone expects but when done right, huge amounts get accomplished in the meeting seamlessly and the group actually enjoys the process (and if I have my way, walk out of the room a more effective team. See #5).
  4. Use a professional facilitator for the meeting. I am not just saying this because I am one. I am saying it because it works a thousand times better than not having one! I would much prefer to be maximizing everyone’s time and using each person’s brain in the room rather than have one of those folks worrying about lunch, the air conditioning or making sure the conversation stays on point. A pro will pay for themselves a hundred times over.
  5. Use the strategic planning meeting to tune up your team. There is no question that teams outperform groups of individuals on complex tasks about 99% of the time. It used to be that we did “teambuilding”. Now I find the best way to build your team is while they are working on a real project. A professional will know how to do this seamlessly and effectively and at the same time you are setting up your plans for the future. It’s a win win win win. Better strategy, alignment, direction, and teamwork!
  6. Do quarterly follow-ups to create a built-in accountability system, adjust the plan as needed, speed up the team, and continue to develop toward high performance. It only takes about 4 hours for the quarterly meeting to meet its objectives but most groups try to leverage or maximize their precious little time together. High performing teams will rotate who is in charge of each meeting and give them total freedom to run the session where and when and how they see fit. They can be at client sites, hotels, new offices, wherever will work for the theme of the day. Most groups put in place a ¾ day or all day quarterly meeting and use the extra time to develop everyone, either with team building, leadership development, site tours, or expert panels or guest speakers. It is a day everyone looks forward to. And then once a year, usually 4th Q, we do a longer retreat to close the year formally and kick off the next, all in alignment with the executive committee and shareholders meetings.

So there you have it. A leveraged approach to your strategic planning. Pick a third party to run the process, collect and analyze data, create a specific and detailed agenda, hire a professional facilitator to run the meeting, and create a built-in accountability system that ensures people stay on track and in alignment. This process works like crazy, takes very little time, is not terribly expensive, uses your people where they are best and does not waste their time. It creates ownership and buy-in, decreases resistance and makes full implementation almost assured, creates strategic alignment, builds your team and helps them to achieve and stay at high performance. It gives you a full opportunity to participate as a leader, makes everyone smarter and leaves your organization aligned, agile, collaborative, and highly productive.

Paul David Walker

Understand Present Reality

There are flows of intelligence that manifest as multidimensional streams of cause and effect at every level of life. These flows have momentum and move forward with or without you. In business these flows are formed by market wants and needs. As you consider your business strategy, it is important to understand these flows and position your window of opportunitycompany to use these flows, like a surfer at the sweet spot of a wave, to move forward accurately. It is pointless to try to swim against the current. As you ride these flows forward you will be able to see opportunities as they emerge before your competitors. The objective is to find emerging trends that lead to a window of opportunity, as we do with our clients illustrated here.

The Right Plan For You

It is dangerous to develop a strategic plan that does not take into account your companies true capabilities. If a surfer chooses a wave that is too big for their skills they will be drowned or seriously hurt, the same is true of a company. It does not serve well to develop a business strategy that requires more resources, talent, or momentum than the company can realistically achieve. Find a place in the flow of your market that acerbates you, not one that will drown you and your company. Once you succeed and gain power and skill, develop a bigger plan.

Explosive Targeted Actions

After understanding your place in market trends, build a simple focused strategic plan. Then eliminate all activities that do not support that plan. Make sure every executive understands that this is not a drill. It is a road map for all actions. Paint a compelling picture of the outcomes at every stage in your plan and develop the courage to act. Teams with clear missions, a sense of urgency, the stillness of a master, and explosive targeted actions are the ones that will win in the 21st century. Those that hesitate will lose. To summarize:

  1. Understand present realitytarget road
  2. Develop the right plan for you, not a grandiose fantasy
  3. Commit to explosive targeted actions

 

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014

Larry Cassidy has been a Group Chair with Vistage International (formerly TEC International) for over 27 years. He currently works monthly with more than 50 Southern California executives, in three chief executive groups and one group of key executives, regarding all aspects of their businesses. Larry can be reached at hndicapper@gmail.com and 714-460-3090.

Marc Emmer is President of Optimize Inc. a management consulting firm specializing in strategic planning. Marc is the author of Intended Consequences, Design the Future you Wish to Create. Marc can be reached at marc@optimizeinc.net or at 661-296-2568.

Diana L. Ho is a seasoned facilitator/executive coach, percussionist, book-binder and kick-ass project manager. She began her career in retail merchandising and was Vice President and division head in a Los Angeles management consulting firm before founding Management Arts in 1995. Contact her at DianaHo@ManagementArts.com or 310-475-6563.

Brian Oken has a 20 year track record as a successful President/CEO, having effectively guided organizations through aggressive revenue growth to sustained profitability. Throughout his career, he has been involved in managing, operating and strategically positioning companies in the public and private/family sectors. He is well known for improving the profitability of organizations while also creating great places to work. Prior to opening his own firm, Brian spent two decades running manufacturing and service based businesses as President and CEO. His accomplishments include significantly growing income and cash, being listed on the Inc. 500/5000 fastest growing company list, engaging in international strategic alliances and the launching of numerous successful new products. CEOs, Presidents and business owners call on Brian as a trusted advisor to help grow their companies, make better decisions with greater returns and create the highest performing workplace cultures. Brian can be reached at boken@informalcowboy.com or 310-466-2804.

Steven Phillips, Ph.D., Founder and CEO. In his relentless effort to deliver uncommon results, Dr. Steven L. Phillips has built an enviable reputation for his senior team consulting service that focuses on results-driven off-sites for senior leadership, strategic planning, and executive leadership. Dr. Phillips has helped thousands of individuals and organizations establish new levels of teamwork, transformation, and performance, all specifically targeted toward bottom-line results. Dr. Phillips has extensive experience as an Organization Development professional. For many years he served as a SVP Chief Talent Officer for a privately held 1B company with 10,000 employees. As a consultant, he has worked with Senior Executives at Microsoft, PepsiCo, Viacom, Mattel, Boeing, and many others, helping individuals, teams, and entire organizations successfully implement change. Steve also works one-on-one with Presidents and CEOs helping them strategize for powerful and successful leadership. Additionally, Dr. Phillips creates customized team development activities for executive teams designed specifically to shorten cycle time to high performance. Dr. Phillips’ best-selling books are used in corporations throughout the world. His latest book, The Senior Leadership Off-site Playbook, is soon to be released. Steven can be reached at sphillips@phillipsassociates.net or 310-456-3532.

Paul David Walker, Founder & CEO of Genius Stone Partners was part of building the first leadership firm to align Strategy, Structure and Culture, and has been a business leadership adviser to the CEO’s of Fortune 500 and midsize companies for over 25 years. He is the author of Unleashing Genius: Leading Yourself, Teams and Corporations, two other books, and will publish a new book called Invent Your Future. He has succeeded by unleashing the genius of the people around him and is known to be a visionary leader and master of collaboration. Paul can be reached at pauldavidwalker@geniusstone.com or 562-233-7861.

 

Inspiration and Techniques for Building Championship-Level Performance
Lighthouse clients have one thing in common – all are committed to boosting the performance of their organizations. So, we are pleased to introduce our clients and friends to Boaz Rauchwerger — speaker, trainer, author and consultant.  We highly recommend Boaz to you. Ask him to deliver one of his inspirational programs at your next executive retreat or strategic planning session.

One of our favorite Boaz programs is “Playing Like a Championship Team Every Day”. It helps you build on the strengths of everyone’s individual differences. This program helps you discover five steps to get everyone to join the building crew and resign from the wrecking crew. This is a very powerful and inspirational program that receives rave reviews every time.

• Master five techniques to inspire others to perform like champions
• Six recognition techniques including the powerful “good finder” program
• Learn four ways that your team can gain a competitive advantage
• Identify the three prerequisites for maximizing the team’s results
• Learn the two forms of keeping a daily score so everyone wins

Who is Boaz?
Over a 30-year span, Boaz, author of The Tiberias Transformation – How To Change Your Life In Less Than 8 Minutes A Day, has conducted thousands of seminars internationally on goal setting and high achievement. He has taught over half a million people how to supercharge their lives, their careers and how to add Power to their goals. His innovative program, for individuals and corporations, is a simple and highly effective process for high achievement. He was voted Speaker of the Year by Vistage, an international organization of CEOs and business owners. How to contact Boaz – Want more information on Boaz’s Power Program, including “Playing Like a Championship Team Every Day”? Just click here and we’ll be in touch.

