Change is Inevitable

Basic Business Cents

“It is not necessary to change; survival is not mandatory.”

  1. Edwards Deming

The world around us is changing rapidly and we must change in order to stay in business and prosper. Satchel Paige said, “Don’t look back. Something might be gaining on you.” It is no longer possible to stand still; we either go forward or we regress. Three areas of change are crucial; process improvement/innovation, strategy, and culture.

The biggest breakthrough in management thinking is to change focus from the product/service to the process that produces the product/service. Certainly problems occur with products/services, which demand attention, but it is important to reach a balance of one’s time between problem solving and process improvement/innovation. Typically, managers have the responsibility to create and improve processes and employees do the best job they can within the process they are given. Employees can be involved in collecting data and, if trained in process improvement techniques, they can start to analyze the data and make suggestions to management. Management must also be trained in the improvement/innovation techniques to develop new or improved processes with the input from the data of existing processes.

Strategy is also in need of change. Robotics in manufacturing, electronic communications in marketing and training, and advances in distribution are impacting everyone. The aim or dream for the future needs to be identified and shared by all employees so they can work together to accomplish it. Whatever might stop the organization from achieving that aim should be identified along with opportunities available and a strategy identified to achieve the collective aim or dream. A leader should be selected to be responsible for the achievement of each strategic action and report regularly on progress. Words without action are useless and follow-up is key to accomplishment of the strategy.

Culture change is also important. Gone are the days of cracking the whip over employees and are being replaced by leadership. Business is so complex today that one, or a few, brains aren’t enough; we need the brainpower of all employees to succeed. Leaders aren’t drivers but more leaders, being out in front, setting the example. They embrace the minds of the employees. Trust and respect must be exemplified at all levels, up, down and across the organization. Training must be provided at all levels and a growth path for employees should be visualized. Leaders should display enthusiasm and a positive attitude because negativity will rub off on the employees and morale will tail off. Leaders lead!

Why change? It provides opportunities to grow and flourish. Change is exciting, rewarding, and provides a sense of accomplishment for all.

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Fix the Right Stuff

Basic Business Cents

We only have so much time, energy, and emotional drive; we need to deploy it wisely. It is much harder to regain momentum in the organization after a false start than it is to initiate it. Following are three areas in which we need to constantly remind ourselves to avoid missteps.

Fix the Problem, Not the Blame

Few people deliberately make mistakes. They want to be proud of their work and their organization. Blame is demoralizing and counter productive. Blame wastes time and money and delays customer satisfaction. We want and need an environment where people feel free to identify problems without experiencing repercussions. It can cause employees to hide problems and stifle innovation. Fixing the problem is constructive use of your energy; fixing blame is destructive to the organization. Focus on fixing the problem; it gets solved and the employees are happier.

Fix the Cause, Not the Symptom

If you spend time compensating for the symptoms of a problem, it doesn’t go away. The problem continues to exhaust time and effort. Fixing symptoms is just rework, over and over again. Instead, spend your time digging for the real cause of the problem and eliminating it so you can go on to more productive activities. When you break your arm, you don’t just take pain killers to mask your discomfort, you treat you arm in order to heal and reduce the pain. The same holds true for work, you should not just mask the pain and continue doing the same thing without removing the cause.

Fix the Process, Not the Product/Service

All work consists of a series of processes that produces our products or services. Bad processes, not by people doing something wrong, cause most problems. Two world leaders in the field of performance improvement shared thoughts on the percent of fault for problems. Joseph Juran stated that in his experience, he found 80% of the time it was a process problem and only 20% of the time was it people at fault. W. Edwards Deming said he thought 90-95% of the time it was a weak or faulty process that led to the problem. Again, don’t blame people, they are doing the best job they can with the processes they are given. Typically, management’s job is to create and improve the work processes and the people’s job to follow the processes. The ideal is to create processes that are incapable of producing bad products.

