Onward & Upward

Well, I certainly haven't been keeping up with this blog lately, have I. Been busy, not that that is any excuse.

Among other things, I've been preparing for a trip to Vietnam. I'm going to give a presentation and conduct a workshop in early June.

I'm giving a presentation to Vietnam Supply Chain related to my next book, titled Deliver on Your Promises. It is a view of Business Operations based on my interviews with numerous companies, and my experiences working with a variety of organizations and industries.




And I'll be conducting a workshop at the Logso Conference, a supply chain conference now in its second year. I'm still working on the details, but this session will focus on what to improve and how to improve it, in terms of Business Operations (assuming that you need to improve something).



Since I will be traveling, I have, of course, been searching for airline flights. I've been using Kayak. I like their format and on my iPad 2 I've found that it remembers my last search so I don't have to re-enter everything when I go back to search again. I've used a few of the flight search websites, and some of the airline's own websites, but I've found that I like how ANA (All Nippon Airways) shows their results.



The results are shown in a grid with 3 days before and 3 days after both your departure and return dates to give you a nice snapshot of possibilities. This is how I want to see the results. Since a day or two on either side of your planned date can often make a big difference, this is how all search results should be presented.

OK, more preparation and planning to do, so that's all for now.

Looking Good!

The special New Year / Year of the Rabbit issue of Vietnam Supply Chain Insight magazine is out - and I'm in it. This is a good looking magazine (and the articles are good too), and I'm proud to be in it.

Here's the English version of my article. And here's the Vietnamese version.

Feel free to let me know which language I sound better in.

U.S. Manufacturing

As far as blogs go, some are good and very many are mediocre. Even in the good ones, not all posts are equal. But occasionally, you come across a very good post that should be shared. And that's what I'm doing here.

Derek Singleton at The Manufacturing Blog writes about 5 Strategies for Growing as a Domestic Manufacturer. He makes some good points.

I would have added Improve Your Processes as a separate item, where he includes it under Invest in Your Workforce. Investing in your workforce brings many benefits that will help to boost productivity, which can include process improvements because of increased training. But I think process improvement should have its own focus. It is a vital, and ongoing, activity that is imperative at any time, in good times or bad.

I could make further comments, but you should read the post first and let me know what you think.

What or How?

What is more important to an organization, What you do, or How you do it?

That's the question Bec Kennedy of Australia asked Richard Branson in Entrepreneur magazine.

Is the organization's purpose and mission more important, or are the methods and efficiency of how the organization works more important?

After reading the question, I was curious as to what Mr. Branson's answer would be. What would you say?

Mr. Branson answered that while efficiency and profitability are certainly important to every company, but acting responsibly is more important for long term success. Do you agree? It's hard to argue with the logic.

Acting responsibly helps to motivate and engage your employees. This is especially true for many non-profit organizations. Motivated and engaged employees strive to work more efficiently and effectively to continue with and build upon the success of the organization. Motivated and engaged employees translates into higher levels of customer service. Motivated and engaged employees search for ways to develop, build, and deliver higher quality products and services.

This all translates to more loyal customers, more customers, and lower operating costs. That leads to higher profits. Mr. Branson calls this the virtuous cycle. Does this work in your organization? Can it?

The Gumby Walk

The Gumby Walk, or Going to Gumby...

Oh,wait, that's not it. Gemba. Gemba, not Gumby.

If you are not familiar with gemba or the gemba walk, here's a couple of great posts that illustrate the concept so that you'll never forget it. The first is by Jon Wetzel at the Gemba Tales Blog, the second is by Norman Bodek. I heard Norman speak once. What a character! But also full of knowledge.

To summarize the concept of gemba in the Lean Management system, it means going to the source, or where things actually happen. If you want to know what's going on, go look. Don't just listen to what people tell you. Go look and see for yourself. If you run a manufacturing plant, go out onto the factory floor. If you provide services to clients, go to where those services are provided and see for yourself how it's being done. Go look.


As for Gumby? If you've never heard it, you have to listen to The Ballad of Gumby. Or, if country western ballads aren't your thing, try Zydeco Gumby Ya Ya.

