The four challenges you need to take business improvement seriously!

There are many aspects to managing or owning a business.  Finance, people, supply chain, sales, marketing, training, quality management - the list goes on.  Over the years I have heard many leaders describing their situation as unique or complex.  Well today I am calling it - that is bullshit! You are only making it complex by keeping it in a chaotic state for you and your team.

Is it hard - yes, absolutely.  Keeping teams engaged, making sure they are doing what they should be doing, checking in to ensure customers are happy, all of these are an ongoing challenge and balancing act.  Days can get stressful to the point where you wonder what the heck you are doing - hard, yes, but not complex.

In New Zealand not many businesses or organisations can be categorised as a ‘complex system’ in a world economic perspective.  Air New Zealand, maybe, Fonterra - possible, but from that point I struggle to identify any. Considering the majority of businesses in New Zealand are Small Medium Enterprises (SMEs), their challenges are quite removed from those internationally focused organisations.

After years of working with a large variety of SMEs, sometimes on the brink of spiraling out of control. From my perspective of business improvement, there are a few common threads that these SMEs share with each other. It is all focused on the ability (or lack of) to maximise the resources, people, opportunity that the business has. So here is my take.

Challenge One: It’s a Journey - for everyone
No one can ever debate against the idea and benefits of business improvement.  It just makes good sense - improve stuff that isn’t going well, improve performance, make more money - simple.  Financially it stacks up, everytime. Teams enjoy the opportunity to make a difference.  So why does it go horribly wrong so many times, in so many different organisations?  

In just about every situation where any structured attempt to instill a business improvement attitude in a company, it is the result of a single person or at best a few individuals.  Most likely it was the result of something they heard the competitors were doing, a paper at the last conference, or they read about it in a book over the summer break.

It starts and becomes the pet project of a few, the latest trendy thing to do.  Beginning with great intention, but with very little communication or planning around the ‘why’. Some people understand it but many others in the business don’t get the full message. Because of the high energy a majority of people tend to get involved achieving nice wins across the business.  It is the honeymoon period.

Then it happens, a month or two later it dwindles to a core few.  Sporadic activity is still happening, but a bulk of the quick wins have been knocked off. The longer term projects are left, the hard stuff.  It becomes harder to maintain momentum, to keep the enthusiasm for longer benefits to be realised. 

The problem right at the start was that the leadership team did not prepare themselves, or the business for a long term journey.  They don’t realise how easy it will be for ‘business as usual’ to sneak back into the daily behaviours and actions.  When things get busy, people naturally go back to what they know, how it was done before. The time is not invested in communicating the ‘why’, spending time establishing the purpose and listening to the team. All of this takes time.

Business improvement is a journey.  It is a bit of a cliche these days, but it is still true.  Those organisations that have cracked this code realised early on that it takes years to really imbed a culture of improvement.  There are ups and downs, and the leadership team needs to be tight on maintaining the focus on improvemen/t activity.  Many forget about this critical step as they rush towards action at the start. Not investing time into really telling the story, listening to teams and individuals, translating feedback into ‘what’s in it for them’. The benefits both for the business and individuals. Have a read of a previous post about the actions needed to start a new idea.  This is when that process becomes invaluable. Spend time on setting the scene, telling staff that this will be part of the DNA of the business, not just an idea that will last for six months.  

The high achieving companies I have seen who are 5, 10, 15 years down the line always state that they are just beginning.  That the more they learn about the business, the opportunities for improvement, the initial years only scratch the surface. However it was this activity that enabled them to identify and realise their true potential.  They make up the top 5% of businesses, the rest have come and gone with their attempts at business improvement and haven’t reaped the true rewards.

The opportunities are there in front of you, in your business waiting to be discovered.  The financial rewards are there and it is compounding, for most SMEs it is worth $170,000 per year.  These are the rewards you can reap if you are prepared to commit long term and begin the way you want to continue.

Challenge Two: Simplify your view on the business.
I want to stress right at the beginning, this is not about dumbing everything down. It is about simplifying the story so that it isn’t an overwhelming beast that keeps your mind spinning at 3am. Jim Collins, author of Good to Great also provided a simplified model after studying organisations over a decade.  Pick the framework you want, in the end of the day it really doesn’t matter. Take the main message about keeping it simple and maintain the discipline. 

