Archive for June, 2009

Tragedy of the Commons

Monday, June 22nd, 2009

abound

Are we reaching the breaking point in our environment?  Tragedy of the commons is a phenomenon used by ecologists to describe a dilemma in which multiple individuals acting independently in their own self-interest can ultimately destroy a shared limited resource even when it is clear that it is not in any one’s long term interest for this to happen.

Today I attended a luncheon sponsored by Abound - where some of Portland’s top sustainability community members – including Earl Blumenauer - discussed the challenges of maintaining short-term business viability while also balancing the needs of long-term environmental needs.  I could only think about the tragedy of the commons and maybe an organization like Abound Global provides a space where we can transcend history and work together and not destroy our shared resources.

If you are interested in sustainability and how it may affect your organization I would recommend you reach out and connect to the Abound community.

Lean Forward by Implementing Continuous Improvement Initiatives

Monday, June 22nd, 2009

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In the last year, there are few companies who’ve not had to react in some way to the recent turbulent economic events.  In fact, many still are operating from their heels.  Perhaps your organization is still in a reactionary mode.

At what point do you and your employees realize it’s time to look for different ways of doing the work — and getting back into a proactive stance?  Maybe the time is now to start implementing a Continuous Improvement (CI) initiative to help your people get back on their toes again.

Other than the obvious financial reasons to implement such a program (e.g., cost savings — by doing more with less) there are a few other factors to consider.  1st – awareness will never be higher among your employees for why change is needed.  Today employees are thankful to still have a job; they’re also looking for new ideas and resources to do their jobs more effectively and efficiently.

2nd – the economic crisis is providing the prefect motivation for all parts of the company to work together towards a common goal.

3rd – everyone in the organization is aware of the need to add value to your customer to ensure that the customer continues to do business with your company.   Whatever the reason, based on my experience implementing improvement initiatives (both as a business owner and as a consultant) — there is no better time than right now.

So, where do you start?

Assess – you must start to see how your organization adds value to the customer and where the waste exists.  We’re not used to thinking this way – we do our jobs everyday and don’t always think about the little things that can add up quickly.  Assess which functional areas are most critical at the moment – those that can add the most value to the customer or that are your biggest risks.

Train — provide tools, resources and training to all your employees.  That may simply be accomplished by providing articles and blogs like this.  Or you may choose to utilize outside resources such as consultants or facilitators.  Whichever way you go – your employees will need to gain knowledge that effectively implements changes in your company.

Plan – Next, plan out your CI initiative.  Start with small improvements that will help to get your people up to speed.  If the improvement seems too big to bite off at one time, then break it down into smaller pieces.  Also, start with a smaller group of talented people who come from diverse parts of the business rather than with bigger groups.  In my experience, trying to implement CI programs company-wide is a recipe for disaster.  Once the initial group gains experience and confidence, then expand the size and number of CI teams.

Implement – This is where you try a lot of different things.  Just like anything else – it takes failing to find success.  As someone once told me — fail fast because that means you’re close to success.  Also, be sure to to identify the specific targeted improvement metrics (e.g., 30% reduction/improvement) you would like to get.  If you don’t put a number down, then it’ll be difficult to gauge your success level with the improvement initiative once it’s completed.

Validate – Verify your results.  Did you gain the improvement you expected?  If not, why?  Don’t give up on the work even if you’ve gained some benefit but not your target.   There’s always room for more – so don’t stop until you find the additional corrective measures that get you to your goal.

Standardize – Once you’re satisfied with your improvements, then memorialize them and make them your new standard.  This includes building in systems to verify that all employees are trained on the new standard and that you take the time to spot check each other’s work.  Improvements are difficult means to create new habits, so building systems into your CI program will help new improvements stick over time.  Don’t let the old ways of doing the work creep back into your organization.

The bottom line is this: there is no end point.  CI programs are iterative processes of assessing, training, planning, implementing, validating, standardizing your activities.   Now is the perfect time.  Start making improvements now – you’ll be impressed with how much opportunity exists inside your businesses today.

Who Should Lead Your Continuous Improvement Initiative?

Wednesday, June 17th, 2009

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Having been a CEO implementing a Continuous Improvement initiative within an organization as well as a consultant helping other organizations establish their own CI initiatives – one of the first questions to answer is, “who should be a part of our CI team?”  Unfortunately there are no simple ways to answers this question.   However the following description by Peter Senge in his newest book – The Necessary Revolution best describes the type of leaders to look look for:

“One thing we have learned from working on organizational and systematic change is that the leaders are hard to identify in advance.  Sometimes they are CEO’s or presidents, but often they do not occupy positions of obvious power in a corporate hierarchy.  They are not the flag wavers, campaigning vocally for change, but rather passionate individuals working to transform their organizations from the bottom up.  They are most often open-minded pragmatists, people who care deeply about the future but who are suspicious of quick fixes, emotional nostrums, and superficial answers to complex problems.  They have a hard-earned sense of how their organizations work, tempered by humility concerning what any one person can do alone.  They often do not think of themselves as leaders, but time proves them wrong.”

In my own experience – the best champions where the ones who were the slowest to jump on board – but once they did the impact thay had on our overall progress was incredible.  Perhaps when you are starting to implement your own CI program you can use this as part of your selection criteria. There’s nothing easy about undertaking CI programs but the feeling of achievement when it works is more than worth it.

Behavioral Economics – How to Increase Revenues by 42%

Sunday, June 7th, 2009

After watching this video I’ve been fascinated by Behavioral Economics.  Is it really possible to increase your revenues by 42% by merely changing how you offer your products to your customer?  Watch the segment on the Economist Offer – if you do the math his research showed a 42% increase in revenues by adding a meaningless option to the pricing strategy.   I’d love to hear about your own experiences with this concept.