 

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

To order the books, Cracking the Personality Code and Cracking the Business Code please go to www.lighthouseconsulting.com.

Streamlining Distribution

By Ted Margison

As the economy slowly heads forward, most companies need to get more done with the same resources.

globeStreamlining operations means eliminating activities that don’t add value and putting in place controls to make sure transactions get processed quickly and effectively.

Eliminate Non-Productive Activities

Everyone is really busy – they’re already overloaded, or are they?

“Why does it take so long to turn around orders?” asked the CEO, “Everyone says they’re working as hard as they can but how can it take so many days?”

“Your company is doing credit checks when orders are received and again when they are about to ship. Since your customers are Fortune 500 companies, do you really need these credit checks? If you skipped these checks you could save 2-3 days” the consultant replied.

“Of course we don’t need to do credit checks on our customers. Why on earth are we doing them?

“Apparently, several years ago you sold to smaller companies that had credit issues. To ensure credit checks got done the controller had all orders credit-checked.”

“We could probably handle 25% more business by eliminating these delays. We can stop that practice immediately.”

A lot of companies think they have a good grasp on how they operate but reality is different. Several years ago I began asking consultants ‘Have you ever asked someone how their company operates and found out later that what you were told does not match what really happens’. Without exception, the answer was ‘yes’ for every project they ever worked on.

A critical part of streamlining is making sure you understand exactly how you really operate, and eliminating all the activities that don’t add value. Usually, there are several opportunities to immediately free up resources. The following example is one that occurs in many companies:

“How are things coming with the new system?” asked the VP.

“I was really struggling with one thing but I finally figured out how to do the Flash report on the new system” the consultant said.

“What Flash report?”

The one Adam does. He spends about eight hours a week pulling together data from different sources to create the Sales Flash report.”

“Oh, that one. We stopped using that months ago.”

Well, now Adam has time to work on other efforts.

Make Sure Things Stay On Track

As you get busier and busier it is easier and easier for things to ‘fall through the cracks’.bizman maze

♦ Did the customer sign-off on requirements?
♦ Did the job get re-scheduled?
♦ When are the parts going to arrive?
♦ Did the change-order get approved?

Some demands might come from new customers or be for new types of products and services, resulting in considerable variation in the demand requirements. As such, not only do your personnel have to handle more transactions, they have to handle a lot of different processing requirements. This is where proper controls for managing transaction processing are invaluable. ‘Transactions’ are quotes, sales orders, purchase orders, service orders and so on.

“We get about 2,500 quote requests per month. Of these, we auto quote about 800 a month” the Customer Service person indicated. “The rest go to Engineering, so they are really swamped and turnaround takes a long time. Unfortunately, it is taking so long we get a lot of customer complaints and lose a lot of business – we only close 15% to 20% of our quotes.”

In a subsequent meeting with Engineering, “We work on major quotes – about 25 a month”.

Wait, what happened to 1,675 quotes? It turned out that these were going to some clerical personnel in another department that had no formal processes or tracking for these quotes. Two-thirds of all quotes were falling through the cracks.

Even worse, the people processing these quotes were only looking at how long it had been since the product was last sold and then trying to guestimate a cost and price based on a more recent sale of similar products. They didn’t take into consideration if the job was a government job or a commercial job, nor if there was one delivery or multiple deliveries. When a job was run for a government quote the cost overrun was extremely large, causing serious repercussions with the government agencies. Also, no one was tracking costs for preparing the quotes, which ended up being a problem for the government agencies.

In setting up new processes we addressed the issue of ‘transaction management’ – how do we manage the workflow to ensure things are done in a timely manner and cost-effective manner. In this situation, ‘cost-effective’ covers ensuring processing costs are properly recorded and cost risks for the transaction (e.g. potential for penalties, lost bizman cutting mazerevenue, lost profit) are properly covered.

In this situation, the most expedient solution was to use a shared spreadsheet document to track the processing of quotes. A separate worksheet was used for each type of job – government versus commercial. Within each worksheet, columns were set up for each department to record the date and time they received the quote and initials for when they completed their portion. Managers could quickly see what should be coming to their department and what was sitting too long in one department.

Certain conditions could result in extensive analysis which would require special handling and delay turnaround of the quote. For example, if the requested item was no longer available but the ‘replacement’ item might need to be certified, the quote was ‘red flagged’. This allowed the managers to zero in on problem quotes.

In summary, the basic steps for ‘transaction management’ are:

♦ Identify transaction characteristics that change how a transaction is processed and the steps required to process the transaction.
♦ Identify the role for each department (or person), involved in processing a transaction.
♦ For each department role, identify the following:
♦ What is needed to manage the schedule for processing the transaction:

─ Identify key ‘milestone steps’ for processing a transaction (based on its characteristics) and the desired timeframe for reaching that milestone
─ Identify critical steps and potential red flag conditions

♦ Identify what is needed to manage costs:

─ How to ensure costs are properly recorded
─ How to avoid excess costs (e.g. expediting costs, penalties)
─ Identify critical steps and potential red flag conditions.

“We should be able to book an extra $4 million this month.”

“How’s that?”

“We have some jobs that weren’t quite ready at the end of last month but should be good to go now.”

“Are those the ones we were waiting for sign-off from the customer?”

“Yes.”

“Did any one follow up with the customer to get the sign-off?”

A few minutes later … “Oops.”

Final Thoughts

According to Dana Borowka, CEO of Lighthouse Consulting Services, LLC and author of the books, “Cracking the Personality Code” and “Cracking the Business Code”, hiring the right people is key to future growth. If you would like additional information on hiring, please click here to see an article on this subject.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014 

Ted Margison is a Senior LCS Consultant and has over 30 years experience in operations management and process improvement. Ted worked for Ernst & Young in their manufacturing & distribution practice and then headed up one of PriceWaterhouse’s manufacturing & distribution practices on the west coast. You can contact Ted at ted@lighthouseconsulting.com.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

To order the books, “Cracking the Personality Code” and “Cracking the Business Code” please go to www.lighthouseconsulting.com.

Does Your Quality Need Tweaking?

By Jerry Feingold

Want to improve your company’s quality?

Adding inspection staff or blaming the operators or service providers won’t help.

[dropcaps type=”circle” color=”” background=””]A[/dropcaps] friend of mine called to tell me that the expensive stove he just bought had a serious defect. It seems that the factory painted over contamination and the paint was now flaking off. That got me thinking about the subject of quality: Quality of a service as well as quality of a product.

man and microscope bldgsMost companies rely on some form of inspection to assure quality. It could be a person in an office whose job is to check over the work of people, see if there are any errors and perhaps add a signature to show that the work was approved or that could be in the form of an inspector at the end of the assembly line whose job it is to find defects.

Unfortunately that’s not a very good way to assure quality. Let me illustrate this point. Let’s pretend that you are the final inspector in a factory that produces heart pacemakers. And let’s pretend that the following paragraph in the box represents a pacemaker. Let’s say that every letter “F” represents a fault or a defect. Your job is to find all the “Fs”. Give yourself two minutes to find all the Fs. See how many you can find.

According to the United Federation of Petroleum Retailers, the files kept by most fuel purveyors lack the organization necessary to run a successful business. This surprised Fred Ferguson of Ferguson’s Fuel Depot. He felt that his files were among the best of any filling station he had ever seen. Of course, Fred knew that not all of what he had stuffed into the shoeboxes under his desk was important, but still, frequent and effective filing was the key to his bookkeeping system. Fred, quite insulted, immediately cancelled his subscription to the United Federation of Petroleum Retailer’s magazine, the Fuel Filler’s Forum, for the remainder of the fiscal year.