By focusing on the right things, fixing the right stuff, we can conserve our time and energy and get the best results. This results in happier and more fulfilled customers, employees, and managers.

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Brainstorming

Basic Business Cents

You cannot legislate creativity, but brainstorming is a tool that is helpful. It taps the brains of a number of people and allows them to build off others’ thoughts. It is a great technique for generating creative ideas, a fun way to get fresh ideas in the open, and get everyone to thinking together.

When looking for solutions to a problem or a challenge, assemble a group of people involved with the area where the problem exists. Develop a clear problem statement that everyone understands. Choose a facilitator to record the ideas of solutions on a white board or, preferably sheets of paper like a sticky flip chart that can be posted on a wall so everyone can see the ideas. Ensure they are clearly visible to everyone.

Explain the rules of brainstorming:

  • Encourage spontaneous, freewheeling responses
  • Do not discuss each other’s ideas
  • Cultivate a supportive atmosphere
  • Emphasize quantity, not quality
  • Build on ideas of others
  • Write everything down
  • Seek total participation from the group
  • Discourage negative, nonverbal responses to ideas

Do not allow any criticism or evaluation of others ideas. Emphasize that there is no such thing as a bad idea. It might seem crazy or far out at the time, but it could lead to triggering an idea in some else that would not have otherwise surfaced. The facilitator is to write down every idea without evaluating the merits of the idea. Do not suspend the process to discuss a single idea but keep the flow of ideas going. Build on other ideas and it is surprising how many good thoughts emerge. At this time, focus on quantity, not quality of ideas. Brainstorming tends to be fast going for a while until a lull is reached. The flow of ideas can be restarted with an out-of-the-box idea or a prompt by the facilitator.

An alternative form of brainstorming is called a cause-and-effect diagram. It is sometimes useful to draw a skeleton of a fish on the paper or board with the problem shown as the head and four lines drawn from the backbone to brainstorm the possible causes of the problem. The titles of the four categories are typically methods, material, machinery, and manpower, referred to as the 4Ms. Today, for obvious reasons, the category manpower is changed to people. Other categories can be used, but these four are convenient to get things started. At this time you are not trying to find the solution, only the principal cause or causes. Data can be collected to validate the causes. With the principal cause (s) identified, the solution may be obvious.

Once the flow of ideas is spent, it is time narrow the field down to the cause or solution. This can be done in several ways. One is to lead the discussion until a true consensus is reached, rather than a meaningless compromise. Care should be taken that outspoken people do not dominate the result.

Another way is to vote. Each participant can be given three votes and they can go to the wall and cast their votes on the solutions or causes that they feel are most important. After everyone has voted, the principals will stand out.

A third way is to group the ideas into a few similar subjects and perform a cause and effect test of each group to the other. The group with the most causes versus effects emerges as the group to pursue.

The brainstorming tool surfaces creative ideas to solve problems not otherwise available and builds teamwork and enthusiasm as a plus. Who knew solving a work problem could be fun?

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Sales: Art or Science?

Basic Business Cents

Some people denigrate themselves and think they can’t sell. They view others as born salesmen and defeat themselves. I submit that selling is a process like every other facet of business and therefore a science rather than art. It can be defined as a customer focused approach presenting the product/service to meet the customer’s needs. The sales process can be viewed in three areas, Listen, Learn, and Adjust. These areas are not serial but intertwined.

Listen

Many sales people make a big mistake by opening the discussion with the prospect by telling about their company, their products/service, and themselves. This can be boring, irrelevant, and self-centered. Prospects are more interested in their business, their problems, and themselves, so ask questions to get them to start talking. Then listen and learn. People prefer talking about themselves rather than listening to others talking about themselves. These questions might include probing for insight into the prospects wants and needs, what is important to them, their aim or vision for the future, what causes them problems, and what is their desired result from meeting with you. Listening and talking in their language helps to build a strong relationship.

