Unfortunately it is probably often true that someone could be reprimanded because of a know-it-all attitude by leadership when suggesting how the overall business could be improved. However, now top leadership is often having major credibility problems, which could mean the stage is set for change.
However, suggesting an improved business system will not be easy. Success is often dependent upon how we approach leadership. Advocacy selling is the way to go. A leading thinking influencer can have top leadership connections. Headway can be made through his person when presenting a clear concise approach that directly addresses leadership pains; i.e., not selling the benefits. What needs selling is an enterprise-wide system that is much grander than implementing process improvement projects from a brainstorming session.
The following statement makes sense to me: “We all need a different set of business approaches and metrics that can bring sustainability to our own future development. We must do something different now or our grandchildren will not have the same life that we know and love.”
For sure advocacy selling can influence leadership who strive to do the right things for the enterprise. Surely there are leaders that would like to have a no nonsense system for measurements, analyses (blended with innovation), and improvements that benefit the system as a whole. There must come a time when corporate america moves away from top executive changes every new season with an accompanying new-fangled business methology, where the old guard was granted a major golden parachute even as the company value plumeted during their term.
Can you use some help implementing process improvement systems for your enterprise? Achieve the Three Rs of Business; Everybody doing the Right things and doing them Right at the Right time. Subscribe to the articles in the “On-line Resource Center” at www.SmarterSolutions.com” that provide insight to a long-lasting Integrated Enterprise Excellence (IEE) system that overcomes these issues.
If you have a passion for implementing process improvement systems, consider becoming an IEE Blackbelt.
Dr. Edwards Deming’s Profound Knowledge deals with Systems Thinking, Statistical Thinking, Scientific Thinking, Applications of Psychology; but today’s business management system and its scorecards are not aligned to this philosophy. How does this impact your lean six sigma methodology?
As Deming pointed out it is important that managers understand variability. We need to have an executive metric reporting scorecard, dashboard reporting system that describes this variability so that appropriate actions occur. We’re not dealing with rocket science here. Is it different? Yes. As we are seeing in the economy today, if organizations don’t make the change they can have very detrimental behaviors that can be very costly.
The systems of business management are not work and they must be reinvented! Metrics and the way we report them is a critical part of this reinvention or nothing will change.
Red-yellow-green scorecards, for example, can lead to much detrimental behavior and significant firefighting. Looking down from the 30,000-foot-level on red-yellow-green scorecards shows how nothing truly important may have changed although the colors toggle back and forth.
The primary role of traditional control charts is to identify when special cause conditions occur so that corrective action can be taken in a timely fashion. We can create an individuals control chart (not an x-bar and R chart) to create a 30,000-foot-level metric report to assesses whether a process is predictable and, if appropriate, declare a prediction statement.
Even though there was much toggling between the colors no improvements were made because the 30,000-foot-level control chart did not move to a new level of stability. The probability plot (data considered a random sample of the future since there is a recent level of stability) predicts a red condition about 1/3 the events in the future. If this is not satisfactory when considered with all metric conditions a process improvement would be pulled by this measurement for creation.
This situation is not unlike Edward Deming’s red bead experiment where people were getting praised or criticized based only on the color of a bead they had chosen at random. Isn’t this not unlike what is frequently happening in businesses today to you because of our metric system?
This system takes tools of the balanced scorecard and lean six sigma methodology to an enterprise management system.
Several 30,000-foot-level articles can be found in the “On-line Resource Library” link at www.SmarterSolutions.com.
What is a SWOT analysis (also known very simply as a SWOT) and why is doing one important to your business? Use this sample SWOT analysis to help you do your own SWOT. All small businesses need to include a SWOT in their strategic planning. SWOT is a key element of successful strategy development.
I saw a company once that listed its mission as producing a product with minimum impact on the environment. While certainly a noble idea, I would ask if they were willing to sacrifice the success of their business to reduce their impact on the environment. Really, their mission was to produce the product. Doing so in an environmentally sensitive way was certainly a key result they wanted and should be a central theme in the plan. This environmental concern will definitely impact their efforts, but it wasn’t the mission. I suspect though that it was the vision of the company’s owner. So the mission was to produce a product but the owner’s vision was to be a company that produced a great product in an environmentally friendly way.
