Engineering Efficient Business Operations

Cost of Quality

2009-12-07T13:45:00.000-08:00

I recently sat down with a private business owner that thought quality sat in the engineering and production departments, I asked him why it didn’t belong to finance.

In his boardroom there was a whiteboard, thankfully it was one of the bigger ones, I handed him a blue marker and asked him to ‘big picture’ sketch his product development steps; from concept to delivery.

I then picked up a red marker and put next to each step a variety of quality costs:

Cost to define markets, customers and users
Cost conduct all the market research and define product specifications
Cost of surveys (customer satisfaction, user perception, product research)
Cost to bid on contracts
Design costs
Cost of support activities
Testing / Qualification / Certification costs
Field Trials
Technical / Customer Support Centers
Supplier reviews, dealing with supplier issues
Cost spend for inspection, reviews
Process validation costs
Quality planning
Measurement & Control equipment
Education & Training
Audits
ISO certification
Updates / Upgrades / Improvements
Labour validation, time to complete, time / task
Return Material Authorizations – product returns
Corrective Actions
Engineering Change Orders
Scrap Costs

Aside from the scrap costs the organization didn’t track the cost or time associated with these actions. The subsequent 2 hours resulted in a basket full of low-hanging fruit, a variety of projects identified and a substantial opportunity for cost control and cost avoidance.

There is more than one meaning to the 'cost of quality', the one that seems to hit home is that with the $$$ in front of it.

Organizational Hierarchy of Needs

2009-12-02T08:21:00.000-08:00

Organizational Hierarchy of Needs

Maslow's hierarchy of needs - an organizational / business version:

Need for Survival

Need for Maintaining Current Operations

Need for Improving Current Operations

Need for Adopting New Solutions

Need for Develop New Solutions

.....where do you think your organization is or should be?

.....where is your organization?

.....why is it where you think it is?

.....where are you telling your organization you are or want to be?

.....do you really stand behind / support where you are or want to be?

You've hire top talent - let them work!!!

2009-12-01T06:12:00.000-08:00

Over the course of the last two years (basically at the onset of the recession where some great talent became available to the market) I’ve been asking two questions. The first question was to some top talent individuals; in essence, how is the new position going? The second to business owners, GMs, hiring managers; how’s the new employee going?

From the employee side, and these are keen folks I’ve known and worked with, understand their abilities, their dedication, their ability to make it work, I hear over and over again:
- It’s a one man battle and I’m expected to be the front line, reinforcements and supply.
- There’s a bunch of lip-service, I’m the only one biting into any of the tasks.
- Management can not make the tough decision(s), they look me to make them but don’t like the fallout.
- Lack of structure, support.
- Keeping getting told to not get absorbed into the ‘rut’, stay fresh.

From employers I’m hearing, and it’s not just one employer or about one employee, it’s a disturbing pattern:
- On paper and in the interview process was perfect, but he/she can’t win the staff over, they get lip-service from the staff (peers) but no real buy-in.
- They can’t implement the change required.
- They don’t understand the culture, they’re upsetting the current balance.
- They’re not ‘joining’ the team, they stand out, not entirely accepted.

When I first started hearing this I thought it was a bit of whining, some coincidence, personality mismatch, but there is a pattern, there is a trend and there is a problem.

Business owners have to realise a few key things:

One person is not going to solve the problem or address all the issues – not when you are hiring them at a manager or directors level – especially when you have not given his/her peers the same mandates for their departments. If you are telling the organization it’s status quo and then telling the new hire to make this change, make that change, increase this, decrease that, you are setting them up for failure. The organization is a living, breathing, interconnected mechanism. All the pieces have to work together.

There is a reason they accomplished so much prior to coming to you. I would venture to say it’s mostly due to their intelligence, drive and ability, but they did have the tools, structure and support needed to get things done. In hockey terms you’ve hired a great goal scorer but if he has no one to feed him the puck, no one to block a check and a goalie that lets every other shot on net in, your start scorer will never win you a game.

You’ve hired them for their ability, their know how, the fact they’ve done it before – use them to help transform your organization, help them get other managers on board to the changes, address the issues with managers that resist the change. Support these guys/gals and you’ll see they’ll go above and beyond to make things happen. Yes, they are the types you can put in a sink or swim situation (and they’ll swim) but you can’t expect them to survive if you throw them to the sharks. Think about how you won them over to join the organization, what you said that got them to join – they knew you had issues – but they saw the potential, help them unlock it.

Dragon's Den

2009-07-16T06:29:00.000-07:00

There was a rerun of a Dragon's Den episode on TV last night - interesting how one of the dragons turned down a project that he thought was very impressive but, since he was unfamiliar with the product / industry, didn't want to get involved. He struggled with not being able to add value (other than funding) to the project.

