3 words summarising the challenges of maximising productivity

Sep 25, 2019 | Leadership, Management

 

‘Rhythm’, ‘Flow’ and ‘Balance’.

These three simple words reflect the ideal state for a process, big or small, in any enterprise. That state where the process is optimised for both efficiency and productivity, which are very different beasts. I have seen highly optimised processes that are still way short of being  productive, simply because there has been too little time spent considering the most productive use of the range of resources consumed by the process.  For example, US car companies used to  be highly efficient at driving the assembly of a car through a production process, but the cars they produced were terrible.

Rhythm.

Everything happens in an orderly and predictable manner, the ebbs and flows of volume have a cadence to them that enables the appropriate level of resource to be planned and allocated. No surprises!

Flow

The product being produced, or the process being followed proceeds in an uninterrupted manner, without obstacles, and complications. Achieving ‘Flow’  should be a core objective of anyone charged with the responsibility of managing a complete process, or participating in any part of a process, which is all of us. In most cases creating flow is like fitting a 1,000 piece jigsaw puzzle together. Complex at the beginning, but when completed, the picture is obvious, with no irregularities.

Balance

There are always forces acting against both rhythm and flow, forces that tend to distort the process. Seeking to balance all these forces is a job of leadership, and when efficient processes are optimised, all these forces are kept in ‘Balance. It is a  bit like trying to balance a top heavy piece of wood on the palm of your hand, you have to keep all the forces acting on the wood in balance in order to keep it vertical.

When you need some assistance in herding all the cats involved in this crucial but often easily pushed aside exercise, let the experience I have gathered over 40 years help you.

 

The cost of preventing errors

The cost of preventing errors

Sep 18, 2019 | Change, Lean, Management

 

Prevention of waste is a core tenet of lean thinking, and has been systematically used to optimise processes of all types.

However, it is not universally useful.

Prevention of errors in an existing process is one thing, you have the process established, and can map the manner in which the process is applied, and the outcomes achieved. However, when dealing with a new product, or process, things are a little different.

There is no known path towards an outcome, you are in effect telling the future, and that is an occupation with a high failure rate.

In order to tell the future with anything approaching an acceptable level of certainty, you need to experiment, try things, see what works, ask customers, deploy the ‘Lean start-up’ type mentality to the development of the process.

This means there will be many false starts, errors, failures, or more accurately, opportunities to learn.

Established businesses often do not accept errors. Promotion, salary reviews, and all the other trappings of corporate success are usually based on not making mistakes, so guess what, nobody tries anything new that just might not work, just in case.

An effort to remove these errors will end up costing more, as the implication is that the product or process will be developed until it is seen as ‘Completed’ before launching. As we know, not all new products work, so the losses involved in such an exercise can be huge

Remember ‘New Coke,’ the new improved taste of new coke that nearly destroyed the brand? With the benefit of hindsight, it was obviously a dumb idea, but at the time, I am sure Coke management had market research coming out their ears that confirmed this was a great idea. Pity they did  not pick a small test area, and put the change into the market, similar to a Minimum Viable Product, (MVP) to see what Coke consumers in real life rather than is some contrived market research environment said. Such a ‘waste’ would have saved them many millions of dollars, and being head of the queue in the greatest marketing blunder of all time list.

The lesson here is to encourage experimentation, each being an opportunity to learn, and improve your fortune telling skills, substituting small errors that do not compromise the business, for the big blunders that will.

 

 

 

Not all data is created equal

Not all data is created equal

Aug 16, 2019 | Governance, Management

We seem to believe, sometimes accurately, that the lack of data points is indicative of a less than a reliable outcome.

We also think that the more data points the better, but then we  tend to ignore the outliers, while privately acknowledging that is where change, and key insights, first emerge.

At other times, we are paralysed by the lack of data, or have so much of it we use misleading analyses to make our lives easier. The use of averages is a prime example, often resulting in absolutely misleading conclusions.

There was plenty of information about the distribution of icebergs in the North Atlantic in April 1912. However, the only data point that really counted, was that of the lookout on the foredeck of the Titanic.

Captain Smith was motivated by the race to set a new record for the Trans-Atlantic crossing time, and reassured by the information that there were ‘probably’ no icebergs so far south, he piled on the speed.

Whoops, missed the one really important data point.

The lesson: Not all data is born equal, and it is the insights that come from the analysis that really counts.

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How do you crete a documented ‘Flow’ in your processes?

How do you crete a documented ‘Flow’ in your processes?

Aug 5, 2019 | Management, Operations

 

‘Flow’ evolves as a completed task is handed over to the next stage, or person, automatically, with no error, in an entirely predictable manner.

When seeking to build flow into a system, there needs to  be a lot of detailed and logical thought put into the individual actions that need to take place in order to complete the activity, stage, and whole job.

There needs to be a list of the individual actions that are required, that are checked off.

Nothing too adventurous here.

If you boarded a plane and saw that the pilot was running through his preflight checks from memory, rather than a clipboard held by the copilot, you would be justified to feel nervous. In the case of a light plane, the pilot will use a clipboard himself, and physically check items off the list.  This post will have been edited several times, but it is only the use of the ‘speak’ tool that will root out the small inevitable errors of grammar, syntax, and spelling that I make. Even then, some sneak through.

We all miss things, our mind sees what it wants to see because it makes assumptions about what should be there, and just ‘sees’ it.

The easiest way to write out a sequence of actions in sufficient detail for it to be a contributor to the creation of ‘Flow’,  is to assume you are writing them for  your grandmother who has advancing Alzheimer’s, and for whom  every action has to be articulated in detail and in sequence. This should deliver a simple, logical flow, that is easily communicated and used.

