Being nice does not mean being a doormat

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I’m not aggressive and I have to get it done. I’m a nice guy, but while I tend to see the best in other people, I know I also get walked on by vendors, customers and sometimes even employees. How do I find the balance?

THOUGHTS OF THE DAY: Think about what makes you call yourself a “nice guy.” Hone skills that are synonymous with leadership. Make sure you’re clear about where you want to go with the company. Make asking for input a sign of strength, not weakness.

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We Just Can’t Wing It Anymore

Right now people have a “wing it” attitude. If there’s a problem, people jump to help, which is both good and bad, but some people say it feels like there’s a lack of clarity, who does what, no agreement on how things get done, and no clear chain of command. There seems to be inadequate communication, and a lack of responsibility or accountability. We need more structure in operations. Help!

Thoughts of the Day: Operations is the guts of the business. Putting process, job descriptions, and accountabilities in place can help make things smoother. Figure out who heads up operations, preferably not the owner. Build a team to work on the best way to handle routine workload as well as exceptions. Make it clear the routine clear enough so a new person could easily learn most of what they need to know from a chart and back up descriptions.

Operations is where everything comes together. Orders from customers have to get delivered on time, in budget. Lack of planning often creates a lot of problems in operations. Things run smoother when everyone in the company takes the time to talk about workflow, defining what’s routine and what needs special handling. Departments need to layout/diagram how work flows through their department, and if they work on a variety of things, which typically happens, ask them to make multiple diagrams.

Look for interruptions and exceptions in the work flow drawing. Don’t try to define everything, you can’t solve all the company’s problems overnight, and you shouldn’t try to. Instead indicate where someone goes to get clarification if things don’t go according to plan.

Ask everyone in operations to submit a list of the things they do daily, weekly, monthly. If 2 people do the same job, ask both to submit their lists. You’d be surprised how many differences there may be as one person remembers one thing, another something else.

Ask managers to review the lists and then compile the lists into job descriptions. You can also look online for standard job descriptions and salary ranges to help move the process along.

Make sure that each job description includes a list of accountabilities. These are the standards to which people are expected to deliver. What is most important in your organization? Is it speed, accuracy, price cuts, whatever the customer needs?

You need to clarify your expectations, and document them. Ensure employee responsibility by distributing the job expectations and discussing. If there are grey areas, try your best to clear them up and make your expectations concrete.

Assign someone to be in charge of operations. It’s best if this is a person is available throughout the day to field questions, deal with obstacles, and generally oversee and assist people. Make it clear to everyone that this person is in charge and has your full support.

If you’re like most business owners, when there’s a problem in operations you stand ready to step in and head it off, or deal directly with the person who caused the problem. Build a chain of command and support them in their decisions, resist temptation to do it all yourself.

Start with the manager in charge, making sure they’re aware there’s a problem. Give them time to do some homework, if necessary, and ask for a report back to you. Use your time together to listen, provide direction and teach. Asking them to solve the problem allows your employees to take responsibility and prevent the issue from recurring.

If there is a recurring problem, form a work group. Ask the group to tackle the problem and identify a more permanent solution. Resist the temptation to get involved directly, unless they ask for your input. The goal is to build a team that learns to solve problems without your involvement.

Give everyone the goal of having a well documented, error free operation. Each time a problem surfaces, treat it as an opportunity to strengthen your processes by fixing the hole that led to the occurrence. Check that instructions on how to do things are clearly written and shared with new employees. Ask new employees to make notes anytime procedures are unclear, and update the procedures for the next person. Several rounds of teaching people what’s expected, and recognizing the improvement should lead to a near-error free, well documented operation!

Looking for a good book? Operations Management: the Art & Science of Making Things Happen, by James T.H. Cooke

Want to print this article? We Can’t Just Wing it Anymore

Andi Gray is president of Strategy Leaders Inc., https://www.strategyleaders.com, a business consulting firm that specializes in helping small to mid-size, privately held businesses achieve doubled revenues and tripled profits in repetitive growth cycles. Interested in learning how Strategy Leaders can help your business? Call now for a free consultation and diagnostic process: 877-238-3535.
Business owners regularly turn to Ask Andi and Strategy Leaders for advice on how to grow profitable, successful companies. They find what they need time after time. Ask Andi is also published weekly in the Westchester and Fairfield County Business Journals and HV Biz. Written by Strategy Leaders President, Andi Gray, the Ask Andi column is a rich source of advice for owners of established, privately held businesses.
If you are a business owner and you have a question or would like to discuss some aspect of your business, call 1.877.238.3535 or send an email to AskAndi@StrategyLeaders.com.
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When Things are Quiet, Focus

I had told my operations manager to gear up production to match sales projections. Except now sales are coming in slower than expected.  I don’t want to lose profits keeping operations over-capacity while I wait for sales to catch up. But it can be expensive to turn down production only to have to gear it back up later; any suggestions?

