A Community Performance Improvement Plan for Small Business

Basic Business Cents

A Community Performance Improvement Plan for Small Business

MONTH ONE: IT ALL STARTS WITH LEADERSHIP

In the last column we talked about the need to improve organizations’ performance, which has never been greater. Customers are increasingly demanding, employees are overextended, the economy is challenging, and competition has never been as fierce. Because business is complex, there is a need for systematic improvement, but where do you start? How do you know on which processes to focus? And how do you sustain improvement over time?

Organizations around the world have been improving their performance by improving and innovating their strategy, work processes, and culture. The purpose of this plan is to help small business managers apply some of those same basic principles and techniques for customer- focused quality. It applies to all manufacturing and service industries, healthcare, education, and government operations. Small businesses have unprecedented opportunities today to lead economic growth in their communities. The focus of this program is to take action to improve business results.

A leadership commitment to quality improvement is the path to success in our changing environment. This plan details a process whereby small and medium sized organizations can join together to bring in professional consultants for training and coaching key personnel in their organizations. Proven techniques will be taught and action initiated to get measurable results in the performance of the participating organizations. The plan is contingent upon enlisting 10 organizations joining together to learn and share costs for one year. Two days of training in joint sessions each month plus one-half day of individual coaching per each participating organization each month will be supplied over a twelve month time period. Training material and unique implementation processes will be provided for each of the participants. Licensing to use these processes will be granted for internal use only by the participating organizations.

The initial session will start with introductions and objective setting for participants and consultants. The first activity will be a self-assessment by the participants on the Leadership category of the Baldrige Award, the prestigious national quality award. Leadership is the first of seven criteria to be self-scored, the others being Strategic Planning, Customer Focus, Measurement, Analysis, and Knowledge Management, Workforce Focus, Operations Focus, and Results. A scoring guideline method will be supplied to provide an honest assessment of the starting point. The objective of this activity is to reveal opportunities for improvement in leadership. All processes can be improved, even leadership, and by starting with this category a strong message is sent to the organization that all will be involved in the process improvement activity and leadership is leading the way by looking at their own processes.

The remainder of the two days will be spent in review of the American and Japanese Quality Masters and selection of realistic philosophies, methods, and tools that can be used in each attendee’s organization. A copy of Profiles in Quality, Learning from the Masters will be provided. The objective of this exercise is to study people considered to be world masters in improvement, collect ideas useful to each individual organization, and develop operating principles to guide behavior by all employees.

One or both of the top two executives plus another leader in each participating organization should attend the training so that they may be effective in leading the performance improvement movement.

Performance Improvement for Small Business

Basic Business Cents

Would you make an investment that promised a 20:1 return in three years? That is a commitment by Enterprise Minnesota with their Pathways to Business Growth program. Each of 10 small Minnesota businesses pledged a modest amount to participate and the National Institute of Standards and Technology (NIST) Manufacturing Extension Partnership is contributing a grant of $515,000 to fund this activity.

You might think this is too good to be true but they are using concepts and tools proven with large companies who can afford consultants to teach and coach application of performance improvement techniques to remove waste, rework, and redundancy in work processes in manufacturing and service organizations.

Let me explain a little. First, all work is a series of processes by which we accomplish a certain result. All processes have variation; waste, rework, and redundancy are everywhere. From my experience you can usually pinpoint around 35% in manufacturing organizations and 60-90% in service organizations. All processes can be simplified and improved. Although these techniques have been proven in large organizations, the costs for the training and coaching have been prohibitive for small companies. By combining a small group, say ten companies, training costs can be shared. Application coaching must be done on an individual organization basis.

The next series of articles will define how we could do such a plan in our community, which would benefit us all. We could call it the Park Rapids Community Performance Improvement Plan, or we could substitute Hubbard Area or Northwest Minnesota for Park Rapids, or anything else we might like. For now, I will just call it the Community Performance Improvement Plan.

The plan involves 1-2 days/month of group training for 1-3 employees from each participating organization. It is best if the number one or two person in the organization attend so they can lead the effort within their organization. Then the trainer or another consultant will spend ½ day per month coaching the application of what was learned in previous training to make sure it is being applied correctly and results are being obtained.

This plan involves new tools or techniques to be introduced each month for twelve months. At the end of the year, each participating organization will have knowledge and experience to continue their process improvement journey indefinitely. There will always be room for improvement; the perfect process has not yet been invented.

Now lets get back to the return on investment. If we do initiate our own plan in this community, the investment by participating organizations is a fraction of what large companies pay or even the statewide program mentioned above. The training may be covered by a grant, but if not the cost per day of training would be about $3000 including materials divided by ten participating companies or $300/day each. The individual consulting is the responsibility of each organization and can be expected to be $1,000/month plus any travel and living expenses. With a maximum of $1,500/month outlay, based on 10 organizations participating, each organization commits to $18,000. If they complete 10 projects at an average saving of $5,000/project, they should save $50,000 or a 2.7 times return in the first year. Each succeeding year multiplies that return. This cannot be promised as each organization is different and will embrace this activity differently, but in my opinion these numbers are conservative.

