.

Keep Competition at Bay…

Grow Better Everyday!

.

What really separates you from your competitors? Will future innovations in technologies help you or cripple you? Are you prepared to weather changes in the marketplace or economy?

For your business to not only survive long term, but to actually thrive, you need to make a commitment to constantly improve. And the most important areas to improve your business are not your marketing or products, for those are the easiest for your competition to duplicate; but rather your internal operations and culture. Most businesses have nothing special going-on in these areas and lack constant improvement for a small variety of reasons.

The first is plain and simple- a lack of discipline. Organizations are so busy with the day-to-day that they simple don’t make time to think about the improvements that need to be made until there’s a disaster to deal with. Then before you know it, it’s a few years later and you’re sitting there wondering why that windfall of success has eluded you. The truth is that well-run and sensible operations and culture do not happen by accident, so it requires setting aside time to do so.

The second is that organizations never set-up a consistent way to measure the internal state of an organization. If you’re currently just relying on revenue figures as your prime measuring stick; you’re a prime candidate for losing valuable time and money in your internal operations as revenue is often a misguiding figure in terms of measuring excellence and productivity.

The third is that people don’t set-up structures within their organizations to properly keep the business going in the right direction of growth through hiring practices and reward systems that are in-line with that direction.

You can start to become a more excellent organization today by just taking thirty minutes or so right now to ask your front-line staff what they think. Doing little things everyday that promote an awareness and desire to become more excellent will bring you and your organization closer to long-term success!

First, stop and set aside time to develop yourself as a leader/organization. Make sure you’re giving yourself at least an average of 30 minutes a day or 2 hours a week in these types of activities. Secondly, revisit what it is you are in the business of doing. This is really easy to lose sight of as people get more and more nearsighted amidst busyness and lose the big picture of what it is they originally set-out to do as an organization. Most importantly, don’t be afraid of improving and growing and growing some more. Just because change is required doesn’t mean you were doing everything wrong in the past.

Improvement Action Step:
Give it a Good Ol’ SWOT
Most of you are probably familiar with this assessment tool. It’s takes a qualitative snapshot of your organization in light of four specific areas.

.

Write down as many things that come to mind as possible.

Now go back to each comment and give it a score of 1-5 in relation to how important it is. This isn’t a ranking of order; it’s scoring how significant a listed item is to your business. 1= not very important to your business, 5= very important to your business. For example, all of the strengths could be given a score of ‘1’ if that’s how little they affect your business.

Then go back to each score and rate how capable your organization is currently able to address that item. Do this by multiplying the first scores by a 1, 3 or 5. 1= able to address it very well. 3= can probably do okay at addressing it. 5= not able to do much.

The highest numbers you have for each category are items that need your attention right now! If you have limited resources, focus on the ‘threats’ and ‘opportunities’ boxes first.

By making this simple assessment a quarterly habit for your company, you’ll start to get a better picture and grasp of your organization and ideas on how to move it forward. If you have any questions on using this or other assessment tools, please e-mail us.
Now if you’re ready to start a more thorough process of assessing where your organization stands and to build a stronger competitive advantage click here and go to the ‘organization’ link to get started. Stay tuned as we throw-in more assessment tools in the coming weeks. See you again next week!

.

The Secret to Efficiency...Decide Today!

/
“Hey, where do you want to go for lunch today?”

“I don't know, where do you want to go?”

“I dunno, what do you feel like eating?”

“Anything that you’re in the mood for works for me.”

“Is there anything you definitely don’t want to eat?”

“Well, what did we have yesterday?”

“Do you want to try something new?”

“I’m okay with whatever you decide.”

“Is there anywhere specific you want to go?”

“Uh, we’ve spent the last ten minutes deciding, our lunch break is almost over!”

/
Although a typical and comical situation, this exact scene replays itself thousands of times everyday and not just in lunch decisions. It is eye opening to keep track of how many decisions we put off on a daily basis. This is not a productive habit nor does it lead to a sustainable level of efficiency or greatness for any organization because if operating well, organizations will have growing levels of complexity and so we cannot afford to muck-up"our operations merely due to a lack of decisiveness.

/
Now a lot of our decisions are suspended in the name of gathering more information so that we can make a superior decision later; yet that ‘later’ rarely becomes a reality. This postponement of decision and responsibility (and thus leadership) comes from our irrational need to avoid making mistakes. A growing and thriving organization will pride itself on being wise, decisive, course-correcting when necessary and learning from routinely making all of the right kind of mistakes.

/
If we can practice making decisions in a timely manner, then we can grow into people that make excellent and more significant decisions. It is very hard to become a successful goal-achiever (or leader) until we become a habitual and effective decision maker.

