Business Systems and Processes.

The Systems Thinker Blog

The UPSIDE of Having Lousy Business Systems and Processes!

Ron Carroll

I confess, your company does not really need to have great business systems and processes. The truth is, most organizations don’t—and they get by (for a while). Some owners and managers are believers but don’t seem to get around to it. Still, others find the whole topic of business systems boring just to think about. (It pains me.)

Upside DownSo, today I’ve decided to write about the UPSIDE of holding onto your rudimentary, undocumented, half-baked, ever-changing, mistake-ridden, inefficient, frustrating, profit-stealing, seat-of-the-pants business systems and processes. You know… the ones that are sputtering along every day just keeping your company out of the boneyard, or at best, preventing you from becoming remarkably prosperous. Yeah, those are the business systems I’m talkin’ about!

Reasons to Celebrate

Well, cheer up! I now present you with twelve compelling reasons to celebrate the UPSIDE of having low-grade business systems and processes.

  1. The UPSIDE of not squeezing the maximum profit out of your business is that you will have fewer taxes to pay.
  2. The UPSIDE of not meeting customer expectations is more opportunities to get to know them up-close and personal.
  3. The UPSIDE of inefficiency and low productivity is that you will need more employees to get the work done, thus adding jobs to the economy.
  4. The UPSIDE of owning a business totally dependent on YOU is that you feel needed, irreplaceable, busy, and important.
  5. The UPSIDE of having chronic customer or employee frustration is that they will eventually leave you alone and go somewhere else.
  6. The UPSIDE of having rudimentary business systems invented by workers on-the-fly is that you don’t need to spend much time and money on training.
  7. The UPSIDE of ineffective marketing and sales systems is that you don’t have to deal with so many demanding new customers.
  8. The UPSIDE of having higher operational costs than necessary is that vendors and employees get more of your money, and you will have done your patriotic duty to spread the wealth.
  9. The UPSIDE of excessive mistakes, defects, returns, and repairs is that workers get more practice doing the task, and we all know that practice makes perfect. Upside Bonus: you also have more “seconds” to sell at the always popular discounted prices.
  10. The UPSIDE of not focusing on business and process improvement is that you are spared the brutal facts about what is wrong with your business and holding you back.
  11. The UPSIDE of crisis management is that there is never a dull moment.
  12. The double UPSIDE of not having written policies and procedures is that you don’t get bogged down writing policies and procedures. And you avoid the taskmaster of accountability.

Are You Upside Down?

It turns out, there are so many UPSIDES to having second-rate business systems and processes, I, myself, could be tempted to go back to the old ways.

On the other hand, I’m a sucker for doing things right. I admit it; I like happy customers and employees, making money, and creating a business I can one-day have someone else run.  But that’s just me. I’m probably a little UPSIDE DOWN.

How about you?

Kaizen: Ten Ways to Achieve Continuous Improvement!

Ron Carroll

After World War II, business leaders in Japan developed a strategy to become more competitive and profitable. Since then, “Kaizen” (change for the better) is widely practiced in businesses around the world. It is commonly referred to as “Continuous Improvement.”

Kaizen is a deeply held belief that everyday managers and staff can turn problems into opportunities, and find ways to become better for customers, employees, vendors, and stakeholders. It is a compelling desire to achieve operational excellence.

“Traditional Western philosophy may be summarized as, ‘if it ain’t broke, don’t fix it.’ The Kaizen philosophy is to ‘do it better, make it better, and improve it even if it isn’t broken, because if we don’t, we can’t compete with those who do'” (Steve Hudgik, Graphics Products, Inc.).

Continuous Improvement—Kaizen—is an idea whose time has come for the small to midsize-business community!

Kaizen Continuous Improvement

So, What Exactly Is Kaizen?

Kaizen is the ongoing, systematic, incremental improvement in the way things are done. It is a relentless attempt to eliminate the unnecessary activities, delay, waste, and variation of business processes that add cost without adding value. Kaizen results in improved lead-time, efficiency, quality, productivity, and customer loyalty.

“The goals of continuous improvement are simple: 1) make things easier 2) better 3) faster and 4) cheaper” (Shigeo Shingo, pioneer of Lean Thinking). It is the new “best solution”—from the customer’s point of view (five customer types).

Watch Honda’s 30 second ad that captures the spirit of Kaizen


Kaizen is a mindset and practice that encourage reflection, teamwork, standardization, mastery of the process, experimentation to find better ways, comparison to baseline accomplishments, incremental and ever-evolving change, and the ongoing improvement of results. It asks the simple question, “How can I do this better?” Kaizen is the everyday quest for perfection!

Masaaki lmai, father of Continuous Improvement, teaches, “Kaizen means ongoing improvement involving everybody, and without spending much money. You can’t do Kaizen just once or twice and expect immediate results. You have to be in it for the long haul.”