The lesson is clear:

1 - be sure you can add value
2 - know your limits
3 - set yourself up for success

The answer to the business challenge.....cartoons!?!

2009-07-02T10:22:00.000-07:00

Just got back from a business trip with a portfolio company and sat down to watch a movie with my daughters - we watched Fung Foo Panda - Secrets of the Furious Five, it's an animated features with Jack Black and Dustin Hoffman.

Two key take aways.

1. the essence of Kung Foo is excellence of self......hmmmmmm
2. the group tries to capture the Dragon Scroll - thought to provide unlimited power - it's blank - when looking at the scroll all you can see is your reflection.....hmmmmmmm

Just a little too coincidental with the last post on leadership.

_________________

Kung Foo Panda - The Secret of the Furious Five (from Wikipedia)

In an anthropomorphic China, the Valley of Peace is protected by the Furious Five - Tigress, Monkey, Mantis, Viper, and Crane - a quintet of warriors trained in kung fu by the wise tortoise Master Oogway and his protégé, the red panda Master Shifu. One day, Oogway has a premonition that Shifu's former pupil and foster son, the brutal and ruthless snow leopard, Tai Lung, will escape from prison and return to the Valley. Shifu decides to hold a martial arts tournament so that Oogway may identify the legendary Dragon Warrior - the one master worthy to receive the Dragon Scroll, which is said to hold the secret to limitless power. Tai Lung had been denied the Scroll years earlier, causing him to decimate the Valley in retaliation and resulting in his imprisonment.

Po, a young Giant panda and kung fu fanatic who works in his goose[7] father's noodle restaurant, is anxious to see the tournament, but is instead forced to take a noodle cart up the mountain to the Jade Temple. By the time he arrives, the gates are closed and the tournament has already started. Desperate to see the tournament, Po straps himself to a set of fireworks; he rockets into the sky and crashes into the middle of the arena just as Oogway is about to select the new Dragon Warrior. To the surprise of all, Oogway indicates that Po is the Dragon Warrior. Unwilling to believe that a clumsy, fat panda can be the Dragon Warrior, Shifu attempts to berate and humiliate Po into quitting, subjecting him to a grueling series of matches with the Five, all of whom despise Po as an upstart novice. Po is dejected after his first day of training, but after Oogway counsels him, he refuses to quit. Soon, he endears himself to the Five (except Tigress) with his impressive tenacity, culinary skill and good humor, though he is still unable to grasp the basics of kung fu.

Meanwhile, as Oogway had foreseen, Tai Lung escapes from his prison and heads for the Valley. Sensing his death is imminent, Oogway extracts a promise from Shifu that he will train Po and then disappears, ascending to heaven in a swirl of flower petals. Upon hearing that Tai Lung is coming, Po panics and tries to flee the Temple. Shifu refuses to let him go, insisting that he can change Po into the Dragon Warrior, but Po has lost all confidence and Shifu can not explain how he will turn Po into the Dragon Warrior. Seeing this argument, Tigress leads the Furious Five to stop Tai Lung themselves. The next morning, Shifu discovers that Po displays impressive agility when he is motivated by food; using the promise of food as a reward, Shifu trains Po into a skilled warrior.

The Five confront Tai Lung over a long rope bridge, but he easily defeats them and sends them back to the Valley unconscious as a warning, to inspire fear. Feeling that Po is ready to fight, Shifu gives him the Dragon Scroll, which he opens to reveal nothing but a blank, reflective surface. Shifu, despairing, orders Po and the Five to evacuate the valley while he prepares to delay Tai Lung for as long as he can. During the evacuation, Po finds his father who, in an attempt to console him, reveals that the long-withheld secret ingredient of his famous "secret ingredient soup" is nothing - except the belief that the soup is special. Po realizes this idea is the point of the Dragon Scroll and returns to face Tai Lung.

At the Temple, Tai Lung confronts Shifu and demands the Scroll. When Shifu refuses, Tai Lung attacks Shifu and, in a furious battle, overpowers and nearly kills him before Po arrives. Tai Lung can hardly believe that the Dragon Warrior is a "big, fat panda", but as he battles Po to take the Scroll, using a hybrid variation of his natural unorthodox clumsiness and the training he had accomplished with Shifu, Po unexpectedly proves himself an equal. Tai Lung gains the upper hand and opens the Scroll, but cannot comprehend its symbolic value. Po explains that "there is no secret ingredient" other than the warrior's belief in himself, but Tai Lung fails to understand and attacks again. With the combination of his new understanding and his own natural resilience, Po counter-attacks with devastating effectiveness and finally defeats Tai Lung, destroying him with the secret "Wuxi Finger Hold".

