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Saturday, July 24, 2010

Value Centric Work Analysis

How to consistently take up to 80% of the time out of a process

History Counts
Just like the story of the Easter Ham, how many of us have seen behaviors and beliefs that over time had significantly departed from best practices?

Perhaps even practiced a few ourselves?

“I don’t know who discovered water, but I’m pretty sure it wasn’t a fish,” highlights how hard improving your situation is when you are in the middle of it. Why, that is like doing an engine overhaul while inflight! (Another description)

What are some other descriptions you have heard about the difficulties of improving your existing situation?

Value centric work analysis is a fast, efficient way to consistently take 80% of the time out of a process.

What could that mean for your organization?

Flow Analysis
The first thing to do is make a list of every action your organization takes to get a specific result. This is not easy.

Work has a way of going around to many people. It gets batched and stopped. It gets scrutinized and approved. It gets broken and fixed. Work becomes rework on a regular basis.

To get different results, try a different point of view. Instead of observing, imagine you are the thing being created and document every change that way. If you start as a request by email,
  • Step 1 is you are sent,
  • Step 2  you arrive,
  • Step 3 you wait, 
  • Step 4 you are examined, 
  • Step 5 you wait, 
  • Step 6 you get worked on,
  • Step 7 you wait, 
  • Repeat steps 6 and 7 as often as usual,
  • Step 8 you are completed,
  • Step 9 you wait,
  • Step 10 you are sent to the next stop, maybe!
    Repeat to describe what actually happens until you have defined the entire work process.

    Now you’re ready to establish value!

    Value Added
    After you have an accurate work analysis, you need to figure out which steps are adding value. Normally this breaks down when the Sacred Cowboys make a last stand guarding the Sacred Cows, so let me make this easy for you.

    There are three conditions that must be met for an action to be considered valuable.

    First, the thing has to change physically. I have seen whole careers built around moving a piece of paper from this box to that box. That no longer qualifies. Neither does checking or scrutinizing. No improvement, no value.

    Second, you have to get it right the first time. Rework is evil, doesn’t matter why. All operations involved in rework don’t count.

    Finally, the customer has to care. Have you ever looked at how many operations in a process have no direct improvement to what the customer gets? This means bad times for many staff functions…at least as they are currently done.

    So at its simplest, a value centric work analysis is a table of steps in a process with the name of the task, the time it takes, and three boxes to check off whether it provides each of the three conditions defining value.

    Knowledge is Power
    Now you have a view of your operation that is decidedly different from what you have seen before. As you look at the non-value operations, some will be easy to delete. “Why did we ever start doing that?”

    Others may be mystical. “What will happen if we stop doing this?”

    Some may have been defined incorrectly. Change them. No harm, no foul.

    The remaining non-value operations are now sharply defined. The time has come to look at them critically, to eliminate them, to reduce the time required to do them, to think about using higher value replacements.

    The result is taking A LOT of the time out of process, often dramatically reducing the cost of operations, and creating some flex for finding higher value use for resources.

    Your comments?

    Monday, July 19, 2010

    The Commodity/Breakthrough Curve

    How do you energize a commodity situation...take it to a breakthrough?

    Turns out that prior experience has a lot to do with it. This morning I was talking with a client who has an incredible track record for creating new opportunities for common commodity products.

    He and I share an almost mystical belief that eventually customers will ask for anything. Remember when cell phones were free? Who would have thought the most popular phone in history would cost $400...competing against those free phones?
    Commodity occurs when top suppliers supply indistinguishable products. 

    Breaking a commodity logjam can hinge on easier, faster, cheaper, better in some way that is defined by the customer.

    The trick is to make it available, and then get clients to focus on why they want it. 

    The history of fashion, technology, transportation, and other industries all show a continuous curve of  commodity breakthrough development.

    Where have you used the commodity/breakthrough curve?

    Saturday, July 17, 2010

    There are Three Kinds of People – Which One Are You?

    In organizations, on boards, in social and business groups, and other similar entities, there are three kinds of people who are show up as busy and active – the PBR’s of group activities.  Each is vastly different but each has a strong influence on the group achieving success.