Thoughts of the Day: Ask a series of questions to get a handle on where to focus in operations while things are quiet. Proactively take advantage of the slow time. Protect the margin, so that you don’t dig a deeper hole.

 

Ask sales for an adjusted forecast, by product. Ask them to look through orders and proposals for indicators of which products might be selling, and which might not. Ask if there are any big proposals outstanding that could require production to go from zero to full throttle, with little or no warning.

 

Figure out where to focus until sales rebounds by working your way through a checklist of questions:

  • What’s the status of customer back orders and continuous needs? What goods are consistently ordered later in the year? If we produce those goods now can we safely and cost effectively store them until they’re needed?
  • What about equipment and people sitting idle? Can we change the flow of orders through the shop in order to catch up on items that are backlogged? Is it cost effective to re-tool a machine for short term use? Can we switch people around?
  • What’s inventory on order look like? Can we cancel or delay delivery on goods? Can we sell goods in transit to someone else and divert the inventory before it’s delivered?
  • Is there inventory that’s about to become obsolete? Should we write it off now? Can we find a way to sell obsolete finished goods at a discount? Should we have a sale of raw inventory?
  • Do we need additional financing for inventory that will sit longer in raw, unfinished or finished goods? Should we ask finance to term out the inventory credit line, to give us more time to pay down the expense? Will vendors give us more time to pay for inventory that isn’t moving?
  • Which people need training? Where do we have only one person able to do a job? Who is the trained backup for people who are expected to leave or be promoted this year?
  • Which people had higher than normal error rates last year? Do they need more practice to improve results? Or do they need to be asked to leave the company now that things have slowed down?
  • What equipment needs repair? Can we take the equipment off line to do overhauls? What about taking aging machines completely out of production?
  • How about moving up installation of new equipment? What equipment installations will cause the most production disruptions later in the year? What’s our confidence that we’ll need that equipment later in the year? Is it more cost effective to install now and be ready to gear up later, or to wait to see how sales pan out?
  • What can we do to manage production hours? Why not ask people to take vacations now, while things are slow? Is it time to slow down the work week by 5 hours, or go from a 5-day to a 4-day work week? Anyone working overtime who should be cut back to straight time, only?

As you work your way through this list of questions, keep your eye on the Cost of Goods Sold Margin for the current quarter, as well as estimates for the full year. Get finance to run projections under differing conditions. Anything that can be done to lower the margin now will help to buy the company time to wait out the slow sales.

 

Looking for a good book? The McGraw Hill 36-Hour Course: Operations Management, by Linda Brennan.

PDF Version: 3.25.13 – When things get quiet, focus

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Learn to Delegate in order to Grow

My wife is just learning to accept that there are 4 people doing her job. She runs the company. It’s difficult for her to step back and allow others to do what they have to do. What advice can I give her?

Thoughts of the Day: Delegation is essential. Entrepreneurs struggle to overcome their basic instincts of pitching in. Generally people are most highly engaged when they are challenged. Giving up control yields significant rewards for the owner

Think of the business owner as a juggler. Each day she goes around keeping balls in the air. Building a team of jugglers is key. The group can handle a workload substantially greater than what the owner can juggle alone.

Most business owners are characterized by the entrepreneurial mentality of, “I’m on it, I’ll make it happen.” They step into situations to get things done, to help out, to rescue people who are in trouble, to make things come out right. Unfortunately, that behavior can get in the way of allowing other people to learn how to take on their own juggling load.

It’s better if the owner steps back, lets people try, and teaches them how to recover when they make mistakes. When people ask for help, instead of providing direct answers, this owner needs to ask:

  • What do you think you should do next?
  • What are your options?
  • If you try that, what do you think will happen, and is that what you want to have happen?
  • How did you get here, what did you learn that you can apply the next time?

Think of decisions and actions as the balls being juggled. When someone tries to throw a decision the owner’s way, throw it back. Let the original juggler decide, take action and learn.

People down line in the organization can be disruptive. They see the owner as the person in charge, and want contact with the source of power – the ultimate juggler. They throw balls into play, to the owner, past the juggler it should go to, who may lose momentum and focus watching the ball go by

Redirect down line players to the people they report to. Follow through to be sure they learn how to work with their direct managers. Check that mangers are doing a good job working with their direct reports.

