Category Archives: Making Money

The Big Lollapalooza: Exposed

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Lollapalooza: an extraordinary or unusual thing, person, or  event;
an exceptional example or instance.

When was the last time you experienced a lollapalooza? Well, these days it seems that Lean and Six Sigma are the big lollapaloozas, although Lean and Six Sigma are nothing more than common sense approaches for efficiency. And getting work done efficiently is never an exception to how organizations are (or should be) practicing. Along with effectiveness (doing the right job), efficiency is essential to ensuring productivity.

Efficiency has a long history, starting with scientific management in 1899 with Frederick Taylor’s industrial experiments to Edwards Deming’s Total Quality Movement (TQM) and influence on the Japanese following World War II, to Peter Drucker’s management philosophy in the 1980s and Concept of the Corporation, and, of course, many other influencers in between. Their goal was to enable individuals and organizations to do their best for the least possible cost and maximum gain. Efficiency can save you and your organization time and money, and sometimes in a big way. Let me give you an example.

Client X (not his real name) had a problem with the way his organization’s decentralized branches were managing and delivering services to their customer. Specifically, management felt that branches were duplicating work both within and between branches. One example I was given was that some branches were calling on each other to invite ‘guest staff’ from one branch to speak at another branch for the purpose of sharing vital information that the recipient branch could incorporate into their own processes. Client X clearly needed help.

The first step to solving Client X’s problem was to convene key staff in one room to create a value stream (flow) map of their processes. For this initial meeting, in person attendance was mandatory. Using sticky notes, staff wrote and illustrated each branch’s process(es). When all the sticky notes were posted on the wall, it was clear that branches were duplicating multiple steps that had no value to delivering customer service. In addition, for one process alone, there were six different methods for getting the job done. From here, staff wrote down the time required to perform each step. Then participants had an opportunity to pinpoint areas where delays and complexities were the greatest. With just a few simple improvements, they were able to eliminate 20 processes out of 40, streamline another 15, and reduce waiting time for their customers by 95%. Not bad for a couple of days’ work in the boardroom!

So did Client X and their staff have a “lollapalooza” moment? Sure, they probably did. My take on this, however, is that through Lean and Six Sigma concepts, efficiency and effectiveness have been re-invented in order to help a worldwide sagging economy. We needed something new, something trendy, so that people and organizations would stop throwing time and money away. If you haven’t jumped on the efficiency and effectiveness bandwagon, you must have money to burn.

 

Remove Complexity to be Productive

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There are many roads to productivity, but the best way I know how to become more productive is by eliminating complexity from personal and business processes. And the way to eliminate complexity is to identify areas in your personal and/or business processes that are costing the most and/or are creating the most customer dissatisfaction in the shortest period of time. Let me give you an example relating to a business process that is also impacting personal process.

I recently worked with a client to assist him with developing better personal practices to enable him to be more productive. The biggest problem he was experiencing was not getting his work done on time. His employer felt that he was taking too long to produce finished product. That said, some tasks he was performing were costing the organization a lot of money in terms of his salary compared to the length of time he was taking to finish the task. And, also, as a result of his taking too long to finish tasks, his customers (bosses and co-workers) were becoming increasingly dissatisfied with his performance. Now it would be easy to say that my client should just use better time management skills and focus on performing these important tasks and the problem would be solved. But it’s not so clear cut.

You see, upon analysis, it was discovered that my client was indeed using good time management skills and working diligently at important tasks, but the tasks themselves were suspect. In one instance, the task required several repetitive steps including review and feedback from others. This back-and-forth prevented my client from completing what otherwise could have been a simple task.

One particular task involving a simple spreadsheet was implemented years ago and it steadily grew in complexity with new rules and new decision makers added along the way. You guessed it. Each time new rules and decision points were added, complexity increased and the amount of work went up. This undermined my client’s productivity while increasing the costs of delivering the completed task. In this instance, instead of adding new and more rules to an existing process, the entire process should have been re-evaluated and simplified. This would have saved time and money as well as customer (and client) angst.

You can see from this example that helping clients become more productive is not necessarily about the clients’ work habits, but it could be related to organizational systems and processes that have become complex over time. To remedy the situation, I suggest conducting a diagnosis to identify the causes of the symptoms (i.e., the “problems”). Then develop an action plan and implement the action items to remove complexity.

In any organization, a modest estimate is that 40 to 60 percent of activities and costs associated with services and processes do not add value to either the services or processes, and do very little to satisfy the customer. By eliminating complexity, an organization can realize large productivity improvements in a just a few short months.

Putting People Back into the Quality Process

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When we focus on business improvement, the easy part is fixing holes in systems and processes to gain quality and efficiency. But the key to making those fixes stick is the people. Enter: positive psychology.

Positive psychology is a psychological theory that looks at the positive side of human behaviour. Where psychopathology categorizes undesirable behaviour, positive psychology builds on character strengths to help optimize organizational productivity.  Positive psychology is especially well suited for use within culturally diverse workforces. Here’s how it works in an organizational setting.