The deeply impressed Furious Five accept Po as a kung fu master and their superior. Po returns to Shifu and finds that he is exhausted but alive, and finally at peace now that Tai Lung has been defeated and peace restored to the Valley. In a post-credits sequence, Po and Shifu are seen eating dumplings under Oogway's favorite peach tree, where a peach seed Shifu had planted earlier has begun to sprout into a seedling.

Management Round Table

2009-06-30T19:47:00.000-07:00

This past weekend I was invited to sit in on a mini executive round table - I know the COO of a private company and he asked me to sit in and just observe the management team - how they acted, reacted, attitudes, etc. The room had six couches, all facing eachother, it was very relaxed, everyone was open and I felt quite at home - I did know a few of the team members.

The group chatted about the organization as a whole, pros, cons, strengths, weaknesses - was a very good, very productive session.

Take away - every VP / Director was excellent at their job, their area of expertise but had no clue about any other function. When we talked afterward I was asked what it would take to get the organization to the next level. First things first - get each VP to starting learning more and appreciating other departments, functions, responsibilities. Getting the management team to be expertise to their staff but generalists among eachother was key. Every senior manager had to start learning more about the other departments so that the organization could grow from one base simultaneously instead of each department growing individually and some playing catch up.

Leadership is a great thing.

2009-06-26T18:50:00.000-07:00

Sometimes, as leaders, we get caught up in the day to day grind. I came across this presentation and thought it was a good refresher - take s a minute or two to load but worth the effort.

Not much to comment on, really speaks for itself.

http://s3.amazonaws.com/ppt-download/leadership-trainingv1-1227410222472541-9.pdf

Private Equity Pod Casts Kick Butt

2009-06-25T06:34:00.000-07:00

The world is revolving around blogs, podcasts, ithis, ithat. I'm a pen & paper guy for the most part but have taken to various forms of communication that help turn a 24 hr day into a 28 hr day. I love podcasts. Downloaded onto an ipod or playing in the office I find they are a great way to stay current, hear something new, provide a spark for a fire.

The Financial Post has FP Executive

http://www.financialpost.com/podcasts/fp-executive/index.html

that has a number of PE, VC andother interesting topics. Our latest newsletter talked about Jacoline Loewen's podcasts that surround private equity. I've received more than a few comments from clients wrt these podcasts and thought I would send it out for larger distribution.

It's worth a listen.

5 Rules to Live By

2009-06-14T06:34:00.000-07:00

There are five simple points I like to keep in mind whenever undertaking any project or working with any company:

1. You have to execute with discipline at all levels - no exceptions. Promote excellence in execution.
2. You have to create a culture where change is a matter of course.
3. Focus the entire business on a few initiatives.
4. Make effective trade-off decisions about investment.
5. Maintain strong metrics and feedback loops.

#4 is one I have been concentrating more on as of late and Jacoline Loewen of Loewen & Partners has several podcasts at http://www.financialpost.com/podcasts/fp-executive/index.html that discusses the private equity side of investing and how balancing the right amount of outside investment and support with internal structure can help an organization get to the next level. Jacoline has a number of podcasts, you can find more at http://www.moneymagnetbook.ca/

C-Level Walk About

2009-04-27T09:57:00.000-07:00

C-Level Walk About

Two things I did every morning as a Military Officer was ‘morning prayers’ and ‘the circle’.

‘Morning Prayers’ involved the key Officers in the Squadron standing in the Operations Room and taking 15 minutes to highlight the days objectives & identifying and addressing any gaps that impacted the objectives.

‘The Circle’ was simply a military term for Management By Walking Around – simply walk the Hangar floor, talk with staff, ensure communication boards were current, walkways clear, obtain a pulse for the climate, address any morale issues, etc.

I have to admit I’ve struggled in bringing this type of behaviour into civilian / commercial operations.

A colleague recently said to me, ‘it worked there because lives were at stake, lives aren’t at stake at the office’.

Jacoline Loewen, in her book ‘The Money Magnet’ has this quote – “a business earns it’s right to exists each and every day”,

so I guess I have to beg to differ with my colleague, lives are at stake – he obviously hasn't seen the recent jobless rate or it's trend.

I guess I’ll keep pushing.

engineering types (and I'm one) - listen up if you are looking to attract funding

2009-04-03T08:22:00.000-07:00

This week I received three proposals for review – entrepreneurs looking for advice, guidance or funding. Our strength (nCompass) is on the engineering / operations side of the equation but we do have the network that supports the funding side (that exceeds our scope).