If you found them all, you know there were 32. If you didn’t find them all, your pacemaker customer will drop dead. It’s very unusual to find all 32 Fs. Most people miss the Fs in the word “of.” Studies have shown that on a simple product, inspectors are only able to find 75% of the defects.

Besides not being effective at finding defects, there’s another problem with relying on inspection as a means of eliminating defects and improving quality. First of all, inspection is expensive (you have to pay the wage of an inspector who adds no value to the product or service). Secondly, the inspectors are not only required to FIND the defects, they are also responsible to take the time to CATEGORIZE the defects and even to find the person to BLAME for the defect. Unfortunately while the inspector is doing all those things, whatever was CAUSING the defect is still going on and nobody is addressing that.

At the beginning of World War II paratroopers were getting killed because their parachutes weren’t packed properly and wouldn’t open when the ripcord was pulled. The rate of these failures was alarming. The general in charge did a really smart thing. He announced to the parachute folders that every week 10% of the parachute folders would be picked at random and be required to jump out of an airplane with a parachute they had just packed. As you could imagine the defect rate plummeted.parachuting

Adding a final inspector to the parachute folders would not have done much good. Neither would adding an inspector to the stove factory. The contamination on the metal that was painted over was probably invisible.

It’s easy to blame the painter. Just like it’s easy to blame the clerk whose error was found by the auditor or checker. But that’s not getting to the root cause of the problem. Edward Deming, the famous Quality guru believed that all inspection should be eliminated from a factory or office. His point being that the process should be designed so that it isn’t even possible to make an error. For example, it’s impossible to insert a floppy disc incorrectly—they only go in one way. At the fast food restaurant, the cash registers have pictures of the product so that the clerk won’t key in the incorrect charge or give the wrong change.

Some companies got the idea that if the operator in the factory had to actually put his signature on the product, that there would be fewer defects. We’ve all purchased garments with the little tag, “Inspected by Number 37.” And that was the garment with the missing buttonhole.

None of these work very well. Remember trying to find the 32 Fs?

It is Management’s job is to give their people processes that work. The stove factory needed a pre-cleaning step prior to painting to be effective. Inserting an inspector or rewarding the painter for defect-free paint jobs would not work very well.

Management’s job is also to make it very clear what the customer is expecting.

The bottom line is that in an effort to improve the quality received by the customer, management often attempts to either add more inspectors, seeking out offenders for blame or to incentivize the producers. The effort has to be put into improving the processes themselves so that variability and ambiguity are eliminated.

There’s an old saying, “Tell me how I’m measured and I’ll tell you how I’ll behave.” A survey by the American Productivity and Quality Center found that only 38.7% of employees thought that there were good, fair performance measures where they worked. People want to be measured. They need to be measured. The only people who don’t like to be measured are the poor performers. Metrics are used in factories to control the workforce. These metrics include simple things like pieces per hour or percent defective pieces per day. Use of metrics such as these not only give the employees an idea of what’s expected of them, it allows management to react to the situation, correct any problems, understand how to improve, and to establish improvement objectives.

While applications of metrics are common in a factory, they are not typical in an office. As a result of having no metrics, quality problems remain hidden and improvement efforts never get off the ground.

America is transcending from the manufacturing age to the service age, much like we did before, going from a farming economy to a manufacturing economy. About 90 per cent of jobs in the United States are in the service industry but most of the books and articles about quality focus on factories. That’s because it’s easy for someone to notice a problem with a product, it’s much more difficult to pinpoint a service problem.

A good way to kick off a service quality improvement effort is to be sure your employees understand what is important to the customer and what metrics are in place to monitor bulls eye worldthose. There are only two important metrics; how long did the process take and was it done correctly the first time. All metrics are just variations of those two concepts.

Metrics to improve quality in an office could include such things as:

• Percentage of bid errors
• Number of unpaid invoices over 20 days old
• Percentage of lost business
• Percentage of unanswered phone calls in four hours
• Dollars not paid versus dollars billed
• Time between order receipt and order entry
• Time between request for service and delivery of that service
• Percentage of rush orders
• Number of customer complaints

Take the Quick Quality Quiz!

Here are some questions to help you analyze where you might want to raise your quality bar:

time paper pen• In what areas do some of your competitors provide better quality than you do?
• What would happen to sales if your quality were better?
• Is it possible that your specifications are too loose? How about too tight?
• Are your suppliers part of your team? Do you work with your suppliers to help them provide the quality you need?
• Are your people working on the right things? Are the right things being measured? Is action being taken on facts and data?
• From a quality standpoint do you know what your customers think of your performance?

If you have additional questions on how to improve the quality of your service or product please contact Jerry Feingold at (805) 643-4216 or by email jerryf2870@aol.com or take a look at http://www.continuousimprovements.com/.

Jerry Feingold is president of Continuous Improvement Consultancy offering services in the application of Lean techniques. His consulting service specializes in the Kaizen approach which emphasizes a “let’s go do it” approach that is quick hitting, highly focused and unleashes employee creativity dramatically. He has worked in Japan, England, Scotland, Switzerland, Austria, France, Denmark, and the U.S. assisting companies to become competitive on a Global basis. His clients include a wide variety of companies from, service providers, consumer and commercial products, military contractors and food processors.

Jerry Feingold’s books, Getting Lean and Lean Administration introduce lean business concepts and practices in a readable, comprehensive and easy-to-follow format. Getting Lean is written in the form of an entertaining novel that draws on real world experiences to show readers the steps to creating a Lean Enterprise. Getting Lean describes the concepts and processes of lean manufacturing in a practical and uncomplicated manner, so that every member of the workforce can understand these concepts. Lean Administration is a wake-up call to companies that pride themselves on being Lean. Unfortunately, these companies measure their success on manufacturing improvements, but have overlooked the rest of the enterprise where the majority of waste exists. Lean Administration, provides a roadmap and requisite tools for improving the critical administrative functions in an enterprise. Fun to read and highly instructive, this book proves conclusively that Lean isn’t just a manufacturing tool, and illustrates how leaders must drive change throughout the organization- not just the factory floor.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

To order the books, Cracking the Personality Code and Cracking the Business Code please go to www.lighthouseconsulting.com.

Ethics and The Bottom Line: Ten Reasons for Businesses to Do Right

By Rushworth Kidder

[dropcaps type=”circle” color=”” background=””]A[/dropcaps]s the Institute for Global Ethics develops its Corporate Services activities, executives everywhere ask us the big question: Can business really be ethical? What they’re asking is: How can I be sure that acting ethically won’t damage my bottom line? Can I make a real profit and still exhibit real ethics? We think they can. Here’s why.

scalesIn his book The Moral Sense, James Q. Wilson reflects on his decades of research into the criminal mind and raises a pithy question. “What most needed explanation,” he writes about that experience, “was not why some people are criminals but why most people are not.”

The question, in other words, is not, “Why do some people do bad things?” It is, “Why doesn’t everyone?” Why don’t most people opt for the immediate rewards of duplicity, fraud, and theft? Given a choice between the hard slog and the easy grab, why not go for the latter? Why abide by the constraints of a moral life when, as the old adage goes, the devil has all the good tunes?

One way or another, these are all forms of the age-old question lying at the heart of moral philosophy: Why be good? It’s a question asked by small children eyeing the cookie-jar, truckers pressed for time on late-night trips, athletes who notice that the referee isn’t looking, shoppers given too much change, and politicians wanting to line the pockets of their friends.

It’s asked in modern corporate life as well. The culture of short-term rewards, the exigencies of the quarterly report, the pressure from unscrupulous managers, the glut of overseas competition—there are excuses aplenty for the moral shortcut, especially when the stakes are high and careers are on the line.

Can the case truly be made that, despite the apparent advantages of unethical activity, a corporation’s bottom line will be significantly benefited by ethical standards and practices?

During years of public lectures and corporate presentations on ethics, I’ve fielded versions of that question by the score. Sometimes they come from executives who are already in a lather of enthusiasm, sold on ethics and only wanting more ammunition for their arguments. At other times they come from furrowed-browed cynics, keen to ferret out the logical flaw and prove that ethics is only for the naive. But most often they come from good people yearning to be convinced that ethics is congruent with a healthy bottom line.