Many larger companies have adopted one or more formal methodologies to achieve Continuous Improvement” (e.g., Six Sigma, Lean Thinking, or the Theory of Constraints). However, these powerful strategies are rarely considered by small business owners—a fact we hope to change!

Things Can Always Be Better

Daily improvement applies to every area of your business—a shorter lead-time attracts more customers; modified words on a web page induce more visitors to buy; bottled water in the reception area pleases guests; an improved business form or application reduces errors; a more compelling radio ad boosts sales leads, and so forth. There are hundreds or even thousands of possibilities to improve any organization.

Below are 10 ways to help the philosophy of Kaizen—Continuous Improvement—take hold in your company.

  1. Start with Yourself – Many entrepreneurs are so busy “sawing” they have little time to step back, read, ponder, analyze, plan, and essentially “sharpen the saw.” Get connected with your numbers (leading and lagging indicators), and with customer, employee, and vendor feedback. Read skill-based business books and articles. Spend time in the Zone working on your business (Michael Gerber). Seek ways to improve your own personal performance, and encourage those around you to do the same. Your company—people, products, and processes—will improve at the rate you improve. Lead by example!
  2. Involve Everyone – Kaizen is a strategy that involves every employee, from management to the cleaning crew. Hold business improvement workshops at the company, department or team level—perhaps at the location of the business system you are attempting to improve. Challenge employees to routinely submit suggestions for positive change. “In Japanese companies, such as Toyota and Canon, a total of 60 to 70 suggestions per employee per year are written down, shared and implemented” (Steve Hudgik).
  3. Challenge the Status Quo – Throw out all your old fixed ideas on how to do things. Replace “sacred cows,” personal opinions, and “it’s the way we’ve always done it” with performance facts and data. Numbers are the language of improvement. Avoid the emotional traps of blaming people or making excuses that prevent you from discovering the real problem. Once you have established the new best-way of doing something, stick with it until a better way is found. When confronting old ideas and traditions, apply the Rules of Engagement.
  4. Get Specific – The dollars—made or lost—are in the details of your business systems and processes. Drill down. Use a 5-Whys Analysis and keep asking “why” until you get to the root cause of the problem. Improve specific steps or components in your business systems and processes; there is no other way! Get defects to less than 1%. Cut lead-time in half. Do little things to WOW customers or employees. Pennies earned from small improvements add up fast.
  5. Keep It Simple and Inexpensive – Ideas for incremental improvements that bubble up from workers are usually easier to implement and less expensive. Like our friend MacGyver, apply creativity and craftiness before cash. Follow the 80-20 Rule; do the twenty-percent of things that get you eighty-percent of improvement results. And do it NOW! Don’t wait until you can achieve perfection.
  6. Focus on the Right Things – Improve the core business systems that enable you to find and keep customers, and earn more money. Find ways to provide customers greater value and a better buying experience. Zero in on removing the obstacles, bottlenecks, and weak links in your business processes that slow lead-time, order completion, and collection of cash. Fast throughput of products and services creates happier customers and more profit. Remember: quality plus speed equals low cost. Put emphasis on enhancing business systems that drive your Balanced Scorecard goals, or that improve a line-item number on your financial statement.
  7. Provide Training – Kaizen involves setting performance standards for your business systems and processes and then striving to elevate those standards. Continuous Improvement requires ongoing development of your most important asset—PEOPLE! Tom Peters, business-management author, teaches, “If your company is doing well, double your training budget; if your company is not doing well, quadruple it!” As process changes are made, face any resistance by employees head-on—Listen-Thank-Consider-Decide.
  8. Look for Breakthroughs – Up to this point, we have focused on small incremental changes. However, Kaizen will sometimes produce breakthrough improvements—a moment to celebrate! What’s a breakthrough? Chet Holmes, sales and marketing guru, says, “Let me explain a breakthrough. It’s when you find a method [system] of doing something that dramatically accelerates your ability to accomplish your goals (“The Ultimate Sales Machine”).
  9. Never Stop Improving – Halt the process immediately to fix quality or customer-related problems. Don’t let problems accumulate for later handling. Reflect daily (in the Zone) on your opportunities for improvement and innovation. Make business improvement workshops a weekly habit. Implement a suggestion-box system that calls for employees to submit so many improvement ideas per month or year. And be sure to compensate people appropriately for implemented solutions. Just one improvement a day is 260 improvements a year!
  10. Get Box Theory™ Products – Forgive me if this seems a bit like a sales pitch. I seriously believe that applying the Box Theory™ Way—and software tool—is the most important thing you can do to get Continuous Improvement working in your company. It is a one-of-a-kind product based upon decades of proven principles—not too hard, not too basic, but just right for the owner of a small to midsize business.

Continuous Improvement Forever

In Japan, Kaizen is a system of improvement that not only includes business but every aspect of personal life. Like Systems Thinking, it becomes second nature.

