Small Business is the life blood of most economies yet fantastic tools like Lean haven’t really taken root there yet. Sure there is Lean Start-up which is fantastic for low to no capital start-ups that want to test what products will sell in the market place but what about the business that is out of start-up but isn’t big enough to have mature systems and processes? We talked about the different phases of growth and what tools are applicable in each phase of growth. Lean is all about how to generate a higher percentage of value creation vs. waste in a business and while Lean was founded by businesses in Phase III and Phase IV growth, the concepts are still applicable to businesses that aren’t that big yet.
Small business for our sake is going to be defined as a business that is anywhere from $300,000- $3.3 Million in revenue for service based businesses and $1 Million -$10 Million for a manufacturing business. These businesses typically have a hard time with either sales or infrastructure. One usually will outpace the other and it’s a constant game of cat and mouse. You’ll run into problems like departments not talking to each other, items falling through the cracks, and feeling like there isn’t enough time in the day to get everything done. In these companies we usually see two main problems come up.
Not enough time to get all the work that needs to be done completed
Delegation is difficult
In a phase II business what we notice is that standard work is king to help remove the waste of overburdening. In conjunction with standard work you also want to make sure that the leadership team can manage. Most business owners at this stage aren’t good managers but are good sales people so they can sell but they have a hard time being able to let go. What The Lean Way has noticed is that there needs to be a set of tools that are unique to phase II businesses that help them overcome some of their internal management wastes. Usually coaching and mentorship programs are very helpful and in addition to that we propose a waste that isn’t a traditional waste. We propose the waste of over utilization of people. If you don’t take time for reflection then you are burning out your people and your company, not to mention you also aren’t getting a chance to really think through challenges and you’ll work many more hours than you probably want to work. Reflection can be doing a mindfulness practice, time to just think, or any sort of down time.
Organizations have seven phases they cycle through and the first four phases are growth phases.
Phase I
New Venture
Phase II
Expansion
Phase III
Professionalization
Phase IV
Consolidation
Phase V
Diversification
Phase VI
Integration
Phase VII
Decline and Revitalization
The reality is that you can use some form of Lean in all elements of the growth. For more information on when to use lean based on growth check out our article on Different Flavor of Lean for Different Industries. The most common place to implement tradition Lean and Six Sigma concepts in phase III. A phase III business is one that needs management systems and ranges from 3.3 Million to 100 Million in revenue depending on if it’s a service or manufacturing business. In this phase you need to develop engagement systems that are scalable like planning, organizing, etc. Traditional Lean and Six Sigma work great when you are in this phase. Why is this important? It’s because a businesses growth typically outpaces its systems. A lot of the traits that got your business to a phase III business won’t make you successful in a phase III business.
Case Study
A 15 million dollar food manufacturer hires a new COO. The COO decides that they need more robust and scalable systems in place. The COO decides to bring in The Lean Way to “Go Lean.” First off the timing is correct for the team however unlike larger businesses they do not have very well defined processes. A concern when starting with this company was that we would overkill a solution. We had to be sure that the systems didn’t out pace the growth. So the first step was to standardize and balance the workload. In fact there are different approaches to Lean and Six Sigma depending on where you are in the growth phases.
Phase
Lean
Six Sigma
I
Lean Start-up
Control Charts
II
Standard Work
Control Charts, DMAIC, Hypothesis Testing
III
Phase II + Jidoka, VSMs, Other standard Lean tools
All Six Sigma Tools
IV
Phase III + Strategy and policy deployment
All Six Sigma Tools
Since the business was in Phase II transitioning to a Phase III business we stuck with standard work. As the organization grows we’ll introduce new more complex tools.
What phase is your business in and what tools are you using?
Lean is a bit like ice cream and children. Everyone thinks that theirs is the best. Unlike ice cream or children there is no one “best” way to do Lean. In-fact it will look like the complete opposite in some industries. Because of this you end up with what it seems like as an endless list of Lean manifestation.
Each one slightly different than the rest. So how do you know if you are doing the right one in your industry and the right one for your business at the time? By the way don’t let the names fool you, tools and principles used in Lean manufacturing can be used in software and those tools in software development can be used in healthcare, etc.