Leading the Race?

... and it's Lean leading by two and a half lengths coming into the turn...

I just came across this report that says that Lean is leading Six Sigma as the preferred corporate improvement system. Maybe it is. Without reading the full research analysis I can only comment on what is reported in the press. But I am a bit skeptical about the whole thing.

A couple of points jump to mind. The first is that the analysis is based on job ads that list Lean and/or Six Sigma expertise and experience. I'm not sure how valid that is as a measure of the popularity of the systems. Sure, it says something, but what exactly I'm not sure I'd speculate about.

Second, I don't see these two management systems as competing against each other. First, they are complimentary systems. They work well together, and you could argue that either one is an extension of the other. Second, commitment and implementation are more important than which one you choose. Actually, what's more important is which one is the most appropriate for your organization at any given point in time.

A point I often make is that instead of focusing on what the particular system you're looking at using is called, understand what you're trying to accomplish and what tools you can use to get there. Use parts and pieces of the various formal systems and make them work for you.

Of course, many times it is advantageous to implement a formal, named, system, such as Lean, Six Sigma, or Sales & Operations Planning because that allows people to get their hands and heads around it and keep them focused. Only you know what's best for you.

But you have to have enough knowledge to make the decisions. My book will help.

Would You Like Customer Service With That?

Safeway has a new self-checkout line. Now you get to choose between poor service and no service.

Half the time the regular checkout is almost like a self checkout. Your existence barely registers a blip on their radar as they chat to their friends, check the break schedule, or get distracted by ... Oh! A squirrel! Sometimes while standing in line I move my hands back and forth like I'm scanning my items. No sense just standing there looking at a blank wall. No one notices. Except the people in line behind me. I tell them I'm playing air piano.

Customer Service is an integral part of Business Operations. Business Operations being the part of your organization directly responsible for the delivery of your products and services to your customers. Poor Customer Service means poor Business Operations. Poor Business Operations means lower profits, loss of customers, and in this economy can mean downfall of the business.

I'm Somebody!

The Let's Talk Business! blog has been listed in Top 50 Resources for Students Attending Online Business Management Schools as a resource for Business Operations information.

But, wait, there's more.

I'm also listed in Top 50 Resources For Students Attending Online Organizational Leadership Schools.

I'm not sure what this is about. I usually ignore email like this, but I checked out the lists and looked at a couple of the other blogs listed. Some of them seem worth another look at. I'll take some time to check out some of the other blogs and list some of the ones I like here.

By The Numbers

Do you know who said this: "Guessing is dysfunctional. Ignoring prior experience is denial. Using valid numbers to project performance is rational."?

No? If I told you it was Harrison "Buzz" Price would you know? Don't know who "Buzz" Price is? I didn't either until today.

Mr. Price was a research economist. I don't really know what that entails, but Mr. Price was one, and he was very good at it. How good?

Mr. Price selected the site for Disneyland in Anaheim, CA in 1953. He also selected the site for Disney World in Orlando, FL. That's good.

How did he do it? By using numbers. Data, that is. Facts. He analyzed numerous factors, information like population trends in the area and how accessible the area was, to determine results. He didn't use gut feel or just follow what someone else was doing.

Today, we might say that sounds like Six Sigma or some other management fad (did I just call Six Sigma a fad? I didn't mean it to sound that way, because it's not.), but back in 1953 they probably just called it being smart.



Oh, the quote at the beginning of this post is from Mr. Price's book Walt's Revolution! and I read about him in the November, 2010 issue of Inc. Magazine

I Can't Get No... Job Satisfaction!

According to some recent research, the number one reason that employees leave their jobs is because of their relationship with their direct supervisor. There are many factors, of course. Some people will remain in a job even if they have a very poor relationship with their supervisor, but in many cases, employees leave because of their boss.

I once went to work for a company that had an extremely high level of turnover and an almost toxic environment. This was a small company, and the owner directly supervised all the employees. The owner knew he was the cause of the problems and hired a consultant to help him. One of the results of the consultant’s work was that I was hired to manage Operations and supervise the employees. In effect, I was a buffer between the owner and the other employees.