In another example, a non-profit organization I worked with wanted to restart a thrift store. They said their mission was to provide a place where people could sell their used and unwanted items. I asked what the proceeds from those sales would be used for and was told the store’s profits supported several local charities. So, I asked if, considering overhead expenses and very generous consignment policies, they would be willing to forgo the charitable gifts as long as people had a place to bring their used and unwanted items. At that point the light went on and the organization developed a mission statement spelling out that their prime reason for being was to raise money for charities. The manager then called all the workers together and explained the true mission. There was a noticeable change in the store and the next two years were the most successful in recent history.
The response was “Sure, but I did not think about any employee leaving. The business was over 30 years old and very well established. All the records were in tact and everything looked good on paper.
An old quote states: “Good luck happens when preparedness meets opportunity.”
So possibly the reverse is true that “bad luck happens when no planning meets the unknown.”.
As I said, the leader owns the vision for the organization he or she leads. This vision can be lofty and challenging, a concept that is bold and far reaching. It is leaders with great visions who motivate others to succeed and accomplish great things. To create a vision statement, consider what you would ideally like to accomplish. Don’t worry about what stands in the way, what do you really want to do?.
This creates a working harder not smarter business environment. The business owners in the earlier story are both discouraged because what they believed to be some easy money now has become a daily effort just to keep the doors open.
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A Harvard Business Review article “Why Few Executives are Skillful Managers” made the following points: “despite the billions of dollars, euros, and yen invested in coaching and management development, remarkably few executives can be regarded as skillful managers.” It’s my guess that the majority of managers with responsibility for large teams and significant businesses either do not possess the requisite skills of a manager — or they just don’t put them into practice. Why? There are three main reasons. Firstly, time constraints and day to day pressure to deliver instant results make it almost impossible for execs to ponder, think through, and apply their new abilities. Second, budget constraints can result in a lack of support and follow-through on the best intentions. Finally, behavioral change is difficult — it’s all too easy for a development plan to slip to the bottom of the to-do list.” The article suggested the following development areas: delegation, management distance, visibility, work-life balance, and continuous learning and reflection.
Some other thoughts …
I do not disagree with the issue of executives making skillful managers; however, I have some other thoughts on what should be done to address the problem. I suggest that Executives would be much improved if they were to operate within a well defined strategy that leads to the 3 Rs of business; i.e., everyone doing the Right things, and doing them Right, at the Right time. This management system needs to be different than the establishment of somewhat arbitrary goals throughout the organization for departments without a structure plan for determining what will be done differently to determine how the goals are to be met. Furthermore, this system of management needs to consider the evolution of business strategies that lead to specific behaviors that are congruant with the focused financial needs of the organization.
With the linked described system, Executives would now have a structured framework for them to operate within that cannot be gamed. Lean Six Sigma consulting and/or coaching would provide more of a structure for what they should be doing to be successful operating their businesses within this infrastructure.
Fewer than 50% of businesses survive beyond five years. Visit government census or Depart of Industry web sites and if you look at the detail you will see irrefutable evidence
The industry experts common reason for death is the unfortunate ones just ran out of cash. This lack of detail is of no value and so I decided to find those directly and indirectly connected with failed businesses to see if I could uncover the details, establish any consistent reasons for failure and present them on the web in the hope that my discoveries would help others avoid a similar fate. I discovered eight common reasons for business death. Here are three of them:
No Vision, mission or strategy
“If you haven’t a clue where you are headed then how are you going to get there?” You have to have a clear picture of what you want to achieve and how the environment will be for your business if you achieve it. To achieve anything you it is essential to have a strategy. Strategy is very similar to a road map it shows you how to get to your destination. It’s a structured list of actions. To make a strategy work you have to create a business plan that not only contains the key actions and milestones but can used to measure business performance against. A key tool for monitoring business perfomance is the sales forecast.
Lack of a system for marketing or sales
Marketing is about identifying markets and trying out strategies to position your proposition in the minds of prospects and moving them into your sales channel. Sales is about engaging the prospect and getting them to buy your product or service. Marketing is a process of measuring and improvement of the ways you employ to acquire prospects. Sales is the process of creating leads, forecasting sales and closing business. In successful companies a good marketing and sales system is often supported by a well designed sales forecasting software system. Systems like these enable you to track and measure the activity in the sales and marketing processes. Results arederived from reports created by the software which can then be used to compare what you predicted would happen versus the real outcomes. The point I am making is what gets measured gets improved or discontinued. This is the critical formula for success.