Continuous Improvement of people, products, and processes should be the endless quest of entrepreneurs, business owners, and managers. Wouldn’t you agree?

In short, Continuous Improvement of common tasks produces an uncommon organization! Now, what improvement could you make today?

Lean Six Sigma: 3 Business Process Errors That Drive Away Customers!

Ron Carroll

While attending a defensive driving class many years ago (don’t ask why), the instructor mentioned that the typical motorist breaks the law every three minutes. Surprised? As you become a Systems Thinker, you won’t be. Here’s why.

Our daily lives are filled with unintentional mistakes, and your business is no exception. Each mistake or error robs your company of the money that could be used to hire new people, increases wages, buy needed equipment or give larger dividends to owners and stakeholders. You probably don’t’ see most of this hard-earned cash disappearing into a black hole.

Money Black Hole

Keep It Simple with Lean Six Sigma

In any business, there are hundreds, perhaps thousands of ways for mistakes to happen. However, from Lean Six Sigma, you’ll be happy to know that you only need to focus on preventing or eliminating three bad boys from your business operations.

  1. Delays – Delay is the idle time between steps of a business process—the waiting time. Typically, the actual time required to produce a product or deliver a service is 5% of the total elapsed time (George Stalk, “Competing Against Time”).For example, it only takes about three minutes to print your photos at a store that offers a one-hour photo service. Likewise, a commercial printer may say your job will be ready in five days even though it takes just two hours once the print-job is started. In most businesses, there are many opportunities to reduce idle work-in-process and increase overall cycle speed.Customers also care if you meet your commitment to delivering on time, on schedule, or as promised. FedEx delivers packages overnight—guaranteed! They’ve built a large following by keeping this promise. Delay is a frequent reason for the loss of customers and valuable referrals.
  2. Defects – Defects are mistakes that render a product or service unacceptable to one of your five customer types.  Good or bad, pass or fail, the product either meets a quality standard, or it doesn’t. For example, a prescription is filled incorrectly; a steak is overcooked; a travel bag is lost by the airline, or a part is missing in a product to be assembled. All are unacceptable!Customers want things according to specifications or expectations. If you fail to deliver what is “critical to quality” in their minds, they will shop elsewhere.
  3. Deviation (excessive) – Neither people nor business systems turn out a consistently exact result. Deviation focuses on how far you can stray from precise specifications or expectations and still have an acceptable product or service.For example, if a furniture store promises delivery at 11:00 a.m. and delivers at 11:30 a.m., they have not kept their promise. The deviation in time makes the customer unhappy. However, if they commit to deliver between 10:00 a.m. and Noon, and deliver at 11:30 a.m., the promise is kept and the customer is pleased. In another example, an Internet service provider promises speeds up to 30 Mbps. If Internet speed is too slow, too often, deviation from the speed-guarantee may cause customers to change providers. And finally, a machined part may have a tolerance of .003 inches. If machined outside the tolerance limits, the excessive size deviation will prevent the part from fitting or working properly.Don’t wait for customers to report unacceptable deviation. Establish your own internal controls to make sure deviation stays within bounds. This can prevent the build-up of defective inventory, a product recall, and even damage to your reputation or brand.

You Can Be Perfect

For fun, let’s look at an easy example from the game of football. A field-goal kicker has only 1.25 seconds to kick the ball after the snap. Any delay and the kick has a good chance of being blocked; the team will fail to score. If the kicker does get the ball off, and it goes outside the goalposts, the kick is defective—again, no score. However, the goalposts are eighteen feet, six inches apart. The airborne ball can deviate nine feet, two inches left or right of center, and still be good for the score.

I once heard John Madden—former football coach and color commentator—describe a ball that went just inside the left goal-post as a “perfect” kick. Why, because it earned the team three points; the deviation was within bounds. It was good enough!

Are your business systems GOOD ENOUGH to be considered PERFECT by your customers? To reduce the many little mistakes and errors in your business systems and processes, start looking for Delays, Defects, and excessive Deviation.

Let me know what you find.

Fast Business Processes Increase Profit—7 Strategies to Boost Speed!

Ron Carroll

A Frenchman, count Gaston de Chasseloup-Laubat set the first land speed record on December 18, 1898, at a dizzying 39 miles per hour. Recently, an Austrian daredevil, Felix Baumgartner, jumped from twenty-four miles above Earth, breaking the speed of sound, and free-falling at 833.9 miles (1,342 kilometers) an hour before releasing his parachute.

Throughout history, people have been fascinated with speed—and so should YOU!

Increase System Throughput

Speed of business operations translates to dollars—increased sales capacity, higher productivity and worker satisfaction, lower unit costs, quicker turnover of inventory, faster billing and collection cycles, accelerated cash flow, and happy, loyal customers. What’s not to like?

