Are We Having Fun Yet?

Since our last few posts have covered a number of serious and heavy subjects, we thought this one should be a bit lighter, while still providing some useful information.

As the title suggests, let me ask you two questions.

1. Is your organization having fun and enjoying participating as part of the team?
  2. If not, what can you do to make the culture and the environment more enjoyable for everyone?

If you’re not having fun and enjoying what you’re doing, chances are that your organization isn’t either, and will be less effective, productive, and successful over the long run.  Since you and the team spend most of your waking hours at work, you should enjoy the time that you’re there, otherwise, why bother?

Many articles have been written about this subject, and some have a “formula” to follow in order to improve the organizational culture.  But, when you come right down to it, there are a few things that you can do that will make all the difference.  Oh, and by the way, I’ll be the first to admit that it took me a long time to learn them, and learn them I did, mostly the hard way.

  • Loosen Up

Operations are serious, no doubt, especially when things aren’t going particularly well.  However, rarely, if at all, are the issues or decisions that you are facing, life or death (although at times they may feel that way!).  Yes, there are times to be serious, and there are times when you can lighten up and keep your team loose.  In the long run, this will improve decision making, and the organization as a whole.

  • Have Patience

 Stuff happens in every organization, maybe in some, more than others.  The question is how you deal with it. If you approach the issue/mistake calmly, with a  desire to learn for the future, there is a very good chance that it won’t happen again.  However, if you’re yelling, and/or looking for someone to blame, you’ll create an atmosphere of fear, and the organization will run scared, trying anything to avoid making a mistake, and/or being taken to task or blamed for that mistake.  At the same time, two other things will happen: 1) mistakes will increase because everyone is trying too hard not to make a mistake, and 2) the organization will stop taking “prudent” risks to improve the business because it is afraid of being blamed if something goes wrong.

Note that I’m not suggesting that the organization lower its standards.  Quite the contrary, set high standards, be very clear about them, and make sure the organization lives up to them, which leads to my next point.

Talk with your team about the organization, direction, performance standards and improvement, and what is required to succeed in your market.  People want to know where they stand, and why, and you should be communicating that to them, clearly.  At the same time, ask for their help in resolving issues and improving performance.  Nothing works better than an organization that has active participation and engagement, at all levels, and is moving in the same direction.

By communicating both ways, you’ll find out all sorts of interesting things, including ideas to improve the organization from the people who are actually doing the work.  This will make for a much happier and productive organization over time.

  • Have Fun

Have fun while you’re there.  Organize some fun, inexpensive events that get people involved, and lighten things up.  Doing this consistently will improve participation and engagement, and the overall environment of the organization, and becomes infectious over time.

While these things may not seem difficult, they are a challenge to do, and do consistently.  However, by doing these things, you’ll have a much happier, effective, committed, and participative organization ready to take on anything.  And that’s exactly what you want!

“A business has to be involving, it has to be fun, and it has to exercise your creative instincts.” – Richard Branson

“Find a job you like and you add five days to every week.” –  H. Jackson Brown

“If you don’t do it excellently, don’t do it at all. Because if it’s not excellent, it won’t be profitable or fun, and if you’re not in business for fun or profit, what the hell are you doing there?” – Robert Townsend

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Organizations Need Profitable Growth

There is a saying that “an organization can’t cut its way to profitability“, at least on a sustainable basis.  While this is certainly true over time, many organizations have implemented internal cost reduction programs over the past several years to improve profitability in the face of the poor economic and market conditions.  Although the majority of these programs were probably overdue, and have been effective, many organizations are finding that there is not much more that can be done internally without sacrificing service, efficiency, and quality.

As a result, organizations must now look outward, and improve their profits through profitable revenue growth.  However, this growth must be planned, managed, and controlled in order to make it sustainable over time, and generate the desired results.

One of the more popular, and potentially dangerous, strategies, is growth for growth’s sake, using the tactic of cutting prices, and hoping to “make it up on the volume” to improve profitability.  While there may be some special situations where this tactic may actually work (at least for a period of time), in most instances, the increased revenues will not be enough to offset the lower profit on each sale, reducing overall profitability over time.  In the worst case, some organizations will continue to cut prices, further reducing profits, eventually threatening its survival.

The dangers associated with this strategy include the following:

  • While the lower prices may, in fact, generate more revenue in the short term, this revenue may not be profitable for the organization due to the higher costs, and increased activity required to support it.
  • In many instances, cutting prices will result in an overall decline in market prices, setting the expectation of customers for those lower prices.  Once this happens, it generally takes a long time to get prices back up to reasonable levels.
  • Finally, if the growth occurs too rapidly, and is not profitable, the organization may find itself without the resources or financing required to support the growth, and unable to manage the activity properly.  This will lead to service and quality breakdowns, and the potential for future revenue declines.