Learn

There are two parts to the Learn area, pre-visit and during the visit. If possible, do the homework before the contact to show your understanding of your prospect and his/her problems. Plan the sales call and negotiate access to the most senior decision maker. Learn names of relevant people involved, their positions and level of influence, and if the prospect is funded for the solutions to their problems. Study the prospect’s business, their competitors, trends in their industry, and what others are doing to solve problems. Gather appropriate references and case studies to support your products/services. Plan the sales call. Anticipate objections and develop solutions to them with your products/services.

Observe the surroundings and the body language of the prospect during the contact. Body language is very informative and will let you know if you are on the right track. Probe for insights into problems or areas that can use improvement. If you listen well, the prospect will tell you what he/she wants to hear to become sold. Practice your sales call. There is a great saying, “The best extemporaneous talk is well rehearsed.” Avoid a canned sales pitch but be proactive and plan what you intend to do and say, how you will turn objections into positive points, and how you will close. Then be flexible.

Adjust

It is safe to say the conversation will not quite go as expected, but with proper preparation you can adjust to the situation. Fit your product/service to the recognized need. Speak in the terms of the prospect, propose solutions that have value, and sell benefits as opposed to features.

Repeat the problems in your words to show that you understand what your prospect is facing in detail; only then should you offer your solutions. The value of a salesperson is value creation for both the customer and his/her company.

Deal with questions and objections as they arise and never put them off. Avoid disagreeing with the prospect.

Use a trial close when the prospect agrees that your solution will work. If the sale is not consummated at this point you can use case studies where the solution has worked for others, or you can offer references. Make sure you have the permission of satisfied customers to use their name in your selling pursuits. Differentiate yourself and therefore your product/service will not be viewed as a commodity that can be compared on price alone.

Always, always follow up, whether you win the sale or not, to maintain a relationship with the prospect. A letter or email simply thinking them for their time and interest followed by a statement of what you learned about their business and challenges and how you can provide solutions. Close with next steps as you see them.

The above are fundamental steps in selling but develop your own process because you are unique. Then by continuing to practice, rehearse, and improve you will develop into a successful sales person. You may be viewed as a born salesperson but you know in your heart it is because of your customer-centric selling process that you have developed, improved, and practiced over time.

 

 

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Clues for Problem Solving

Basic Business Cents

The hardest part of problem solving in business is often getting started; it helps to have an outline to follow. An additional benefit of a standard approach is consistency between problem solving teams so people can fit in with new teams.

Dr. W. Edwards Deming built upon a revolving cycle approach to problem-solving which he learned from a Bell Labs friend, Dr. Walter Shewhart. He took it to Japan in 1951 when he was asked to help them turn their economy around after World War II. It further evolved from applications there to what is now called the Plan-Do-Check-Act Cycle. It is usually depicted in revolving circles but perhaps it is clearer in outline form.

PLAN: Before any action is taken, a plan should be made to define the problem, determine who are the customers involved and obtain feedback on the nature of the problem, how it affects the customers and clarify their requirements.

  • Define: Clearly state and obtain consensus on the problem to be addressed
    • Establish the Focus: Narrow the focus to a manageable problem-don’t try to solve “world hunger”.
  • Measure: Find a way to objectively measure before and after results to determine if progress is being made.
    • Examine the Current Situation: Collect data when possible, talk to internal and external customers, and get input from the people actually doing the work in the area.
  • Analyze: Study the processes involved in the problem area and brainstorm possible causes of the problem; it is okay to think outside of the box.
    • Analyze the Causes: Select the most likely cause (s) of the problem and develop a solution.

DO: Try the solution on a pilot basis to see if it does indeed eliminate the identified main cause

  • Improve: Measure the effect of the trial of the solution.
    • Act on the Causes: Apply the solution and document the effect. If necessary try more than one approach.

CHECK: Study the results of the trial approach to the solution.

  • Improve: As you learn more about the problem and processes involved, document improvements in the solution approach for future action.
    • Study the Results: If the problem is solved or the process improved measurably, take it to the Act action. If not, return to the brainstorming of the causes and develop a different solution. If necessary, go back to Plan and roll the cycle again.