In Old English, “sped” meant success or thriving. In business, it means much the same thing. The speed at which a company churns out products and services—its throughput—has much to do with its success.

So maybe we should get our employees track shoes and start cracking the whip…

Not so fast!

Creating a speedy business—high throughput—has much more to do with removing time-waste and delays in business processes than it does with how fast people work.

Focus on Cycle Speed

The true speed of a business system or process is the total elapsed time it takes to go through one system cycle—the first step to the last step—including idle time. For every 25% reduction in elapsed process time, productivity doubles, and costs drop by 20% (George Stalk, “Competing Against Time”).

Whether applied in the factory, the workshop, the store, or the office, here are seven strategies that will accelerate the throughput of your business operations, and lower overall costs.

  1. Create Smooth-running Business Systems – Get rid of steps in your business processes that do not add value to customers, such as inspection, rework, and unnecessary movement. Avoid overproduction and inventory buildup. Eliminate the idle time that work sits around on pallets or in-baskets. Pace your business systems with sales orders. The steady tortoise, not the hare, wins the race.
  2. Improve Quality – Don’t waste time on redo’s, repairs, and reprocessing. Create business systems with high yield and low defects (less than 1% errors). Stop and fix systems that produce frequent mistakes. This prevents the accumulation of problems for later handling. Use a 5-Whys Analysis to get to the root cause of errors quickly. (They may not be coming from where you think.)
  3. Elevate Bottlenecks – Look around your operation and notice where things are getting bogged down—the bottlenecks. Find ways to elevate the constraints to non-constraints. Your individual processes and your entire business are only as fast as the slowest point. Bottlenecks and weak links in a chain of tasks kill throughput!
  4. Reduce Process Downtime – Plan better. Downtime is very expensive. Avoid stop-start work-flows. When people switch back and forth between tasks, there is a great loss of concentration and momentum. Worker errors rise. Performance is hard to measure. Throughput drops significantly (see System Busters).
  5. Keep It Clean and Simple – Reduce the physical path, clutter, barriers, and distractions. Minimize complexity, customization, and exceptions in making and delivering your products and services. Eliminate uncertainty and excessive employee discretion caused by inadequate policies or procedures.
  6. Lift Your People – Improve employee performance with training, accountability, performance standards, reporting, recognition and incentives. Inject the fun-factor. Provide a safe and pleasant work environment with good communication systems.
  7. Focus on Speed – At your weekly Business Improvement Workshops, discuss specific ways to create fast business systems and processes. Start with systems that touch customers. At future meetings, report results, and celebrate improvements.

Customers Love Speed

Customers—both internal and external—want things fast, or at least on time, as scheduled, or as promised. Strive to provide a quality product faster than your competition (lead-time) in order to differentiate yourself and become the best in your target market.

Remember: shorter lead-times also increase sales capacity, billing cycles, customer loyalty, and profit.

You don’t need a lot of analysis to make significant improvements. Simple observation and reasoning can help you quickly reduce delay, boost speed, and cut costs.

For a more in-depth analysis that will get your systems in high gear, you need Box Theory™ Gold software. It will help you diagnose problems and prescribe remedies to dramatically increase speed and throughput. I predict that a little improvement to just one of your business systems will offset the cost of this powerful software tool. So, what do you say, get your software (now for FREE), and let’s get going today!

Business Plans: What Smart People Say About Business Planning

Ron Carroll

It’s always a good time for business planning and setting goals. Some do it. Most don’t. Of those who do it, some follow their plan, but many eventually lose interest. Of those who do pursue their plan, some reach their goals; however, most plans don’t go as expected. So why have a plan?

Consider the wisdom of the Cheshire cat in the story of Alice in Wonderland:

“Would you tell me which way I ought to go from here?” asked Alice. “That depends a good deal on where you want to get,” said the Cheshire Cat. “I really don’t care where” replied Alice. “Then it doesn’t much matter which way you go,” said the Cat. (Lewis Carroll, “Alice’s Adventures in Wonderland,” 1865).Business Planning - Cheshire Cat
More Brainy Quotes on Business Planning