To answer them, I find I talk a lot about shared values. Companies searching for effective ethics programs are increasingly moving beyond a compliance orientation and toward a values-based approach. What they’re finding is that a consensus on a set of core, shared values—especially moral values—lays the basis for ethics programs that bring significant benefits to their organizations.

But they’re not interested only in soft, fuzzy, and intangible benefits. They need to see results. And in at least ten ways, they’re finding that sound ethics can have practical impact on the bottom line.

  1. Shared values build trust. Any company benefits from a high level of trust among employees. That trust translates into faster decisions with less churning. Since decision-making is time-consuming and costly, that means immediate savings to the bottom line. Just as important, however, is the quality of the decisions. In a company that has come together around a common set of values, managers are more apt to react in the same way. A shared-values company, in other words, reflects a consistency in response. Companies without that consistency can find themselves challenged by debilitating levels of suspicion, envy, and back-stabbing.
  2. Consistency leads to predictability in planning. Shared-values companies are more able to do serious strategic planning—and have some certainty that the plan will be carried out. The clearer the sense of predictability based on shared values, the clearer the ability of executives to prepare accurate forecasts and implement strategies based upon them—especially across the far-flung collection of business units that makes up the modern multinational. Absent such predictability, what confidence is there that top management will not suddenly shift gears and dismiss months of careful thinking? In that case, why bother to think carefully?
  3. Predictability is essential for crisis management. Having common expectations about decision making, shared-values companies are able to react more quickly to severe situations and sudden emergencies. They can respond rapidly, without having every move delayed while it is checked back with headquarters. If the values are sufficiently explicit, managers will trust in right doing rather than stonewalling—and will know that they will be rewarded for so doing. By contrast, managers in firms in which the values are foggy or absent often learn the tough lesson that, in times of crisis, no good deed goes unpunished.
  4. Confidence in such rewards builds loyalty. A culture of shared values creates the basis for a flattened management structure, giving increased autonomy to managers in the field. Shared-values companies can deliver more power to more people, thereby increasing the pace of business, the allegiance and commitment of those with a stake in decision making, and the likelihood of developing excellent future leaders within the company’s own ranks. As firms become increasingly global, there is clear benefit to promoting top executives from various parts of the world. Such a practice will be successful in the degree to which the promoted executives’ values are aligned with those at headquarters and widely shared.
  5. Companies are as good as their people. Developing clear statements of expectations is vital to successful hiring and promotion. Those expectations should include a torch bizwomansense of character shaped by the core values of honesty, responsibility, respect, fairness, and compassion. Those five values, which our Institute’s research suggests are cross-cultural and universal, reflect themselves in the moral integrity of leadership. By developing screens for employment and promotion based on core values (as well as on competence and performance), human resource managers can have greater confidence that employees from different backgrounds will fit well into the corporate culture. Without those screens, any firm risks building a base of bright, vigorous, smooth-talking, hard-working individuals who, lacking a moral compass, drive up the levels of employee turnover, absenteeism, cynicism, and dishonesty.
  6. Consumers care about values. Increasingly, customers are holding companies to account for their products and services. A shared-values company sees no difference between its own values and those of its customers. Result: Smoother handling of problems related to damaged products, returns, wrong labeling, missent orders, conflicts over sales territories, and so forth. Such companies put the customer first not only to improve the sales record but in recognition that the firm and its customers are one in values, attitudes, and expectations. Managers without that sense of shared values can easily imagine that the customers are out to “get” them—and that, in defense, they better “get” the customers first.
  7. Shareholders also care about values. America’s socially conscious investment movement, at $650 billion and rising, already accounts for some ten percent of the nation’s invested funds—up from zero in 1970. Increasingly, investors want to be part of “good” companies, not just profitable ones. As high-quality competition narrows the differences among products and services, companies that do things ethically, and are seen to be doing so, will have powerful advantages in attracting shareholder investment. Companies already recognized in this area can improve their standing in proportion as they are known, praised, and given awards for the strength of their values and ethics programs. By contrast, companies that hit the headlines for unethical practices can build investor aversions and brand disloyalties that may take decades to overcome.
  8. Ethical leadership forestalls oppressive regulation. The best preventative to red tape and external rule making is a respected, proven track record in self-regulation. The reason: Ethics, which can be defined as “obedience to the unenforceable,” is fundamentally different from law, which requires compliance with enforceable rules. In corporate life, as in every other part of society, laws arise when self-regulation collapses. But no company is an island. It is very much in any corporation’s interests to exemplify high ethical standards that can be emulated across the industry. Otherwise, when a close competitor goes belly-up in its ethics, everyone else in that sector risks the heavy hand of increased regulation.
  9. Effective partnerships depend on common values. In alliances and acquisitions, especially overseas, shared values are essential. Nothing is more difficult than trying to blend two corporate cultures whose values are at odds. A shared-values company will have in place procedures and programs for identifying potential ethical differences; for working through them; and for emerging with a core of shared values, a common mission, and a similar set of goals. The greatest danger in alliances is that, despite the consummation of all the legal and financial details, the cultures simply won’t align because nobody bothered to look hard at core values.
  10. Ethics is a form of insurance. A thriving ethics program provides the comfort of indemnification. Like any insurance, it costs something to maintain. Yet no serious executive would be without insurance. And none would measure success by charting the return from that expense. Quite the opposite: Success flows to those companies that never file world peoplea claim because they escape the hurricanes, floods, fires, and other devastations that drastically reduce business. Similarly, a well-tuned ethics program provides insurance against the moral lapses and ethical meltdowns that have damaged so many companies in recent years.

So does ethics affect the bottom line? Well, try arguing that it doesn’t. You’ll have to start by convincing yourself that trust, planning, and crisis management don’t affect your ledger at all. Then you’ll need to demonstrate that empowered personnel have nothing to do with success, and that neither customers nor shareholders are worth worrying about. Finally, you’ll need to be clear that regulation carries no costs, that growth through partnerships is financially irrelevant, and that insurance is just a waste of money.

Frankly, it’s easier to make the case that ethics has a powerful, practical, and immediate impact on profitability.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014

Dr. Rushworth Kidder is the founder of the Institute for Global Ethics, an independent nonprofit organization working in educational, corporate, and public settings to advance ethical action worldwide. Website: www.globalethics.org © Institute for Global Ethics

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

To order the books, “Cracking the Personality Code” and “Cracking the Business Code” please go to www.lighthouseconsulting.com.

It’s Time to Get Back to Basics!

By Dana Borowka, MA

[dropcaps type=”circle” color=”” background=””]T[/dropcaps]here seems to be a great amount of underlying fear and tension in many organizations right now. You can see it by watching the news or talking with people. Many individuals are asking, ‘Am I doing enough to prove my worth?’, ‘Will we make it through these tough economic times?’ and the question mark exclamation markquestions go on and on. A long time friend and experienced business person once told me that when things aren’t working like they used to, then something needs to change. He shared the definition of insanity: Doing the same thing over and over again and expecting different results. Sometimes by just making a minor change or seeing things from a different perspective can make all the difference in the world. In the movie, Dead Poets Society, Robin Williams’ character asked his students to stand up on their desks and look around the class room. His point was to do what it takes with your immediate resources in order to look at things differently to change your vantage point.

In today’s business environment, we always need to take a fresh look at how we do things or service our market place. It doesn’t take a big budget to do so. Many times just going back to basics and taking the complexity out of a situation can provide new and exciting ideas. Let’s take a look at some of those areas that you can explore with your team:

♦ Focus – Instead of focusing on the fear, be open and brainstorm with others on how to be more efficient, to reach out to others internally or in the market place in order to do the best job we can do and then go beyond norm. That doesn’t mean to work yourself into a frenzy but rather to listen – to be open minded – to gain empathy – be compassionate to those who need a helping hand – to focus on what is the primary need today and – to be flexible to see what might be needed 6 to 12 months down the road.