ACT: If the measurements show the solution does not work, return to identification of causes and develop a better solution.

  • Control: Obtain consistency in the organization in applying knowledge learned to improve the performance.
    • Standardize the Changes: If the measurements do confirm the solution of the problem, then document the changes in the Organization Operating Principles or similar document. Roll it out to other departments so the process is performed consistently throughout the organization.
    • Draw Conclusions: Study what was learned from the problem-solving process that can be applied elsewhere.

The Plan-Do-Check-Act Cycle is a simple approach to problem solving. It becomes a way of thinking to aid in constant improvement of improving the performance of the organization. No process is perfect but the cycle can be rolled around again and again to pursue that perfection.

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Understand the Work Process

Basic Business Cents

Some years ago, I was studying a Japanese process to solve problems and I thought I could improve upon it. I added a flow chart of the process involved as it is before the improvement work began and another after the process is improved to solve the problem, comparing the before and after. I was quite proud when I later showed it to a Japanese friend and he said, “We just assume you know what is going on in the process before you attempt to make any changes.” That may be a good assumption in Japan where they have grown up with process thinking, but I don’t think it is a good assumption here.

A very useful tool in understanding a work process is an Integrated Flow Chart. This not only lists the steps in the process, it places each step under the person/persons responsible for the step. The purpose is to show how the work flows and who is responsible for each step along the way. It will reveal inefficiencies, gaps, delays, and other streamlining opportunities. It will also show internal customer/supplier relationships.

To start, list each of the participants in the process, either individuals or groups across the top of a large sheet of paper. Draw a column for each participant or group in which all activities will be displayed. An example might be a Direct Employee Acquisition process with the headings of the columns Hiring Manager/Team, Recruiter, HR/Other Management, HR Administration, Applicant, and Outside Providers or Other.

Establish a beginning and ending process point. Use Post-it-Notes to add items or steps in the process. It is best to do this in a group of individuals with individuals from each column represented, as often there is conflict as to how the process actually works. In this case, discuss it until consensus, not compromise, is reached. People actually doing the work are key to be involved because often they are doing something different than what management believes they are doing. Sometimes they do not follow their work instructions because they do what they have to do to make the process work.

The name of the step is written inside a symbol on the flowchart in the proper columns with the keys being:

  • A rectangle for an action step
  • A diamond for a decision with a yes or no output
  • A circle for information purposes or cooperation

Arrows are filled in from one step to another, or laterally to information circles.

Do not edit the process at this time; the objective is to see how things are being done now in order to establish a baseline.

Then the group can begin to brainstorm better ways. It is interesting when people see the process on paper staring back at them, ideas will inevitably pop out on how to improve.

Process quality concerns are:

  • Anything which causes extra work or rework
  • Excessive dead time or movement
  • An apparent inefficiency in the process
  • An activity causing dissatisfaction to a customer, internal or external
  • More than one method of performing the activity
  • Anything causing dissatisfaction or pride of workmanship of the employee

When the group is satisfied they have removed rework, waste, redundancy, and streamlined the process, they can document the new, improved process.

The Integrated Flow Chart is simple and effective to use, It is also satisfying to those involved because they have a voice on low their work is to be done and will continue to discover other opportunities to improve in the future.

 

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Defect Diagnosis

Basic Business Cents

No product is perfect. No service is perfect. That is because the process that produces them is not perfect. Only about 20% of the time can people be blamed, the rest of the defects or poor services are system or process problems. Unfortunately, defects become routine, and people become callous and accept them until a competitor proves they have fewer defects, better products or services.

In order to reduce defects, people need to believe defects can be reduced, and they initiate action to discover and remove causes. The main cause is variation. If the same method prescribed is not followed, applied differently, or is incorrect, defects will occur. Experience and intuition can sometimes remove causes of variation but they can also cause increased variation. An example is, “I know from my experience or I think it is better or easier to do it my way.”