  • “He who fails to plan, plans to fail, so plan your work and work your plan” (unknown).
  • “Reduce your plan to writing. The moment you complete this, you will give concrete form to your intangible desire” (Napoleon Hill, author of “Think and Grow Rich”).
  • “A good plan is like a road map: it shows the final destination and usually the best way to get there” (H. Stanley Judd, American author).
  • “Good plans shape good decisions. That’s why good planning helps to make elusive dreams come true” (Lester R. Bittel, “The Nine Master Keys of Management”).
  • “Plans are only good intentions unless they immediately degenerate into hard work” (Peter F. Drucker, business author and coach).
  • “Proper preparation prevents poor performance” (Charlie Batch, football quarterback).
  • “Adventure is just bad planning” (Ronald Amundsen, Norwegian explorer of Polar Regions).
  • “If the ladder is not leaning against the right wall, every step we take just gets us to the wrong place faster” (Stephen Covey, business author and coach).
  • “Good fortune is what happens when opportunity meets with planning” (Thomas Edison).
  • “Planning is bringing the future into the present so that you can do something about it now” (Alan Lakein, author on personal time management).
  • “The man who is prepared has his battle half fought” (Miguel de Cervantes, author of “Don Quixote”).
  • “Every minute that you spend planning your goals, your activities, and your time in advance saves ten minutes of work in the execution of those plans. Therefore, careful advanced planning gives you a return of ten times, or 1,000 percent, on your investment of mental, emotional, and physical energy.“It takes only about 10-12 minutes for you to make up a plan for your day. This investment of 10-12 minutes will save you time of approximately two hours per day, or a 25 percent increase in productivity and performance. The very act of planning forces you to think better and more accurately about everything you do. Perhaps, the most important rule of all is for you to ‘think on paper!’
  • “A clear vision, backed by definite plans, gives you a tremendous feeling of confidence and personal power” (Brian Tracy, business author and coach).
  • And my personal favorite:
    “Everyone has a plan—until they get punched in the face” (Mike Tyson, Boxer).

I’ve Got Just the Plan for You

The Box Theory™ Way includes planning with a purpose. You first create an Organization Blueprint so that your business systems and processes propel your company to achieve its mission, vision, strategy, and goals.

Within Box Theory™ Software, you address ten important areas of business planning to complete your Organization Blueprint.

  1. Mission Statement (Why do you exist?)
  2. Values Statement (What are your core values?)
  3. Vision Statement (Where do you want to be in five years, and beyond?)
  4. Voice of the Customer (What do your customers expect from you?)
  5. Voice of the Employee (What must you do to retain your best employees?)
  6. SWOT Analysis (What are your organization’s strengths, weaknesses, opportunities, and threats?)
  7. Strategy (What is your unique game plan for success?)
  8. Balanced Scorecard (What are your specific measurable goals?)
  9. Organizational Structure (What business activities are you engaged in?)
  10. System Framework (What business systems and processes must you excel at?)

While the type of business plan required by venture capitalists may not be necessary for your company, planning is still essential. Throughout Box Theory™ Software, you create meaningful Action Plans that, when carried out, will enable you to produce a smooth-running, profitable, and even remarkable business operation.

Make the year ahead your best ever with Box Theory™ Software. I believe this will be one of the most important business decisions you have ever made!

Peace on Earth, Good Will Toward Men

Ron Carroll

It was Christmas Eve, 1914. The German soldiers had just retreated from another futile attack. The day was cold and wet. The trenches were filled with mud, blood, and the bodies of friends and enemies. Heavy snow began to fall. The wounded left behind would surely freeze during the night. The survivors had to prepare for the counter-attack that would come in the morning.

Trench Warfare

As usual, the nightly canons belched their deadly bombs. In spite of the noise and death that surrounded them, the men reflected on the many friends who were lost. Despair and hopelessness increased as the soldiers’ thoughts turned to Christmas, family, and home. Tomorrow would be Christmas Day. Rather than looking ahead with courage, the soldiers prepared themselves to die.

Then, along toward the mystic hour of midnight, with deep snow on the ground, a full moon in the sky, and stars shining down in the icy night, an incredible thing happened. The noise of the rumbling guns began to grow faint, and finally, the sound ceased altogether. Silence lay over the Western Front. The noise of battle gave way to a heavenly peace.

 

Christmas Eve on the Battlefield


Deep in the German trenches, one young recruit, homesick for his family and aching for the joy of Christmas, began to sing, “Stille Nacht! Heilige Nacht! Alles Schalft, einsom wacht….”

His reverent voice pierced the silence and was heard by soldiers on both sides. Quickly, the thoughts of countless soldiers turned from the despair of war to the hope of Christmas. Soon the same song rose from the trenches of the French.

Next, the Dutch soldiers added their voices.

And finally, the British and Americans joined the angelic choir, “Silent night, holy night. All is calm; all is bright.”

Some of the German boys became so excited that they burst up out of the trenches. Their officers tried to restrain them, but nothing could hold them back. They ran across “no man’s land” (the ground between enemy trenches), reaching out their hands to greet the British. For two or three hours they fraternized. They were no longer soldiers. They were German boys from the Rhineland; they were Scottish boys from the Highlands, and they were English boys from the cities and the green fields. “Let the war stop,” they said, “it is Christmas Eve!”

This miracle on Christmas Eve, a brief pause from the horrific suffering of war, was one of the greatest events during World War I. It was one lonely night when humanity turned to love, and God whispered the comforting words, “Peace on earth, good will toward men.”

May our troubled world embrace this same wonderful message of hope, “Peace on earth, good will toward men.”

Small Biz Owner: Do You Have a “Scarcity” or “Abundance” Mindset?

