"Efficienize" your Business

Avatar | Jonathan Spence

21 January 2014
Authored By: Jonathan Spence

 

I'll start by admitting it, efficienize is NOT a word. Yes I know, but without those who promote new words how will they ever be accepted into a language?! In any case I thought I would do a quick search to see what the linguists had to say on the subject matter and they were very much adamant that indeed it is not yet a word even though its use is arguably spreading. In one of the forums where they were discussing this, a user suggested a better word to use: Kaizen. Kaizen or 改善 (for those who can read Kanji) is a Japanese word, defined in Wikipedia as "improvement" or "change for the best", refers to philosophy or practices that focus upon continuous improvement of processes in manufacturing, engineering, and business management. I thought that was a poignant word to come across in my search as Kaizen is really at the heart of what this blog post is about - improvement. Japan is famous for it, the development story which has seen a destroyed nation rise from the ashes to become one of the world's most respected manufacturers known for quality and automation. But can we say Japan really still subscribe to this philosophy? Perhaps. Perhaps they need to have another revolution of Kaizen, much like a large number of stagnant businesses in the world today.

Reflecting on that last thought, let's get to business: whether your goal is to maximise the bottom line, stay competitive in your industry or provide a better result for those above you - running an organisation efficiently is a critical aspect to achieving any of these goals. This means maximising your resources, implementing superior technology/processes and most importantly of all, embracing change. All can be hard but change is often seen as THE hardest thing to overcome and an organisation's culture can have a huge impact on this possible impediment. Let's investigate what can be done and how opposition is overcome.

Analyse

Often those who are carrying out a task are so fixed in their ways or change adverse, that either they couldn't identify an improvement in processes they manage/work in or they wouldn't of their own accord ever suggest it if they do. There are a variety of reasons for this which include:

  • Lack of knowledge about alternative approaches
  • Focus on current process restricting lateral thinking (can affect even creative or critical thinkers)
  • Fear of "rocking the boat" or change that could disrupt a worker

All these reasons above have different cause, affects and remedies. For the first two points, these can be easily remedied; asking staff to spend a little time researching a process through tools such as search engines or asking professional networks (e.g. LinkedIn) can often open their mind to new ideas and "take a step back" from a closed mindset. The third point is more tricky and will be addressed later in the blog.

Going beyond encouraging innovation from within, depending on the nature of the business, its often best to get a party from a different part of the organisation or a completely external point of view to help analyse current processes. For many SMEs (and by SME I refer to an NZ sized SME which usually doesn't exceed 50 staff) resources are available often in the form of mentors, business coaches, professional advisers such as accountants and of course, consultants.

People in these positions will often look at key parts of your operation and provide advice around your process strategy. It's important to remember that while these people often have great opinions, at the end of the day it is an opinion and don't treat it as gospel. On the flip-side, don't discount it either, especially if they have better knowledge and experience in a particular field. For example if I advise my mechanic in regards to IT and I have a good idea to allow him to improve his/her process its the same as if he/she suggests something that would help  to improve my car. I would take that advise on board and in most cases act upon it. I would strongly suggest he/she does the same.

Speaking from my own experience, we at Xtracta have had similar situations arise. Since many of our development and research staff become so engrossed in their work, their thought train often narrows to just a small set of problems and solutions. By doing things such as:

  • Team brainstorming
  • Encouraging staff to talk with those outside the company with ideas
  • Read research papers, blogs etc.
  • Very hands on, challenge orientated management

We have been able to overcome closed thinking - for Xtracta, a company focused on developing cutting edge technology where hardly two days are ever the same, its critical.

Technology & Automation

Implementing technology to automate tasks is an easy way to improve the efficiency and productivity of your business. This can be as simple as learning a new keyboard shortcut to installing a new system which transforms your business through better process management.

