Markets are always changing but companies don’t always recognize the changes. According to Harvard Business Review Daily Stat 1/4 of all households now only have a cell phone and no land line. How have you seen the land line market change because of this shift in the market? How do you see traditional land line companies changing their business models to accommodate a higher rate of cell phone only households?
What if your business had such a shift? How would you respond? How does your business system adapt to a changing market? Is your business system able to :
1) recognize a change in the market quickly
2) change your operations to meet the demand
3) deliver a high quality product/service
4) deliver the product/service at a competitive rate
5) fosters a flexible work group to deal with changing demands and day to day operations
If your business system cannot do all of those items listed above then what are you going to do when the next market shift happens in your segment?
If you have read the E-Myth and in the book it talks about having a system put in place to be able to duplicate and expand your business. To do this you have to standardize processes. The biggest question I get is what to standardize. The question usually comes from the belief that what is being done is unique. The perception is there is a scale ranging from 100% repeatable to 0% repeatable. The more repeatable then more standardization can be applied. The reality is that you can actually standardize just about anything.
To get started on how to standardize you can first breakdown a process into 3 categories:
100% repeatable – These are tasks that are the same every time and we can easily standardize the process. Example: Installing a screw into a panel.
0% repeatable – The task is diffrent every single time with no elements that repeat. Example: I have never experienced a 0% repeatable process
0% repeatable – Most tasks fall into this category. Example: Checkout process at the grocery store.
Once you take an inital look at your processes and determined which catagory they fall into then you look at to see if you can maximize the repeatable elements.
What every you can repeat make sure everyone is does it the same way and what ever cannot be repeated then standardize as much as possible. An example of a non standard process is diagnosis of a problem on a computer. Fixing a computer once you know what is wrong is a standard process but trying to find out what is wrong is not a standardized process. One way that your business can standardize something like a computer troubleshooting is to come up with a flow chart or a decision chart where it will help everyone start the diagnosis process.
The biggest obstacle to standard work is the thoguht that “I’m unique and my work cannot be standardized.” Try to fight the urge to think that way and instead think about how you can standardize your business.
For more information or any other questions please contact us.
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EI (EQ) is tactical or immediate functioning, Cognitive (IQ) is strategic or long term capacity. IQ accounts for 4-15% of work performance, EQ averages 27% and can be as high as 60%
source: MHS UK
EQ can be broken down in to 5 areas:
1. Intrapersonal Skills
2. Interpersonal Skills
3. Flexibility
4. Dealing with Stress
5. General Mood
These skills translate directly to communication, trust, alignment, and productivity for your company. Do you know any companies that focus on these factors? How does your company address EQ elements? Please leave comments.
Word of mouth is no longer just an intimate act: Consumers post product reviews online and disseminate opinions through social networks. McKinsey research indicates that in developed markets, word of mouth has its biggest impact when consumers decide which products to consider and when they’re actively evaluating products — at those moments, 18% and 19%, respectively, see it as the single most important factor influencing them. In developing markets, WOM is most significant at the moment of purchase (46%). In both kinds of markets, word of mouth is the only factor that ranks among the top three at every stage.
Word of mouth is generated by the level of service and level of satisfaction with your products. If you are in a developing market then how do you you are providing the best level of service and product quality? Do you get feed back from your customers to? Do you design process around the customer or do you just design processes based on what you think is best to run that operation? Please leave your comments.
As a company when you traditional companies think about removing waste and “weight” they will commonly use layoffs or a reduction in force as a common tool. But that doesn’t address the root cause that gave rise to the need to shed employees. Here are some of the more common reasons that are given for layoffs:
-Lack of work aka lack of demand
-Down turn in the market
-Changing cost structure to stay competitive
To be honest unless there is a sever downturn in a market the real underlying cause is usually poorly run company. I like to equate layoffs to liposuction. You have a lot of fat but instead of fixing diet and exercise (removing waste from operations and adding more value) you get liposuction (layoffs) and the root cause that caused you to get so big in the first place isn’t addressed. Not to mention there might be long term effects of liposuction that can’t be seen yet but the long term effects of layoffs are a little better studied. Layoffs can lead to :
-the organization moves towards less risk-taking and innovation
-destructive conflict tends to increase
-internal competition for resources increases
-individual staff members devote less effort to working together and more attention to doing things that will protect themselves.