  1. Goals - when a problem is identified, instead of blaming workers for poor performance, invite the workers to embrace the opportunity to participate in creating a new set of objectives and goals to solve the problem. In doing so, the workers improve their skills. For example, instead of pointing out that the workers’ ”inefficiencies and lack of productivity are inhibiting workflow,” the leader says, “Let’s make records management a priority and skill for improvement.”
  2. Feedback – once the problem is identified and the worker is invited to participate in problem solving, the leader needs to provide specific and immediate feedback about the problem. Following from our example above, “inefficiencies in filing methodology are costing the organization $1 million in lost productivity annually” offers a measurable and definable goal for workers using positive psychology. Providing a measure in these terms ensures that workers really hear the message (criticism for poor work, on the other hand, may breed hostility and  more inefficiencies).
  3. Challenge – now that the workers understand why it is important to fix the problem (e.g., loss of $1 million due to inefficiencies), challenge the workers to discover the root cause of the problem. For this step, leaders need to take care to ensure that the strengths and talents of the workers invited to identify the root cause be matched to the level of the challenge. If the challenge outmatches the workers’ skill, then a heightened level of anxiety can occur which is counterproductive to the task at hand.
  4. Coaching – when the root cause is identified, invite the workers to brainstorm and pilot a solution to the problem. The leader does this through coaching and mentoring the workers. Coaching and mentoring are goal-oriented and collaborative processes that encourage building on strengths to implement solutions. Building on strengths can help enhance performance. In our workflow inefficiencies example, the brainstorm solutions provided should focus on the workers’ primary character strengths to increase their self-esteem and participation in solution implementation.
  5. Rewards – in order to ensure that the solutions devised are consistently and reliably implemented, rewards are essential. Rewards should include rituals that the workers develop to help them reduce their anxiety over the new performance levels. For example, teaching the workers to use enthused and compelling self-statements ensures continuing good performance. So instead of negative thinking such as “I can’t do this,” the workers’ self-talk includes: “What a great opportunity for me … I can expand my new learning to other areas … there’s a promotion in my future.”

Using positive psychology to include workers in solving organizational problems can help leaders solve vital productivity issues, improve the organization’s existing skills, and ultimately improve the organization’s bottom line over time. In addition, leaders will realize a happier workforce as a result. And who doesn’t want a happy work environment?

 

Money, Money, Money

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A study in 1972, repeated in 2004, showed that the percentage of very happy Americans stayed virtually unchanged at about 31 percent. This despite the fact that the average income increase was about 50 percent. The findings of this study were also replicated in other countries. But doesn’t money make us happy?

It turns out that when we get more money, we are happier with more money, but only for a short while. Once we adapt to ‘more money,’ our happiness level drops to previous levels because now we need to acquire even more to get back to the ‘high’ level of happiness that we had when we got more money. To sustain our happiness then, we need to keep making more money.

But what about individuals who already have more money than they could possibly spend in several lifetimes? Last week, I listened to a news reporter ask Jimmy Pattison, one of the world’s richest people, if he ever takes a vacation. Pattison’s response was that everyday is a vacation for him. So the question here is why would one of the world’s richest people continue to work so hard? Why not retire?

It turns out that those individuals that succeed at what they do tend to keep doing more of the work that makes them so successful. It is their drive to succeed that keeps them at their jobs, but it is also their creativity that drives them to keep raising the bar. Their success drives them, not the money. In fact, the more one is successful, the greater is the need to continue to be successful in order to sustain an acquired level of happiness that is brought on by success. Money is just a nice side effect of success.

That is why successful people and organizations continue to be even more successful. They work hard to create success for themselves and as a result to increase their profits. I would say that there is a strong possibility that the most successful and profitable organizations in the world also have the happiest employees. The common denominator? Money. So does money make one happy? Yes.

 

Happiness at Work and Play

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In the upcoming issue of Extreme Profits, I write about how happy employees can help a company be successful. The flip side of course is how unhappy employees can drive customers away and create increased costs to the company in terms of employee turnover and hiring expenses.

While research has linked happiness to our genetic makeup, the “nature-nurture” theory certainly has a role here as well. Our culture and upbringing bear some responsibility for our happiness as does our socio-economic status, but if work continues to be a constant source of stress for you, you’re not scoring points with either yourself or your employer.

Leger Marketing surveyed 58 countries in 2011, ranking their happiness based on per capita income and hope about the nation’s economy. The Happiness Barometer for 2011 identifies Fiji as the happiest country overall. Canada comes in as #23 and Afghanistan fares better than the United States. Overall findings show that 53% of the world is happy compared with 13% who say they are unhappy.

So as this year comes to a close, it’s a good opportunity for all of us to take stock of our own happiness index in not only our work, but in our personal lives as well. If you’re unhappy, you need to get happy. Make 2012 your year to improve your happiness.

 

 

 

 

 

Simplicity is Key

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Creative accounting. Insider trading. Financial fraud. Ever wonder why (or how) such corporate problems have become a part of our culture? I think it’s because corporations have lost sight of the importance of maintaining an efficient workplace.

The bigger an organization gets, the bigger and more complicated its systems (and technology), the faster (or maybe slower) their service/product output, and all in the name of providing more, faster, bigger to the client. But more, faster, and bigger promises, products and services do not always result in better.

Our corporate cultures have become entrenched with the need to keep up with the competition, but in doing so, they have lost their innocence and their simplicity. When the focus is only on more, faster and bigger to hurry up and make money, the organization’s efficiency and productivity can suffer. If efficiency and productivity suffer, so do profits.

An organization can keep up or beat the competition by first focusing on the efficiency of its operations. Efficiency enables an organization to be more productive, thereby enabling transparency and accountability to its clients, to its employees and to itself. What this equates to is trust and when clients trust an organization, profits are bound to go up. It’s really about getting down to basics – the simplicity of how we do our work.