Strategic Innovation Newsletter

A free monthly newsletter on leadership, strategy and innovation.

Back issues are archived for free downloading at www.DanielLockConsulting.com.

Welcome

This morning I conducted a breakfast briefing on the subject of change and transition. I applaud the attendees who engaged in lively debate and discussion, not so much for their willingness to be open (which is  commendable), instead because they took responsibility for their own learning and development.

We can’t put off change and personal development because of the economy, in the same way we wouldn't put off buying food. It is precisely this attitude that will set these business people apart from their competitors.

You need nutrition to thrive.

7 Steps To Streamline Every Area of Your Business

For every step you introduce into a process the complexity increases exponentially. Actually it increases by the 'square' of the number of steps involved. That is one step has a complexity factor 1 squared = 1. A two-step process has a complexity factor of 2 squared = 4, and ten 'steps' has a complexity factor of 100.

It makes sense, if you have a task to make a phone call and you ask some one else to do it, the extra complexity of relaying information and the risk of that person not understanding and making mistakes increases significantly.

So it make sense to limit the number of steps in any process and as a result decrease complexity. But this is easier than it sounds. In a complicated world, with complicated customers - how do you simplify a process quickly and easily? Below is a step-by-step approach to simplifying business.

1. Map out the current process and ask yourself if there is a better way.

Be open to the possibility that your current approach is wrong or could be improved. Especially when there is some resistance, with lots of mistakes, complaints and errors. Don't slip into believing it is just a mistake and it can be fixed with a better staff member, or more discipline. Think of mistakes as process and system problems.

2. Define the current reality clearly by defining the problem exactly.

The solution often presents itself easily. Or at least the immediate next steps. Be absolutely honest with yourself and your team about what situation exactly as it is today. Not the way you wish it might be. Define the scope of the problem; often we think problems are bigger than we think. Also define problems objectively and without blame.

3. Re organise the process.

After mapping out the process it should become obvious where and how you can re-organise the process. Processes and functions often evolve over time. Identify which parts of the process a Customer Value Add (CVA). That is they add value directly to the customer and what they will pay for. Identify the Business Value Add ( BVA), that is the what the business must do in order to be in business, eg finance, meeting government regulations, and so on. And finally identify and eliminate the Non Value Add (NVA).

4. Restructure

Restructure your resources and distribution channels to where you get the most results. Look for the places where either 80% of the problems or opportunities come from 20% of the causes. In every process I have ever come across this relationship exists. Restructure the processes to either deal with or take advantage of those causes.

Continually restructure your activities and resources to those which produce the best results. Concentrate exclusively on the highest and best uses of you time and resources.

5. Re engineer.

Look for newer, cheaper, faster ways to do certain activities and processes. Introduce technology to do what people previously did, and re-use the people on higher value tasks.

6. Eliminate.

Simply eliminate all Non Value Add activities. Eliminate and reduce all waiting times. Often files are only touched for a couple of ours but spend weeks in holding patterns. Outsource non core tasks, this is a form of eliminating.

7. Implement Control Plans.

Now you have a new process and business, don't lose the gains you have made. Implement simple and effective control plan and Key Performance Indicators, and explain to everyone what they mean. When the process starts to go out of kilter you will know where to look to fix the problem.

Wash, rinse, and repeat. Move on to the next process and do the same. When market needs change, and they will, re-visit the processes and amend accordingly.

Finally, cycle time is critical, as customers perceive speed to equal quality. Not to mention they may have signed with another business.

You can begin to implement these steps immediately. These apply to every area of business and no problem is too complex that it can't be improved. I have worked on incredibly challenging projects and reduced time to complete tasks from 63 days to three and increased quality at the same time. These steps are quite painless and the results compound over time.

Technique of the month: Improving Work Design

1. List your top 20 internal customers
2. Rank them in order of importance
3. Interview the top 10 customers asking for actions steps on how you could improve your service
4. Set up an action plan to implement the relevant changes
5. Start with 'low hanging fruit' or easier improvements and then progress to the more challenging
6. Share results with the customers, check for quality
7. Wash, rinse, and repeat

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