Two of the three wanted some support in completing applications for some of the government funding that is currently available to organizations looking to implement processes that increase efficiency in either manufacturing output or general business processes. In essence we were asked to review their organization and identify projects that would qualify for the funding / grants.

Most of the people I meet understand and can articulate their project quite well but lack the ability to develop the ‘pitch’ that attracts investors. I find myself repeating the same line over and over, “if you can not pitch your concept in a manner that attracts funding, in essence, you can not pitch your concept”.

To attract the attention your project deserves entrepreneurs have to learn to attract the attention of those individuals that hold the purse strings. A great place to start is http://www.moneymagnetbook.ca Jacoline Loewen has put together a great book that really helps attract investors – The Money Magnet is a great read and a fabulous resource.

The key to getting any project going and keeping it going is funding – pick up a copy of The Money Magnet, you will truly see things differently.

I would pass on my copy but it's been ear-marked, highlighted and tabbed. Most books I read get put on a shelf, this one stays on my desk.

the value of humility

2009-03-27T05:27:00.000-07:00

I have worked with a number of companies over the last 20 years that were extremely successful in their markets. If I look at where they are today, on the list of successful companies, they are no longer near the top.

Curiousity got the best of me as I wondered why - having been involved with each organization I was very familiar with not only the hard numbers but the soft cultural and people side. I put together a chart highlighting what these organizations had in common:

- strong contacts
- strong contracts
- dominated a market, or portion of a market with a niche product
- were early adopters taking risks in new areas - more wins than losses there

Surely all these points foster growth so I looked a little deeper and the answer popped off the page; humility.

None of the leaders in these organizations were humble enough to look take their contribution out of the equation and look at the key underlining factors that made their organizations grow at the rate they have. The 20 / 80 rule. In dropping the ball on that small percentage of key inputs, the house comes tumbling down.

On the operations side humility is the biggest contributor to optimizing a factory or production line - if you assume you know it all you'll never succeed, if you are not humble enough to cultivate the knowledge within the staff and workers you will never gain support.

Keep an eye on why your organization thrives (or maybe has hit a rough spot) but be humble enough (at least with yourself) to highlight that main ingredient that you were able to spot, foster and grow - is it sustainable? Can you make is sustainable?

Minding the Store

2009-03-23T08:14:00.000-07:00

I had a very interesting conversation at an event this weekend, it was with three colleagues that all have their own businesses. Most of what they were saying concentrated on the financial side of their business and when I said ‘is that all you guys concentrate on?’ the response was, in concert, ‘what else is there?’
Well, there is the ‘machine’ that utilizes resources, consumes cash and generates income. “you remember, that thing you started that became a business that you are so busy running that no one is minding the store”.

Who is minding the store while everyone is doing the ‘important’ work?

Some things to consider, keep in mind or at least glaze over during the course of the week.

- Where is the business going? Not just $$$ or lack of $$$ in the bank or sales in the funnel but where is the business going – new products, old products, new markets to enter, current markets to exit, channels, offerings, service…..
- Why are you doing what you are doing? Are you making decisions based on the market conditions – what about your plans, your strategy, did the market turn ‘eat up’ all the risk mitigation that was built into the plan?
- If you are making changes be sure you can give them time to stick (assuming they were the right decision). Be sure they are in line with the overall plan.
- Is management behind all the initiatives (don’t answer – ask someone on the factory floor).
- Are you pooling your team together and utilizing the talents and experience of your staff. Maybe there is someone new or young that has some experience that should be capitalized on. Don’t think that the core group has to come up with all the ideas.
- As the leader are you creating the right atmosphere. The rumor mill is working overtime these days, speculation can generate a number of very ‘believable’ scenarios….are you spending time and effort on ensuring the right message is getting out.
- Keep in mind that what you believe is happening, what you implemented some time ago, what people say is being done may not be….keep a list of key initiatives and ask about them regularly, to different people at different levels within the organization.

Take some time to reflect and plan. Times like these have people running on the need to the latest information, don't get overwhelmed, step back, reflect and validate your plans.

Suppliers / Defects - the liberty taken with definition

2009-03-22T09:41:00.000-07:00

We work across a number of industries with our portfolio companies and one of the many things I see over and over again is how suppliers define defects - BEWARE, is all I can say.

I sat in on a meeting as an observer to a company we were looking to work with and I was stunned at the supplier's behaviour; I couldn't figure out if they were that arrogant, ignorant or thought that their client grossly lacked any sense of intellectual acuity.

This particular supplier (a globally recognized brand) kept defining defects as 'anything that stopped production'. By 'their' definition they had an outstanding performance record that they were only too happy to promote.