    What’s PBR?  Planner…Buyer…Results Getter are the informal titles I use for these folks.

    I can recall a project by a committee of volunteers several years ago - shortly after inception we each received a bound stack of legal-size paper about a ½ inch thick – what an impressive surprise!  Without input, one of the committee members had developed a detailed project plan to meet the project goal of increasing participation in the organizations activities.  The architect was dogged in pursuing updates to this plan and many, many hours of meeting time were spent on updates and reviews of the plan.  In the end, the committee may have had a minor effect on increasing participation but the project had morphed into maintenance of the Plan as the goal of action, instead of a tool for action to increase participation.

    The Planner:  This person is usually quite organized, imposes order and structure to every situation, develops detailed documents for deadlines, dependencies, materials, and other resources – typically in minute detail.  As the project transactions grow, this information is useful as a tool to guide the progress of the project to a timely and complete conclusion.  However it is a tool not an end in itself.  The Planner tends to be so invested in process that the individual loses sight of the actual work to be done.

    In the early days of the new technology explosion (early 2000’s) when my organization was going through the next upgrade of networks and internal systems to connect all locations, we were supported by an excellent network design and support firm.  When a problem developed, one tech would run a variety of diagnostics and poke around in the various computers and servers for a while and then go on-line for some research.  The eventual outcome was his recommendation to replace a piece of equipment or purchase some new equipment to solve the problem.  Acting on the recommendation we would often get up and running again for a while only to have a related problem develop.  {Would this individual keep buying new computers to correct the fixed format problems when revising written document which have hard returns after each line of text…just like the Selectric the typist used to have?}

    The Buyer:  This person is quite knowledgeable about technology, equipment, software, and other aspects of business process tools that are evaluated and purchased.  In a project when the need arises, this individual is indispensable for collecting detailed information such as specs, capabilities, scalability factors, related resource requirement, and delivery timeframes.  This is put up in multiple spreadsheets and a presentation results with recommendation(s) and a purchase decision.  The Buyer is done with the project once the purchase decision has been made, but may return to check off the packing list at delivery time.  Cheerfully humming the tune “no one has been fired for buying IBM”, in their mind the project is done when the BUY decision is made.

    Think for a moment about those projects you worked on or know about that were wonderfully successful.  I can picture my favorite project leader who immediately goes to what outcome is needed for a successful project and worked backwards to structure an approach to get there.  The emphasis is laser beam focused on outcome and how to achieve it on-time and in budget.  The measure of progress is based on what’s now in place that accomplishes the outcome.  The tools and aids to move the project forward are useful and necessary, but are not part of what is measured – outcome is measured and it is the target for all activity.  It is downright impressive when this person sings the single note song of results, results, results.  It reminds me of playing golf – you know the desired result and each stroke must advance you toward that result, even if behind a tree or in the weeds; you overcome the obstacle and advance. 

    The Results Getter:  This person is focused on outcome and results, but is skillful in using project tools and aids (often written on the back on an envelope or napkin) to move the project forward toward the outcome.  The individual expects an update to begin with the achieved results, not a catalog of process steps working toward them.  He or she will do everything possible to obtain needed resources to complete aspects of the project, but will expect results in return.  No worries about micromanaging here – create top quality and timely results the best way you can, typically by drawing on the detailed knowledge of the doer to be creative and innovative in how it is done.  The Results Getter is there at the conclusion of the project congratulating the team for their excellent work.

    People have different perceptions of what a project is and what is expected of them.  As a leader, we must be clear about the outcome expected from a project and match the results with this goal to monitor and evaluate it.  All too often we receive updates that catalog process rather than progress, in part to document activity justifying the worker’s continued employment.  If these are the ‘results’ offered, we have not been clear in what the expected project outcome is and must articulate the project vision and outcome differently until real results are achieved.

    Have you worked with these three before?  Which one are you?

    Our next two Sales Lab Leadership events are The New Management Is Leadership, July 20th  and
    What is Web 2.0 And Why Should You Care? July 21st

    Thursday, July 15, 2010

    Sales Quota

    Sales quotas are often misused when they are administered by people who misunderstand the sales and buying process. Effective sales quotas are part of a performance enhancing environment, not a blunt instrument for non-selling observers to harass the horses.