Ron Carroll

 

During challenging economic times, it is important for most small-business owners to run a lean business operation—cost-conscious and careful with financial resources. However, a mindset of “scarcity” can be harmful while a mindset of “abundance” may be just the ticket to more prosperous days. Let me explain.

Scarcity and Abundance Thinking

The Scarcity Mindset

If I have a scarcity mindset, I tend to see winners and losers. Look, there is only so much to go around, and if you get more, then I will naturally get less, right? It’s a dog-eat-dog world. By carefully holding on tight to everything I have, I will be more secure, prosperous, and happy. It’s not about wishing ill-will on other people. It’s just a way of thinking to protect what I have worked so hard to earn and accumulate.

The Abundance Mindset

If I have an abundance mindset, I tend to see everything in terms of win-win. There are unlimited resources and I am genuinely happy for the success, well-being, achievements, recognition, and good fortune of other people. I love to contribute to and celebrate the accomplishments of my friends, associates, and even competitors. The better they do, the better I do. Success generates more success. In my way of thinking, there is plenty to go around. I win. You win. We all win!

The Scarcity Organization

It is very easy to get into a scarcity mindset when a business is struggling and every penny counts. The normal instinct of many owners and managers in financial stress is to cut costs to the bone. But like dieting, this can be unhealthy if taken too far. For example, cutting corners to marketing activities can create some immediate and short-term financial benefits. However, profit margins are eventually eroded by severe cuts to core business systems such as marketing, accounting, or even hiring and employee compensation.

The Abundance Organization

It is a misunderstood notion that when the rich get richer, the poor get poorer. The truth is that when the rich get richer, the poor generally get richer as well. We prosper most when we help others prosper, when everyone in our network is doing well. 

In a nearby community, a reputable fast-food restaurant stood alone with no competition. They “owned” the neighborhood. Unfortunately, the store went out of business. A mile down the road is a cluster of twelve fast-food restaurants competing side by side. The parking lots are always full, and even the weaker stores are thriving. That’s abundance thinking!

Zig Ziglar, the great motivator, taught, “You will get all you want in life if you help enough other people get what they want.”

With a mindset of abundance, the business owner should always be looking for the best value he or she can get when purchasing goods and services. However, getting the most value from vendors or employees does not necessarily mean paying the lowest price, just as giving the most value to the customer does not always mean being the cheapest in the marketplace.

As my outlook matured over the years, I paid more money for fast service and superior quality rather than less money to a questionable vendor with a lower price. I paid employees above the market rate because they “made things happen” that created value in my business. I put more money into my business systems and processes because the payoff far exceeded the out-of-pocket expense.

In my former world of accounting, I often gave clients ideas that saved them thousands of dollars. I sent them new customers and even became one of their good customers myself, only to have them mumble about a few hundred dollars in accounting fees I charged. They did not put a value on the significant non-accounting elements of our relationship. They had a scarcity mindset.

Which Describes You?

Compare some characteristics of the scarcity mindset to those of an abundance mindset. How do you think about and relate to your vendors, employees, and customers?

Scarcity Abundance
Not enough resources to go around
 More than enough resources to go around
I Need to win/succeed I Need to be fair/we all succeed
I have the answers We learn from each other
Relationships of suspicion/doubt Relationships of trust
Adversary Partner/Ally
Expense Investment with a return
Focus on costs/tasks Focus on results/systems and processes
Buy time/hours from people Buy desired outcomes from people
Expect minimum required performance Expect high performance
Micromanagement Stewardship
Low morale High morale
Worry/Stress/Frustration Confidence/Peace

The outcome of an abundance or value-oriented mindset is the maximum utilization and development of people. The outcome of the scarcity or cost-oriented mindset is the maximum control of people. Over the years, I have learned that I want to control business systems and processes, but I want to develop people as valuable partners.

According to Brian Tracy, business author and teacher, the Law of Abundance is this:

“We live in an abundant universe in which there is sufficient money for all who really want it and are willing to obey the laws governing its acquisition.”

Achieving the more productive mindset of abundance requires a leap of faith for many of us. It is a counter-intuitive principle. Come to think of it, isn’t this the great lesson learned by Ebenezer Scrooge? (Charles Dickens, “A Christmas Carol,” 1843)

Create Better Business Systems: 4 BIG IDEAS!

Ron Carroll

“All wealth is based upon systems” (Dan Kennedy, author and marketing coach).

Becoming an expert at developing effective business systems and processes will put more money in your pocket than anything else you can do—PERIOD!” Let me share with you four BIG IDEAS that will greatly improve your business performance, including customer loyalty, profitability, and growth.

Business Systems and Processes: 4 BIG IDEAS

BIG IDEA #1: Systems are the Building Blocks of Your Business

Business systems and processes are the essential building blocks of your organization—the better your systems the better your business. In fact, there is no other way to build a remarkable company!