♦ Appreciation – A simple thank you can go a long way. Showing appreciation for others can help them to feel valued and encourage them to open up so that they can share valuable ideas that they have to offer. Saying thank you to the delivery person, a client, a truck driver, senior management, or a business owner is a wonderful thing to do. Everyone needs to be shown appreciation because everyone has something to offer. That’s right – everyone!

♦ Customer Service – Always keep your customer in mind. If for one moment anyone in your organization is putting the internal process over the customer’s needs you have a problem! The process always needs to first meet the customer’s needs. Otherwise you may not have a customer to enter into the process in the future. Every contact needs to be friendly, warm and value driven – those three points will create a retention environment as well as positive word of mouth. A number of years ago, the airline industry did a study that showed for every dissatisfied customer, that customer tells 300 people about the incident whereas a good experience is only shared with 30 people. We need to work really hard at providing really great experiences!

♦ High Quality – Whether you are in the service industry or manufacturing, everything we do is of the utmost importance. It reflects pride, respect, value, honor and yes, appreciation for the recipient. It demonstrates concern and trust for those who have entrusted you to help them with providing a service or a product.

We’d love to hear from you regarding other qualities that can be added to the list of ‘basics’. These ideas may seem very simple, but sometimes as the saying goes, less is more, and the simple ideas can be the most transforming ones. At your next staff meeting, test out the waters… ask some questions around these four areas and see what kind of response you get. Here are a few questions:

man diving in pool– How have you shown appreciation to others recently?
– What is your key focus for the next 30-90 days?
– What is your key focus for the next 6 months to a year?
– How is the quality of our work doing?
– How do we know if our quality is as high as we think it is?

Those are just a few questions that can be used as a spring board to explore the basics of doing business in today’s environment.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014

Dana Borowka, MA, CEO of Lighthouse Consulting Services, LLC and his organization constantly remain focused on their mission statement – “To bring effective insight to your organization”. They do this through the use of in-depth work style assessments to raise the hiring bar so companies select the right people to reduce hiring and management errors. They also have a full service consulting division that provides domestic and international interpersonal coaching, executive onboarding, leadership training, global options for expanding your business, sales and customer service training, operational productivity improvement, 360s and employee surveys as well as a variety of workshops. Dana has over 25 years of business consulting experience and is a nationally renowned speaker, radio and TV personality on many topics. He provides workshops on hiring, managing for the future, and techniques to improve interpersonal communications that have a proven ROI. He is the co-author of the books, “Cracking the Personality Code” and “Cracking the Business Code”. To order the books, please visit www.lighthouseconsulting.com.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

Are You Making the Most Out of this Business Time Frame?

By Dana Borowka, MA

[dropcaps type=”circle” color=”” background=””]M[/dropcaps]ost individuals and organizations are very concerned over the short term business outlook. Today is the day to look beyond… to look at the many opportunities and the open horizons that can be in store for you and your organization. This is the time to rally the people that you work with and begin to collaborate and gather ideas in the following areas:

• Improving efficiency
• Marketing and sales
• Opportunities for acquisitions
• Operational processes
• Cost efficient ways to do things differently
• Identify specific traits in people that you’d like to add to your team
• How to better mentor staff members

Those are just a few areas to explore. Looking out into the future you’ll want to take advantage of some of the fresh talent that will be available. However, you’ll need to be very selective as to who you’ll want on your team. Managing down just doesn’t work any longer. Understanding the strengths of an individual will help to promote a positive environment where people will want to share ideas that might not have been considered in the past. This is the time to build a positive reputation so your company is a magnet for attracting top talent.

Thinking Outside of the Boxperson on a box

I was at a restaurant recently and asked to see if an item that I didn’t see on the menu was available or if I had overlooked it on the menu. The restaurant didn’t have the item, but the staff response set me back. The server stated, “Our goal is to think out of the box. To do what we can to please the customer so that positive word of mouth is shared and that will result in more business for us!” Isn’t that what we all want… team members that will think out of the box… positive word of mouth about our business… to increase revenue. What we all need are people like that on our team. So the million dollar question is… how do we get staff members to think along those lines and how can we attract people like that?

What is Driving Your Top People

Learn what is driving your top talent people. If you help them to succeed you’ll create a high level of retention and become a magnet for recruiting. Here are some action items for you to consider:

  1. Use an in-depth work style and personality assessment during the hiring process and for current staff.
  2. Use the data to manage, which in turn will reduce the learning curve for new hires and help to better understand current staff members.
  3. Place individuals in positions that they can succeed in based on their strengths.
  4. Take the time to constantly mentor and create plans to help individuals grow.
  5. Identify traits of individuals that you want in your organization and target those individuals through specific messages in ads, on the web, through networking and association gatherings.

For your A players (your major contributors), play to their strengths and help them grow. Don’t ignore them just because they are doing well. These are the individuals that if they don’t feel engaged in helping the organization to continue to grow and improve, they’ll leave.

For your B players, nurture them through mentoring so they can become A players down the road. For your C players, measure and possibly remove them if they are eating up your time. Never spend 80 percent of your time and energy on the people who are producing 20 percent of your results.

Peel the Onion

But don’t write those C players off too fast. A small hotel chain had reservation reps that were not meeting the volume level that was being required. The manager thought they were just C players and was a very unhappy camper with his team. That person was placed in a different department and a new manager came in who sat down with each individual and then with the group. She discovered that 24 hours before a guest was going to arrive at the hotel property that a high percentage were calling in to verify the reservation and to get directions. This used up valuable call time, so as a team they brainstormed together and came up with a brilliant idea. Since the reps were asking for email addresses why not send an email confirmation 24-48 hours prior with a fun page welcoming the individuals and include links for weather and directions.

Guess what happened? Calls were reduced and the reps were able to take more calls for new reservations with less hold time. All because the manager took the time to ask questions to peel the onion back to identify the underlying issue. When the reps were asked why this topic hadn’t been addressed in the past they simply responded, “No one asked and we never thought of it”.

Set Your Sights on the Future

Make the most out of this business time frame by helping others in your team to be successful, build a positive reputation, ask your team for ideas and contribute to the well being of sunrisethe entire organization, train staff to mentor others and be on the look out for adding fresh talent to your team! Remember, it is important to be precise in what you are looking for and do a thorough job interview by asking probing questions, doing reference and background checks and utilizing an in-depth work style and personality assessment.

This is the time to set your sights on the future, deal with the present by supporting your team and ask for input. Set your organization on a course for long term success by using proactive and collaborative mentoring, management and vision. We’d love to hear about your successes.

 

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014 

Dana Borowka, MA, CEO of Lighthouse Consulting Services, LLC and his organization constantly remain focused on their mission statement – “To bring effective insight to your organization”. They do this through the use of in-depth work style assessments to raise the hiring bar so companies select the right people to reduce hiring and management errors. They also have a full service consulting division that provides domestic and international interpersonal coaching, executive onboarding, leadership training, global options for expanding your business, sales and customer service training, operational productivity improvement, 360s and employee surveys as well as a variety of workshops. Dana has over 25 years of business consulting experience and is a nationally renowned speaker, radio and TV personality on many topics. He provides workshops on hiring, managing for the future, and techniques to improve interpersonal communications that have a proven ROI. He is the co-author of the books, “Cracking the Personality Code” and “Cracking the Business Code”. To order the books, please visit www.lighthouseconsulting.com.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

Are You Getting Full Value from Your System, or Could Your System Use a Re-alignment?

By Ted Margison

[dropcaps type=”circle” color=”” background=””]A[/dropcaps] company was considering replacing the three systems they were using to run the business. One system handled financial information, a second handled production and a third handled service calls. The company felt that it would be more productive to consolidate into a single system.J0287005

The controller, who started with the company around this time, joined in the interviews to meet people and get a better understanding of how the company operated. Thirty-two (32) systems were identified. On top of this, he found the financial performance reports management had been using did not come from the corporate financial system but from isolated Excel documents. Thirty-two systems sounds like a lot, but someone recently told me that they had worked with a Fortune 500 company to consolidate databases and uncovered over 3,000 different databases (many of which were in Excel).

Right now, the odds are this is happening to you. How does this happen?