I remember the first business I ever started, I was 15 and started a business to provide a wireless internet service to my neighbours. With 50 clients paying $20 or more per month, extremely low costs and only admin to really deal with - it was an amazing position to be in, especially at that age. Admin was the downfall however. The system which was in place was extremely manual - requiring me to check each customers' usage daily and then retrospectively determine whether they had exceeded their chosen monthly plan and bill accordingly. Then there was collections which again was tricky.

I remember one day, after finding an especially difficult customer whom wanted an extremely complex part billing arrangement I thought "there must be a better way". I headed to Google and started searching. After looking at various options I came across a great (and soon to be business changing) application I remember to this day: Antamedia Hotspot.

This application allowed me to flip my entire business model around to a prepay, voucher based system which instantly removed all of the hassle of collections and with virtually no complaint from customers. They would simply buy a voucher each month and have an emergency "extra" voucher on hand in case I wasn't home and they exceeded their plan. The software handled everything from recording their usage in real time to automatically reminding them they need to get a new voucher to even generating the vouchers. It was heaven and an absolute transformation for my business.

The investment for this software seemed like a big deal at the time but it allowed me to shift my focus towards business growth so I could gain more customers. With the new customer growth, excluding all the other benefits, it paid itself off in 1 month.

It's not just computing where this applies - it could be industry specific plant/machinery, building controls, fleet management, it all depends on your industry. Also remember that what you see from the incumbent, well known suppliers isn't the only option. I'm a strong believer in considerable research which usually finds a far superior solution compared to what you may know of at a particular time.

Outsourcing

We all know about this so I won't go into detail - suffice to say it can be a really great option but with a strong caveat - it's implementation and management must be managed well internally. There are very few outsourcing providers who will provide a good service without close monitoring and a collaborative working arrangement with their clients (YOU). If you get it right, outsourcing can be an extremely effective way to make your organisation much more efficient and competitive. A quick checklist:

  • Ask as many questions as you can
  • Talk to your (potential) fellow customers about their experience
  • Consider the reputation, but don't rely on it - one bad incident in the media can demonize an otherwise great outsourcing supplier
  • Plan as much as possible so both you and they know exactly how everything will operate
  • Mutually set expectations and hold each other to them
  • Work collaboratively with your outsourcing provider - they may make some mistakes (as do your internal staff) but work with them to remedy those, don't make them the enemy.

Change

Staff discontent with change can be a significant hurdle when it comes to improving your business' efficiency. In many organisations, change is met with trepidation and apprehension. "Will I lose my job" or "I'm too old to learn new ways" are common lines that staff often think when it comes to this. In selling the Xtracta App, a solution which many see as a direct threat to their jobs, it has been interesting for me to note people's attitudes. We will work with customers where a culture of change opposition is instilled and it can be difficult to make a sale and then actually implement (often the process will be "sabotaged" by staff which makes it more painful for everyone). At the same time we will work with customers where change and improvement is embraced and its a completely different feeling when implementing Xtracta systems - much more positive and uplifting for everyone involved. My experience working with staff who think they will lose their jobs due to an automated system has been that the feared job loss never eventuates. In fact I often see staff who were doing laborious and boring data entry move to a greater value added role which they find much more rewarding themselves.

Change | Management

One of the important things to ensure when change does happen is that it occurs positively. If implementing a new system is not smooth, colleagues who were disenfranchised with change before may have even more to complain about and a positive, change-friendly culture can be diminished. Plan change, go through every detail of implementation and "what-if" scenario and plan contingencies.

Change | Culture Driven

My overall feeling is that change acceptance is linked directly to company's culture; and that culture is ultimately driven from the top down. Often if the CEO and management team are enthused about improving their business, the culture then moves throughout the company. While organisational politics can always be tricky, I would encourage all who sit organisationally above all those who work to impede change due to misconception or unfounded fear - don't let it happen, work with your colleagues to embrace positive improvement for your organisation.

 

I hope you've received a little insight into my perspective of organisational improvement. Remember, Kaizen.