Explain to Me Like I’m 5 – What is Lean?
Lean is a management system designed to focus on the customer by adding more value and removing waste in the processes that you do. You also want to have your processes flow and you don’t want to overburden anyone or anything in the process. The real key to the process is defining what is wasteful in your industry and what is value added. For instance in the manufacturing setting where you treat every widget like a commodity you define value just on utilitarian purposes. However in the service industry where it’s not as much of a commodity you can add value through emotional appeal. An example of this is spending more time with the doctor to be comforted or have a condition explained to you in greater detail.
How Do I Know Which Version of Lean l Will Need?
Before you can understand what you need you have to understand what type of communication happens in your organization. There are four main types of communication styles:
Communication Style
Description
Collaborative
Information is shared with everyone and decisions are made on a broad basis
Hero Based
A few key resources drive most of the progress and change. Information is funneled through these resources.
Political
Information is only shared if it helps “me or my team.”
Command and Control
Information typically only goes one way and there are only a few decision makers at the top of the organization.
In the last blog post (Mindfulness as a management Skill Part I) we talked about the cycle leaders can get into and how their stress can affect the performance of the team. Most companies don’t get the results they want from doing Lean (or any change effort for that matter). One of the reasons that change is so difficult is that it’s stressful. During times of stress a manager can actually become less effective as a leader. The stress response will lead others. The way that mindfulness works to pull you out of the stress response is to focus your mind. Imagine your brain is like a person riding an elephant. The elephant represents your emotional brain and the rider represents the logical brain. For the most part the rider can keep control of the elephant but if the elephant gets distracted then the rider cannot do anything except hold on until the elephant calms down. When you are stressed your elephant is in control and you have to find a way to get back into control. Mindfulness training helps you focus. Over time it can change the way you think and the way your brain. One example of this is that negative emotions can register in your amygdala (the elephant part of your brain). Mindfulness training helps your brain us it’s attention and concentration resources more effectively thus allowing you to keep control of the elephant instead of the elephant running out of control. Mindfulness also helps your mind be still. Mindfulness skills, once developed, improve self-awareness and influences how we perceive challenges. Stillness in thought process is just as important as active problem solving and sometimes even more important. Mindfulness is important since it also reduces stress. Stress can kill brain cells and chronic stress over years can really hurt your performance. Daily mindfulness practice is important to develop the skills you need to prevent brain cell loss. Another reason mindfulness is so valuable as a management skill is that inner thoughts can really hurt your short term memory and attention. By being mindful and not letting those thoughts consume you you can elevate your performance. These are just some of the reasons why mindfulness is so helpful as a management skill. In a more complex business environment we’ll need more tools to help us grow as people and grow as organizations. Mindfulness should be one of those tools and skills that are developed by you and your team.
Want to learn more about mindfulness and how it can help you in your growth as an employee, leader, and/or manager? Please schedule a free call with The Lean Way. Please fill out the information below.
Want to learn more about mindfulness and how it can help you in your growth as an employee, leader, and/or manager? Please schedule a free call with The Lean Way. Please fill out the information below.
Having a Lean culture will get you incredible results with your company that can last for a long time. It can also win you a Shingo Prize which is the top Lean award you can achieve. Some results include reducing costs structures by over 50%, improving quality to near zero defects, reducing turnover from as high as 25% down to as low as 2%. However only 2% of companies get what they want from a Lean effort. The primary issues that we find is that most organizations focus just on the technical changes and very little or not enough on the behavioral changes. There are very specific cultures that make Lean possible and most organizations don’t have this culture to begin with. You can learn more by watching this 30 minute webinar “Why Lean Fails” on the cultural elements. To change a culture take leadership and leaders need certain skills.
At the core of the change is looking at behavior change. Behavior change is the largest reason why Lean (for that matter any change) fails. Mindfulness is the one thing that managers can leverage as a skill to enable the change. Here is how it works:
Mindfulness is just about being aware. Being aware of your emotions, surroundings, other people’s emotions, and their surroundings. Practicing mindfulness can be done several ways. In part II we’ll explore the science behind mindfulness and what are some techniques you can use.