Generally, no organization can be successful in the long term with this strategy.

Profitable, and sustainable, growth results from a strategy that is well designed, managed and controlled.  In order to accomplish these objectives, the  organization should ask itself several key questions:

  • Where will the new profitable business come from?
  • Do we know our real costs, and are they competitive?
  • What are the additional costs and resources that will be necessary to support the future growth?
  • What is the real profitability of our current customers, and/or market niches?
  • Who are our most profitable customers, and can we increase our share of their business?
    • Are there more potential customers like them in our market?
  • Can our existing processes and procedures handle the increased activity without a breakdown?
  • What differentiates us in the market, so we are not competing just on price?

The answers to these questions may lead to even more questions, all of which will assist you in defining your profitable growth strategy, the requirements of that growth, and how best to manage and control it over time.

Those organizations that can define and execute a clear strategy for profitable growth, and manage and support it properly, will sustainably improve their profitability.

If you have any questions, or would like to discuss your organization’s specific issues, please give us a call at (727) 637-4666, or email me directly at Don@HuttlinAssociates.com.

“Without continual growth and progress, such words as improvement, achievement, and success have no meaning.” – Benjamin Franklin

“Companies that grow for the sake of growth, or that expand into areas outside their core business strategy, often stumble. On the other hand, companies that build scale for the benefit of their customers and shareholders more often succeed over time.” – Jamie Dimon

“Growth is never by mere chance; it is the result of forces working together.” – James Cash Penney

Are You Taking Care of Your Customers?

As we work with our clients, many of them believe, rightfully so, that their particular organization is unique, and requires a number of complex processes, procedures, and reporting for their operation to work efficiently.  However, while there is nothing wrong with being unique, too many organizations make their operations much more complicated than they need to be.  As a result, the organization gets bogged down in the process, procedures and reporting, and loses its focus on the most important goal of any organization – Taking Care of the Customer, in the most cost efficient way.

Let me give you an example from my sailing days.

Tacking a sailboat is basically a four step process including turning the boat to the new course, releasing the sheet on one side, pulling in the sheet on the other side, and trimming for speed.  All a straight line process to accomplish one goal.  Yet, I have seen this simple process become very complex when there are too many hands involved, and/or too much talking and direction, resulting in a very inefficient process and a bad tack.

If we apply this straight line concept to an organization, there are really only three major steps for the entire customer fulfillment process, regardless of the organization, service or product lines.  These steps include:

  • Receipt of a customer/client order, or request
  • Taking action required by that order or request, which could include:
    • Ordering material
    • Processing that material
    • Performing a service
  • Delivering that product or service, cost effectively

That’s it.  Now I realize that the list is oversimplified, and that there are a myriad of details and actions required for each step, but the question is – Are all of those details and actions required to fulfill the customer’s request as efficiently and effectively as possible?  Probably not.

As you look at your organization, ask yourself some key questions:

  • Do you have processes and reports in place because this is the way it’s always been done, or just in case?
  • Is your organization getting bogged down following the processes and procedures, or filling out reports?
  • Does your customer see value in all of your processes and reports?  Are they willing to pay for them?
  • Can you fulfill their request in a straight line, or have detours grown up over time that are inefficient?

Depending on your answers, you may need to take a hard look at your operation, and update the processes to make them more efficient and effective.

Successful organizations have the following attributes:

  • Processes move in a straight line, with as few steps as possible
  • Processes, procedures, and reports have perceived value for the customer
  • The processes and procedures are cost effective, and efficient
  • The client/customer experience is the best it can be

It all comes down to just two objectives:  A great customer experience at the lowest cost.

It’s all about the customer.  How does your organization compare?

If you have any questions, or would like more information, please give us a call at (727) 637-4666, or email me directly at Don@HuttlinAssociates.com.

“Reduce the layers of management. They put distance between the top of an organization and the customers.” –  Donald Rumsfeld

“Quality in a service or product is not what you put into it. It is what the client or customer gets out of it.”Peter Drucker

“The single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer.” – Peter Drucker

Are You On Course?

Many organizations have just completed their First Quarter, and should be asking themselves several key questions:

  • What Were Our Actual Results?
  • How Do They Compare to Last Year and Our Budget?
  • Did We Make Money?
  • What Was Our Cash Flow?
  • Are We On Course?
  • Are We Making Progress on Our Objectives?

If these questions can’t be answered accurately, your organization may be off course, and drifting.

To determine your position, progress to date, and course, you must have accurate and timely reports including, at a minimum, an Income Statement, Cash Flow Statement, and Balance Sheet.  These reports will provide most of the information necessary to answer these questions, and should be carefully reviewed to identify where your organization is presently, and any changes in conditions that may be affecting your performance and course.