When I work with a client - I view their business from three different aspects. 
The Customer

The Business

The People

Each of these has certain aspects that we need to keep vigilant on. Please note, this is my view biased heavily with a business improvement mentality. Other professionals have a different view on a business.  These are critical and still fit into this structure.  For example, the CFO / Accountant has a critical eye on the numbers, cashflow, income - this is about using those specialist team members in a holistic manner. They play a huge part in the business aspect of this model. 

The customer 
Key to any business success is the customer. Without happy and satisfied customers you are out of business.  But how often do we get so focused on what’s happening internally, supply chain issues, staffing shortages etc, we take our eye off the ball.

From a business improvement perspective, there are specific questions that I focus on.  First, customer value.  Are you always thinking of customer value when delivering your product or service?  Is it because you provide better instructions than your competitors, or is it better quality, materials, hours of service.  There are many ways that you can continuously add value to your customer without necessarily adding cost. 

How are you enhancing your customer experience?  By this, I am not meaning just great customer service.  But how can you create those ‘wow’ moments for your customers. How can you add your unique value by making sure the experience is one that makes them talk about your business during their next coffee catch up with friends. Were you always proactive, on time, did you do what you said you were going to do.  Was the communication exceptional from the team (even look at ways you can automate this - but keep it personal). There is always room for improvement and something that can differentiate you from the crowd.  It might take a while to discover it, but when you do become zealous about it.

The Business
This is where the internal focus really hits top gear.  Have you got all the systems and processes in place that are geared toward exceptional performance.  When was the last time you mapped out a process to ensure you have the right people doing the right things.  Do you really know how long it takes to deliver your key products or services?  If you aren’t measuring this, how can you improve?  Know your numbers beyond just the profit and loss statements.

What are the key metrics that tell you that the business is on track?  I have seen Directors swamped with pages of data, graphs, trends, only to get bogged down with the details.  Don’t panic, that information is always there, always available - but just like a car - what are the key numbers you can glance at to tell you all is OK?  If a red light comes on, dig deeper - that’s fine, but don’t get stuck looking at everything all the time.

How stable is your supply chain?  The last 12 months have shown us, particularly in New Zealand how fragile this can be.  Sourcing products closer to home may be initially higher in cost, but this can be offset by smaller orders, less lead times - all designed to improve cash flow.  Keep improving the process, keep explaining to the team the purpose and why.  Deming was teaching his principles way back in 1950, yet we still struggle to consistently apply the thinking. Here is a brief video of how he has simplified the challenges.

Yet all of this can be a collection of frantic activity going in all directions if it isn’t focused on the right things. How long ago did you refresh the team’s understanding of the company’s purpose.  Taking on Jim Collin’s insights - what are you really great at that separates you from the competition? This might sound crazy, but assumptions can build up over time. This results in the dilution of why you started the business in the first place. The local electrician, why did they start the business?  What was their point of difference in relation to the dozens of other choices there are for the consumer?  

When was the last time you and the team talked about the original purpose and re-aligned with the vision.  What got them out of bed at the beginning of the business? Create the ‘true north’ and keep talking about it, align actions to this.  If people have some awesome ideas, but it doesn’t contribute to this direction - respectfully put it aside.  

The People
Like having customers, any business is lost without great people. Your staff are often the largest cost to a business, so invest your time and energy and look after your people.  More than having a fair salary and a happy environment, this is about engagement and empowerment.

How engaged are your teams and individuals?  This more than satisfaction (that is still important though). How invested are you teams in their roles and the work that they do.  Research has shown time and time again that an engaged workforce performs 20% better than an engaged workforce and the benefits just don’t stop there - Gallup has identified multiple benefits from an engaged workforce, read here for more. 