/
You can take a practical step towards becoming a great, effective and respected leader/organization today by growing into a more decisive person!

/
First, acknowledge that life is full of mistakes just waiting to be made and that you will grow the most by embracing the lessons in each of them instead of trying to unrealistically avoid them. Secondly, understand the value of making decisions to allow for yourself/others to react to them and the sheer amount of time saved. Most importantly, discipline yourself into avoiding postponing decisions unless you absolutely need more information to make a sound decision.

/

Decisive Next Steps:
Step One: Learn to Use Target Dates

This is the simplest skill you can adopt today to increase productivity, get organized and get more control over your operations. Don’t ever set a goal without some kind of timeframe for it to be accomplished or else you’ve ensured that it will only get done by chance instead of work ethic or leadership. If you need more facts to make a decision, set a date to get that process done and to make a final decision. Give yourself incremental target dates if you have to (i.e. get numbers for a question # 1 by tomorrow, # 2 by Friday, and then make final decision by next Monday.)

Step Two: Corner Indecision

If you are ever tempted to suspend a decision, make an obvious notation (sticky note, red marker, etc) with the exact information you need/want/lack in order to make that decision. Then use target dates to get the answers you need. Do not let any situation linger; either make a decision right then and there or decide what you need to make that decision.

Step Three: Develop an Ethic of Mistakes

Get involved with something low risk that shows you that the world will not end just because you made a mistake.(1) Once you biologically, psychologically and emotionally get used to this, you will have escaped the false safety that keeps most organizations from becoming excellent and great.

Step Four: Master the P

Some of you are hard wired with a personality type that lends itself to perpetual suspension in decision making. In the psychological profile called the Myers-Briggs personality temperament, this hardwiring is represented by the last letter being a “P.”(2) For the rest of us, the P that we need to overcome stands for paralysis, which is effectively what we experience and maintain whenever we sit in indecision.

Step Five: Live with Fewer Options

Adopt the mind set that with most decisions, there are really only two possible answers; that is ‘Yes’ or ‘No’ but NEVER ‘maybe.’ Every decision needs to be met by a ‘Yes’ or ‘No’ or it’s equivalent in the given situation. In the case where a decision needs to be made between viable choices; determine your criteria regardless of the choices available and then apply the criteria without prejudice and arrive at your decision swiftly and well. Do this at least five times today. Then try it at least five times daily for the next 2 weeks so that this great leadership skill has the opportunity to become a successful habit in you!

/

As always, contact the various businesses, consultants or coaches in our chamber who specialize in developing better business/organizational/personal decision making. Hey, if it was easy, every small business would be doing it habitually and successfully. I hope you find yourself in that category soon… Talk to you next week!

/

Stop the Madness… Control Variability!

What prevents you from delivering consistent quality everyday? What cost controls do you have for your business?

/

There are lots of things in life that we cannot control. People contract rare diseases. Random violence can erupt at any given time. Someone becomes a solo lotto winner every now and then. Hey, unknown debris can fall from the sky at any moment.

/

Now on the flipside, there are many things that we can control. This is especially true in regard to our businesses. In fact, our ability to do so will dictate our quality, profit margin and competitive advantage. Welcome to the world or variability reduction.

/

Variability reduction is merely getting control over as many of the variables involved in providing our service/producing our product as we can. Other than offering a basic level of sanity in our daily operations, variability reduction truly allows us to consistently deliver the highest quality within our respective industries. If we ‘reinvent the wheel’ every time we provide a service/product, chances are that our customer satisfaction ratings are all over the place. Quality in such a scenario is more contingent on just having a good day rather than any kind of mastery/expertise in our field. This definitely leads to low customer loyalty to say the least. Those of us that can master our variables can keep customer loyalty high (since our customers can know/expect a certain level of quality every time they purchase from us) while keeping costs down (avoiding reworks, customer service burden, etc). Obviously, this allows us to intentionally produce repeated excellence on a daily basis and that is surely a great thing to have going for us in business!

/

Even in a highly customized business, there is the ability to lock down the majority of our variables since we’re usually providing 80% of the same core service/product and really only about 20% customization to our customers (I can’t realistically see the split shifting to more than 70/30). In fact, reducing our variability actually allows us to customize our services/products much easier and at a lower cost to ourselves, giving us the upper hand over our competitors.

/

In the end, variability reduction shifts our focus from reinventing the wheel to making it more excellent and moving it faster!