I was a good buffer. Eventually, it didn’t happen overnight, I stabilized the workforce and the Operations of the company. However, the effects on my health of being the buffer were not good and I left the company. But the experience did give me first hand knowledge of the effects of bosses on employees.

Other research has looked at the factors of job satisfaction. I was looking at this after a question was asked about how to retain employees when, in the current economic conditions, the company could not give raises or bonuses to employees. While base pay is an important consideration in job satisfaction, it is not the top factor. The factors that affect job satisfaction are complex. Base pay is usually ranked in the top 5, but a survey done by the Society for Human Resources Management (SHRM) in 2009 showed that job security and benefits ranked the highest, with compensation coming in third. Given the state of the economy at the time of the survey, that is not surprising, but that would not be surprising even in a good economy.

Many factors contribute to job satisfaction, but if you look beyond job security and compensation, you will see that there are a number of factors that relate to the job or the work itself. And, of course, relationship with supervisors and management are important. The factors that relate to the work and the relationships with management are important for Business Operations professionals.

Employees want to perform work that utilizes their skills, and they want to perform work that is meaningful. What does meaningful mean in this situation? It means that the work they do is important for the success of the organization, and in many cases, important to the health and well being of society in general. For Business Operations professionals, the challenge is to ensure that the employees work is meaningful. How can you do that?

One place to look is within one of the core principles of the Lean Management system. Lean advocates, no, relies on, employee participation and input. Workers play an important role in designing and improving processes, establishing procedures, and developing work systems. When the workers themselves are heavily involved in their own destiny, their satisfaction with the job is very high.

The takeaway here for Business Operations professionals is to tap into your employees knowledge, bring them into the process of designing and improving how you do things, and understand and improve your relationships with your employees.

Dialing for Dollars

I was listening to Hawaii Public Radio’s semi-annual fund drive when a couple of things struck me. Regardless of your views on public radio and their news coverage, there are some important business lessons to be learned from how they conduct their fund drives.

The first thing you notice is that they have set some very specific goals. The second is that their entire focus during the drive is on those goals. They are unwavering in their focus. They set their targets, focus all their efforts on achieving them, and monitor their progress in extreme detail in real-time.

Their goals start with the overall dollar amount they need. You will notice that this is a fairly precise number, not some generally rounded figure. For the just completed drive, the target was $808,000. Not $800,000 or $850,000, but $808,000. You get the feeling right from the beginning that they know what they’re doing and have a well developed plan because they have set such a precise target.

Not only do they set a dollar goal, they set a completion date goal. They communicate from the beginning just how long the drive is expected to take. Again, it is precise. Not “a week or two”, but a fixed number of days. For the current drive, the target was ten days. So you have set goals of $808,000 in ten days.

To help keep the focus strong, and to break down those large goals that are hard to really get your mind around, they break the goal down into segments. The segments are aligned with the programs that are broadcast throughout the day, and each segment has its own specific dollar goal. The dollar goals vary throughout each segment, so one segment might have a goal of $1,500, while another might have a goal of $3,000.

Another thing you will notice is that during the on-air campaign, the staff and volunteers are asking for specific, or target, donation levels. They don’t just ask for a donation, they ask for a specific level of support, such as the True-Believer, or the Dollar-A-Day levels.

You can clearly see that in order to be able to so finely tune their goals they have to have large amounts of data at their fingertips. But not just large amounts, they have the right data. They are able to effectively analyze prior results so that they can define their goals and break them down into segments. The whole thing is very impressive if you think about it.

The lesson is – set specific, measurable, goals, use data, the right data, to define those goals, and monitor progress towards achieving them.

Interview

I have another interview scheduled this week. I've been interviewing people who's organizations are doing something well in the area of Business Operations, for inclusion in my upcoming book.

I've been a bit surprised at how difficult it is to find people to interview. You would think that most people would jump at the chance to talk about what their organization is doing well. It doesn't have to be the entire organization, doing something well in one area is enough for my needs and enough to inspire other people to improve their performance.