Over time, the organization goes through changes. Personnel changes occur, functional needs change and roles and responsibilities change. Often times, people forget what they were trained on because they only perform the function once or twice a year. Sometimes personnel changes mean the new person is not fully trained on all aspects of the system. As changes occur, people are not sure how to handle them within the current system and because they need to get something done now, they begin to look for workarounds such as using Excel. The greatest problem is that it goes unnoticed until it becomes so overwhelming that processes collapse. The issues with workarounds are:

• Data are being entered into multiple systems – potential for keying errors
• Extra time and effort is required
• Potential for the various systems to get out of sync
• Users tend to rely more and more on the workaround systems which then become the operational systems.

There are times when the current system simply does not handle a new requirement so, it’s either modify the system or use a workaround. The first step should be to check with the software vendor to determine if this requirement is addressed in any new release that the company has not installed or is in an upcoming release. If the requirement will be addressed in a new release due out in a few months then the interim workaround solution need only be a relatively inexpensive, temporary solution. If the vendor does not have any plans for addressing this requirement contact other companies using the software system to see if they have addressed this requirement. The key question here is whether to create a solution outside your current system or modify your current system. If you do any modifications, review them with the software vendor to ensure they will not impede implementing future releases from the vendor. If you create an external solution make sure you identify any points of ‘connection’ with the current system and develop controls to keep the systems in sync.

Challenges with New Implementations

Maybe you have just implemented a system and so this can’t be a problem, can it? Hopefully, the implementation effort went well with a smooth transition. However, more often than computers connectingnot, transition is not smooth so, users hold onto the workaround systems they were using because they still need to get things done and they are not fully comfortable with the new system.

Security is often a major concern during implementation. Great care is taken to ensure users are restricted to just the functions and reports that apply to their job. I have seen numerous implementations where users are using workaround solutions because the system does not provide a report they need or perform a task they need to do; only to find out that the system really does meet their needs – the functions and reports had been hidden from the user. IT had based the set-up of user menus on perceptions of what was involved in a job position. Unfortunately, perception does not always match reality.

• When implementing new systems try to keep open access to as many functions and reports as possible (taking into account appropriate segregation of duties).
• As accountability is defined, or re-defined, for each person, ensure the functions and reports are aligned accordingly.

Past problems are often carried forward to the new system: “The reports that come from our corporate system are the lifeblood of the company. We need to ensure that each report bizman connecting with computeris reproduced in the new system exactly as it is now.” the CEO directed. “Talk to everyone and make sure you understand exactly how each report is used so that we can be sure the new system can produce them.” Actually, 98% of all information on the corporate system reports was thrown out. Users took selected bits and pieces of information from the reports and put them into Excel documents along with data from other sources to produce reports for management. Converting the corporate system reports would perpetuate the need for workaround systems.

A major problem with new implementations is too much change all at once – users get overwhelmed and return to familiar tools (workaround systems). Traditionally, implementation focuses on identifying a desired new way for how to do business and then rolls out the new system. One Friday night the current system is turned off and on Monday users start with the new system: new tools, new concepts, new terminology, new processes, new workflows, new roles and responsibilities and even new organization structures. Is it any wonder that this heralds a period of disruption, despite preparation efforts? This ‘big bang approach’ to change is too much for organizations. Major changes take time to institutionalize and usually involve a culture change.

Sometimes, when new systems are being implemented companies modify them to exactly fit the current operations, eliminating flexibility. When operations need to change, the system is unable to adapt without heavy modifications. When this happens – workarounds!

• Avoid doing extensive modifications during initial implementation – implement ‘as vanilla as possible’. Take six months, preferably twelve, to learn the different ways of using the system to handle various issues that arise.
Have users log issues they have difficulty addressing with the system and identify what they did to handle each issue.
• Review any desired modifications with the software vendor to determine if this fits into their R&D efforts. Avoid any modification that restricts your ability to implement new releases from the software vendor. You are better off to create an external sub-system that interfaces with the new system.

Solution Approach

Survey each employee to identify which systems they use and how they use them (this includes manual systems). In particular, ask them what issues cannot be addressed by the primary system and which systems, or tools, they use instead.

For business management efforts have each manager identify key controls, such as ensuring on-time delivery. Have the managers identify what information is needed and where they expect the information comes from. Then have each employee identify what system they use to provide each piece of information. On an ongoing basis, have employees identify situations in which they could not use the current system and had to use an alternate tool.

Review the surveys and logs to determine:

• Potential risks with current workarounds
• Which workarounds can be addressed by current system or new release
• Which workarounds need a more formal solution

Looking to Replace the Current System

If you have decided that your system needs to be replaced, take heart – this is not as daunting as it might appear.

Finding the right software package is straightforward. Packages can be divided into ‘solution classes’; identifying a few key requirements of your operations will determine the right bizpeople climbing up arrowsolution class. Any package in the solution class will meet your key functional requirements. The next step is to pick the right vendor and the package that has an intuitive ‘look and feel’ to your users – it will be easier for users to understand this and use this system. This is where the product demonstration is important. Be sure that the demonstration focuses on your business; in particular, ‘a day in the life of’ your company.

Do not spend all your time and money on finding the right package. Implementation is key. Try to implement as close to your current operating environment as possible. Make sure you identify the current workarounds and determine how to address them with the new system. Do not make massive changes in processes, roles and responsibilities. Once the new system is in place, focus on accountability. Ensure that accountability is properly defined for each employee and restructure process, roles and responsibilities to align with accountability. Adjust the system as well to align with accountability.

 

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014

Ted Margison is a Senior LCS Consultant and has over 30 years experience in operations management and process improvement. Ted worked for Ernst & Young in their manufacturing & distribution practice and then headed up one of PriceWaterhouse’s manufacturing & distribution practices on the west coast. You can contact Ted at ted@lighthouseconsulting.com.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

To order the books, “Cracking the Personality Code” and “Cracking the Business Code” please go to www.lighthouseconsulting.com.

Economic Slowdown?

By Robert Hougland

[dropcaps type=”circle” color=”” background=””]W[/dropcaps]hile some form of economic slowdown may seem possible at times, it is important to occasionally prepare for it. In 2007, the experts varied widely in their opinions of an economic slowdown. A few responsible opinions bear consideration. Interviewed on the KNX Business Hour, Jack Kyser, Chief Economist of the Los Angeles Economic piecharts graphsDevelopment Corporation retained his 40% possibility of recession prediction with the qualifier that Orange County would suffer more than other SoCal counties. On the same program, John Augustine, Chief Investment Officer at Fifth-Third Asset Management pointed out that two precursors to past recessions are not in place: there were no excess inventories in other than housing, and all segments of the export market were healthy. In testifying before a Congressional committee, Fed Chief Ben Bernanke expressed support for a prompt economic stimulus package, but maintained his position that 2008 would not see a recession.

Regardless of who was eventually proven right or wrong, we need to be ready for slow economic growth. Economic slowdown can mean that some marketplaces and the revenue they generate are going to grow more slowly than normal…and some may even decline for a while. Permit me to share some thoughts from what I’ve seen about small businesses during down economic times over the last 30 years. You may well have thought of all of these, but it might be worthwhile to refresh your thinking.

You’re an entity: What happens in your marketplace and/or what happens to any or all of your competitors does not necessarily have to happen to you in similar proportion. When revenues taper off or even drop dramatically, every company in that market is not impacted identically. You have opportunities to influence how a slowdown affects you. Focus on your opportunities, not your limitations.

Think wide, not narrow: Consider the value of chipping away at expenses and costs a little bit here and there rather than focusing on one or a few areas to slash. No one likes to lay off staff, but make sure you’ve explored the alternatives of reduced hours, cutting overtime, etc. And, consider the long-term implications of layoffs: you may be able to do some reorganization to permanently trim some fat. Just make sure your job descriptions are based on functions which need to be performed, not the particular array of skills of specific employees. Finally, don’t overlook profitability. If you can trim your profit expectations for a few months, you can relieve some of the cost-cutting pressure.