Systems are the means to carry out every business function, including lead generation, sales, customer care, order-fulfillment, hiring, and many others unique to your company.

The primary purpose of these business systems is to help you find and keep customers, eliminate inefficiency and waste, and make you stand out in your target market like “a purple cow in a field of brown cows” (Seth Godin). Your business will prosper to the degree you become an expert at creating effective systems and processes.

BIG IDEA #2: Systems Thinking Will Increase Your Business Intelligence

Systems Thinking will empower you to see the world and your business in a profoundly different way. It will raise your business I.Q. by 80 points—OVERNIGHT!

As a Systems Thinker, you will get a vividly clear view of the “nuts and bolts” of your organization—what’s working and what’s not. By focusing on Cause and Effect, Systems Thinking will magnify the details of your operation, revealing the root-cause of problems and transparent solutions. Your business frustrations will be viewed through a logical lens rather than an emotional lens. You will learn to resolve problems and make decisions systematically.

When you begin Systems Thinking, you’re going to have an Ah-Ha Moment. From that point on, you’ll never look at your business the same way again.

BIG IDEA #3: System Building is the Master Skill of the Entrepreneur

Creating high-performance business systems and processes is the Master Skill of the entrepreneur. No other endeavor will remove more problems and pain, or put more money in your pocket.

Good business systems are the solution to all your operational challenges—weak sales growth, dissatisfied customers, waste and inefficiency, under-performing employees, poor cash flow, and low-profit margins. Whether in the store, the workshop, or the office, you can manage and improve your business processes by applying correct principles.

Now, here comes a rather bold statement. The ability to create effective business systems and processes is the most important skill you can acquire. Every business function—marketing, finance, and operations—requires this expertise. And the real value of your business comes when your systems consistently get good results—when they make your company money day-in and day-out, even when you’re not around.

BIG IDEA #4: The Box Theory™ Way is the Best Way to Build Business Systems

OK, I’ll admit it, there’s a little self-interest in the final BIG IDEA, so bear with me.  The Box Theory™ Way is a ground-breaking system for you to create growth-producing, customer-pleasing, waste-removing, profit-boosting business systems and processes. Just imagine having a business culture of discipline and excellence that runs on autopilot.

The Box Theory™ Way is a method that breaks your business functions down to manageable systems or “boxes.” The method is easy, intuitive, and even fun. It includes some amazing principles of business process management (BPM) such as Six Sigma, Lean Thinking, and the Theory of Constraints.

What’s more, The Box Theory™ Way is incorporated into a ground-breaking software tool that empowers you to design, create, manage, document, store and print everything pertaining to your business systems and processes—sort of like a QuickBooks, but for business systems. Box Theory™ Software was created specifically for owners and managers of small to mid-sized businesses—YOU!

Work in an Extraordinary Manner

A few years ago, I was in the lobby of a hospital waiting for a grandchild to be born. I noticed a sign on the wall that read: “The major work of the world is not done by geniuses. It is done by ordinary people who have learned to work in an extraordinary manner” (American Fork Hospital, 3/29/2008).

Well, I’m not a genius. Most of us aren’t. And much of what we do is pretty ordinary. However, learning the art and science of Systems Thinking and how to build effective business systems will enable you to “work in an extraordinary manner.” As I said before, it will put more money in your pocket than anything else you can do.

Process Improvement: The Rules of Engagement!

Ron Carroll

President Woodrow Wilson said, “If you want to make enemies, try to change something.” Or it could be said, “Try to improve something,” which often has the same consequence.

Process Improvement - Change Ahead

Challenging the Status Quo

Creating a results-driven business culture—with discipline, measurement, and accountability—can be a new way of doing things for many small-business owners and their employees. Care must be taken that these elements do not discourage or even become threatening. When people work together—solving problems and sharing ideas—the exchange should always be positive and motivating.

Developing or improving business systems and processes challenges the status quo. It puts the organization under a microscope and exposes ugly blemishes. It questions long-established traditions. It recognizes no “sacred cows.” The only goal is to find the best way of doing something. This scrutiny sometimes makes people feel nervous, threatened, frustrated, or even angry.

When seeking truth, you must be prepared to face the brutal facts and emotions surrounding your current business practices and proposed solutions.

Look for the Best in People

Most people involved in improvement projects want to make a positive contribution and arrive at the best solutions. So be careful not to put people under the microscope or blame them for performance problems, especially in an open meeting. Instead, focus on faulty systems or processes that prevent people from doing their best.

In his book, “Results Rule!,” Randy Pennington describes a Positive Performance™ management process based on the following core beliefs:

  • “Individuals need to be treated with dignity and respect.

  • Most people want to do a good job and will do so if given the opportunity and ability.

  • The leader’s job is to create an environment for employees to succeed as individuals and as a group.

  • Everyone is responsible for performing in a manner that helps the organization achieve results and build strong relationships.

