Jack's Story
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Understand the actual results that flow from properly executed Business Improvement Initiative. Let me tell you a little story about a client. For reasons of anonymity, we’ll call him Jack...
Jack started his business with an extremely profitable idea. This idea gave Jack the ability to massively grow his business in a very short period of time. This massive growth led to an EXPLOSION in staff. At the time I met Jack he had close to 150 staff.
But his business had begun to experience problems...
Do you want to know exactly what’s involved in successful Lean Six Sigma Implementation without getting bogged down in theoretical mumbo jumbo?
If you want the simple version, then let me tell you a little story about a client named Jack…….
Jack started his business with an extremely profitable idea. This idea gave Jack the ability to massively grow his business in a very short period of time.
This massive growth led to an EXPLOSION in staff. At the time I met Jack he had close to 150 staff.
This was the largest group that Jack had ever led and like most business leaders he felt the EXCRUCIATING PRESSURE to continue to grow his company and ensure that all of his valued staff had a secure future.
But his business had begun to experience problems.
During good time Jack's business made enough money to ignore these problems. But in the leaner times the cycles of waste rife in the organisation became blazingly obvious and their effect on the bottom line was ALARMING.
When Jack actually forced himself to examine the figures in detail it was A VERY SOBERING EXPERIENCE. Jack realised that because he wasn’t on the ball managing his team internally he had left a feast of income on the table which he could never get back.
But even more frightening was the fact that due to the impact of external factors in the market this wastage now threatened to jeopardise everything he had worked for since having that first great idea.
Perhaps the biggest problem that Soarent Vision was able to rectify was the lack of operational direction in the business.
In the business there was a lot of movement – YOU COULDN’T IN YOUR RIGHT MIND CALL ANYONE IN HIS ORGANISATION LAZY. From the very top to bottom everyone was constantly compressed for time. Even Jack himself said he had never been busier in his entire career. Yet the results continued to be disappointing.
Now here is a very IMPORTANT and POWERFUL POINT so make sure you pay close attention.
The majority of business owners would be tempted to blame this lack of results on the economy or other outside factors. Saying…...
Well I can’t possibly work any harder, it must be the economy and I can’t control the economy – maybe I should just give up – or batten down the hatches (downsize) and try to wait the storm out.
Either one of these reactions is a RECIPE FOR DISASTER.
Luckily for Jack he had me around to advise him. I taught him the difference between ‘busy’ time and ‘effective’ time.
BECAUSE THE REAL PROBLEM WAS OPERATIONAL DIRECTION. The company’s strategic direction was clear. However, there were plenty of people in the organisation who were extremely busy but none of them were moving towards any specific outcome or unified goal.
Jack was astounded when he understood this, surprisingly it was actually something he had always known but had forgotten in the face of the frustration and responsibility of running such a complex organisation.
Now that Jack was in the right frame of mind I went on to question him about the outcomes he had envisaged for the organisation before he got trapped in his "Busy Time" cycle.
This line of questioning raised MASSIVE DISCREPANCIES between the ultimate goals he had for the company and the results he and his team worked towards on a daily basis.
As a result of this relentless examination Jack and I formulated detailed plans to reach the ULTIMATE OUTCOME he had in mind for the organisation. This included a shrewd strategy to empower his staff and get them working diligently towards this common goal together.
IT WASN’T ALL SMOOTH SAILING as some of his managers had gotten into the nasty habit of controlling people’s behaviour. The problems created by this method were far reaching….
…. Not only were the staff unhappy and rapidly losing motivation the ‘Industrial Age’ management techniques had already driven some potentially valuable staff members away.
We had to redress this power balance and quickly.
All the Staff (including the managers) were put through an intensive 2 day program with Soarent Vision. This 2 day program was designed to NEUTRALIZE the negative behaviour patterns that had crippled the organisation in the past. And lead to them into a radical new state of mind.
[I could tell explain them here but that might reduce their STUNNING EFFECTIVENESS when I apply these techniques to members in your organisation. You’ll just have trust that they are based on cutting edge research of the human psyche and look to the results they achieved for my other clients.]
In order to bring the staff back onto equal footing we did exercises where the managers and staff had to work as a team toward a common goal (rather than having the managers dictate the process alone).
It was hard at first for the managers to relinquish the negative control they had become accustomed to. But as the workshop progressed they began to revel in the initiative the staff were beginning to show.
Finally by the end of the second day they felt the weight of the burden of responsibility begin to lift.
