Run a Better, Faster, Leaner Business

 

Run a Better, Faster, Leaner Business

 

Lesson Info

Data Collection Questions

So I hear the questions and these are the things that way wantto make sure we pay attention to and again in whatever business we're in so let's start with the market bucket so what's our position in the market what kind of trends do we see? How are we going to position ourselves in that market if we're start up with somebody new or for existing just where are we? Do we know or do we just think we know or do we not have a clue? Smart businesses no let's find out where we are it's still our home works to our research but our current sales or what we what do we expect them to be? You know what? Uh how do we expect it to trend trends? Tell us a lot who are our customers? We've talked a lot about that already. And what are their expectations? And then what are they experiencing? Good, bad and ugly. What of the brutal fax? All right, what about the competition, the competition promising or offering and delivering? What does that look like? You'll see some pretty astonishing numbers later on ...

with this came that the competition is not just promising but capable of delivering that will put our numbers to shame while as a wake up call but benchmark dated we do have available how do we compare what is considered world class these air questions to really think about because if we're starting up a new business so we're running a small business and we're completely unaware of of other value propositions around us that could crush us I could be a brutal waste of money and a brutal waste of time so then we might do something called a swat analysis we were measuring are evaluating our strengths, our weaknesses, opportunities and threats all right, so a swat analysis is just a way of really looking at how do we how can we differentiate ourselves from from everyone else? All right? Those are the market questions then we go into the process again if we have a current process a current value stream what does that look like let's map that will come back to that a little bit if we don't let's do it future state map let's draw what our process is going to look like how we plan to do it this is powerful it's actually easier to do future state value street mapping in many cases with without having a present state then going from a present state that's really messed up to a future state. The reason for that is we get so attached to the current state that to tryto unlearn it to draw future state, we're still caring a lot of baggage around with us that we don't even realize so the idea here is uh if we've got one let's map it well it's examine it will do that in a little bit if we don't have one and we're starting up a new business draw picture what that value streams going to look like how is the value going to flow through to the customer what are you going to measure and what you're going to time and what you're going to evaluate to make sure it's done in the best way possible okay so what are the process steps the value of the non value at what's the sequencing what does that look like? The devil is in the details so we've got to make sure we pay attention to the details vague is the enemy here what's the physical flow look like much distance isn't going to cover what's the layout going to look like we're going to organize it in this kind of way where is there a better way to organize it with information flow look like where's our air traffic control so to speak how are we going to know who's doing what and where everything is? What about the overall throughput time what's that look like the value add time the ratio will come back to a time value map to display that how much inventory a we're going to carry in raw material work in process and finished goods where is it going to be these air the details how often does the inventory turn whether it's tile film uh flowers, whatever it is we're doing what's that what's that going to look like, um, correction, how much correction is involved? This would be those reviews those approvals, the back and force, the lab's inspection, the testing, interesting stuff all right, where's that taking place and then where the value stream uh or system constraints where the bottlenecks we'll take a closer look at that. So with these questions, we can start to really characterize our operation, lay it out, map it out and figure out ways to lean it out and make it very smart organization do we have an organization chart? What does it look like if we don't have one what's it going to look like for a one person show or two person show who are the other key stakeholders that we rely on up on downstream that we need to to to build into our organization design? So these days we have to stop thinking in terms of literal, who reports to who and in terms of more virtual who partners with who? All right, how does the organization design impact the value stream? Does it look like those silos cutting across that arrow that's, not uncommon what's our head count full time in temporary all right, how many people that we need to deliver whatever it is we deliver, where are they? What's our turnover rate we talked it break a little bit about what? About comeback organizations that have a high degree of employee turnover. What can we do about that? That could be court other significant. How do we distribute our labor? The value of the non value add the location shifts all of these things have to be carefully thought through in our business is what is their productivity expectation our output per for a labor hours. How do we measure up how much we're going to spend on overtime? Danny, how does that work? Where we're gonna spend it on any job classifications? Do we have? All right. How many job classifications do we have? Uh, that can surprise you. A lot of times we complicate the simple it's, like einstein, said anybody