/

When we eliminate needless variability in our operations, we’ll find ourselves agreeing with one of my clients when he said, “I’m truly starting to run my business, instead of my business running me.” You can start applying this kind of excellence today! Please contact us if you’d like someone to hold you to actually realizing this kind of change

/

First, take some time to determine if this is a worthwhile endeavor for you because it will get very messy before it gets better (kind of like organizing a garage, it looks like an utter disaster area for a long time before things settle into categories and eventually into clearly labeled boxes) (1). Decide for yourself how much value this kind of process will provide for you. Secondly, plan on taking-on one area of your business at a time. This makes it manageable and more realistic that you’ll do an effective job. For instance, tackle the customer ordering process this week, the accounts payable and receivable system in two weeks and then your internal trouble-shooting/course correction process in a month. Most importantly, do not give-up halfway on any of your attempts at reducing variability. It’s a very important and underutilized aspect of all businesses so make sure you devote at least 24 hours over the span of a week to work on any particular process. It works best if you can have a few people that are knowledgeable about the particular process with you in the room during the time you’ve set aside to clean-up the process.

/

Variability Control Action Steps:

Step One: Chart-out the Processes Involved in Your Business
This is the obvious but most often misunderstood step. There are always more steps involved in a particular process than you initially think. Taking a customer’s order for instance sounds like maybe 3 steps max but is actually more like 9 (1-receive call/email 2-input contact info 3-document order 4-order parts/schedule appointment 5-send to billing 6-under-promise in order to over-deliver 7-confirm order details 8-answer any questions 9-offer tip/new product/upsell/great day spiel). Keep an eye out for steps that happen/can happen simultaneously. Also, this is a good time to consult your frontline staff as they will easily be able to tell you if you have a broken/needlessly convoluted process. Remember, this takes dedicated time so stop the car and change the tires instead of trying to do it on the go.

Step Two: Lock-down Your 80%
Either go over all of your orders for the past 3 years or survey your customers on what they like most about your service/product as this will directly inform you as to what is the core of your business (your 80%). When going through the variability reduction process, your goal is to lock-down all the variables involved in this 80% so that you have excellent systems at the core of your business. You’ll be surprised at the extent to which you’ll enjoy your job after this is done well. Your quality goes up and your costs go down… what’s not to like about that!

Step Three: Revisit Old Processes
This is very important as there are always ways of thinking or reasons for doing something that are just no longer true. The usual candidates for irrelevancy are any processes or steps that you adopted more than 4 years ago. If its computer/software related, you probably want to revisit anything that is at least 2 years old for sure! This step works best when you can get an outside perspective to just go through your systems/processes and ask lots of ‘why’ questions about everything they see. You’ll probably come-up with better ways of doing things by just doing this step alone!

Step Four: Automate as Much as You Can
This might easily be the most frustrating thing for me to see on a regular basis. Technology is our friend (say it again with me, technology is our friend). Moreover, the right user-friendly, easy-to-maintain technology is such a great accelerator yet it’s painfully underutilized by companies, even in hi-tech and bio-tech! Technology is usually (and sometimes rightfully) associated with unreasonably high costs but just avoid those folks. Go ahead and e-mail me if you don’t have a true frame of reference for a tech service/product you’re looking into. It really saddens me when I see that most of a company’s operations can be moved online/other electronic means, but rarely is done mostly from a lack of imagination. If you’re still doing a lot of filing on paper, please, please, please stop it. There are lots of firms/companies that specialize in these type of services so make sure they’re a good fit in that they can grow with you, provide you high usability without having to call/pay them for every little update/change and obviously provide great customer service (2).

Step Five: Incent Quality in Your Company
This is a very significant component to any effort to increase the quality in your business. Take a good look at how you promote, reward, etc since many companies don’t align their practices in these areas with any type of quality benchmarks. Rewarding those that adopt and adhere to high standards of quality and excel at meeting them consistently is the easiest thing you can do as a business owner to maintain a strong advantage over your competitors. These folks are also a great source of what you can consistently do to better your organization as it grows. Make it an organizational habit for those that produce the highest quality to be rewarded publicly and often (3). This has to be important enough to your business for you to make an example of the right kind of people and for you to budget enough time to correctly identify and reduce the variables in your business.

As always, contact the various businesses or consultants in our chamber who specialize in variability reduction for small-mid businesses (4). Hey, if it was easy, every small business would be doing it habitually and successfully. I hope you find yourself in that category soon… Talk to you next week! For more information on Better San Diego please click here.

.

What’s the biggest pain about your job? What drains you most in a typical workday?

In helping business owners solve their key frustrations, the following are some of the typical sources of their pain: 1) “My employee productivity/turnover.” 2) “I’m always worried about my competition.” And surprisingly many folks say 3) “Lots of my customers are a real pain.”