When everyone was motivated and committed to the common goal the management were able adopt roles as FACILITATORS rather than acting as DEMI-GODS to be obeyed and feared.
Now Jack, bless him, was so pleased with the changed attitude in his organisation he thought that he could now take this new environment and start driving the changes that the company so sorely needed. ALONE.
This enthusiasm following Soarent Visions 2 day intensive program is normal and I’ve learnt to expect it.
… The negative behaviours that have created the problem in the first place are often too ingrained to cure in just 2 short days.
By looking at just a sample of the staff in Jack’s business it was abundantly clear that these destructive behaviour patterns were the source of problems in both their personal and professional lives.
Changing the behaviours that has directed your whole life up to this point involves a CERTAIN LEVEL OF PAIN.
Jack’s team was no different. If left on their own, faced with a confronting situation the team (and individuals within the team) will naturally revert back to these emotional crutches or negative behaviour patterns.
That is why the team needed someone who was outside the situation to hold up a mirror to and act as a POWERFUL BARRIER to shrinking back to those old destructive habits.
So to ensure that the team was able to SUSTAIN this PARADIGM SHIFT I:
- Sat in on improvement meetings;
- Observed team behaviour in an the workplace; and
- Participated in any potentially stressful workplace activity that could trigger resistance to change.
If at any point I observed team members reverting back to old negative behaviour patterns I pursued a subtle line of questioning to guide them back to the accepted form of attitude.
Now you may think that stood over everyone and employed DIRTY TRICKS to push them back into line.
Well nothing could be further from the truth. In fact my subtle questioning merely helped them confront aspects of their psychology they already knew were in bad shape and break through them.
Like one of his managers who had been struggling in his marriage. 2 weeks after the Paradigm shift was implemented this managers wife called to ask:
what in the heck I had done to her husband to make him so nice all of the sudden?
She was so ASTONISHED and PLEASED with the change she had witnessed in her husband.
Many readers might be wondering what all of this has to do with Business Improvement initiatives and Lean Six Sigma Implementation.
This is a valid question because as far as I’m aware few of my industry counterparts undertake such a stringent preparation process.
Before we fixed the mind set in Jack’s organisation there was ZERO CAPACITY FOR IMPROVEMENT.
Sure if the managers bullied the staff into working longer hours, meeting stricter deadlines, and increasing output they may have achieved some results. But if you compare these results against the effort, pain and stress required to achieve them they could hardly be described as worth the effort.
It’s like someone who is DEAD BROKE and they win the Lotto Jackpot. I’m sure you’ve heard all the stories, after 5 years or so they’ve gone through all the money.
In fact most of them make such disastrous spending decisions they end up in more financial trouble than when they started.
Why? Because they didn’t have the capacity to deal with that kind of money.
Their reality was probably earning $32,000 a year and struggling to make ends meet. Sure they would have liked more money, even earning an extra $5,000 or so per year would have still been in their comfort zone.
But going from struggling to make ends meet to millions of dollars of disposable cash is a completely OVERWHELMING JUMP, enough to blow anybody’s mind.
The ‘lucky’ winner is usually happy for a moment in time but then they find all the money confronting and scary. They want to go back to their comfort zone and FAST. The quickest way to do this is to dispose of that cash as quickly as possible in the most frivolous ways.
Do you see how this applies to Business?
If Jack had just gone ahead and initiated a business improvement plan he may have had short-term results but because the old thinking patterns and behaviours persisted it would not have been long until his company sank back into the same cycle of waste accumulation.
It may have even worsened the situation by directing resources towards a change that could not have been sustained.
This is the mistake often made by rookie Lean Six Sigma practitioners.
However when the wastage reducing measures are preceded by appropriate preparation it is by far the HIGHEST RETURNING ASPECT of the entire process.
In Jack’s case he had successfully driven a change in thinking in his organisation before undertaking the final step in the process and he had an environment ripe for an improvement initiative.
The improvement initiative in Jacks case focused on 2 main aspects of his business that were letting him down:
- Production; and
- Order Processing
Production was in Jack’s case a more simple problem and required the principles of Six Sigma to resolve.
The product supplied had an unusually high defect rate. To date Jack and the team had not been able to resolve this defect rate despite a few attempts.
After going through a systematic process of measuring and studying variables in the process and examining their relationship with this defect, we were able to isolate the causes and explore solutions that could be used to eliminate these types of defects completely.
Now my explanation here may seem overly simplistic and you may be wondering if the problem was so simple why did they need me to come in and resolve it? Why couldn’t they handle it themselves?