Taking a closer look at supplier performance there are a number of factors that come into play:

= on time delivery
= order accuracy
= incoming inspection defects
= product quality
= cost fluctuations
= program management & effort
= returnable containers
= defective component handling
= cost of rework

Add these factors in and one quickly sees the suppliers true colours - one not to do business with.

A well balanced supplier scorecard is key to understanding the impact a supplier has on your business.

Is it too late to save?

2009-03-17T17:20:00.000-07:00

More and more I hear about business owners and managers discussing the utilisation of cost cutting measures to compensate for lack of sales in hopes of maintaining margins.

Not to say that cost cutting is not a valid undertaking, optimization is key in manufacturing / operations but it really isn't an overnight exercise. No doubt savings will be found however, if you are seeking a sustainable process (sustainability - the key in any business initiative) you need to address the cultural side of costs; how does your staff feel about and treat (your) money.

Building a sustainable cost conscious culture means you'll have to deal with 'change' - it becomes a bigger undertaking.

If you are hiring a firm to find cost savings - ask what they will do with respect to developing the proper culture - if that isn't addressed the initiative will end with the end of the consultant's contract.

The Old Model for Finance is Dead - MoneyMagnet Blog

2009-03-12T17:00:00.000-07:00

Jacoline Loewen had an interesting post on her MoneyMagnet blog....I thought I would parallel her financial thoughts with some operationally orientated ones.

http://moneymagnetbook.blogspot.com/2009/03/old-model-for-finance-is-dead.html

Not the TEAM speech again......

2009-03-11T15:36:00.001-07:00

At a client today and, well, another TEAM analogy – 9 times out of 10 when I get a plant / office tour I hear the TEAM analogy. I have to wonder if managers really know / understand what TEAMS do.

A very good friend of mine is a professional football player and I got to shadow him for a couple of days – jog, train, run plays, watch videos about good plays, rerun plays, watch videos of bad plays followed by laps, run drills and a quick game.

I have to be honest I didn’t see the link - all I saw was EXECUTION. Executing, watching how to execute, watching how not to execute, practicing to execute followed by more executing. TEAMS win because they work together, no doubt, but they work together because all they do is practice executing and then execute.

Google “professional services” and you will be bombarded by help with ‘your strategy’, ‘your costs’, ‘your planning’. All that is important but the reality of it is that most initiatives fail during execution.

I really wish I could hear the Execution speech and not the Team speech.

Product / Service Liability Mitigation

2008-05-26T15:09:00.000-07:00

Lately I have spoken to more than one client that seems to have their 'head in the sand' with respect to product / service liability. As a Certified Risk Manager I have put plans together to mitigate risk and they can be quite 'ncompassing'. This short blog is simply to get people thinking about risk management and liability mitigation - to be the starting point for your own research.

A few hints to Reduce Risk:

Learn from settled and closed claims – review claims made in your industry, with your competitors.

View our industry compliance requirements as the starting point of Risk Management, not the ‘do this and we’ll be ok’.

If you are outsourcing any portion of your product or service, you still own the risk, that does not get outsourced.

Insurance is not risk management (though it has a role to play).

Manage your Sales and Marketing processes. You may be creating your own liabilities in how to sell what you sell.

Think about risk mitigation wrt product / service liability - plan properly and you will notice that the efforts not only support reducing your exposure, they will result in stronger product offering.

Trade Shows - what to do

2008-05-17T05:44:00.000-07:00

The other day a client asked about trade shows, commented on the high cost, lack of access to the best spots, best ad space, best deal....I spent some time explaining what we have done in the past.

Working with several small to medium size businesses, trade shows are a big part of what we help with - having a printing & promotion company in our group also makes getting involved a lot of fun. Remember the point is to get your name out, allowing clients to see the product, but most of all being part of the scene, part of the community - that's key.

Yes, shows are expensive and yes the 'choice' spots and space are often taken by repeat attendees (hint #1 - commit to the show and the show will commit to you, at a minimum it provides more leverage during negotiations). Learn to take advantage of all the show management has - listing of clients, listing of attendees, who is where, media room (big one), discounts - ask - ask - ask.

Look at your show expenses from two angles - the cost of the show and what you get for your money - by that I mean how can you dice and slice your budget for more bang for your buck - remember you are looking for exposure. (hint #2 - look outside the show for opportunities). For one show (that we helped a company with) we scouted the show venue a few months ahead of time. We noticed that across the street was a condominium being constructed - I negotiated with the construction company to hang a 40 by 100 foot banner off the 5th floor of the condo - the cost, virtually free compared to the cost of such a banner / space on the trade show floor. The condo was right across from the main entrance to the trade show - priceless. For another event, this one in Phoenix, we advertised with all the hot dog vendors that lined the pathway to the entrance - we picked up all their beverage costs for the day - again, relative to that type of exposure at the show, very inexpensive. Remember it is all about exposure, you have to create exposure any way you can and don't limit yourself to the show. One of our portfolio companies always arrives extra early and takes the best parking spots - they park their installation vans with all their logos and advertising - great FREE exposure.

