Fit for Business

There are lots of blogs written about topics such as a The 7 habits of the Superperformers, suggesting we can learn from what successful business people and entrepreneurs do to make them successful.

Well, we can. But the (one) secret is very simple.

Most successful business people - and politicians come go that - keep themselves fit. They jog, run, go to the gym or swim on a regular basis.

Of course they are very busy people but they take the time to get fit. No, more than that, they make the time. They schedule it into their busy lives.

Regular exercise obviously makes you fit giving you energy and making you more able to cope with stress.  But it also makes you mentally sharp, capable of better analysis and decision-making.

So, get your trainers on.

Value is not a straightforward concept

Lean Thinking emphasises the concept of value - which in business is the creation of product/service features and attributes that the customer wants or needs AND is willing to pay for. 

The second criterion of that statement is very important. If the customer is not willing to pay for something you are creating or adding to your product/service, then you are wasting your time (and money). Take a few moments and think about, say, your car.  If all the items were separately priced, are there some of the ‘included extras’ that you would choose to exclude? In my case, one item is electric windows. In my youth, all car windows were raised and lowered by mechanically turning a handle. The system worked. It was simple. It has been replaced by a system that is more expensive and is more likely to go wrong, resulting in an expensive repair. So, I would  be quite happy to eschew this feature and save a little money. So, why can’t I?

Well, the car companies work on standardised procedures and economies if scale. If I, and others like me, were able to choose between electric and manual window opening, the manufacturer would have to create a separate production line or workstation for the manual option. This would increase costs, add to their parts costs and make manufacturing a little more complex.

These ‘value decisions’ are thus not simple. Manufacturers are continually balancing customer choice and value with manufacturing cost. You, as a customer, may lose a little choice but you do get a cheaper car.

And, of course, price is factored into our value decisions. 

Ao think about what you produce, what you might change to make it offer 'better value' and how that would impact on tour costs and flexibility.

Efficiency is not enough

Are you doing everything you can to make your organisation efficient? Do you run a very ‘tight’ and ‘lean’ company..

Good! 

But it’s not enough.

Efficiency is the baseline. It is where all organisations should start from. It is almost a ‘given’.

If your competitors are also striving for efficiency, they will be at the same base position.

So, on top of your efficiency, you need to add .... innovation, strategic direction, world-leading customer service ... those things that make a difference to the customer experience. These are often perceived as somewhat more difficult to achieve ... but a singular focus on the needs of the customer is all that is required.

One way to help this is to think not about what the customer wants but about what the customer wants to achieve,  So, if you are selling dog biscuits successfully, you might, on reflection, assess that what the customer really wants to achieve is a healthy, happy dog. The biscuits are simply a means to that end. 

You might then consider what other things you could do (and sell at a profit) to help create healthy, happy dogs.

Your expertise and experience with dog biscuits should be retained (and even enhanced) but you might look for complementary products and services ... or simply a marketing campaign for the biscuits that focuses on their role in creating healthy, happy dogs.

Your biscuit manufacturing should be efficient but the ‘wrapper’ of customer service and appropriate promotion is where additional, customer profits lie.  

What can you do over and above becoming efficient to unlock those additional profits?

Know what you want

I saw someone suggesting the other day that increased private  investment in (private) education would improve its productivity.

 think this is debatable.

As in many other areas, it depends on how you define and measure productivity. We all know that productivity is quite different than production or output: fundamentally it involves the incorporation of resources consumed ... mirroring the judgement we all face daily on assessing 'value' for goods and services we consume.

More investment would certainly raise the numbers of students coming out of private education .... but, as we have just said, that is not a measure of productivity..... nor, importantly, of that very elusive factor 'quality'.  

Take India as an example. Lots of private colleges and universities output thousands of students each year. Yet, there is some doubt about whether many of them are fit for the workplace. They know lots of stuff ... but they can't do very much. Their employability skills are lacking.

Even in admittedly strong areas like engineering, India's education is limited. Their engineering graduates are excellent at solving 'standard' engineering problems .., but when faced with a problem that requires ingenuity and innovation, they lack the problem-solving and creativity skills to take the next step.

So, let's define what we mean by 'productivity' in relation to education, let's determine our aims, objectives and aspirations ... and then try to assess whether more investment from the private sector can help us deliver.

It possibly can .... but if we don't know what we want to happen, we can't bring it about.

The same is true in your business. Unless you know exactly what you are trying to achieve, it is difficult to make it hsappen.