-general listlessness and lethargy
-decreases service levels and increased public hostility
Focus on the root cause problems and learn to see waste and value. Next time you are on your work floor look for things that are wasteful and how you can change them. Little change now can make a big difference down the road. How do you see waste?
For more information or any other questions please contact us.
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The Missing Link To Lean Six Sigma – Emotional Intelligence
Friday Factoid – Culture = Profits
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In the month of July, the number of fatal medication errors jumps 10% in U.S. counties with teaching hospitals, according to David Phillips and Gwendolyn Barker of UC San Diego. Each July, medical residents get new or increased responsibilities for patient care at the beginning of the academic year.
Source: Society of General Internal Medicine via Harvard Business Review Daily Stat
Moral of the story is don’t get sick in July. What are some ways to combat these mistakes? Leave thoughts in the comments.
You may have heard of Kaizen which is incremental continuous improvement. It is a great way to make improvements consistently in any organization. The idea behind Kaizen is to just be a little better than before. Over time Kaizen can lead to significant changes.
Another concept that doesn’t get talked about as much in a Lean Business System is Kaikaku. Kaikaku is a major breakthrough also known as breakthrough kaizen. What does that mean? Well a picture is worth a thousand words:
What tends to happen in reality is something more like this:
Kaizen improvements will take you so far then you need a breakthrough improvement (Kaikaku). Kaizen would be like a 5s program where Kaikaku would be a line design project that converts your entire front to back process from batch to single piece flow. Going from cell build to progressive build can also be an example of a Kaikau.
How do you know when to use Kaizen and when to use Kaikaku? I like to use these rules:
1) Define what success looks like for your operations. In manufacturing you might use delivery time, % of operation that is waste, or even defect rates. In the service industries you may use number of customers, wait times, or even employee turnover.
2) Do Kaizen activity until you start hitting a glass ceiling with your improvements. This is when you start seeing diminishing returns on your improvements.
3) Test your breakthrough idea thoroughly before large scale implementation with cardboard mock-ups and an iterative design process.
4) Continue to Kaizen the new design.
For more information or any other questions please contact us.
A 1990 study concluded that a star performer is 85% more productive than an average performer in jobs of medium complexity (sales clerks, mechanics). A star performer is 127% more productive than an average performer in the most complex jobs such as insurance sales, account managers
Source:Hunter, J. E., Schmidt, F. L., & Judiesch, M. K. (1990). Individual Differences in Output Variability as a Function of Job Complexity. Journal of Applied Psychology
Do you have a plan in your company to create and foster star performers? If you have a star performer how would you keep them on your team? Do you know what keeps star performers motivated? Please leave responses in the comments section.
For more information or any other questions please contact us.
Related posts:
Combining Lean With Emotional Intelligence Case Study
The Missing Link To Lean Six Sigma – Emotional Intelligence
Friday Factoid – Culture = Profits
Motivating Employees Without Money
The human brain can hold about 7 (+/- 2) pieces of information in short term memory.
Source: Memory Article on Wikipedia
Many of you may already know this fact but do you apply it to your work? How many items do you juggle at one time? Maybe 5-6 work items and 4-5 personal items. Do you ever “drop the ball” on any of the items that you are working on either personal or business related? You may want to try a principle called standard work.
For more information on Lean Business Systems, standard work, or any other questions please contact us.
Related posts:
Combining Lean With Emotional Intelligence Case Study
The Missing Link To Lean Six Sigma – Emotional Intelligence
Friday Factoid – Culture = Profits
Motivating Employees Without Money