I also ask everyone I interview if they can refer me to someone else that they think I should speak with. But not one person has recommended someone else. Is it that no one is really happy with their suppliers, customers, or anyone else they do business with either professionally or personally? If that's the case, I need to change that. That's why I'm adding all the great information I'm getting in these interviews into the book.

If you know of any organization that's doing something well in the way of Operations, please let me know. Contact information would be even better, but just the name of the organization will give me a start.

Hard Times Offer Chance To Improve

The headline reads "Hard times offer chance to improve through IT". The article is well written and I agree with most of it, but I have to disagree on a couple of key points. This article is in the Sunday (December 6, 2009) edition of the Honolulu Star Bulletin, written my John Agsalud.

The article starts off with a very important, and very true, point, "...it's that this is a good time for organizations to innovate and improve their business processes,..." John is right, this is the best time for organizations to make improvements. It's not only the best time, it is absolutely vital for many organizations if they are going to continue to survive. In good times, waste inevitably creeps into every organization. You're doing well, things are moving fast, you don't have time to worry about the little things. But all those little things add up over time, and even in the best of times it is important for organizations to continuously improve their Operations and drive the waste out of the system. In these tough economic times you can't afford to wait to make the improvements, you have to do it now.

The end of the above quoted sentence is where I have my disagreement; "...improve their business processes, usually through the use of technology."

The proper use of technology is very important to the Operations of an organization, and Mr. Agsalud points out many of the benefits in his article. My disagreement is that you do not always need technology, and oftentimes shouldn't use it, to make improvements to your Operations and your business processes.

There are many improvements that can be made without investing in technology. Many times simply examining the flow or steps of a process can reveal surprising insights that lead to simple changes that result in great improvements. Too many organizations (and I've seen some of them personally) immediately jump to a technology "fix" to their problems without ever even analyzing the causes of the problems in the first place. Find out what is causing you to be less than excellent, or what is causing you to perform lower than you want or expect, then craft a solution. You can decide at this point whether the solution includes the use of technology or not.

Technology has a high cost, in time, money, and other resources. You have to make sure you approach a technology implementation as an investment, and you have to be very clear on what the return on that investment will be. You also have to be very clear on what the actual and total investment is before you begin.

Use technology when appropriate. Use it to improve your organization. Just don't use it as a crutch and expect technology to help you when it's not the lack of technology that is causing your problems now.

Lessons from the Airwaves

Here's a lesson in Business Operations from an unlikely source - the Hawaii Public Radio semi-annual fund drive.

I listen to HPR (usually KIPO) even during their fund drives. I'm that much of a Public Radio junkie (I'm also a "True Believer"). I'm always amazed that they raise the amount of money they need, and they almost always achieve their goal on-time.

That's your first lesson. They set a specific goal, a specific dollar amount that they need to raise, and a specific time frame to reach it. Lesson? Set specific, measurable, achievable goals.

But I was getting worried this drive because they had fallen significantly behind after several days. With the economy the way it is and all the cutbacks and layoffs, it wasn't really a surprise, but it was a concern. But they got back on-track and even managed to reach their goal right on time. Amazing! So how did they do it?

Here's the big lesson. The big, final goal is hard for most people to really get their head around. It's a big number and people don't see how their little, individual contribution puts a dent in it. So what HPR always does, and what they sat down and really pushed and focused on after they fell behind, is break that big, final goal down into smaller targets set for each program or hour of the day. That is, instead of having to think about how your $60 membership (or $120 True Believer or $365 Dollar-A-Day pledge) puts a dent in the $700,000-plus final goal, you can get a really clear picture of how you pledge makes a difference in a $1,200 target during your favorite show. Lesson? Break a big, final goal down into smaller, more easily digestable targets that people can understand and feel good about.

Oh, and donate to your favorite Public Radio station (even if you're not liberal-leaning, the music's great).

Giving Back - A Guest Post

Today is a big day for Let's Talk Business! We have our very first Guest Blogger. Jeff Thomas of Ideal Computer Systems, Inc. wrote the following article titled The Benefits of Investing in Your Community. It is a timely article because during the last interview I did for my upcoming book the gentleman I spoke with talked about how his company donates resources to the city and state Civil Defense organizations and why that's good business.