Another cause of variation is materials. A leader in the field of quality once said, “Any two things not the same are different.” He was implying that nothing is exactly identical. A chicken soup manufacturer has to adjust equipment when the supply of chickens changes from one grower to the next. Maybe they were fed differently, had larger growing area for more exercise, were of different age, etc. Clothing size varies from manufacturer to manufacturer. Food delivered to a restaurant varies in texture, taste, and age. Nothing is exactly the same.

A third cause of variation is machines. Condition, tool wear, age, manufacturer, temperature, and humidity are all causes of variation in the output of machines.

The worker cause of variation should also be investigated. They may be trying to do their best but do they have the same energy in the afternoon as the forenoon, is there a difference between shifts. Is there a difference in physical characteristics, have they slept well the night before, is there a difference in mental conditions, and are they receiving different directions from supervision.

Methods, materials, machines, and workers are all causes of variation in work processes that need to be reduced. Variation can never be eliminated; it can only be reduced!

The first action is to correctly diagnose the principal causes of variation. If the true causes are not properly identified, corrective action may be carried out on a minor cause and the major causes overlooked. An analysis of the “vital few versus trivial many” will provide direction to action where the best results are attained. Data should be collected on causes of defects and grouped in like types. In this way, a priority of where to focus attention will appear.

When the most important causes are identified, then data should be collected to prove they are the main problem. Then investigate remedies and try them out on an experimental basis. Collect data again to prove they have significantly reduced defects and, if so, standardize on the new process. If this proves not to be the main solution, then restart the process to detect the main cause of defects.

As stated earlier, defects will always occur, no process is perfect, variation always exists, and process improvement action needs to be sustained forever.

 

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Overview of Process Improvement

Basic Business Cents

People never seem to have enough time to do things right, but they always have time to do things over. This does not make sense on the surface, but it is what I have observed over time working with many organizations. It is true that performance improvement activities take time, which is precious to the small business, but that time can be found by simplifying systems and processes.

A process improvement activity has three elements, simplify, improve, and sustain.

Simplify

The performance improvement objective is to reduce waste, rework, and redundancy. The first step is to take an overview of the organization and draw a chart of the main systems, starting with the entering to your organization of the goods from your suppliers to the exiting of your goods/services going out the door to your customers. You may have parallel paths of product lines A, B, C or services A, B, and retail. Examine the chart yourself, observe how it works in the actual work area, share it with employees actually working in the systems, and look for ways to reduce cost, minimize time, and improve the quality of the system. Eliminate unnecessary steps, distance traveled, redundancy, wait time, obsolescence, and stockpiles of inventory.

When you are satisfied you have done what you can to simplify the overview, go down to the next layer of detail until you get to the detail of individual items for each worker in their work processes. The more you streamline your systems, the more time you and your workers will have to further improve the operation. Eliminate rework by doing it right the first time. Improve processes to the point that they cannot make defective products/services.

Improve

Two types of activities are needed, solve problems and improve processes. In both cases, workers need to be trained and given authority to act. Problems should be identified and resolved and not allowed to hang over the heads of the workers. Processes should continually be improved; there is always a better way. Collect data to show the problem is real or the process is improved and make decision on facts whenever possible. Tools and methods are available for conditions, where data is available and where it is not. Involve all the employees in the performance improvement quest.

Sustain

Not to be overlooked is the importance of sustaining improvement progress. Changes should be documented and communicated throughout the areas affected. Follow-up by observing adherence to the new ways and not allow backsliding into the comfortable way of “that is the way we have always done it”.

In order to be ahead, you have to get ahead. Keep reducing waste, rework, and redundancy as a way of life. Organizational performance improvement effort must be continued relentlessly forever in order to survive and prosper.

 

 

 

 

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Introducing Process Improvement

Basic Business Cents

Business is tough and necessary performance improvement is a never-ending quest. We cannot ever rest on our laurels and stand still; we are either continually improving or we are losing ground to competitors.