Essentially, these responses identify employees, competitors and even customers as the source of a typical bad day. These are all legitimate frustrations and can be a constant source of stress for sure; but are they the real problems or just symptoms of deeper ones?

In employees, we’re talking about possibly the most inexpensive resource for growing business. Even with the rising costs of healthcare (1), administrative burden, etc, a solid employee still yields a fantastic return on investment for us because top-notch staff produce an exponential amount of work and goodwill on behalf of our business. If we’re experiencing low productivity/poor retention, there are usually a couple factors contributing to a culture of poor attitude/habits. The problem is rarely 100% the actual employees themselves but rather the environment in which they are asked to perform.

Regarding competitors, I reference JFK when he said, “A rising tide lifts all boats.” I always feel that competition is good for our businesses in that it keeps us innovative, efficient, on our toes and can provide valuable research as well as be a source of strong alliances. It is key however to ensure that competitors are a positive motivating factor instead of a source of workplace stress. Sometimes it’s just a matter of perspective so it’s helpful to see competition as a mechanism to grow us in ways that make us strong against declining/shifting market conditions.

And finally, complaining customers; if the source of our livelihood is the bane of our existence… well, that’s a pretty sad situation. When those we serve are constantly coming-back to us with grievances; there’s most likely some core process issue causing this inordinate dissatisfaction. Instead of seeing this as a deflating experience, we can recognize this symptom as a loud wake-up call that will actually save our business from irrelevance and closure.

The good news is that we can address each symptom by taking a closer look at the causes of each problem today!
First, don’t take the issues personally so that we can focus on the causes instead of just how they make us feel. Secondly, carve-out significant, uninterrupted time to unpack and examine symptoms for the root cause of each problem. Most importantly, be prepared and committed to take action once the root cause is identified.

Root Cause Action Steps:

.
Step One: Diagram the Symptom to Find Root Cause
A very easy tool to do this is the Ishikawa Diagram (or the fishbone, etc) (2) . Here is how it looks using employee productivity as an example. The head of the fish is the symptom at hand. Then added to the main line/backbone is each possible cause (these have to be causes not symptoms). Then attached to those are possible solutions. There is usually one cause that is birthing the others- this is the Root Cause and needs to be addressed well swiftly and decisively. In the example below, the root cause would be ‘unclear roles/expectations’ unless there was data specifically singling-out the senior leadership, in which case it would be ‘poor modeling’.

Step Two: Turn the Problem into a Goal
Using competition as an example, we write down how the competition is affecting us and in what ways they’re superior. Using these statements, we can craft a solid gameplan for the month and give everyone (including ourselves) short-term, specific and measurable projects to accomplish for individual and organizational fulfillment and success.

.
Step Three: Use Frustrations to Foster Better Teamwork and Communication
It’s great to be a constantly learning organization (and person) so every time there’s a significant problem affecting the business- it’s an opportunity to maintain great communication and practice asking good questions as a team to wade through symptoms to find the Root Cause. A simple and effective technique is The 5 Why’s (3). Using customer complaints as an example:

.
1) Q: Why are customers complaining? A: They are not happy because we do not deliver what we promise.
2) Q: Why don’t we deliver what we promise? A: We don’t have the ability to consistently produce quality services/products.
3) Q: Why is that? A: We have no quality control or accountability/incentives.
4) Q: Why don’t we have these? A: Because we’re too busy running the day-to-day business to have time to create them.
5) Q: What can we do about this? A: Have a focused 4 day retreat next month led by an outside facilitator.

.
Step Four: See through the Fog
It’s very important to get into the habit of identifying symptoms of frustration and then to dig deep and find the root cause underneath. We can do this daily in every frustration that comes our way and then take consistent action to eliminate it. Strong follow-through is required or else we need to stop complaining.

As always, contact the various professionals, coaches, business consultants in our chamber who specialize in solving your key frustrations. We can all live frustration free habitually and successfully with a little bit of focused work. I hope you find yourself in that category soon… Talk to you next week! For more information on Better San Diego please click here.

.

________________________________________________________________________

.

1. I usually recommend small business owners to hire 1099 employees and then set aside chunks of the budget to subsidized employee health benefits and retirement plans. An example of great, non-traditional solutions for each category would be: http://www.iabweb.com/johnvit for health care and http://www.icrfinancial.com for retirement plans (858.456.6070- ask for Corey Froelich)
2. This is a very powerful tool when trying to identify a problem that is affecting multiple areas of business and is most often utilized in group settings with various departments represented, etc.
3. This simple technique was first formalized by the father of the founder of Toyota. It’s okay to substitute “What” for “Why” on occasion because it’s sometimes the more appropriate question.