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Short Term Vs Long Term Results

Posted on by Adam Payne

Now in anybody’s mind the drive for short term results should be aligned with the long term. But why is it we struggle so much to get this balance right, and to add, it’s never been more needed as it is in the current economic way of the world.

One of the more obvious ways I’ve seen it manifest itself is between the overall corporate strategy and the operational behaviour of local teams. Here are just some of the examples I have seen…

First one, Corporate Strategy was to reduce internal costs, based on a Senior Leaders comment regarding a competitor’s costs, an assumption made with some questionable data. Now the local team had done analysis to show profitability in what they were producing and a significant growth improvement too which the corporate focus was fighting against. Which would you have had? Peter Drucker “preparing for tomorrow” springs to mind.

The second, Corporate Strategy to enter new markets with a new service, the local sales teams refusing to follow this as they believe it would be hard to hit their commissions so subsequently paying lip service to it when necessary. Interestingly the price and the margins for the older services were falling drastically, hence the focus on new service.

The third, Private Equity Investors driving the short term results against the Business Leader driving the long term vision, I’ve witnessed on numerous occasions where PE investors introduce a weekly operations call to review KPI’s (key performance indicators) they have introduced (35/week at one business), from Health and Safety, Productivity, On Time In Full, all the good stuff but driven at a behavioural level that can have a negative impact. KPI’s drive behaviour! When managed at a micro level from upon high every week begins to channel the focus on covering the past, we spend most of our time in answering questions that happened last week, not on where are we going, how are we going to achieve, how can I help.

This is one of the more obvious I have witnessed, the pressurised environment of the end of week/month/quarter / year period often creates behaviours that from an outside perspective at least, appear to be utter madness. Of course every business needs to keep the lights on but not to the extent that it sacrifices long-term value.

There has to be a balance between Visionary/Strategic leadership and Managerial Leadership. Managerial leaders are primarily immersed in the day-to-day activities of the organisation and lack an appropriate long-term vision for growth and change. Conversely, visionary leaders are primarily future-oriented, proactive and risk-taking. These leaders base their decisions and actions on their beliefs and values, and try to share their understanding of a desired vision with others in the organisation.

In essence a business needs to have both mind-sets present, a combination of the managerial and visionary styles. Having two leaders like this requires that they trust each other implicitly and are willing to listen to each other, the CEO and COO for example. It is possible to have a singular person with both mind-sets but they are few and far between.

The balance comes in how you “Operationalise that Strategy/Vision” so both styles work hand in hand.

Food for thought as we start to get closer to a new year.

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Why you should do this when looking at Business Performance

Posted on by Adam Payne

Raising Performance is always a challenge (many a sleepless night) but it’s not just about getting it right in your manufacturing processes, it’s about looking at your business as a whole.

Recently, we were asked to support a £40m turnover company with an objective to reduce costs.

Now, although Reducing Costs (and in particular eliminating waste) is an excellent focus, you can sometime lose sight of what other advantages/opportunities there may be, new market opportunities, sales optimisation, finance, etc.

During our detailed business diagnostic, it became apparent that there were some fantastic opportunities to be realised with particular projects on Increasing Growth and Efficiency Savings.

With TCMUK’s Business Practitioners coaching and mentoring our customers internal team, a total of £700K+ efficiency savings, £1M in cash flow improvement and a 17% growth opportunity have been realised so far within the business, with further projects being highlighted for implementation over the next 2/3 years.

So remember, step back and look at the whole business not just the usual suspects (this goes for any size organisation) and you’ll be confident (and hopefully sleeping) knowing you are focused on the right things.

And don’t forget, if getting results like this is on your agenda and you’re looking for some sector expertise, call on 0330 311 2820

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The new ISO9001:2015 standard has arrived.

Posted on by Adam Payne

It focuses on a process-based approach with the aim to produce a desired outcome. Several changes have occurred from the 9001:2008 version: The process approach strongly emphasises that the Quality Management System has to be woven into and fully aligned with an organisation’s strategic direction.

The PDCA (plan-do-check-act) methodology is overlaid on the system of processes, which apply both to individual processes as well as the Quality Management System as a whole. A strong focus on risk-based thinking is required now! It is aimed at “preventing unfavourable outcomes,” such as non-conforming products and services.