These opportunities are not always available and some are just luck so you do have to concentrate on the show - I believe it is always best to go to the show the year before and see who's who. What do exhibitors do? What don't they do? It's a good idea to also go to other shows at the same venue. (Hint #3 - other industries have the same challenges, are going to shows for the same reasons - learn from them). For one of our portfolio companies it was their first show at a new venue, a month before I went to a plastics show at the venue - consumer plastics (cups / cd cases / hair combs) is far off from construction but I picked up alot. The one thing we used was a business card idea, one vendor was giving away plastic cups with their business card screened on it. We ended up giving away business cards at the construction show that were printed on sand paper - we also gave 'normal' business cards - but the sand paper ones were well received - people remembered it - got us exposure. At another show, one that was at Euro Disney (which meant that many attendees were traveling with family) we couldn't get anyone to visit our hospitality suite. We went out and gave away Mickey Mouse hands - all the kids wanted Mickey Mouse hands and they brought their parents - our clients - to our suite. The power of a child with a mission. The point is creativity is key. It's a trade show, you have to put on a show. People that are looking for your product will come, you have to attract all those others and the ones that visit your competitors.

We have done a number of other interesting and creative 'things' at shows, these are just a few that may help get you thinking for your next event.

Free Resources, People Power, Ideas

2008-05-13T17:56:00.000-07:00

Having 'extra' staff resources has many advantages, staffing definitely allows you to execute but it also allows you to fill the hopper with great ideas.

So, if you are limited in staffing resources, and perhaps talent, if you are small or medium size company that does not have access to big thinkers, how can you achieve the same results?

How can you double or triple your talent pool, generate great ideas and execute almost overnight?

Try a Tear-Down Analysis.

I have done a number of Tear-Downs with many companies and the results have always been worthwhile.

A tear-down is simply an exercise where you tear apart product. Take your product, take a competitors product and side by side dismantle the products.

Look for how you do things, how they do things.

Look at what materials you use, what materials they use.

Look at how you hold your product together, how they hold their product together.

Look at your subcomponents, look at their subcomponents.

Look at the technologies you are using, look at the technologies they are using.

Look at where you add cost, where they cut cost.

Your competitor has spent hundreds of thousands of dollars, countless hours and taken advantage of people power to develop their product; it is yours for the taking at pennies on the dollar.

The key to success:

Attention to detail.

Look at everything. Every nut and bolt, every screw, piece of double sided tape. Paints and coatings. Plastic vs metal. Product, labels, printed materials, packaging.

Look at it from different points of view: manufacturing, cost savings, marketing, assembly. Have key member of your team participate, have designer, product managers, assembly people all get involved.

Document; photos, video, notes.

It's a great tool, well worth the effort and extremely cost effective.

Give it a try.

Web Self Service

2008-05-12T17:28:00.000-07:00

Web Self Service is an excellent tool for any organization - buy on-line, book on-line, check status, there are ample examples everywhere for every industry and every business.

As with everything there are pros and cons. I'm writing a few lines as one client believes that Web Self Service is the answer to all his company issues.

Some things to watch for:

Web Self Service (WSS) does not mean lower costs because you need less warm bodies. You can reduce some costs however you will always need people, their role is simply different in a Web Self Service environment.

Still need human interactions.
Still need to build the relationship with the customer.
Still need to deal with issues that arise that can not be solved with WSS.
You will have inquiries generated by WSS.
Still have to maintain loyalty and build the business.

Use WSS to add to the business, to leverage resources, to multiply what you do well. To maximize value to the customer.

WSS is only one 'tool' to use.

You will have to drive customers to your WSS site. It has to be value added, easy to use and a little 'fun' to ensure they get the best of the experience.

You will have to monitor their experiences and take action on what customers are saying.

You have to ensure the WSS is personalized, intelligent, seamless - access to phone assistance, web-chat, etc.

WSS is not an extension of what you currently offer, it is a separate offering.

WSS can be as small or as big as you want or need it to be. From simple FAQ pages to on-line ordering. If in doubt start small, monitor, get feedback and grow, it is a place to be.

Ensure that WSS is not a silo of information - it has to be current, dynamic, alive.

To succeed, remember that Web Self Service is your company interacting with customers; it can add real value or create real frustration.

signature blocks

2007-05-11T07:14:00.000-07:00

Though I am planning on going through the six stages of growth, I wanted to just add a comment about signature blocks.