I can understand why you might ask this question because I have simplified the process we went through with Jack quite significantly….
…Suffice to say that the discovery of the defect causing factors was a very involved process that they hadn’t been able to resolve on their own because of the interdependent relationship between the different critical factors.
At the risk of giving the technical types a FIT at my simple examples the best analogy I have to offer is that of a friend’s amplifier.
My friend bought a brand new amplifier (I won’t mention the brand) but after a few months it began to cut out.
My friend took the troublesome thing to the repair shop 3 or 4 times over a year – each time they shock their heads at him and said they couldn’t find anything wrong with it. They gave him strange looks that implied they thought he was a bit cuckoo because the amp had worked perfectly every single time they tested it.
But when he took it home it would invariably continue to be inconsistent and turn itself off whenever it liked.
Funnily enough it wasn’t until years of subsisting with this amplifier that he realised the problem. He often had BBQs in the warmer months and this would be when the amplifier would play its dirty tricks and cut out every 2 minutes or so. But in winter when my friend would invite us over it would work perfectly without a single glitch.
The area in that the amplifier was situated was quite poorly ventilated and in the warmer months the amplifier would over heat. It was an open plan area so this ventilation problem wouldn’t normally affect a modern amplifier.
But in my friends case this slight temperature rise exacerbated a small problem in the manufacture that may have otherwise been a minor defect causing no discernable issues.
So it was not easy for the repair centre to diagnose the defect with the amplifier. It was so cleverly disguised, because while there was an almost imperceptible defect in the amplifier it was the combination of the poor ventilation and seasonal heat that caused the actual error.
In Jack’s case it took Six Sigma principles to identify all the factors that contributed to high defect rates and including the intermittent elements that impacted the production process.
It was then a matter of finding viable solutions to counter the gaps in the production process – this was actually quite STRAIGHT FORWARD once the elements critical to quality of the product were defined.
The other place where I observed significant wastage was in the service area. In Jack’s business there were a lot of bottlenecks in the ordering/supply process.
Many businesses might not consider the ineffectual nature of their service processes a BIG DEAL but they might not be considering the long reaching implications of processing issues such as:
- Customer Dissatisfaction
- Duplicate Orders
- Increased Holding Costs and
- Product Waste
In Jack’s case the 2 main problems arising from the order process were customer frustration and increased holding costs.
Now I know some leaders with knowledge of Lean Six Sigma are right now saying “Lean Six Sigma is for production or manufacturing – the principles can’t be applied to service processes!”
This why Soarent Vision applies ‘LEAN THINKING’ to problems outside of the company's manufacturing or production to extend the savings to other areas of the business such as internal processes and those that impact on client service.
We’d be remiss if we didn’t in Jack’s case because the bottlenecks he had in the order processing design had caused such serious flow on effects.
While the effects on client service were devastating it was difficult to quantify the direct result on the bottom line except through cancelled orders.
The most obvious waste that flowed on from the inefficient ordering process was the COLOSSAL holding costs Jack was paying out every month.
Applying ‘LEAN THINKING’ we systematically removed the bottlenecks that were holding up the order process. Using these principles we were able to streamline the ordering process and prevent much of the frustration experienced by clients waiting on the product.
Leading Jack and his team through the records concerning customer demand we discovered clear trends that occurred every year like CLOCK WORK. By combining this information with the reduced processing time in the order process were able to significantly reduce PRODUCT INVENTORY and still deliver ON TIME to customers.
Most business owners who supply physical product would realise the huge benefits that resolving Product Inventory created, such as:
- Reduced warehousing space (thereby saving on rent)
- Reduced insurance costs
- Less need for Movement and Inventory Control Systems
- Reduced wastage of perishable products and
- Reduced working capital
For Jack’s business (which had quite a large inventory) we conservatively projected savings of 5 MILLION DOLLARS in the first year with this new streamlined ordering and inventory process.
This $5 million figure did not include the more difficult to quantify savings like the improved job quality of employees and greater client satisfaction.
Jack’s organisation managed to stop the wastage that was threatening his business.
Through effecting a change in the whole mindset of his team (and himself) and by using Six Sigma and Lean Thinking procedures, he was able to successfully implement an AMAZINGLY EFFECTIVE business improvement initiative.
One of the best outcomes of Jack’s story though was that his company continued to move forward, even after we met all the original objectives set out to reduce waste. The process and coaching created a culture of continual improvement to propel the organisation in the pursuit of new goals.
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