The standard has now been published and there is a transition period of 3 years to make the necessary changes, so do you have a plan on how you will tackle it?

Quoting BSI, with more than a million organisations certified to ISO 9001, it’s the most widely recognised standard in the world. ISO 9001:2015 sets out requirements for quality management systems, and is suitable for all types of organisations.

It….

Enables you to better align and integrate multiple management standards

Takes a risk-based approach, becoming a tool for preventive action

Moves away from prescriptive paperwork

The standard is currently being rolled out, so if you are looking for a competitive edge within Production and Service areas, ISO9001:2015 maybe it.

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The Process is the Problem and the Solution

Posted on by Adam Payne

Reality is invariably different from perception; few processes work the way we think they do. You will probably use a dozen business processes each day. For example:

  • Writing a report
  • Manufacturing a product
  • Managing a new client

You’ve likely come across the results of an inefficient process too,

  • Unhappy customers
  • Missed deadlines
  • Invoicing mistakes
  • Poor quality

That’s why it is so important to improve processes when they are not working well.

Now in the age of Technology Innovations we tend to throw IT systems in the work stream to improve the process, despite that often correct assumption, caution needs to be taken when implementing IT solutions. A common saying “shit in shit out” always springs to mind.

Our focus should always be to systemise processes, but remember the process is the solution and also the problem.

Process Analysis

Put it this way, in understanding a process recently, over 40% of production management time was chasing parts, that ripple effect is massive, (throwing a stone on one side of an ocean can cause a tidal wave on the other). Now in understanding the process we found that certain bits of information were being omitted. The business process is flawed. If we design the IT system without first understanding and optimising the process, the IT system we implement will be flawed as well.

It might make things easier, but long term, you’re never going to get the best results, because the underlying process isn’t up to scratch.

Based on our experience/research you can expect a 25%+ improvement within a process by focusing on optimisation.

So, fix your processes, then systemise them, because doing it the other way around will almost always cause headaches.

Process Improvement and Optimisation

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HAPPY CUSTOMERS, WHO WANTS THEM?

Posted on by Adam Payne

Recently I was asked by an MD if I could support in a situation that was causing them a lot of stress and pain with a customer, customers who’d have them…;0) but in this case get the issue sorted = increased sales volume.

The Customer was increasingly getting frustrated, but not with the actual product (the product, new material and manufacturing process were performing superbly).

THE PROBLEM LAY WITHIN THE PAPERWORK.

For some customers (most to be fair) traceability is a key item which needs to be controlled, like anything both parties had their view, which generally fall into these two options

a) What you THINK it is…
b) And what it SHOULD be…

Documentation Process Map

It’s not very often we look at “what it ACTUALLY is”, one of my sayings is “we don’t see things as they are, we see things as we are and perception is invariably different from reality, few processes work the way we think they do”

So manage by fact, collect the data, highlight the outcomes and opportunities and put it right.

Hasten to add that’s exactly what we did, a SIPOC (Suppliers, Inputs, Process, Outputs, Customer) was completed along with documenting the current situation, analysing the data, removing the waste and optimising the process. Standard Work was created for the new operation with all parties trained to the new standard.

Now we have a happy relaxed(ish) stress-free GM and more importantly a Happy Customer willing to increase the volumes to the business, WIN WIN!

Business Focus:-

  • Customer Satisfaction
  • Do so profitably (but Customer Satisfaction is always at the fore)

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FEAR, ONE OF OUR BIGGEST HINDRANCES

Posted on by Adam Payne

It’s getting to that time of year again for some of us, when we start to look at our half year performance or even looking to the operational budgets for the year to come.

The economic outlook is being driven by uncertainty (some of it in my opinion is the media plus others talking us into it, you’ve only got to look at the articles in the News to see it’s not all doom and gloom), we have to think positively in order to be successful.

I read an article recently from The Magic of Thinking Big, by David J. Schwartz. (here’s an extract)

“Belief and wishful thinking are quite different. Wishful thinking will never spur you to action and as a result, your wishful thought will forever remain a wish. However, when you truly believe you can do it, the how to do it will reveal itself.