    Realizing that true sales professionals sell for money and recognition provides a better base for understanding how to use quotas effectively. “Show me what you pay me for and I’ll show you what I’ll do.”
    In our experience, selling is not where performance problems occur, but in ancillary post- and pre-sales activities designed to make accepting the sale easier for others in the organization. Are you selling what buyers want? Are you earning the right? Is your delivery timeframe realistic?

    When sales quotas are misused, they elevate predictive management wishes, non sales desires, and a whole bucket of side issues. This usually means sales projections championed by those developing products or services, without the input of those who might buy, or those who sell it.

    I like quotas that encourage sales professionals to accomplish their weekly activity goals by the 3rd afternoon of the week. They can then go on to invent something better for the next two days. This approach has produced remarkable insights, monster transactions, increased job satisfaction, and new ways to deliver better value at higher margins.

    Sometimes it takes a couple of weeks, but I want everyone on the team to be exceeding their activity goals before each week’s Status Meeting. I want that status meeting to become a competition for most excessive performance and a roundtable review of best methods.

    Our next Two Sales Lab Leadership events are The New Management Is Leadership, July 20th and
    What is Web 2.0 And Why Should You Care? July 21st

    Tuesday, July 13, 2010

    Organizing Collaboration

    Today was the first meeting of the Social Media Engagement Forum of the Mount Vernon-Lee Chamber of Commerce. It was a conversation about the application of Social Media in marketing and advertising, a conversation that will continue in the months ahead.

    The group was small and diverse; we had participants from business, military, and education sectors. Not everyone was an active user of Social Media, but most had at least “stuck their toe in.” Highlights included a discussion of the use of Facebook as a tool of public information and using Twitter on a website. We heard success stories about the use of web-based promotions and using Social Media interaction to answer inquiries.

    Information and “tips” were freely exchanged and it was evident that there were a lot more stories to tell from those in the room. There will be another forum next month and we will keep the conversation going.

    In a broader sense, this was also about learning to collaborate: to work together toward a common goal. The real value of these sessions is in getting to know each participant; the elements that are important to his or her enterprise, and to develop a positive regard that can be used to help all succeed.

    Friday, July 9, 2010

    The Beginning of Wisdom

    “I don’t like Twitter” (Blogger, WordPress, LinkedIn, Facebook, email)

    “Have you ever used it?”


    Starting any new technology can be threatening, especially if you talk yourself into feeling threatened.

    Starting to compete in government markets, or using open source software can make me feel the subject is so vast it’s like trying to watch an IMAX movie from way too close to the screen.

    My solution is to focus on any smaller specific area and do something quick. If it turns into an immediate industry-changing success, well and good. If it doesn’t, we have learned something valuable.

    We become experienced as quickly as we engage. Six blog posts is a mature blog.

    St. Bumpersticker teaches us, “If you think education is expensive, try ignorance.”

    Join us at Limits on Change? The Hull Speed Lesson, Wednesday morning, July 14, Rockville, MD. Free - Register at

    Saturday, July 3, 2010

    Build…Borrow…Buy… An Optimal Growth Strategy

    Mother Nature gives us the cobalt blue skies with white fluffy clouds to enjoy.  She also provides the variety of the four seasons and the consistency of their renewal cycle.  However, Mother Nature hates a vacuum and will seek to fill any occurrence.  In addition, she is constantly in motion – blowing wind, rotating earth, flowing rivers,  orbiting sub-particles in the atom – everything is in motion at all times.

    In business, these same natural laws also apply, although observing them in action may not be as simple as with the wind and rivers.  Once established a business is always in a cycle of motion – it grows; it contracts; it replicates; it splits…it does pretty much anything but stand still.  Business can’t be motionless – except just prior to launch and as a placeholder in the history of failed organizations.

    A popular axiom is a business must always grow.  In recent times, growth has been hard to achieve.  Leaders who have been successful in growing their organizations have had to navigate world competition, a world labor market for knowledge and administrative workers, changing market demands and a contracting domestic & world economy.  Whew!  What a collection of factors to juggle while trying to successfully lead an organization.