A caution: Never assume because a process has been articulated in this way, and seems to work well, that there is no room for further revision and improvement.

Improvement can only occur in a stable environment, and documenting the flow is a key step in the ongoing challenge of improvement. 

Where is the demarcation between Accountability, Responsibility and Authority?

Where is the demarcation between Accountability, Responsibility and Authority?

May 20, 2019 | Governance, Leadership, Management

The words ‘Accountability’ ‘Responsibility’ and ‘Authority’ are often mixed up, used inconsistently, and often as synonyms.

How often have I heard someone say they have accountability, but not the responsibility, as well as the opposite?.

In any organisation, the ‘language’ used has to be crystal clear. Without clarity, ambiguity and finger pointing creeps in.

Let’s put this one to bed.

In my world, the demarcation between these words is very clear.

Accountability.

The clue is in the word: ‘count’. The person with accountability is the one keeping track of progress, counting it. They may not have the power to make all  the decisions, their role is to be the one who gives voice to issues as they arise, and should be independent of the role the person plays in the organisational hierarchy.  In former marketing management roles I held product managers accountable for margins of the products for which they held responsibility. They did not set final prices, nor did they control the promotional spend or COGS, but they were accountable for margins, and it was their role to monitor, communicate, and persuade, to deliver both the percentage and dollar outcomes.

Responsibility.

Anyone who is in a position to ‘respond’ carries responsibility. An individual does not have to carry either accountability for outcomes, or the authority to make decisions to be responsible for actions taken, most particularly their own. It is in this area of responsibility that the cultural aspects of an enterprise are felt most keenly. When those without any institutional power feel attachment to an outcome, and act accordingly, they are exhibiting a level of responsibility, and it is a powerful marker to a positive, productive culture. 

Authority.

This belongs to the person who has the final say, the power of veto. Authority can be delegated, even to the lower levels in an enterprise. On a production line where there is an ‘Andon’ line in place, workers carry the authority to stop the line when they see a quality fault, rather than allowing it to proceed further down the line.

The larger an organisation becomes, the more nuanced and ambiguous these definitions can  become as people interpret their position and role, and that of others, slightly differently.

A regular and blatant misuse of the word authority occurs when it is used to point at someone who is expected to be an expert. The word sometimes carries the preposition, ‘an’, in front of it, becoming ‘an authority’, as in the header illustration. The doctor was used in the header ad because he was seen as ‘an authority’, and therefore had an opinion that should count, but had no authority over the actions of an individual.  

As a further example, In most organisations, the CFO is accountable for the cash. They literally count it, report on it, and recommend actions that impact on it. The CEO retains authority over the cash, as they have the final say in how it is managed and allocated, and everyone in the organisation has a responsibility to ensure that cash is spent wisely, with appropriate governance and reporting.

Having clarity around these definitions, and a culture that respects and responds to them, is crucial to any improvement process.

 

How SME manufacturers can survive the coming downturn.

How SME manufacturers can survive the coming downturn.

Apr 10, 2019 | Management, Small business

In contrast to the rosy picture politicians of both colours are painting about the prospects under their  government, and the disaster looming if we elect the other, I think we are in for a rough ride.

I am not an economist, so have no numbers apart from those in the public domain to support this rather pessimistic view. However, I have been around a long time, and the feeling in my guts from the anecdotal stuff I see everywhere has a familiarity to the lead up to several tough periods I have seen before. 

Part of the challenge is that many now in so called leadership positions have never seen a downturn in their working lives.

So, following are a few tips on commercial survival in a tough period, and dare I suggest it, prosperity, if you are bold enough to see the downturn as an opportunity.

Act early.

If you agree that it might get nasty, batten the hatches before the impact gets to you. Even if the worst does not happen, you will be better off anyway by seeking greater productivity from your resources.  If it does get nasty, you will then be in a much stronger competitive position for being prepared. 

Focus resources.

Pareto rules, and focussing on the 20% that generates the 80% is always a good strategy, and essential to thrive in tough times. Doubling down on areas where you have a competitive advantage, increasing your share of key customers wallets, being explicit about your value proposition,  sending high cost low margin customers to competitors, and so on. In effect, you set out to do more with less, increasing the productivity of your assets. 

Take a long term view.

Economies work in cycles, every downturn is followed by the good times, again, it is just a matter of time.  Many times I have seen a few businesses double down on marketing activity when others are cutting to preserve short term profit, grab market position at relatively low cost, and keep it when things improve.

Be opportunistic.

In a downturn, opportunities arise that may not normally become available. Some of those I have seen in the past:

  • Customer acquisition becomes less costly
  • Distressed sales of inventory, businesses, capital equipment, premises, all sorts of opportunities emerge as others scramble for cash.
  • Lead times for capital equipment, and contractors with specialised skills become shorter.
  • Great people with the capabilities you need to grow suddenly become available.

The challenge is to remain externally observant, while everyone else has their eyes on their own internal problems.

Be collaborative.

Tough times are usually the best to forge lasting relationships. Assisting others when they really need it creates trust, the foundation of  collaboration, which will pay off in many ways over time. 

Expect the unexpected.

While this may be akin to being optimistic, in my experience, planning to be opportunistic does help. Anticipating the opportunities before they actually emerge enables planning, and therefore better use of resources. It amounts to being prepared to be proactive rather than just being reactive.

Hoard your cash

To act on any of  the above, you need cash. While interest rates are at historic lows, having cash when others are struggling is like being the only one in a rainstorm with an umbrella. Everyone wants to be your friend. Hoarding cash is not a matter of being mean, it is an outcome of discipline in your expenditure, removing waste from your own processes, maximising your own revenue generation strategies, and collecting from debtors.

When you would benefit from the experiences of others, give me a call.

Header photo courtesy Sarah Macmillan