could make it more complex, working recently with a company that over thirty four thousand job classifications it's a big company. But really, you know, that's just extraordinary number what what is our safety record look like on how many lost time accidents are we experiencing? Where are those? All of these questions lead us to deeper knowledge and greater intelligence. We can run our businesses smarter if we decide that I don't really need to ask all these questions, I'm just gonna wing it be careful incidentally, these aren't all encompassing. You start drilling into some of these questions, you start getting answers from customers, from associates, for employees from vendors, and they trigger more questions. All right. It's, like einstein once said, never stop questioning, never stop questioning. So as we question, we open our minds and we explore and then that's the that's the nature of of innovation and growth is to explored and stay keep keep an open mind and an open heart, not let it shut down on us and think we have got it all figured out. Okay, so they were going to support systems. This is where ah, a lot of the root causes are two businesses who are struggling. And this is where the failure modes are the potential fairy modes to businesses getting off the ground. It's and it's right here. In other words, if we have undesirable effects in the market, the customer, the finances that process itself and we say, why do we have a lot of those beauties undesirable? It effects the causes khun b found oftentimes in here. So we need to drill in tow the support systems and ask the thoughtful questions. So I want, how do we prioritize and schedule value stream activity? How do we make sure we're working on priorities? Tell you what you've got a lot of companies these days and find people busy but they're not working on priorities we have no way of knowing and many organizations don't we purchase and supply our material what policies do we used to do that what delivery sequences we kind of we warehouse in store it I was working with a company in mexico a few years ago and they were in the process of building another massive warehouse well let's take a look though when you have so we walked out there and we went through it it was jammed full I said well what do your turns your inventory turns in this warehouse your annual turns on the times you turn your inventory each year on average there was less than two okay I mean world class is fifty you turning it a week you know if not faster to a year so here's the question did you know that if you doubled your turns you double your warehouse in space without building another warehouse you get twice as much through the same warehouse as you would by adding another warehouse with two turns did you know that if you thought about that as an option which they hadn't which they then did but that's managing with knowledge and intelligence not just falling into that paradigm of more more more they didn't you know that warehouse they needed were not to turn their inventory is faster working with another company just a few years ago up in canada during the baseline analysis where we were going through all these surgeons we uncovered one hundred million dollars and material that had to be disposed off that's a lot of money one hundred million dollars had to be disposed off here's the catch actually, a couple of people told me this at the company yeah, but we got a good deal on it because the incentive system was you can get more for less so if you buy a ship load I'm very careful how I stay that you buy a shipload of this material you can save a few bucks a kilo or a few bucks a pound or whatever and, uh not thinking about where it's going to get warehoused it's got to be kept in humidity controlled this was in pharmaceutical controlled environments refrigerated environments things like that and there's test and retest procedures it's federally, you know, regulated industry all this kind of stuff here's an opportunity to run a business a lot smarter but to do that we have to break the paradigm of the procurement department thinking we got a good deal on it so we covered our hind ends and the rest of you guys can figure out what to do with it. So the game we played in the earlier uh segment was exactly uh, replicating uh what a major organization is doing for real and I see it we kept a week time after time again because we're not thinking through a lot of these these questions and looking at the whole picture so purchasing supply material no matter what business you're in you gotta have supplies they've got to come from somewhere how do you manage that? How do you control your inventory equality, your safety performance about support departments that interface with the value stream the information technology human resource is how do they if you have them maybe you're going to use temporary sort out your inner facing with the, uh, staffing company attempt firm so you're gonna you're gonna lease employees things like that? All right um are you going to bring in part timers? Where you going to get him? Are you going to get him trained your financial department, your laboratories? If you have laboratories, you're you're testing environments, whatever it is you're you're doing facilities, maintenance things like that and most certainly procurement. So how do we measure and reward performance? We get what we inspect, not what we expect. So what do we get inspect what we're gonna measure like drucker said, you know, uh what gets measured gets managed and what gets managed gets it done so what are we going to measure? What what about our measurement system if we got that right a lot of times we measured and sent the wrong behaviors we measure it and sent the wrong behaviors we could get the very thing we don't want if we measure an incent efficiency and requisition department and we get that stuff flying