Halden Zimmermann: How you know if you're a continuous improvement company

3

Click here to load reader

description

There are many characteristics that can show whether or not your company is a continuous improvement company or not. This article discusses them in detail.

Transcript of Halden Zimmermann: How you know if you're a continuous improvement company

Page 1: Halden Zimmermann: How you know if you're a continuous improvement company

You  know  you  are  a  continuous  improvement  company  IF!

I  was  thinking  about  the  concept  of  continuous  improvement  and  lean  six  sigma  principles  and  how  many  companies  that  are  well  know  even  well  regarded  state  they  are  "continuous  improvement"  or  "lean  six  sigma"  companies.    I  got  to  thinking,  is  that  really  true  or  a  marketing  ploy  to  bring  in  top  athlete  talent  and  market  the  company  to  wall  street  as  a  choice  investment.    As  Jeff  Foxworthy  would  say,  you  know  you  are  a  redneck  if....  I  put  together  a  few  IFs  for  continuous  improvement  companies.

You  know  you  are  a  "Continuous  Improvement"  Company  if:

1.  Not  continuously  restructuring

For  people  who  are  lean  six  sigma  experts..  this  one  probably  threw  you,  but  give  me  a  second  to  explain  why  this  is  number  1  on  the  list.  Many  companies  file  for  restructuring  costs  every  year  as  part  of  a  way  to  save  money,  take  out  head  costs  and  drive  operating  profit.  This  is  typically  done  in  the  4th  quarter  of  every  year.    If  you  are  a  company  that  continually  and  every  year  restructures  under  this  model  especially  at  the  end  of  the  year  YOU  ARE  NOT  a  continuous  improvement  company.

  Why?  Companies  that  need  to  do  last  second  restructuring  every  year  clearly  do  not  have  the  processes,  metrics  and  long  term  strategy  to  stabilize  through  a  focused  execution  of  their  original  plan.    True  continuous  improvement  companies  are  dynamic,  and  use  proactive  metrics  and  processes  to  drive  growth,  cut  costs,  acquire  and  out  maneuver  the  competition.    If  a  company  has  to  rely  on  cutting  head  counts  or  costs  using  restructuring,  this  is  not  sustainable  and  is  cause  for  concern.    Even  worse,  stability  is  a  major  factor  in  productivity  and  continuous  restructuring  is  a  sign  of  instability  and  not  being  proactive  in  managing  the  business.

2.  Business  System:

Now  you  lean  six  sigma  people  are  on  board....  Companies  that  have  a  standard  business  system,  that  is  documented,  followed  and  improved  upon  are  continuous  improvement  companies.  A  business  system  is  the  core  processes  that  takes  long  term  strategy  to  short  term  execution  and  deploy  priorities  in  a  systematic  approach.  Key  performance  indicators  (proactive  and  reactive)  are  also  part  of  the  business  systems  that  trickle  down  to  the  teams  that  are  closest  to  where  work  happens.  Also  measurement  allows  teams  to  understand  problems  before  they  hit  the  fan.  Last  in  the  business  system  is  a  way  to  hold  teams  accountable,  this  can  be  done  many  ways  but  typically  this  is  done  through  a  goals  and  action  plan  system  that  is  plugged  back  into  and  aligned  with  the  long  to  medium  term  strategy  of  the  business.  

So...  

a.  Strategy  and  Operating  agenda  process

b.  Policy  deployment  (focus)  ,  KPIs  (measurement)    and  model  to  hold  people  accountable  (action  plans)

Page 2: Halden Zimmermann: How you know if you're a continuous improvement company

c.  Results  oriented

3.  Process  Orientation

Of  course  now  we  are  getting  into  the  crux  of  what  continuous  improvement  is  all  about.  Now  most  of  you  are  going  to  think  I  am  going  to  talk  about  manufacturing  here,  and  this  may  surprise  you.  THE  BEST  continuous  improvement  companies  have  strong  process  orientation  in  their  commercial  environments  and  back  office  areas.    I  believe  that  you  can  drive  more  growth  and  results  with  the  right  process  orientation  in  core  levers  of  the  business  way  beyond  manufacturing.

Some  Examples  where  I  have  personally  executed  and  been  involved  with  seeing  significant  growth  and  performance  improvement  by  applying  processes  and  metrics  to  these  front  end  levers.

A.  Sales -­‐  Prospecting -­‐  Deal  Management -­‐  Funnel  management -­‐  Time  and  territory  management B.  Marketing -­‐  Demand  Generation  and  ROI -­‐  Pricing -­‐  Market  Strategy  (Segmentation,  Competitive  analysis,  offer  development) -­‐  Online  Marketing

C.  New  product  development -­‐  Product  roadmapping -­‐  Blue  Ocean  Strategy -­‐  Design  (Design  for  six  sigma  and  ROI) -­‐  Beta  Testing -­‐  Commercialization These  are  just  a  few  examples  of  front  end  core  processes  that  dramatically  changed  the  face  of  how  a  company  did  business  and  literally  had  an  effect  that  so  positive  most  are  still  in  use  today. 4.  Financial  model This  might  be  an  overlap  of  #2,  but  I  wanted  to  clear  something  up  that  very  few  people  may  think  of.    The  financial  model  for  a  company  is  an  equation,  and  that  equation  MUST  always  balance  to  the  profit  side,  ie:  budget  or  "market  expectations".  Don't  let  any  of  the  above  fool  you  into  thinking  because  I  do  number  2  I  don't  have  to  worry  about  EBITA  or  OP.  Any  great  company  must  have  a  financial  model  that  is  plugged  into  daily,  weekly  and  

Page 3: Halden Zimmermann: How you know if you're a continuous improvement company

monthly  management  of  the  business  and  the  managers  of  the  business  must  be  held  to  balance  that  model  each  and  every  day.    The  financial  model  must  have  non  dilutive  growth  as  a  key  priority  in  the  model  and  should  always  position  itself  to  outgrow  inflation  and  the  market  COMBINED. 5.  Right  sense  of  urgency

This  is  the  last  one  I  am  going  to  mention,  I  wanted  to  see  what  others  thought  of  it.  The  right  sense  of  urgency  is  something  that  I  learned  from  a  professor  at  Harvard  (Prof.  Kotter)  that  is  fantastic.  This  is  a  cultural  mindset  that  is  not  measured,  it  is  set  by  the  leaders  of  the  organization.  Be  careful  here,  because  there  is  such  a  thing  as  false  sense  of  urgency,  where  everything  is  important  all  the  time..  that  leads  to  fatigue  and  then  nothing  is  important.  The  right  sense  of  urgency  is  an  alignment,  gut  feel  of  what  needs  to  get  done  today,  now,  that  will  move  the  ball  forward  to  WIN  for  the  team  (not  you,  not  the  department,  but  the  company).    The  right  sense  of  urgency  should  be  an  alarm  bell  that  goes  off  in  your  mind  when  you  see  it,  hear  it  or  witness  it...  and  it  should  spring  you  into  action  either  because  you  are  seeing  the  train  come  off  the  tracks  or  because  you  see  an  opportunity  that  would  be  a  game  changer.    I  will  also  lead  you  with  this  last  thought..  the  right  sense  of  urgency  also  should  prioritize  your  day,  week  and  month..  think  about  it..  when  in  the  ER  and  a  crash  victim  in  wheeled  in,  the  bloody  toes  of  the  victim  may  need  attention  but  they  always  start  with  airway,  heart  and  severe  bleeding  with  a  high  sense  of  urgency.