Here at Let's Talk Business! we (meaning me, since we is me) don't try to sell you anything or endorse any products or services for personal or monetary gain. This article fits in well with the focus of this blog so I am happily posting it. Plus, Wendy over at Your Scrumhalf Connection has several guest bloggers and interns and if I can make any small progress in making my blog as good as hers, I'll give it a try. Thanks Jeff.

Here's Jeff's article:

The Benefits of Investing In Your Community

We’ve all seen them: the small print shop that is sponsoring this summer’s Little League team, the bakery that donated bread and muffins for the town’s Walk for Breast Cancer, or the record shop that puts on free concerts every weekend for local teens.

As a small business owner, you’re in a unique position to really give back to the community you live in. Sure it feels great to do something good for your town. But can it pay off?

The good news here is that yes, it can, in several different ways. If you go about it the right way.
One of the greatest benefits to being involved with your community is that people will start to recognize your business. And in their minds, your business name will be tied directly in with the good feeling of charity. The two concepts, your business and goodwill, are directly linked. When it comes to name recognition and customer loyalty, this is a very good thing.

Another benefit to investing in your community is the sense of satisfaction you get from doing it. You can’t measure the feeling of giving back in dollars and cents, but it’s amazing the boost it can give not only to you, but to your employees as well.

Many large companies, like Google and Tom’s of Maine, give their employees one paid day per month to volunteer however they like. This is a huge perk in those companies, and the employees say it’s a big morale booster.

If you want to make sure your customers know about your involvement then make sure you advertise it. If you send out a monthly newsletter, then showcase what you did and include plenty of pictures.

Another way you can highlight your efforts is to call your local paper. For example, many businesses will donate a portion of their sales for a month to a local charity, and newspapers love to run these features. This is free publicity for your business.

If you become involved in a larger event, then make sure your business name is displayed as prominently as possible. Invest in banners and t-shirts, and have plenty of brochures on hand to pass out to people.

Community involvement is a great way to give back, feel great about what you’re doing, and get some publicity for your business in the bargain. And don’t forget, most of the time you can write off your expenses as a tax deduction.

Guest post by Jeff Thomas of Ideal Computer Systems Inc. http://www.idealcomputersystems.com/

Just keep getting better

I just keep getting better. I've moved up from the boring wooden plaque to this lovely crystal sculpture award. Though they still can't get the PPR right.

Go me!

Be The Best

I've been interviewing people/organizations to include in my upcoming book (to be released this Fall). I'm speaking with organizations that are doing things well in terms of their Business Operations (since that's the topic of the book). One of the questions I get regarding these interviews is what is the theme or common thread I see among the organizations I speak with.

The answer is - The best organizations plan, and they monitor their progress towards their planning goals. I'm constantly harping on planning and measuring performance, so it's nice to have confirmation for my near obsession.

I call it the Goal Attainment System, and it consists of three parts:

1) Goal Definition
2) Action Plan
3) Performance Measurement System

Define the goals of the organization as a whole. Develop a plan of action to reach those goals. Develop a system to monitor the progress towards those goals. Simple.

So why don't more organizations do it?

Do Nothing

The news is full of talk about the rising cost of healthcare. But I’m always confused, because I don’t understand what costs are rising. At the same time there are reports of many doctors leaving certain areas, physical and specialty, because their pay can’t keep up with their bills (like paying off medical school, insurance, office rent, etc.). Nurses certainly aren’t being overpaid, so what costs are rising and why?

Well, I finally heard an answer, and it was very interesting. The NPR (National Public Radio) show Marketplace spoke with someone who had an answer. Apparently I’m not the only person thinking about this, and someone much smarter and more ambitious decided to look into it. Dr. Atul Gawande wrote and article and spoke with Marketplace host Kai Ryssdal about what he found.