When introducing a process improvement program into an organization, there are many do’s and don’ts. This type of program begins and ends with leadership. There is no point in introducing performance improvement measures where the top leader does not lead. No one else can do, it must be the top person leading the way, setting the example, and motivating others to the cause. Leaders cannot merely stand on the sidelines and cheer on the employees. They must have more zeal and enthusiasm than any other employee and lead the way. The manager’s enthusiasm for work should never be less than subordinates.

The leader must then work on obtaining the same excitement for process improvement in each employee. This improvement activity requires a new way of thinking for the entire organization so that everyone is aligned in his/her thought processes. Simply driving it from the top will not get the desired results; in a one-man autocratic organization, the people will only do what they are told. The organization needs the combined knowledge, experience, and creativity of all employees. This will require a humanistic type of management that builds mutual trust and respect throughout the organization. Employees treat each other as equals in true teamwork.

Lip service or good intentions at all levels do not get results. Implementing measures to improve processes does. First, everyone must understand his/her work processes and then seek to simplify and improve them.

The leader should attend seminars and then teach lessons learned to the employees. Armed with this new knowledge, the leader should improve his/her own processes and then lead improvement teams personally to work on other key processes. The leaders need to be familiar with the true state of the organization. By observing the way employees answer questions and examine data, managers can see the real problems.

Employees sometimes hesitate to have leaders in the same training or on their improvement team because they are reluctant to state problems in front of them. This is indicative of management problems that need to be addressed before the improvement results are optimum. People need to feel secure stating the truth about conditions.

No company, system, or process is perfect and problems always exist. From the top leader to the most recent hire, all need to work together to improve the work processes and solve problems, little by little, better and better. Enthusiasm and excitement for this new journey, coupled with training and teamwork, make the work more satisfying, productive, and even enjoyable.

 

 

 

 

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Introducing Process Improvement

Basic Business Cents

Business is tough and necessary performance improvement is a never-ending quest. We cannot ever rest on our laurels and stand still; we are either continually improving or we are losing ground to competitors.

When introducing a process improvement program into an organization, there are many do’s and don’ts. This type of program begins and ends with leadership. There is no point in introducing performance improvement measures where the top leader does not lead. No one else can do, it must be the top person leading the way, setting the example, and motivating others to the cause. Leaders cannot merely stand on the sidelines and cheer on the employees. They must have more zeal and enthusiasm than any other employee and lead the way. The manager’s enthusiasm for work should never be less than subordinates.

The leader must then work on obtaining the same excitement for process improvement in each employee. This improvement activity requires a new way of thinking for the entire organization so that everyone is aligned in his/her thought processes. Simply driving it from the top will not get the desired results; in a one-man autocratic organization, the people will only do what they are told. The organization needs the combined knowledge, experience, and creativity of all employees. This will require a humanistic type of management that builds mutual trust and respect throughout the organization. Employees treat each other as equals in true teamwork.

Lip service or good intentions at all levels do not get results. Implementing measures to improve processes does. First, everyone must understand his/her work processes and then seek to simplify and improve them.

The leader should attend seminars and then teach lessons learned to the employees. Armed with this new knowledge, the leader should improve his/her own processes and then lead improvement teams personally to work on other key processes. The leaders need to be familiar with the true state of the organization. By observing the way employees answer questions and examine data, managers can see the real problems.

Employees sometimes hesitate to have leaders in the same training or on their improvement team because they are reluctant to state problems in front of them. This is indicative of management problems that need to be addressed before the improvement results are optimum. People need to feel secure stating the truth about conditions.

No company, system, or process is perfect and problems always exist. From the top leader to the most recent hire, all need to work together to improve the work processes and solve problems, little by little, better and better. Enthusiasm and excitement for this new journey, coupled with training and teamwork, make the work more satisfying, productive, and even enjoyable.

 

 

 

 

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