The owner has to practice distance – being aware without being involved. Find out how much each direct report can handle, and how much each of their direct reports can handle. Watch how all jugglers perform, without pitching in pick up the load. Educate, train and coach players so they build their skills.

Some owners shy away from delegating, fearing that their staff will get overwhelmed or resist the additional workload. In fact, most employees today say they don’t have enough decision making authority. They are not allowed to contribute as much as they could. And they are looking for greater opportunity to participate and take on additional responsibility.

High levels of engagement happen when people are working to solve meaningful problems. Show people how their tasks fit into the whole. Give people purpose by helping them see the importance of what they are doing.

When new tasks are in play, plan additional time to complete. Allow for errors. Focus on training people to try, recover, learn and build capacity.

When people get overwhelmed, reduce the number of balls they’re juggling. Help them to get their stability back. Offload assignments to an interim player. Build confidence by letting people master the load they’re juggling before throwing new tasks into the mix.

Through delegation, the organization builds momentum and capacity to perform. The owner is freed up to work more on the business, not so much in it. There’s time to observe how everyone is performing. There’s time to get away from the business to recharge. There’s time to plan what’s next.

Looking for a good book? Turn the Ship Around! How to Create Leadership at Every Level, by David Marquet.

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Gearing Up for Increased Sales

We couldn’t complete all of our projects in time to invoice the customers last month. If larger projects come in, we don’t have the bandwidth to handle a big increase. We need to be able to say, “Bring it on!”

Thoughts of the day: Start with tracking and forecasting. Map out processes and look for inefficiencies. Build a stable of supporters. Identify shortcuts. Check on constraints backwards and forwards. Focus on the most profitable clients first. Gear up now, so that your company can grow and profit as your sales and marketing programs kick in.

How well can you see the peaks and valleys, so you can plan for them? Get sales into a routine of meeting weekly with your operations people, to talk about what’s coming. Challenge sales to increase their accuracy at forecasting what’s coming in, when. If they need help with that – get it for them. You’ll save money on the back end with fewer emergencies and last minute requests.

Ask your operations staff to work with you on a process mapping exercise. Ask critical questions, such as, “Do I have everyone doing what they’re best at?” “Where does time get wasted?” “What are the hold ups?”

Assess the productivity level of your shop. What is it’s capacity when it’s going at full tilt. A production operation should generally run at 85% capacity, so that it has the ability to handle break downs, retooling, and interruptions. If your shop is above 85% capacity, start hiring and getting new equipment in. If you’re cash constrained, hire part timers at entry level and apply for government funds to train them. Ask equipment vendors to help with leases and other financing terms.

Look for products that are “interrupters” – limited volume, big effort to switch in / switch out, lot of need to warehouse expensive inventory, not a lot of margin. Farm them out to another company to make under a private label agreement. Or, if you’re a service company, cut a deal with a sub contractor to provide the work under your brand.

There can be constraints to producing faster that don’t come directly from day-to-day operations. Whether it’s lack of the right material, or inability to deliver, having a geared up operations force with nowhere to go can get frustrating. Make sure minimum stocking levels are correct. Approach suppliers with long order cycles and ask to work with them to shorten the timeline. Identify alternate delivery methods, so that nothing gets held up on the back end.

Think about where to go when the work does come in fast and furious. Plan for it ahead of time by building overflow resources. Interview and qualify contractors who have the right equipment, understand your level of quality, and are willing to sign agreements that they won’t compete with your company and won’t steal your clients.

Consider asking other departments to pitch in when it gets busy. Ask overhead personnel to rotate into operations periodically. It’s good for them to understand what the company does to get products or services out the door. Put them into support positions where they can free up someone in operations to do more.

When you have to make choices about what work gets done first, go back to sales. Together, prioritize the most profitable clients with the greatest growth potential. Stop work on those with past due invoices, until they pay up. First serve those clients who can best help you increase your company’s revenue and profits. Then work on the ones who work with you and pay a reasonable fee for what they need from you. Weed out the bottom 5%, that are the least profitable, least appreciative, hardest to collect from.

Just because you’ve always done things the same way, doesn’t make it right. Whether it’s you, or an outside firm doing the work for you, be open to changing and getting more efficient. Have someone in the company assigned to researching what are the latest innovations that your company could take advantage of.

Looking for a good book? Practical goal programming, by Dylan Jones and Mehrdad Tamiz.

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