Lack a system to get sales from their captive customer list
There is a common phrase that eighty percent of your sales should come from twenty percent of your customers. Your focus is to achieve or exceed this number. Customers that have already bought from you are easier and more cost effective to sell to than prospects that haven’t. A combination of decent web based crm software and sales forecasting software will give you the information of historical activity and enable you to find opportunities in your current customer base.
Organizations can have many problems because they are measuring the wrong things, which can lead to unbeneficial or detrimental behaviors. Improvements are needed in many organization’s measurement and improvement systems. Red-yellow-green balanced scorecard measures, should be avoided because they can lead to firefighting measures that do not benefit the overall enterprise.
Data needs to be from a stable process or “in control” process to create a valid process capability statement. Let’s also strive to have a sampling process so that if more than one person reviews the same process their conclusions should be considered similar even if the process is considered “in control” or not. With this statement, reference is made to how they sample from the process, not a chance occurrence. “Predictable” is often a better term than “in control”.
It is better to use ppm as a response for process capability and process performance indices, rather than Cp, Cpk, Pp, and Ppk, which can be very confusing and deceiving. A better practice is to use a probability plot to describe process capability/performance, since a probability plot offers more output flexibility and data understanding potential than process capability analyses that also provided Cp, Cpk, Pp, and Ppk outputs. When make a process capability/performance metric statement probability plots are also very useful, even though no specification exists. Please note that probability plotting is not the most critical issue relating to the creation of a no-nonsense balanced scorecard measures system that keeps organizations out of the firefighting business.
With IEE (or Integrated Enterprise Excellence) measurement system when implemented from the top down can help you achieve your corporate objectives. In the IEE methodology, there can become a measurement “pull” for the initiation of projects when a predictive metric does not produce a desirable improvement for the enterprise as a whole. To make this happen, a measurement system is most be developed which is independent from how someone designed a sample collection system.
The primary purpose of a 30,000-foot-level control charting should be an overall view of customer experience. Assuming that there is consensus with this position, a couple questions need to be asked to determine if there is agreement as to what should be considered as a potential common cause and special cause input variable source in a 30,000-foot-level control chart. Compare this to the timely identification of a problem using a control chart to halt a manufacturing line to fix the problem because of a signal that is out of control.
Let’s discuss a typical situation where process raw material is changed day by day. Add to that you must consider that some raw material characteristic affects the output of the process. Would raw material be considered as a potential common cause variability source or should it be considered a special cause variability source?
Most will agree that raw material should be considered a source of common cause variability. If there is agreement on this and there is also agreement that control charting should provide information consistent with what we believe with respect to special and common cause identification, we will not use x-bar and R charts.
Why is this? With our current belief system, the fundamentals behind the creation of an X-bar and R chart can seem inconsistent. X-bar and R chart control limits are only a function of within subgroup variability. For x-bar and R control chart limits, variability between subgroups has no affect. The control limit calculations of an individuals control chart provides control limits that are a function of the variability between subgroups. The individuals control chart upper and lower control chart limits would consider the variability between raw material lots; however, this would not occur in an x-bar and R chart.
One could use x-bar and R charts to calculate process capability in statistical programs such as Minitab; however, this is not consistent with our belief system. X-bar and R charts can force an enterprise into a lot of damage control. X-bar and R charts are not used when making an IEE 30,000-foot-level assessment.
It can be tough for some to accept that the taught x-bar and R chart in a basic statistics class has problems. Several 30,000-foot-level articles can be found in the “On-line Resource Library” link at www.SmarterSolutions.com, which provides more details and shows an example, not only for a continuous response output but other outputs as well.
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For any business to succeed, it must follow the three Rs of business: Everyone is doing the Right things and doing them Right at the Right time.
Management’s ultimate goal continues to provide maximum, measurable, predictable, and sustainable bottom-line results for the entire, integrated enterprise. Emergence of the process called Integrated Enterprise Excellence (IEE) from Smarter Solutions, Inc. makes all of these possible.