through requisition and then sitting in a big pile in front of the diamond department because we haven't got good capacity planning and management all right um we're paying bonuses for for meaningless work, okay? And if it piles up long enough and it happens to be a pharmaceutical material that can't be uh it can't be used now it's gotta be disposed of all right, these air disconnects in business going on all the time and not just within companies but between companies so let's remember that as well? All right, I don't hold people accountable including ourselves not preneurs get this because if if they uh screwed up if we screw it up um we're out of business, we're running a business where accountability gets foggy or clouded uh then uh we better better be careful with that. Okay um how do we train people what's that look like some cases it's just here's your job go for it similar what I set up this morning right here we go just put the yellow dots on there you'll be okay how do we keep people informed? How do people know what the scores in a lot of business, this is, um it's invisible to people it's kind of like a sports team where the athletes got to run over to the sidelines and and asked the coach you know, we went in how much time is left because it's not visible it's not available to people and then even the coach has to say from time to time you know what? Let me get back to you I gotta talk to the press box they're going to probably have to do some analysis because we've made it that complicated to know whether or not we're winning or losing or we're headed behind schedule and the really smart companies make that very simple, very visible uh whiteboards magnet boards things like that doesn't have to be very fancy back sometimes the software's get in our way we can we can we can measure and track our performance, our customers everything very, uh very simply on a whiteboard posted and then uh at the root of all of this policies uh policy is one of the most frequent root causes two problems in business today and government so when we start looking at why do we have a lot of the undesirable effects we have it's because of policy deployment got policies based on flawed assumptions that, uh just drive or allow all kinds of waste in the system so what about some of those policies? We had the batch ing policy? If the batch in five, six, seven rays where that come from and maybe it's the assumption will, everybody knows batch is more efficient. That's an assumption artifact? What about that shipping policy of shipping and aids where that come from? Sometimes we just don't know. Well, somebody prior to my arriving at the company made this policy, or I borrowed this policy from another company. You think they get that they're doing it, you know? And they're so and so, why don't we just steal that policy and news ourselves? That kind of stuff goes on all right, and then finance question. So what's the financial health of the value stream how do we know? Show me the data. What the true cost associated with it with the cash flow look like the value stream contribution to the profit loss statement the piano? Okay, so if we've got multiple values streams in our business, what's this value streams contribution to the overall p en el, relative to the other value streams, we have multiple values streams running in aa lot of different businesses, okay, what's the dice trip contribution to the vallance sheet. All right, if we're a solo preneurs entrepreneur young start up to even know what a pml is do you know what a balance sheet is? Do you understand basic finance and accounting if not, guess what you better find someone who does so maybe you're not a one person shop maybe there's a sepa out there somebody that's gonna have to help you out we are dependent on other people to be successful like it or not all right, so who can help me understand the financial elements of this and the financial language I happen to have a degree in finance so this was always something I picked up pretty quick an early age but if I wasn't knowledgable and it most certainly I'd have to find somebody who could teach me or guide me or help me all right what's the cost breakdown for the ice cream what is the cost structure look like how much money do I, um I'm going to need to have to sustain this business that includes value of raw materials tile film uh trees, flowers, whatever it is we're in okay uh and then what are auto our accounting rules and conventions actually impact our value streams, decisions, things like that? What are some of the accounting rules and conventions that we're operating under? What does that look like? How does that work you think about tax and such a cz well all right so these are all fundamental business questions they scare a lot of people by the way I mean it's like oh my gosh I've got a how am I supposed to know all of this stuff about marketing and social media and all the different information softwares and attacks and uh huh especially if I'm a one person show and the answer is you don't have to know it all all right you gotta let go let flow so you know, the thing that gets in a lot of entrepreneurs away is arrogance stubbornness and I got to control everything and I got to know it all and I got to do everything myself and some people grow up that way they grew up with this idea that if you want something done right you gotta do it yourself and then they learn to distrust other people and think that they've got to do it all themselves that's called a bottleneck that's called the constraint and the entrepreneur is most frequently a constraint once the businesses launched if they're not careful meaning they getting away okay they get it launched the highly energetic they get all kinds of things done and then and then I can't let go so they start getting in the way that this comes from ready aim fire great name before they reorganize