Want to learn more about mindfulness and how it can help you in your growth as an employee, leader, and/or manager? Please schedule a free call with The Lean Way. Please fill out the information below.
Time is the one resource we can’t get more of. So if you’re a business owner you know that time is precious and it feels like there isn’t enough time in the day. From our surveys of over 1500 businesses the #1 complaint from business owners is “how can I prioritize all my work so you maximize my time.” Here are 5 ways you can prioritize your work
1) Find What is Valuable to You
Many people will value their time in terms of money. Bill Gates has a time value of roughly $1 million dollars an hour. If you make decisions solely based money you have to make sure that the activity you are doing will lead you to make more money then you spend with your time. I prefer to use a blended approach and throw in the value of family time, of business growth opportunities, and the time value of money. When I come to a task I’ll ask myself these questions:
Will this task get me to my goals quicker than other tasks on my list of things to do?
Will it take longer than the amount of time that I have scheduled for the day?
Will it save me time in the long run if I do this now?
Does it align with my personal values as well as business strategy?
2) Develop Your Discipline
Once you have your priorities write them down and create a scorecard. This way you can hold yourself accountable to your values and the company strategy. Chances are if you are feeling overwhelmed then you have bad habits that will keep you from staying on task. Maybe it’s the habit of always answering the phone even though others could do that. Maybe it’s checking the internet when you should be writing a blog post. Maybe it’s making excuses as to why you shouldn’t go to the gym and skip keeping yourself healthy. Learn to recognize these habits and have a plan to address them as they come up.
3) Create and Streamline Your Processes
Many times we feel like there is absolutely no way we can do more in the time we have. The reality of it is that our brains prefer to look at the big picture and what is happening is that you have 100s of different tasks a day and they are all eating at your time at a few seconds here and a few minutes there. There are so many things going on that it’s difficult for us to pick out more than one or two opportunities. How many times have you helped one of your employees do a task that you don’t feel confident they can do it the same way you would do it? So you decide to stop what you are doing and help the employee with their task. Even outside of work you might experience having to look for the right outfit to wear to work and you spend 10-20 minutes trying to find it. Developing processes that are streamlined are critical to getting time and prioritizing effectively. If you don’t create processes that are robust and effective then you will feel like you are “fighting fires” all day long with the issues that arise that were unplanned. With processes the devil is in the details so the more detailed you can get the more you can streamline.
4) Trust Your People and Processes
This is one of the hardest things for most business owners to do since the business is their baby. Once you have your priorities and processes then it’s a matter of trusting your team to execute. Develop a plan that will make you feel comfortable with the way your team handles situations moving forward and keep yourself out of their jobs. This takes training, it takes some time, and it takes some changing of the way you manage people. It’s not easy work but it is rewarding for you in terms of your time and business growth.
5) Minimize the Time You Spend Aligning Everyone
Depending on the challenges you face in your business you may spend more time on getting people aligned than you would like. What this looks like is a lot of miscommunication that causes an excess of meetings, phone calls, emails, etc. In many cases it what happens is that it causes another fire to put out. Getting your team on the same page is critical and one of the best ways to do this is to have daily meetings with them to talk about where they are and the challenges they are facing. This way you can align your staff quickly, train them daily, and find issues much faster than you would otherwise.
I was on the radio with Heather Stagl talking about “The Power of Conversation” Link to the show
Register for a free 45 minute coaching session with one of our expert consultants! We will advise you on the cultural elements at play in your organization and how to address them properly. You’ll get tips on specific tools that will give you a higher ROI and be on the right path in no time…
Dianne has been the head of RCF Technologies since 1975 and has taken the company from $750,000 to over $3 Million. She blends her technical knowledge wither her unique ability to create a world class culture.
Register for a free 45 minute coaching session with one of our expert consultants! We will advise you on the cultural elements at play in your organization and how to address them properly. You’ll get tips on specific tools that will give you a higher ROI and be on the right path in no time…