Other, related reports will also be of benefit, including Sales by Customer, Productivity Measures, and Accounts Receivable and Inventory aging, among others.  The key is to get as much detail as possible to identify significant variances from either the prior year, or budget, and the root cause(s) of the variation so that appropriate action can be taken to get back on course.  At the same time, these reports will also help to identify trends, and potential issues that may require action in the future.

Finally, assuming that specific objectives have been set for the year, the progress on each one should be reviewed, in detail, to insure that determine if you are on course.

Successful organizations also prepare forecasts of their results for the next quarter.  This will help identify potential operating and cash flow issues, in advance, so timely action can be taken, if necessary, to keep that organization on course, and under control.

The bottom line is that organizations must have accurate, timely information and a regular review process in place, to properly manage and control operations, identify position, progress, and course deviations that may require action, as needed, to keep the organization sailing toward its destination.

“Keep your hand on the helm.” – Matthew Goldman

Sailing requires the management of all the systems on the boat, plus all the controls on the boat, while assessing the weather and navigation. It’s planning everything to a fine level of detail and making the required adjustments all at the same time things are changing” – Unknown

 

Leadership Principles – Volume 3

In this, the final post of our Leadership series, we look at the last three of George Marshall‘s Nine Principles, including:

  • Focusing on the Big Picture: The Principle of Vision
  • Laying the Groundwork: The Principle of Preparation
  • Sharing Knowledge:  The Principle of Learning and Teaching

We’ll also distill all of the Principles and postings down to a simple summary of what it all means.

First, let’s review the last three, and how they can apply to your organization.  While these particular principles apply to the leader, they also have a significant impact on the entire organization and how it operates.

Focusing on the Big Picture: the Principle of Vision
Every organization must have a vision that defines its direction and objectives for the future.  Unfortunately, many small and medium size organizations (and some large ones, as well), do not have a vision, or have a vision that has not been shared.  As a result, these organizations tend to swing from one direction to another over time, with no alignment of performance or goals, and their leaders tend to apply the management solution du jour to try to identify where it is ultimately going.

Effective leaders first establish a vision, and communicate it, clearly, to the entire organization.  This allows for  identification of those areas/actions that the organization must focus on, and alignment of the activities and objectives required to achieve that vision.

Leaders must also identify the members of the organization that either choose not to support the vision, or that can’t or won’t see the big picture, and move them out quickly.  In addition, trivial activities, that don’t move the organization in the right direction, should be avoided so as not to get bogged down, or distracted.

Laying the Groundwork: The Principle of Preparation
As organizations begin to make significant progress toward the vision, some leaders may get complacent and put the required activities on auto pilot.  As a result, they are surprised when events or issues occur that take them off course, and/or threaten their future. The key is to prepare for these potential events.

First, there is no such thing as an organization just staying in place.  If it is not moving forward, it is actually moving backward.  The leader and organization must constantly review their operations to identify for new opportunities for growth and improvement, and worst case scenarios.  This ongoing review will allow the organization to prepare and plan for the potential future, and stay on course, regardless of event.

Sharing Knowledge:  the Principle of Learning and Teaching
As noted above, organizations cannot stand still, and must constantly evolve, and move forward through learning and teaching.  This is especially true in today’s environment, where conditions and technology are changing so quickly, that it is critical to understand and stay ahead of those changes.  Without this learning and teaching, organizations continue to repeat the errors of the past.

Effective leaders learn constantly and share their learning, expertise and vision with their organizations on a regular basis.  In fact, Jeffrey Immelt, the Chairman and CEO of General Electric, states that one of a “leaders primary role, is to teach the organization. People have to feel that you are willing to share what you’ve learned, and what the organization is doing, in terms that are understood by all.”

One tool to accomplish this is for the leader to ask their organizations from time to time, “What do you think we should do?” to resolve a particular issue.  This helps the leader connect with, share, and teach their organizations to think constantly about different ways to solve problems and issues, and exploit new opportunities for the future.

What Does This All Mean?
If we summarize the Nine Principles, and related postings over the past few weeks, we can simply say that:

True leaders have the values and courage required to establish, and communicate, the vision and direction of the organization.  They establish open cultures that encourage communication and debate, live the values, focus and align activities around the big picture, avoid trivia, and constantly learn and teach the organization to think, prepare for, and identify opportunities and issues. Their organizations are always moving toward the vision, constantly improving, and achieving long-term success.

“A leader is one who knows the way, goes the way, and shows the way.” – John Maxwell

“The very essence of leadership is that you have to have a vision.  It’s got to be a vision you articulate clearly and forcefully on every occasion.  You can’t blow an uncertain trumpet.” – Reverend Theodore Hesburgh

“A true leader has the confidence to stand alone, the courage to make tough decisions, and the compassion to listen to the needs of others.  He does not set out to be a leader, but becomes one by the equality of his actions and the integrity of his intent.”Douglas MacArthur

“Leadership and learning are indispensable to each other.” John F. Kennedy