Don’t stop marketing: The biggest and most common mistake I’ve seen owners/CEOs make is to slash or even trash their marketing/sales/advertising/promotion budget(s) when revenue drops off. Of course, you gotta do what you gotta do. But, consider these things: 1) With very rare exceptions, your revenue stream isn’t going to totally dry up…there will be continued demand to some reduced degree for what you sell. 2) As your customers become more selective in their purchases of goods and services and as they seek to consolidate vendors, you have the chance to distinguish yourself even more from your competitors. 3) Its likely that some or possibly most of your competitors are going to chop their marketing budgets, and the ones who do are working from a position of weakness while those who don’t from a position of strength. 4) Numerous studies have shown that its more difficult for a customer to stop ordering or to cancel an order from a vendor with whom they have good rapport than one who’s just another supplier. 5) Perhaps most important, if you can gain some market share during a downturn, that will translate to better market share and profitability when the market rebounds. So, what can you do?

good times mkt sharebad times mkt shareback to good times mkt share

Maintain contact with your customers to the greatest degree possible. Talk to your large customers personally. Listen to their problems and see if you can offer any kind of help.

Be creative: Are there ways where you can “package” your products together to make them more attractive? Are there any premiums or freebies you could offer on the short-term? (Many industries, particularly the auto industry, have found that the most effective is something that improves the usefulness or enjoyment of the basic purchase). Can you give some kind of short-term financial break in return for a commitment to keep buying from you? Look at your vendors the same way. What can they do to help you to reduce inventories or costs?

Keep the blinders off: You never know what might be important to a customer or prospect and what will influence them to continue buying from you. Some examples from my experience:

A client was seeking to take a $400K/yr contract with an aircraft manufacturer away from a competitor. Knowing the prospect was looking to cut costs, we interviewed the buyer and learned they had problems with internal distribution of large, palletized shipments among their many buildings over several square miles. We met with the receiving supervisor and several shop foremen, then returned to the receiving dock with an idea: custom, rather than bulk, palletizing with additional color-coded labels to identify destinations, backed up with availability of one of our knowledgeable people to answer questions. The supervisor agreed to write a letter to the buyer on our behalf, and we got and kept the contract without having to underbid our competitor. Our cost was about one manday of blue collar time per month and we maintained a normal profit margin.

A company providing technical consulting services to a major insurance company was notified of the necessity to look at cutting back or even cancelling the contract because of new budget constraints. We put ourselves in the client’s shoes and took the initiative to present a new proposal. By separating the observation and information-gathering portions of the project from the analysis and documentation portions, we could have our high-hourly-rate professionals work at home instead of client-provided offices and reduce their on-premise time to alternate weeks and even every third week. Since we didn’t have adequate office space, all the consultants agreed to work at home and we would reimburse them for telephone expenses (this was pre-internet). Finally, we prioritized some of the steps in the project, identifying those which could be obeyed without interfering with goals, and we told the client we’d pick up the long-distance bills. The client said the reduced billable hours along with reduced transportation, lodging, per diem, etc. didn’t quite match his economy goal, but it was so close that he agreed to the changes and found the dollars he needed else where. Eventually, the hours that were postponed were made up.

My client who sold primarily to the hospitality industry was devastated by the impact of 9-11, and we rushed to see what we could do to salvage as much business as possible has hotel and restaurant business dropped dramatically. By learning some of the changes our customers were going to make, we were able to determine that earlier daily deliveries would be helpful. Since we used our own fleet, it was easy to schedule trucks to leave the plant at 2AM instead of 3AM to accommodate our customers’ new needs, and we implemented it within 24 hours. By taking a critical look at our internal operation, we were able to offer acceptance of orders until 4PM for next day delivery instead of 2PM. Several large accounts actually consolidated their business with us because we were there promptly with two workable solutions, even though the total volume lagged for a while.

Keep your presence out there: As much as possible, maintain your advertising and promotion activities so your name remains in the minds of your customers and prospects. I’ve lamented with a number of CEOs over the years who, after the fact, realized that pulling in their horns in caused them to lose market share during a tough period and that they faced an uphill battle to try to win those customers back. One client thought long and hard about not attending a trade show which they hadn’t missed in years. Deciding finally to go, he discovered that both of his major competitors backed out and he came back with plenty of business cards of people for follow-up.

Bottom line: Your customers will continue to buy something from someone. You need to be aggressive and show interest to keep them in your corner, although in reduced volumes for a while. When the economy bounces back, if you’re the supplier or provider who helped that customer through his rough time, you’re in the perfect position to reap the benefits in man carrying piea robust market. You could rebound with an increased market share.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014

Bob Hougland holds a BA in Psychology and is a Vietnam vet with almost 5 years’ USAF active duty. He began his business career in the fast-track executive development program at AT&T, but sought out smaller employers. For most of a decade, he held sales management positions at L.A. radio stations KIIS, 93KHJ, and K-EARTH101, and created a successful marketing consulting division for RKO General Radio. With both sales management and marketing management awards under his belt, he founded RGH MARKETING. He now is the Owner/Consultant at SuperTemp where he continues his career of helping good organizations be better, new ones to get off the ground and bringing some back from the brink of failure. He is a strategist who sees opportunities where others see problems and bring lessons learned in a wide range of industries to bear on new situations. He can be reached at 803-774-7777 or SuperTemp@pacbell.net or you can read his blog at http://businessguy.biz/.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

To order the books, “Cracking the Personality Code” and “Cracking the Business Code” please go to www.lighthouseconsulting.com.

Opportunities Could Be Standing Right In Front of You

By Dana Borowka, MA

[dropcaps type=”circle” color=”” background=””]I[/dropcaps]f this topic keeps you up at night, we have some ideas for you to consider and implement so your sailboatorganization will not only make it through the current state of business but will thrive well into the future! You’ll know by reading this article if your ship is heading towards the rocks, towards the open sea or on a clear course to your destination.

Think for a moment about the various components of a boat that are needed in order to keep it afloat and heading in the intended direction. Observe how they compare to your organization.

Components of a Vessel

Hull – Need to have a structure that can endure and thrive in the elements.
Fuel – The energy needed to move the vessel forward and towards its destination.
Crew – The crew will either make sure the ship reaches its destination in a timely manner or cause it to go off course or cause an incident that could result in loss of resources.

The Changing Environment

Water is the most unstable surface on our planet. No matter how much planning a business does a rogue wave can come along and cause havoc. This might be changes in the market, unhappy clients, distribution channels, technology, financial, etc. Preparation can only go so far yet if your organization has one key ingredient you’ll be able to survive and thrive beyond your wildest dreams.

Key Ingredient to Thrive

The answer always comes back to having the right crew on board. It all begins with the selection process, mentoring and staff development. If this is done correctly or you have the right people with potential for growth, you’ll not only make it through to 2013… you’ll also be ready to ride the wave of 2014 and beyond! Let’s take a look at how this works.

By having the right crew on board, you’ll have:

  1. Contributors – That will help the ship reach its course through innovation, ingenuity, timely fulfillment of tasks, follow through, etc.
  2. Happy customers – They’ll keep coming back due to the outstanding service and quality of the product.
  3. Happy employees – They’ll go the extra mile for the organization and its customers. This also leads to positive word of mouth that can attract top talent.
  4. Open Minded Culture – Problem solving is the key to anticipate needs, deal with weather changes, being open to adapting to the environment.
  5. Profitability – You’ll meet your organization’s goal and objective where everyone is rewarded for doing a great job and your organization will be able to continue to provide services and products with the opportunity to visit other destinations in the future.

ocean waveAn organization can build a sturdy ship but without the right people behind the scenes it won’t leave port. All this starts with the captain of the ship and with its officers. If they select the correct crew up front, they know the job will get done correctly, in a timely manner and the work can be trusted. Can you trust that your crew will do their job not only correctly and in timely manner? Do they also contribute ideas for further improvement so you can get the maximum value from each individual?

If the answer is “I’m not sure” then your answer may be reflective of the future survival of your vessel. Every organization must have all hands on deck with crew members that are excited and grateful to be aboard and have the ability to perform the best they can.