What I hope to show in the succeeding articles the Community Performance Improvement Plan provides:

· Affordable training and application knowledge

· Reduced waste and rework resulting in better quality, lower costs, and more market share

· Improved processes result in happier employees who take more pride in their work

· Higher satisfaction for all

Observations of Poor Work Habits

Observations of Poor Work Habits

I once observed a group of workers that have the worst work behavior that I have ever seen. My initial thought was I would fire that bunch in a minute if they worked for me.

They appear slow, work short hours, take long breaks, and seem very unproductive. They do not seem to plan their work and results are agonizingly slow. Other workers noted their work ethics. One would only surmise they do not take much pride in their work.

But why? I believe people want to take pride in their work, even have a need to take pride in their work so why do they act in this way. If we were their supervisor, we would need to investigate why they are working in this manner.

Is it because they do not care? I don’t think that is the case because I believe that people inherently want to do a good job at whatever they are doing. It is human nature to want to excel. It could be that they really are bad workers that don’t care, but that would be very, very unusual. So what is causing them to behave this way?

Have they been trained properly in the best methods of doing their work? Training pays dividends to any employer but most often gets overlooked or short-changed because of cost or expediency. Learning on the job or worker training worker is dangerous. Remember the game you played when young by whispering something to a friend sitting in a circle and then have them in turn whisper it to the person next to them? By the time it gets around the circle the message is quite different from what was started. Worker training worker gets the same distortion.

Do the workers have clear understanding of what is expected of them? As the old saying goes, if you don’t know where you are going, any road will get you there. Objectives, timetables, quality, appearance, and other parameters must be explained in clear, simple terms so the employees have a clear understanding.

Are the employees provided with good processes as to how their work is to be performed? Processes are the responsibility of management; processes that produce the best results in the shortest time. The employees responsibility is to do the best they can with the processes provided.

Is the material they are provided with of good quality, delivered to them timely, and correctly? Do they have the proper tools and of good quality?

Do they have good supervision? I do not like the term management because it means the act or art of handling, controlling, and directing. A better term is leadership because it means setting the example by behaving in ways consistent with stated values, being the role model, out in front, in fact leading. Leaders lead!

So after reflection on the scene I observed, I must conclude it is not the workers fault. Leadership seems to be missing. Once again, we must ask why. Much of the above could also apply to the leader, do they understand their job, have they been properly trained, do they have too much on their plate to lead properly, etc.?

There are many processes in any organization, not the least of which is leadership. We need to constantly remind ourselves to not fix the blame but to fix the process.

Learning from History, Part II

Basic Business Cents

In Part I of our series, we discussed the behavior cycles that repeat every four generations[1] and how knowledge of that can be used to guide our management techniques. Judging by the year our personnel were born, we can determine whether they are from the Prophet, Nomad, Hero, or Silent generations and from that certain personality traits and behaviors that they can be expected to exhibit.

Kurt Lewin identified three major leadership styles; authoritarian, participative, and delegative.

Authoritarian leaders provide clear expectations to group members on what should be done, when it should be completed, and how it should be accomplished. Frederick Winslow Taylor was the foremost expert on this leadership style. His time and motion studies were a small part of his teachings but became attached to his name. These authoritarian leaders make decisions without input from group members. It worked well with the Silent generation following WWII as exemplified by the book and movie, The Man in the Gray Flannel Suit. Overuse of an authoritarian style can be construed as bossy and controlling. Worst-case examples of this style can be seen when leaders utilize bullying techniques such as yelling, abusive power, or demeaning group members.

Participative leaders accept input from one or more group members when making decisions and solving problems, but the leader retains the final say when choices are made. Group members tend to be encouraged and motivated by this style of leadership. It often leads to more effective and accurate decisions, since not leader can be an expert in all areas. Input from group members with specialized knowledge and expertise creates a more complete basis for decision-making. This leadership style resonates with the Artist and Prophet generations.

Delegative leaders allow group members to make decisions. This style is best used in situations where the leader needs to rely on qualified employees. The leader cannot be an expert in all situations, which is why it is important to delegate certain tasks out to knowledgeable and trustworthy employees. These employees match the characteristics of the Hero generation. The complexity of technology today almost demands use of this style but occasions can require utilization of all three styles depending on the situations, for example:

· Use an authoritative style if a group member lacks knowledge about a certain procedure.

· Use a participative style with group members who understand the objectives and their role in the task.

· Use a delegative style if the group member knows more than the leader about the task.

Group leaders need to adapt and change based upon the objectives, needs of group members, and situational factors. Needs can be real or perceived and both need to be understood by the effective leader. Perceived needs are largely shaped by the current generation-Hero, Silent, Prophet, or Nomad-of the majority of the workers. It is up to us to know which type of group we are facing and what will work best with their personalities.

We can indeed learn from history to help us manage our organization and its personnel.

[1] The Fourth Turning, An American Prophecy, William Strauss and Neil Howe, 1977, Broadway Books, New York

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