Strong belief in something allows your mind to figure out ways to accomplish what you believe. Belief is the driving force behind all great successes. For example, Edison wouldn’t have continued to try and try unless he really believed he could make the electric light bulb. Schwartz discovered that belief in success is the one universal, basic and essential characteristic behind all successful people.

The size of your success is determined by the size of your belief.”

The distinguishing difference between a person who is going places and the individual who is struggling is the latter person’s habit of excuses. And one of the biggest hindrances to success is fear, and what do we always see in the papers, news, etc., FEAR!

Thinking dictates action! (David J. Schwartz)

I have witnessed colleagues thinking they are inferior to another and ultimately act like that as well. As David has pointed out, thinking dictates action.

Successful people think big and think creatively.

Creative thinking is nothing more than finding new and improved ways in what you need to achieve. Success is dependent upon using creative thinking to discover these improved ways; and as with most things, it can be learnt.

So whilst looking at your half year performance, your Operational Budgets, and or your Strategy for the coming months, think positively, think big, think what it is you need to achieve and find new ways to do things, learn from others. But definitely don’t FEAR it.

Worth a read: The Magic of Thinking Big, by David J. Schwartz.

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Teamwork – Wales & Leicester Prove the Point

Posted on by Adam Payne

I’ve never been one for football, but the two recent examples of how teamwork and purpose make an absolute difference comes in the form of Leicester City winning the Premier League and Wales currently in Euro 2016. You only have to see the camaraderie within both teams, the celebration in achievement with Wales, and seeing most of the players watching the result of the premier league pan out at Vardy’s house with the celebrations that entailed.

Now a common factor in this, is the role of the leader, both Chris Coleman (Wales) and Claudio Ranieri (Leicester) have set a purpose and belief within their teams which was unstoppable for Leicester and proving so for Wales. These leaders have set the tone for what they want from the team, the goal. They also have what most good leaders have which is ‘Charisma’, but these leaders offer much more than that. Noteworthy leaders also deliver some combination of expertise, commitment, dedication, motivation, focus and concern for others. These leaders are naturally goal orientated and understand the need and the best way to communicate the objective to the team.

 

The Five DYSFUNCTIONS of a Team

 

Absence of Trust

The failure to build trust is damaging because it sets the tone for the second dysfunction:

Fear of Conflict

A lack of healthy conflict is a problem because it ensures the third dysfunction of a team:

Lack of Commitment

Because of this lack of real commitment and buy-in, team members develop the fourth dysfunction:

Avoidance of Accountability

Failure to hold one another accountable creates an environment where the fifth dysfunction can thrive:

Inattention to Results

Team members put their individual needs or even the needs of their organisations above the collective goals of the team.

 

The above you could witness in England within the Euro’s, this is only my opinion, but for comparison look at the England RFU team and what Eddie Jones has achieved in a short time. Again a leader that builds purpose and teamwork, they haven’t lost yet under Jones and did something that has not been done since 1971, white wash Australia in Australia.

FOOD FOR THOUGHT!

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Problem Definition for Beginners

Posted on by Adam Payne

Back in 2006/7 I worked for Goodrich Aerospace as Group Continuous Improvement Manager, within my team I had a gentleman named Tim Holmes. Now Tim is one of those gentleman once met never forgotten, all for good reasons. His passion, intellect is second to none.

We had done a presentation on Standard Work to the Senior Leadership team and after the meeting Tim, Rob (Quality Manager) and myself got to talking. We knew Tim was a poet so we tasked him with creating a poem on Problem Definition something we could use in all of the conference rooms, training rooms, etc.

This was the result. Something I use regularly.