That is why I use Lego Serious Play with teams.  It creates an awesome environment that engages and seeks everyone’s input. No viewpoint  is more or less important than another.  We all can recall a situation, it may be a previous role when either yourself or someone else in the team was totally checked out.  It disrupts everything, pulls down the achievements of others.  The result is that valuable time and effort is spent dealing with the individuals rather than key actions of the business.

Do you have the right people doing the right tasks or jobs?  Again, this might sound like a logical question, but how often do we review who is doing what and why?  I will add here that I am not a fan of continuous restructures, but tweaking roles to keep it aligned with the purpose may be needed. The difference here is that you are constantly monitoring the value chain, ensuring the people have the right skills, resources to do a job.  If there is a handover point for a single task, can someone be upskilled to eliminate this step. This can minimise time wasted in the handover process or human error during the transfer of information.  Is the training and development plan aligned with the direction of the business.  

Finally, do you set clear expectations of the outcomes and trust your teams to achieve them, not getting caught up in the ‘how’ they do it.  After all they are the experts in their job, that is why you employed them in the first place.  Spend time allowing your people to improve the aspects of the job that pisses them off. Don’t bug them or question them when they stop doing the work and invest time in sorting out a long-standing problem.  You will reap the benefits, don’t panic. Don’t get caught up in the details about how they approach the job as long as it meets the expectations.

If your engagement and empowerment is poor or non-existent it will undo all the hard work accomplished in the other areas. Allow the time and space for your staff to try new things, fail and learn, create a space that lights their fire.

Challenge Three: Be Transparent, share the information, communicate
This is core to any relationship right?  If people don’t know what they are expected to do or how things are going, trust and engagement are eroded - quickly.

I love technology as much as anyone, yet I have always found that a great team board (or collection of boards around the business) put up in a central easily accessible location the best way to keep people updated.  The key business metrics (mentioned previously) are displayed, issues quickly documented, ideas listed and prioritised. How well and consistently do you share and use this information to have critical conversations with your people?

Create a process around this - have regular stand up meetings (daily if possible or realistic for your business) to discuss the team, business goals for the month, week, day.  Keep your plans active and current by talking about them as often as possible.  Make them relevant every day. What is the game plan for the week that aligns with your plan? Keep resetting the expectations, keep having the conversations.  The more you share, the more you get the team involved, the greater the chances you will create buy-in for the activity and actions required to be successful.

This might all sound simple and logical, yet it is surprising how many businesses I come across where the leadership teams do not have clarity, let alone the rest of the team.  It is common for team members to never have seen a strategic plan.  So how can you be realistic in staff knowing what the goals are if they don’t know what the plan is?

When business owners get busy and under pressure to keep juggling all the daily demands, the basic communication tasks are often the aspects that are missed. With this knowledge, create a process where communication is team led, it doesn’t stop when individuals are absent.

Challenge Four: Celebrate success - small and large.
People love to know if they are doing a great job.  Just look at all the awards ceremonies around the world, The Oscars, Nobel Prize, Laureus Sports Awards - all design to acknowledge achievement amongst peers. 

Now I am not saying you have to roll out the red carpet each week but it is important that people who have actually done the work are acknowledged and recognised for their efforts.  It may be the ‘Employee of the Month” photo in the foyer - although I do cringe at this, yet it is better than nothing.

More specifically, this is about acknowledging the small tasks individuals may have done during the day or week to enable success.  Making a point to say thank you for individuals who may have completed a thankless task, yet important to the overall success. It might have been finally revamping the form that no-one uses or decluttering the filing room.  All of those thankless tasks that can be overlooked. Sit back and regularly celebrate the small wins, it might be the start of a project, a great idea, achieving that ‘wow’ moment for a customer or client.  All of these actions are critical to the long term success of your business.  Don’t wait till the end of the month, year or please, please not until the annual ‘performance review’ to comment on the positives.

Acknowledging people in front of peers is also hugely valuable. Everyone likes to be thanked for the work that they do - it doesn’t need to be a big occasion, it can be a brief comment during a stand up meeting.

So there it is, my insights into how to make business improvement work for your company.  I am not going to say it will be a walk in the park, but you will need a lot of patience, discipline and commitment to be successful!  Happy improving everyone.

Here is a video summary of the blog.


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