  • Treating individuals responsibly means that we earn the right to expect them to act responsibly.”

During brainstorming and discussion, allow open dialog, inquiry, and free expression from all participants. Say to the group, “I am open to other points of view.” Then listen carefully as employees or customers contribute ideas. When you convey appreciation for shared thoughts and feelings, people are more comfortable in expressing their views. Those who are passionate about their opinions (advocates) should not be stifled if they are communicating appropriately. In the end, business owners, leaders, or voting team members make the final decision.

The process is this: Listen-Thank-Consider-Decide.

Build Trust and Hope

Ann Bruce and James Pepitone give us “12 Cornerstones for Building Trust and Hope in an Organization”:

  • Respect your followers.
  • Watch how you say things.
  • Communicate openly.
  • Listen and don’t argue.
  • Avoid zingers, digs, and putdowns.
  • Point out the positive.
  • Appreciate what others have to say.
  • Acknowledge that trust is a mutual exchange.
  • Increase trust gradually.
  • Be truthful with yourself.
  • Show your human side”

I once worked with a business owner who communicated to his workers the attitude: “It’s my way or the highway.” His strong opinions shut down communication and the valuable suggestions and ideas of others.

It is best to arrive at system solutions based upon facts and not personal opinions. Be objective and unbiased; seek evidence, including business statistics, reports, surveys, and other forms of measurement. There is not a right or wrong solution until proven with results—hard data whenever possible. Listen to those with the “eyes of experience” (insiders) as well as those with the “fresh eyes of objectivity” (outsiders).

Encourage Continuous Learning and Improvement

By introducing change, you may be greeted with resistance, but more often, there is a sense of relief that improvement is coming. Don’t be afraid of change, but implement new business systems with care and patience. Your employees will appreciate it.

Remember: when you include employees in the system development process, you get greater buy-in and support.

So, get all of your people to become Systems Thinkers. Set stretch goals based on your Balanced Scorecard objectives. Aim for tangible financial results. Assign accountability. Handle conflict. Involve team members in the decision-making process. Put your faith in data. Encourage continuous learning and improvement. Hold effective system improvement workshops. Unleash everyone’s potential. And celebrate success.

Business Systems that Keep On Giving!

Ron Carroll

The holidays are upon us and with them come many traditions. What are your Thanksgiving traditions? My thirty-five-year-old son plays “turkey football” every Thanksgiving morning with his high school friends. Do you serve the customary Thanksgiving dinner, watch the Macy’s Thanksgiving Day Parade, or observe customs from your family background or culture?

Turkey Feast

Traditions are Systems

When you repeat any activity because it gives you good results, you have created a system. All family traditions are systems put in place to produce expected happy results. Great families create, borrow, or pass down traditions from one generation to another.

This summer, our family set up an outdoor theater in the backyard to show family videos I’ve created over the years. Everyone had a great time laughing and remembering the good old days. We decided to make it an annual tradition.

What are Your Business Traditions?

Good businesses also create traditions that customers or employees enjoy and anticipate with eagerness. My employees loved pizza days to celebrate success. Some businesses have dress-down Fridays, a summer picnic, or a Christmas party. My son-in-law rents a theater for his customers just before the public showing of a blockbuster movie. Companies often have traditional sales promotions that customers look forward to—sidewalk sales, dollar days, and midnight specials.

These are all business systems. They are anticipated. They are fun. They get results. They become more popular over time. Traditions strengthen the bonds between the company and its customers or employees. They energize people and foster creativity and excitement.

Good traditions will set your company apart in the marketplace and add pizzazz to your business culture.

Next time you are in the Zone, consider starting one new business tradition. Better yet, invite a secretary or a small committee to come up with some ideas.

Once you implement a good system, it is a marvel to watch it consistently accomplish exactly what you planned!

And don’t forget the always appropriate tradition of expressing gratitude. There is much to be thankful for; wouldn’t you agree?

Happy Thanksgiving,
Ron

Just Retired
Gone Fishing
Your Lucky Day

It's time for me to focus on other things. Many hours and dollars have gone into my software and written materials over the last fourteen years. Now it's time to give back. This is not a gimmick. There is nothing to buy. I give it all to you for free. If you use the software and apply the principles, you can create a remarkable company. See Below. Have fun!

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Quotes about Business Systems

So, What Exactly is a Business System?

Video: "All Wealth is Based Upon Systems"

Michael Gerber, "E-Myth"

Michael Gerber

"Organize around business functions, not people. Build systems within each business function. Let systems run the business and people run the systems. People come and go but the systems remain constant."

All wealth is based upon systems - 4 Big Ideas 1 Short Video

W. Edwards Deming, Total Quality Management

W. Edwards Deming

"If you can't describe what you are doing as a process, you don't know what you're doing. . . . 94% of all failure is a result of the system, not people."

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