Problem Definition for Beginners

They say a well-defined problem is half way solved,
So if I want to fix an issue I get the right tool involved.
If I’ve got a problem that isn’t well defined
With lots of complex issues that keep racing round my mind
Or when there’s loads of data but I cannot find the proof
I know that there’s a solution there, but I just can’t see the truth.
Whenever I’m finding it difficult to focus my attention,
Or if I need help to understand and gain some comprehension,
I reach for a tool that’s simple to use and helps avoid contention
I break the problem into easy steps and ask myself 6 questions.
What precisely is it that’s wrong? is the first thing you should ask
I try to be exact here as it helps me in my task.
Where is the next one, as in where was it found?
This will help locate the issue and fix it to the ground.
Next up its When – as in what time of day,
I’ll also add the month & year to help me on my way.
Who is question number four, I need to know who found it?
Then I’ll know when I ‘go look see’ or need to talk around it.
The next question is five and the detail is Which? by way of demonstration
I’d like a specific requirement here, ideally a specification
Now finally I ask a How… to quantify the problem.
How many are wrong? Or even How was it found? And now I’m ready solve em.
This process will lend itself to any problem raised,
It will help us relieve that awful stress from out of our days.
‘Cause when you’ve got the all details, once your problems’ defined.
The picture should be much more clear, the solutions more easy to find;
Just work though the detail use logic… then pause,
For sooner or later you’ll find the root cause.
You see the answers to our troubles are never beyond our cognition,
They’re halfway over a little hill called Problem Definition

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The Pareto Principle

Posted on by Adam Payne

(also known as the 80–20 rule, the law of the vital few)

Wikipedia: The principle was suggested by management thinker Joseph M. Juran. It was named after the Italian economist Vilfredo Pareto, who observed that 80% of income in Italy was received by 20% of the Italian population. The assumption is that most of the results in any situation are determined by a small number of causes.

This principle tends to be a forgotten technique/tool now.

The 80/20 Rule

It means that 80 percent of your outcomes come from 20 percent of your inputs. As Pareto demonstrated with his research this “rule” holds true, in a very rough sense, to an 80/20 ratio. Examples as follows:

  • 80% of a company’s profits come from 20% of its customers
  • 80% of a company’s complaints come from 20% of its customers
  • 80 percent of the difficulty in achieving something lies in 20 percent of the challenge
  • 80% of a company’s sales come from 20% of its products

In a business sense, finding the 80/20 ratios is crucial for maximising performance. Find the products or services that generate the most income (the 20 percent) and drop the rest (the 80 percent) that only provide marginal benefits. Spend your time working on the parts of the business that you can improve significantly with your core skills.

Now this can also be applied to our time. Business owners, leaders, managers (you can even apply it to your home life) waste a lot of time working IN the business. Meanwhile, they forgo the activities that earn £1,000 an hour, such as sending the right email to the right person, creating the next marketing sequence, or convincing a client to do more business with them, the time spent working ON your business.

We don’t realise the same 80/20 principle (the adage that 20 percent of customers equal 80 percent of sales) applies to every dimension of business. And that includes time management.

We are extremely prone to rationalise, “I can do it myself.” Then we spend six hours trying to extract a file from an email, fix a projector, doing accounts, generating a spreadsheet, etc. Now we may be competent in doing this, but we come back to the working IN your business instead of the No.1 job in getting and keeping customers, the working ON your business.

So the 80/20 rule can be applied to most things, don’t lose sight of it, keep it in the forefront of your mind when you’re looking to solve the problems around you.

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Understanding your Competitive Performance

Posted on by Adam Payne

Understanding your Competitive Performance can be used as a differentiator as well as a enabler for growth.

Analysing where our business sits compared with our competitors (order losing, parity, advantage, superior) across the six categories of Quality, Cost, Delivery, Agility, Tech & Innovation and Customer Experience is an excellent way of highlighting where you need to focus.

Competitive Performance Analysis

If you’re sure your competitors are doing something better than you, you need to respond and make some changes. It could be anything from improving customer service, assessing your prices and updating your products, to driving process capability and performance.

Exploit the gaps you’ve identified. These may be in your product range or service, marketing or distribution, even the way you recruit and retain employees.

Customer Experience reputation can often provide the difference between businesses that operate in a very competitive market. Renew your efforts in these areas to exploit the deficiencies you’ve discovered, listen to the Voice of the Customer.

But don’t be complacent about your current strengths. Your current offerings may still need improving and your competitors may also be assessing you. They may adopt and enhance your good ideas.

Don’t stand still!

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