making more money: simple strategies for improving cash flow and profitability

Download Making More Money: Simple Strategies for Improving Cash Flow and Profitability

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Improvement is about helping you make more moneyits not about change for the sake of change. Many organizations try to apply the tools of improvement to things that dont make a differencelike shuffling deck chairs on a sinking ship. Real improvement gets to the root of organizational problems and addresses those problems with lasting solutions. The principles of improvement apply to every kind of organizationregardless of size or structure. There is no organization anywhere which cant benefit from improvement. As my late friend and mentor Bill Conway used to wryly say, The normal state of everything is all screwed up. This statement is axiomatically true because we tend to accept screwed up as the normal state of things. But it doesnt have to be that way. Finding waste usually involves a significant change in mindsetand a willingness to question the way we do things now. To paraphrase a famous quote from Einstein, we cant solve our problems without first changing the way we think. Or to use Bill Conways expression, we cant do improvement unless we get our squash right. With that in mind, the exercises in this workbook are designed to help you uncover areas where significant improvement is not only possible, but absolutely necessary. You may find opportunity in places you never would have expected.

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  • 1. Making More Money Simple Strategies for Improving Cash Flow and Profitability

2. Making More Money Presented to: The Woodland Park Chamber of Commerce May 1, 2014 J.R. Dickens Woodland Park Research Group, LLC 2014 Woodland Park Research Group, LLC. All Rights Reserved. 2 3. Put on your thinking caps Ideas, not answers After-class exercises apply to your current business situation 2014 Woodland Park Research Group, LLC. All Rights Reserved. 3 4. Money Drives Business Simple concept: make more than you spend Reality: competition, slow growth More reality: seasonality, interruptions 2014 Woodland Park Research Group, LLC. All Rights Reserved. 4 5. Getting Better Improvement is the key Improvement is a strategy with tools, not a tool to tack on to your strategy Opportunity is everywhere, but improvement is not spontaneous 2014 Woodland Park Research Group, LLC. All Rights Reserved. 5 6. Three Keys What does it take to succeed? Excellence Integrity Innovation 2014 Woodland Park Research Group, LLC. All Rights Reserved. 6 7. Excellence means... Doing the right thing at the right time, and doing it right the first time 2014 Woodland Park Research Group, LLC. All Rights Reserved. 7 8. What is excellence worth? Errors, defects, and rework can easily consume 30% of your time and cost Lost opportunity cant be measured 2014 Woodland Park Research Group, LLC. All Rights Reserved. 8 9. Integrity means... Building trust by serving others 2014 Woodland Park Research Group, LLC. All Rights Reserved. 9 10. What is integrity worth? Ask the question a different way: What will a lack of integrity cost? 2014 Woodland Park Research Group, LLC. All Rights Reserved. 10 11. Innovation means... Anticipating and embracing change 2014 Woodland Park Research Group, LLC. All Rights Reserved. 11 12. What is innovation worth? Ask companies that died of obsolescence 2014 Woodland Park Research Group, LLC. All Rights Reserved. 12 13. Three Keys What does it take to succeed? Excellence Integrity Innovation 2014 Woodland Park Research Group, LLC. All Rights Reserved. 13 14. Excellence Consider two areas: defects/errors speed 2014 Woodland Park Research Group, LLC. All Rights Reserved. 14 15. Defects/Errors Defect is anything that fails to meet customer expectations 2014 Woodland Park Research Group, LLC. All Rights Reserved. 15 16. Defecst/ErerRs Do it over again rework Catch it before the customer does test/inspection When all else fails damage control 2014 Woodland Park Research Group, LLC. All Rights Reserved. 16 17. Defects/Errors What is the cost? more labor more materials more time more capital lower productivity lost goodwill 2014 Woodland Park Research Group, LLC. All Rights Reserved. 17 18. Defects/Errors Fix the process Prevention, not inspection Root causeaddress the sourceimprove the process 2014 Woodland Park Research Group, LLC. All Rights Reserved. 18 19. Defects/Errors Clue: problem always has a human source e.g., process design, equipment selection, maintenance, procedures, training, etc. Ignorancewe dont understand the process Disorder is the normstuff doesnt fix itself and it doesnt want to stay fixed 2014 Woodland Park Research Group, LLC. All Rights Reserved. 