The other day I received an important email from someone I had met briefly a few days earlier, unfortunately I was out of the office and my blackberry was over the limit - I could receive emails but couldn't send replies. I tried to address the issue via telephone. The sender did not have a signature block. Other than their name I had no other information. The issue was resolved but not without undue tension.

As I was thinkng about this, the obvious hit me. Signature blocks are meant to provide information, typically is it a name, company, telephone, website, etc. But in todays world of information sharing, why not add a link in the signature block to the latest press release, newsletter or webpage update....it's a great way of spreading the word.

Just a thought.

Stages of Growth - Where are you, Where are you going?

2007-05-02T05:30:00.000-07:00

nCompass utilises a six stages of growth approach:

one 'man' band
early success
operationalizing
the resource crunch
suit & tie
the corporation

regardless of the stage, the objective is to get to the next level of growth and reap the rewards associated with a process driven, well resourced organization that understands what to do when and can execute.

the main driver for continuing to grow is that growth attracts competitors, if you are not growing you are losing ground to those around you that have been attracted by your growth

the one 'man' band organizations are the true start ups, innovative, new. the issue here is that the market may not yet know that it wants or needs your product and you may not be 100% confident that there is enough of a market to sustain your organization. most often a one person show. the push is on the product and service and not necessarily on the processes and procedures that need to be developed to run the organization effectively and capitalize on opportunities to their fullest. there is vision but direction is sometimes a challenge. the key here is to understand the product, understand the market and understand that there is an entire backbone to the organization that will be required to make the venture a success. don't forget about the processes that bring the business model to life. granted, with a one man operations the management structure really isn't needed but, it has to be there, one day the organization is going to 'take off' and how the one man band does things has to be duplicated and duplicated and duplicated to sustain the growth, the only way to do this is have a process for the steps the business utilises to execute it's model. many businesses fail at the next step because the business can not mimic the actions that created that initial growth.

early success - next blog.

Lunch with the 'silent partners' - marketing & branding

2007-04-12T15:56:00.000-07:00

I had lunch today with two of the folks running one of our portfolio companies and two of their not so 'silent' silent partners. I was asked to join in to help explain some of the background as to why we were taking the approach we were.

In short, I stressed the importance of understanding the product and how it fits into the different market segments, the portfolio company (www.fluidform.ca) was doing an excellent job of this. They understood what individuals made up their market, they stayed away from any efforts that didn't involve their markets and they did a superior job of making the benefits of their product clear to their target market(s).

They were not trying to be all things to all people.

One of the partners wasn't clear on how our marketing was working, we weren't advertising our products in many cases. Mid 2006 we switched our marketing from product based to corporate based or brand based, in essence, we were promoting who we are and what we stand for. This made it clear that we were there to work with and help our clients and not just 'sell a product'.
In this branding, it was made very clear that the organization never takes our products/customers/reputation for granted. We are down to earth, a partner of choice.

Next was long term vs short term thinking. I explained the concept of marketing around a theme that is long term, the foundation is Premium Precast Product, it goes to what the organization is and what it stands for. Our thinking doesn't go to the end-user, as it does with our competition, but to the designers, architects, integrators. End-users, for our market doesn't allow for our long term model to work but working with designers, architects, integrators makes the long term model work and work well. On the short term we still market to end-users but with a different model. The result; we push the product via the designers, architects, integrators and we pull via the end-user. It seems to work well.

All in all we look at market need, customer needs, gaps and we are constantly evaluating ourselves; performance feedback is key (on products/services, delivery, vs competitors). We plan to be proactive but realise that reacting to events is also a part of business life, though most of our reactions are now quite planned (if a happens, do x, if b happens do y, etc).

In the end we stated what is the obvious around the factory and the sales office; never look at what we are doing, always look at what we have to do and what we should be doing.

Lunch was enjoyable, these silent partners have never been quite so silent.

Elevator Speech approach to Blogging

2007-04-12T15:54:00.000-07:00

Far too much time has passed since the last entry, partly because I thought each entry had to be a mini-thesis, I'll be just putting down thoughts, points and highlights, it's probably best for anyone reading as well. So, from now on, unless it's a cut and paste from my archive or a project I've worked on, most entries will be based on a 30 second elevator ride approach.