    Let’s assume away all the things that can not be changed or influenced in a definitive way by an individual or single organization – this is most of the list in the preceding paragraph.  These factors can not be ignored of course, but the leader can not plan them away either – they are dynamic constants but are external to any plan – so we will assume they are not in play for this discussion.

    How does an organization grow?  Traditionally, growth was by adding new employees and resources when needed, or in advance when positioning to get ahead of the curve.  This requires capital investment and committing to increased labor costs – affecting flexibility of the organization when agility is needed.  During expansionary times, the firm ‘grows into’ meeting the additional production needs.  Thus, the organization was building to create growth.

    When I opened a new regional office, this was the way we developed additional capacity – building it by hiring and training new employees and transferring experienced staff to the office, and purchasing capital equipment to outfit the facility.  We launched the office and very quickly came up to full production.

    As times changed, growth looked more like an accordion – the economy expands; the markets contract; new hiring; rounds of layoffs.  So leaders would borrow people and resources when needed through strategic alliances, joint ventures and use of contract employees and leased equipment. In volatile times this approach provides the flexibility to expand quickly when appropriate and contract quickly when circumstances change.  This flexibility through borrowing people and equipment does carry an extra cost – in most cases, the unit cost to ‘borrow’ is greater than the unit cost to ‘building’ - BUT…when flexing up and down the combined cost of alliances, contract labor and leased equipment will be less expensive overall than the carrying costs of under-productive employees and capital assets during a downturn.

    My approach to launching a new service line included leasing experienced talent and using an external contractor with the required equipment and trained technical staff.  Doing so permitted immediate entry into a new market and mitigated the financial impact of substantial investment before expanded cash flow.  As the volume grew, we developed our own creative staff and obtained the technical equipment and hired technical staff with a comparable reduction of ‘borrowed’ staff and equipment.

    The third leg of this stool is to buy growth through merger and acquisition.  There are many sound examples acquisitions and business combinations that have created an entity which is greater then the sum of its individual parts. The key to successful M&A activity is a vision, which clearly conveys how the combined organization will have superior results compared to the independent organizations operating in a loose confederation of equals, AND detailed comprehensive due diligence.  In practice, the implementation plan (who does what on the first day of the New Organization and the transition thereafter) is a critical element for the success in operating it.

    Mergers and acquisitions are costly ventures – legal, management and staff time to document the existing organizations and to create the new one; focusing only on short-term activities which enhance immediate returns; the unknowns & uncertainties during the planning reduces productivity and cause key staff to investigate other employment opportunities.  That said, a well conceived and executed merger can leap-frog the organizations ahead by as much as a decade what they could accomplish pursuing only a ‘build’ approach.

    As a key staff member in a merger, I experienced first-hand the intricacies of the preparatory stage, merger plan development, and the elaborate due diligence process.  This is an exhaustive and all-encompassing activity, during which we gained incredible knowledge of both our organization as well as the other organization.  With this information at hand, the detailed planning for a combined entity was far more comprehensive and innovative than merely combining the accounting & HR departments and acquiring some additional clients.  The experience gave me a keen understanding of the place for mergers in organizational growth.

    So, how does this affect today’s leaders?  Successful organizations must retain flexibility and agility to meet the challenges of doing business in the existing world economy and world markets (we can no longer focus solely on the domestic market).  Leaders will judiciously use a combination of each of the three elements of growth … build – borrow – buy … to optimize  the size and capacity of the organization to meet the market demands and satisfy client needs.  Tending to the core products and services (always with an eye to improvement & production efficiency) is a given, but seeking to identify new or different client needs and develop effective ways to meet them should always be on the radar screen.  This final element of what is needed is really a primary focus of the successful leader, trusting the managerial staff for delivery of the core products and services.  And one of the more important tools at hand is what combination of the B-B-B will yield superior results satisfying the evolving needs of current and future clients and customers.   What a great time to be in the leader’s seat!

    Do you agree?  What’s been your experience with managing growth in these economic times?