A Whale of a Tale for Teamwork

A manager once had an outstanding team but always told everyone what to do. This person didn’t listen, didn’t ask questions, demanded a higher level of volume without asking if the organization could handle it and created a closed environment. Over time things started to slip through the cracks, customers were not getting the attention they needed, sales slipped, people started to leave and the organization began to develop a bad reputation where recruitment became a problem. Upper management stepped in and started to ask the team members for their feedback. It turned out that the manager was not a good fit for that position and was transitioned into another department. When the new manager was selected, it was based not only on experience but also the ability to work with others. They learned that it is vital to understand a person’s work style and how they interact with others in order to have a high performing team. If just one person isn’t “playing well in the sandbox” the effects can ruin a brand and effect sales and future growth of an organization.

A Checklist for Success

  1. When selecting the crew – have a clear understanding of the ideal crew member and have a system and process to assure you have selected the correct crew members. This can be done through interviewing and asking questions for specific examples and compare those answers to what an ideal crew member would do. Gather as much data as possible from reference and background checks as well as provide an in-depth work style and personality assessment with Lighthouse Consulting Services. The information should be used to validate the interview responses, background and reference checks.
  2. Ask each current crew member for feedback on where they see the team and themselves could be more efficient in the market place within the next 30-60-90 days. This means that everyone on your ship needs to have their eyes and ears open to seeing where it might be possible to improve and enhance processes, structure, services, customer service, etc.
  3. Captains and officers need to listen to everyone and create a truly open environment. Come up with three things that you can do that will make that happen.
  4. Define what the ideal crew member would possess in skills, work style and personality and make it measurable.
  5. Assist the current crew to fulfill that role. Make sure you have an in-depth work style and personality assessment of your crew members so you’ll have the insight to help man on lighthouse with boatseveryone thrive and to get the best performance from every member of the team. You’ll want to know how someone problem-solves, deals with stress, makes decisions, processes information, creates and follows up on leads, etc. This will help to ensure that you have the right person in the correct position so they can perform to the best of their ability. Contact us at reception@lighthouseconsulting.com to get started.

If you have the right team in place, your organization will be able to deal with the many challenges that will come along during the voyage. The key is to hire right the first time and to assist those on board to be the best that they can be. This will lead to happy customers, happy employees, innovation for the future, efficiency for delivery of the product or service and of course, a profitable bottom line.

You can gather additional ideas for working with your current and future crew members by reading Cracking The Personality Code. To order this book, go to: www.lighthouseconsulting.com.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014

Dana Borowka, MA, CEO of Lighthouse Consulting Services, LLC and his organization constantly remain focused on their mission statement – “To bring effective insight to your organization”. They do this through the use of in-depth work style assessments to raise the hiring bar so companies select the right people to reduce hiring and management errors. They also have a full service consulting division that provides domestic and international interpersonal coaching, executive onboarding, leadership training, global options for expanding your business, sales and customer service training, operational productivity improvement, 360s and employee surveys as well as a variety of workshops. Dana has over 25 years of business consulting experience and is a nationally renowned speaker, radio and TV personality on many topics. He provides workshops on hiring, managing for the future, and techniques to improve interpersonal communications that have a proven ROI. He is the co-author of the books, “Cracking the Personality Code” and “Cracking the Business Code”. To order the books, please visit www.lighthouseconsulting.com.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

Things to Consider for Operational Excellence

By Ted Margison – Excerpt from the book, Cracking the Business Code

[dropcaps type=”circle” color=”” background=””]T[/dropcaps]his section was going to be “8 Things to Consider for Operational Excellence”. The good news for you: there are only two things to consider.
bizbuilding1

Better Visibility Provides Better Results

A supplier of protective gear was struggling to meet demands. “We have tried everything over the past couple of years but nothing works. Our turns are less than 1 and we still can’t fill demand. We’ve been selling size 10 and 11 boots the last couple of years and now a customer needs size 13. No matter what we stock, it doesn’t seem to be the right thing; it’s like a guessing game.”

While I was in the General Manager’s office, he received a very angry call from the CEO of a very large customer. Without proper protective gear workers could not work – the downtime on one of their lines cost them about $100,000 per day.

biz in hourglassObviously, the current decision-making processes were not effective; something was missing. We mapped the decision-making processes to find the “blind spots”. These are decision points that are not fully understood or assumptions have been made about them. The blind spots in this case were the decision-making processes of customers. In particular, what drives demand.

We interviewed the top 20 customers and found that demand was driven by two things: replacement of worn-out items and new hires. For replacement we realized that we could predict product life-expectancy based on job position and work environment characteristics. We proposed to the customers that we would gather and consolidate data across customers on job positions and work environment characteristics to predict life-expectancy and then automatically reach out to replace the items. For example, if a product had a life-expectancy of 36 months for workers in a particular department, we would do an inspection at 30 months and replace the item before it wore out. “New hire” demand was primarily “large scale” – new plants being opened, new mining projects. We identified a simple way of inserting ourselves in the hiring process to identify the best-fit product based on job position and work environment characteristics.

The customers were so excited about the recommendations that five of them offered, each, to pay half the cost of any system effort. Some offered the opportunity to bid on business that was going to competitors, while others simply switched their business from a competitor. As one customer said “We no longer have to worry about these decisions – you are making them for us. The cost of these products is far less than the cost of downtime; why would we talk to anyone else.”

Another company was about to make a strategic decision that would have serious operational impact. “We need to move to same-day shipping to get a competitive edge. Our customers buy when something breaks so we have to be able to respond quickly”, said the Sales Manager. The company had recently moved from 5-day turnaround on orders to 2 days and inventory had climbed to the point where turns hovered around 1.2. Moving to same-day shipping was going to be a major challenge.

In order to better understand the buying process for customers we interviewed the top 20 customers. Surprise: All could give at least three months notice on demand; one could give 12 months.

“Why do you give us only 2 days notice”, the CEO asked.

“Because that’s the lead time you gave Purchasing.”

We found some quick and easy ways to get this advance notice and in just a couple of months we were buying ‘to-order’ for these customers. We also approached supplier offering the advance notice. The VP Operations for the largest supplier (a company whose typical customer was 40 times our size) said “If you give us this advance notice you can order anything man jumping bldgyou want up to end of the day on Friday and it will be on the truck Monday morning.”

In less than a year inventory turns reached 7.3. Shortly afterward, the company went on to acquire a larger company.

To get better visibility you need to go beyond your operations to include customers, business partners, suppliers and other external organizations. Start with processes that are key to achieving your business goals. Map your current processes (goes as far upstream and downstream as possible):

• Identify decision points

• Find the ‘blind spots’ for decision-making

  1. Who makes the decisions?
  2. What drives their decision-making? 

— Triggers?
— What are they measured on (what’s a win for them)? 
— Are they ‘driven’ by others in their org (interview those people)?

Accountability

For internal operations this is probably the single biggest problem for companies. Almost every company feels they have a good handle on accountability – unfortunately, they are usually wrong. When things aren’t performing effectively it’s usually because no one is accountable for the performance.

A manufacturing company was looking at getting a new ERP system. The CEO had heard horror stories from various customers and was concerned about implementation.  

“What kinds of things go wrong during an implementation?” asked the CEO.

“Well, a major problem in many companies is that accountability is not well defined.”

“Oh, that’s not a problem here. We’re a very lean organization and everyone understands what they’re accountable for,” replied the CEO. “But, just out of interest, can you give me an example?”

“Well, although it might not apply here, companies that have problems with inventory often find that no one is responsible for inventory accuracy.”

“That’s not an issue for us. Dave, tell him who’s accountable for inventory accuracy.” said the CEO, nodding to his COO.

“No one,” replied the COO. “Maybe that’s why we have a $14 million inventory discrepancy.”

Effective accountability covers ownership, span of control, performance measurements and your reward/ recognition system.

 

Ted Margison is a Senior LCS Consultant and has over 30 years experience in operations management and process improvement. Ted worked for Ernst & Young in their manufacturing & distribution practice and then headed up one of PriceWaterhouse’s manufacturing & distribution practices on the west coast. You can contact Ted at ted@lighthouseconsulting.com or call him at 310-453-6556, ext. 422.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014
If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.
To order the books, “Cracking the Personality Code” and “Cracking the Business Code” please go to www.lighthouseconsulting.com.