What I am about to suggest, therefore, may seem like pouring hot oil on to an already blazing fire. I want you to look to the future.
“Ya What?” says Gay, but hear me out. If we don’t look past today, then we won’t be able to profit from the upturn in business when it comes – and it will come. If I could tell you when, I wouldn’t be writing this blog!
Notwithstanding that minor detail, now is the time to plan for the future but what I am suggesting will also help you with today. No matter what your business model is (service, product, process, etc) there are certain tools & techniques that can help now while preparing for the future.
Firstly, create your Value Stream Map(VSM) for your processes/work flow. There are many types that can be used and there is one for your business model. This does three things. It will allow you to see where there is waste in your current set up which can be worked on to reduce your current cost. It will allow you to look to the future and create what would be your ideal state. Now you have a gap between there and here which you can plan to bridge over time. These are standard Lean techniques. However, a new use for VSMs is to use them to future proof your business. You can stress your current and future processes. What if your business grew by 20% or 50% or even 100% in a short space of time as you come out of the recession? Now use your VSM to see how your business will behave and identify critical points where action is needed. As a corollary, this method can be used to see what happens if your business goes the other way.
Next, talk to your customers. Illicit complaints and fix them. A complaint is a customer outcome you can change from negative to positive. Too many businesses look at complaints as a metric you have to drive down. Wrong. Nurture complaints and develop an internal response that is fast and addresses the issues. Use problem solving techniques to enhance this process. Some of the best products on the markets are as a result of improvements achieved from root causing customer complaints.
Now that you are talking, ask your customers about their business, how can you help them, what kind of notice will you get if their business picks up. In these days of Pull, Kanban, JIT and VMI all along the supply chain, you need information quickly if you are to respond. Now is the time to agree & to put in place the necessary signals.
A useful Lean tool that can be used to help manage your business in these times is called Demand Response Profile. What this focuses on is the level of growth you can have before you have to make changes to your organization (again, like above, this works both ways). How much extra business can you absorb before overtime becomes permanent or at what level will you need to add capacity be it process, shifts or people? By identifying these stress points, you can be ready for the upturn and be proactive in terms of your business needs, particularly if there are training needs that take time. It will also allow you to know where action is needed if a downturn occurs. One of the identified reasons why companies don’t trade out of difficulties is slowness to react to changing fortunes.
If you have suppliers, can they turn on the supply if your business grows? What are their critical supply points and does it make sense to plan for another back-up supplier? This is also a good time to negotiate for the future. Try and get your supplier to agree to volume rebates so that you get the benefits when growth occurs (just hope that your customer isn’t on my mailing list). You will be too busy when it happens to go back to negotiate and by then you’ll be over a barrel for supply.
Finally, since you are now in the talking mood, if you are not already, talk to your staff. Get out of your office and walk Gemba. John C. Maxwell (a leadership guru) states that “people don't care how much you know until they know how much you care”. Get out there and walk the talk. Tell them the whole story, warts and all. They will work with you if they feel they are involved and that goes if business is growing or shrinking. Address their needs; don’t leave any elephants in the room. I have a saying (from Toyota) of ”Go See, Ask Why and Show Respect.” If you do all three, then you will have a loyal, energized staff to fight whatever challenges come your way.
Every business needs a strategy and how that strategy is deployed is the subject of another rant. However, in these days of “Trench” business, take the time out to look out in front of you. Let others do the day to day jobs to allow you the time, space and mental energy to start planning for the coming upturn. The boy scouts have the right motto – Be Prepared.
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If you’d like to have a discussion about Lean or Strategy Deployment or mentoring, give me a call on 091 485 676 or 087 242 9433.