Dr. Gawande looked at the healthcare costs in McAllen, Texas, which has one of the highest per capita healthcare costs in the nation, and the Mayo Clinic, which has one of the lowest costs of healthcare in the country. Why the disparity, especially given the reputation of the Mayo Clinic. As I said, the answer is interesting, and ties directly to this blog’s discussion of Business Operations.

It turns out that two of the primary causes of high healthcare costs are some of the same issues we find in Operations. The first issue is fragmentation. In McAllen, Texas, patients shuttle between many different facilities and service providers. There is no clarity to care, and also no central person or place dedicated to preventive care. This sounds exactly like the operations of many organizations with no clearly defined direction and plan to get there. In other words, no Goal Attainment System in place: Goal Definition, Action Plan, Performance Measurement System.

The second issue is the bias towards action. In McAllen, just about every test and procedure that can be performed is performed. There is no integration between the disparate service providers. And the natural human tendency to “do something”, even when you’re unsure of what to do, is in place. The problem is, sometimes it’s better to do nothing. At least not right away. Study and analyze the situation first, then propose a change, then implement it. Sounds like Six Sigma (the Six Sigma management system). I heard an interesting piece (public radio again) about human’s bias towards action a couple of weeks ago. Even when evidence proves that it’s better to do nothing, most people “do something.”

The thing I found most interesting was a study about soccer (football to the rest of the world) goalies and penalty kicks. This study proved that a goalie is more likely to block a penalty kick if he or she doesn’t move, meaning doesn’t jump left or right. But goalies almost always move. Even when not moving would be better. I’ve seen many organizations feel the need to do something, anything, rather than take the time to look at the issue and develop a better solution.

Maybe your new motto should be “Just do nothing”.

Supermarket Operations

I occasionally check my stats to see how people arrive at this blog, what search leads them here or what website. By far the most popular searches that lead here are for things like “Hawaii rugby” and variations on that. What’s a little odd, though, is the second most popular search that leads people here – “Supermarket Operations”.

Apparently, quite a few people are looking for information on business operations for supermarkets. Sadly, though, it’s probably not the people at my usual grocery stop. I’ve posted a couple of rants about the poor performance of my neighborhood Safeway, and they’re not really getting any better. Ergo, they’re probably not reading up on improving operations.

Since I’ve only posted a couple of these rants, I wondered why so many people (so many being a relative term) ended up at my site. So I Googled “Supermarket Operations”. And there I am, sixth down on the list. Behind a company named Supermarket Operations, the Food Marketing Institute an organization dedicated to the food wholesale and retail industry, a book titled Modern Supermarket Operations, and an article about how big supermarket chains in Britain are driving out the small shops (seems that happens everywhere).

I poked around in these other sites a little, just to see what kind of information about supermarket operations is out there. And it’s not much. The best stuff I found was in that book, Modern Supermarket Operations, and that was printed in 1963.

One thing I did find interesting in the book (the first page of each chapter is available online) was that studies found that fully stocked shelves led to increases in store sales by up to 25%. Which tells me that people want what they came in for, not a substitute item. I know that’s how I am. And that’s why I’m constantly ranting about my supermarket being out of what I want.

I think I need to look into this a bit more and see what I can do to help supermarkets improve.

Modern Supermarket Operations (book, 1963)

http://www.questia.com/PM.qst?a=o&d=6179602

Preaching to the Choir

I was speaking with a colleague the other day and we were talking about our business and the current tough economy, how it's effecting businesses, and how we can help. Basically we were ranting, or "preaching to the choir" (each other).

In these tough economic times organizations have to operate as efficiently and effectively as possible. Their performance has to be exceptional. But my argument is that this is how organizations should operate at all times. Sure, in this kind of economic environment there are some actions that have to be taken that wouldn't be considered in normal times, even in tough normal times. But for the most part, organizations should always be examining how they do things (their processes) and working to make things work better. To me this means working towards defined goals. Develop a plan with defined goals for the organization, develop an action plan that will get you to those goals, and develop a performance measurement system that ties everything that everyone does to those goals. I call this Goal Attainment.

This should be done in the best of times, but it is imperative that it be done now. You can't afford not to.