because this morning they were ready fire aim think about this if you're a one or a two person shop how many of these metrics can you realistically track I mean that's a really good point you're just making that you can't know everything we'll follow everything yeah and I typically say that a a larger small any size business including my own which is a one person literally on the payroll and I've got a virtual organization around me um a typical debt become dashboards or balanced scorecards typical dashboard will have anywhere in the neighborhood of eight to twelve metric that the idea of a dashboard is to say that you know if I'm looking at the dashboard on my car at the dash put in the cockpit of an airplane yeah there's a lot of gauges and a lot of measurements but there are you know, eight maybe ten maybe twelve critical measures that I look at to know whether or not my my business is healthy might my car my driving is is spot on like there's there's fuel in my gas tank if I'm flying a plane all right so uh those those those eight, ten, twelve critical metrics what those what you want to make sure is that uh at least two maybe three of those are customer focused so think about what your customers measuring me give you a real example I was in a kai's an event just uh about two about not probably three months ago and, uh, we brought a customer into this event and the customer revealed to us that she used three measures to evaluate this cos, uh, service and support uh it's a service company three measures the company my client had thirty three measures here's the question how many of the thirty three do you think included the three? How many of the three were in the thirty three? And you said it none zero what think about this? This is a this is a major corporation to we've got thirty three measures were man or measuring all kinds of stuff, but but the three things that customers measuring we're not that was eye opening and changed everything incidentally, at the time that customer had, uh ah red yellow green vendor scorecard and had this company ray did read it the time in a subsequent kai's an event she's a participated now in three and like the last three three to six months thie company's gone to aa green solid green and she has just become a real promoter because she's partnering to make things better. So uh at least three of your metric should be customer oriented and think back to that value proposition equation value as a function of quality ah service price, innovation and time that that bucket so what? Maybe three metrics do we want to use in our business whatever it is that's going to tell us we're healthy we're safe for now in our customer's eyes so think of a quality metric right first time yield so we ninety seven percent right first time eighty percent sixty percent ninety nine percent what's how often do we get it right? The first time r f t is a critical one um time as it relates to the client on time some refer to it is ot f on time in full how often are we on time in full the full order on time well they wanted it on uh june third and we got it to him on june third in full they go but what percent of the time are we on time in full so think of delivery quality um service levels things like that. So what is the is to ask yourself what three or four things might my customers be measuring about me that I most certainly better be measuring or I'm I'm really at risk what what are they measuring about our company about our service about our product? Whatever it is we offer I certain I most certainly pay attention that so on that dashboard of eight nine, ten twelve some might do it with five or six but they're your that's like going in front of the doctor and there's your there's your body mass index your blood pressure your your cholesterol levels. What? You know. Okay, this is telling me that you're in pretty good shape. Those measures. Okay, so there's, the there's, the customer measures you might have a measure around process time, cycle, time value add non value had that type of thing. Um, make sure you pay attention to time management. How you using your time? You're certainly going to have a couple of financial measures, you know, profit loss, cash flow. If you're in a business that manages inventory of any kind tile trees, gardens, film are, uh, paint whatever. Uh, how you managing your inventory, what's your inventory look like but your cost of inventory. How often do you turn it? It's just gives you an attempt. An intelligent business system against the end of the day. Great businesses work smart. They don't work all that hard. Appear to work hard. Someone somewhere card because they want to there's that's a difference. You'll work hard because you want to, um but it's ah, and this is part of those enterpreneurs. Also talk about earlier it's it'sjust a presence it's a gracefulness, it's it's an ease. Its high junker in japan is peaceful order

Class Description

Ready to finally let go of the unproductive processes that are holding you back at home, in the office, and in your creative life? Join educator and business consultant John Murphy for a three-day introduction to streamlining your creativity.

As he shares techniques from his critically-acclaimed books Beyond Doubt and Zentrepreneur, John will cover ways to make your day-to-day life and tasks better, faster, and more efficient. You’ll learn about the DMAIC model of process improvement, and how it can be used to approach problem solving in an effective, rational way. You’ll also learn about how to prevent processes from being bogged down by waste, duplication or redundancy. John will cover Kaizen -- the art of making good change -- and give you tools to change both your processes and your mindset.

By the end of this course, you’ll have an increased creative energy and processes that will help you implement creative solutions in a balanced, harmonious way.