Morning Prayers

2007-03-21T06:31:00.000-07:00

While our portfolio companies are working at maximizing returns, nCompass is looking at getting the most of the programs and processes we implement. Having different companies working in different industries it is often difficult to apply a process that all the portfolio companies can effectively implement. I started going through 8 storage boxes of files, notes and articles that I have been collecting for the last 10 odd years trying to find the ideal ‘process’ to inject into our portfolio companies and realize the greatest return. I was struggling when my 2 ½ year old daughter shed light on the whole exercise when she asked me, “daddy, what are you going to do today?” It hit me right then and there; morning prayers. As an Air Force Officer, every morning, first things first; morning prayers. All the officers would stand in a circle in the middle of the hangar surrounded by fighter jets and each would take a few minutes to say “this is what I’m doing, this is why, these are the issues”. Everyone knew what was going on, everyone knew what had to be done; no excuses, just action and accountability. That was the first process we implemented at all three portfolio companies and the impact has been substantial. The “I sent an email” culture still exists but ‘morning prayers’ are really starting to drive the day to day business. Everyone knows the key is communication, morning prayers ensure that communication flows and actions are taken.

Continuous Improvement Part Deux

2007-03-09T18:36:00.000-08:00

Continuous Improvement Part Deux

The following are 11 steps that we utilize for our continuous improvement initiatives. Feel free to borrow/steal or add comments.

Step One
1. Find a common area.
2. Set up a white board to publish issues, results, steps, comments.
3. Use the board to communicate the issue to the company and drive the schedule.

Step Two
1. Define the problem.
2. The most important step.
3. Ensure you are highly focused.
4. Implement the KISS principle.
5. Indicate a means for measuring results.

Step Three
1. Take notes.
2. Map the process.
3. Identify bottle necks.
4. Identify duplications, issues, opportunities.
5. Quantify time and $.
6. Mark rework, wip, idle times.
7. Google: PERT and implement some ideas.

Step Four
1. What’s the Objective?
2. What are the expectations?
3. Timeline?
4. Metrics?
5. Get buy-in.

Step Five
1. Analyze Data
2. Google: Cause and Effect and implement some ideas.
3. Google: Root Cause
4. Use brainstorming and pareto charts to identify issues and concentrate on heavy hitters.

Step Six
1. Develop several solutions
2. Team effort here.
3. Look under every rock and listen to every opportunity.
4. We are not looking for the root cause but a solution, look at all possibilities.

Step Seven
1. Test the solutions.
2. Pilot tests.
3. Identify areas of measurement and analyzing the results.
4. Look at cost effectiveness, cycle time reduction, quality improvement and process/outcome measures.

Step Eight
1. Implement the best solution.
2. Compare and evaluate all solutions.
Look at:
i. Cost
ii. Value
iii. ROI
iv. Implementation time
v. Commitment
vi. Change required
vii. Google: Force Field Analysis
viii. Apply to top 2 solutions
ix. Select the best solution
x. Implementation plan
xi. Training
xii. Implementation

Step Nine
1. Track Progress
2. Monitor and fine tune, are you getting what you expected
3. Collect data, chart data

Step Ten
1. Take Notes
2. Continue documenting the process
3. Effort, time, people, money, resources
4. Savings: hard and soft
5. Efficiency

Step Eleven
1. Present the Results
2. Win the organization over
3. Illustrate the win and build support for future projects
4. Highlight the how and communicate the project, other project may result, the process might be ‘usable’ in other areas.

Any Questions?

Continuous Improvement

2007-03-05T14:44:00.001-08:00

Today I met with one of our portfolio companies and we discussed continuous improvement (CI). I dug out an interesting article from my archives and thought I would make that the blog topic for today.

The following says it all:

Improvement requires Change
Change needs Action
Action requires Knowledge
Knowledge leads to Experience
Experience results in Wisdom
Wisdom is increased by taking more Action

If your organization is taking on a continuous improvement program it has to definitely feel comfortable with Change, Taking Action and Sharing Knowledge and Best Practices.

From what nCompass has noted and many are sure to agree; many organizations decide to take on a program without regard to the ‘other’ programs that play a support role. Every program is the result of a mindset, philosophy, train of thought. Implementing any program is not as simple as saying ‘we’re doing xyz’; to be effective it has to be in line with the organization’s strategy, philosophy, driving force.

First Post

2007-02-27T14:57:00.000-08:00

Well here it goes, nCompass is entering the world of blog.

The main point of this blog is going to be to concentrate on business ideas and processes. Adding value, targeting growth. Comments and blurbs on general business concepts.

First things first. nCompass ArchAngel Capital is a venture capital firm that invests capital in brick and mortar companies and takes an active management approach to their investment.

To date we have investments in www.fluidform.ca (a precast stone manufacturer), www.gotgas.ca (a commuter marketing company) and sunsplash design build (design/build firm).

Our background. Ex-Military, Ex-Lear Corporation, Ex-General Electric.

Our strategy; apply structure and process to add value and accelerate growth.

Blogs; I plan on writing one to two blogs a week and look forward to any comments.