19 20. Defects/Errors Ideal: everything right the first time no defects/errors, no rework with proper control, no need for inspection 2014 Woodland Park Research Group, LLC. All Rights Reserved. 20 21. Speed Speed is how quickly you generate sales from products/services time lag between expense and revenue 2014 Woodland Park Research Group, LLC. All Rights Reserved. 21 22. Speed Timing is as critical as quality Right product/service at wrong time is the wrong product/service 2014 Woodland Park Research Group, LLC. All Rights Reserved. 22 23. Speed Productivity is often the problem How are you measuring efficiency? 2014 Woodland Park Research Group, LLC. All Rights Reserved. 23 24. Speed Typical problem: too much too early Additional problem: too little too late Too late is probably worse than not at all 2014 Woodland Park Research Group, LLC. All Rights Reserved. 24 25. Speed Right product/service too soon: slows you down increases cost 2014 Woodland Park Research Group, LLC. All Rights Reserved. 25 26. Speed Slower speed because: making more than you need to meet current demand excess goes into inventory 2014 Woodland Park Research Group, LLC. All Rights Reserved. 26 27. Speed Higher cost because: takes more money to make more stuff materials, labor, etc. costs money to store and manage excess carrying cost of inventory (~25%/yr) 2014 Woodland Park Research Group, LLC. All Rights Reserved. 27 28. Speed Ideal: right product/service at the right time speed/flexibility opens the door for customization 2014 Woodland Park Research Group, LLC. All Rights Reserved. 28 29. Excellence Tip of the iceberg Conversation has revolved around product/service at the customer interface Same principles apply to internal processes e.g., HR, scheduling, production, inventory, accounting, etc. 2014 Woodland Park Research Group, LLC. All Rights Reserved. 29 30. A Word About Value Value is the customers perception of your products/services in relation to cost Think in terms of the total customer experience Example: feeding giraffes at the zoo 2014 Woodland Park Research Group, LLC. All Rights Reserved. 30 31. Integrity Success flows from people Customers Suppliers Employees Public In a wordrelationships 2014 Woodland Park Research Group, LLC. All Rights Reserved. 31 32. Integrity Relationships are built and sustained on trust What does it take to build/sustain trust? a willingness to serve the needs of others Relationships take time and effort 2014 Woodland Park Research Group, LLC. All Rights Reserved. 32 33. Six Principles Respect honoring authority Commitment guarding relationshipsconfidentiality Charity kindness, forgiveness Stewardship caring for the property of others Honesty truthfulness in all things Gratitude contentment with your own circumstances 2014 Woodland Park Research Group, LLC. All Rights Reserved. 33 34. Integrity Integrity is concrete, not mushyprinciples never change Integrity is about personal character To be trusted, be trustworthy 2014 Woodland Park Research Group, LLC. All Rights Reserved. 34 35. Customer Service Integrity applies to customer service Customer service is still a differentiator most people dont do it 2014 Woodland Park Research Group, LLC. All Rights Reserved. 35 36. Customer Service Where does your business touch the customer? pre-sale point-of-sale post-sale 2014 Woodland Park Research Group, LLC. All Rights Reserved. 36 37. Creating Engagement Make it friendly Gather information Find the customers problem Connect and reconnect 2014 Woodland Park Research Group, LLC. All Rights Reserved. 37 38. What is the Message? Content is king Focus of client engagement is providing information Internet is the new sales funnelwhere people go for answers 2014 Woodland Park Research Group, LLC. All Rights Reserved. 38 39. Integrity Weve applied integrity to customer relations Integrity applies to all relationships professional and personal 2014 Woodland Park Research Group, LLC. All Rights Reserved. 39 40. Innovation Innovation is about growth... ...and growth is not about getting bigger Think of the maturation process Growth may mean getting smaller 2014 Woodland Park Research Group, LLC. All Rights Reserved. 40 41. Innovation Three premises: You tend to act according to your assumptions Your assumptions are often wrong (or incomplete) Opportunity hides behind wrong assumptions 2014 Woodland Park Research Group, LLC. All Rights Reserved. 41 42. Innovation The key to innovation is challenging your assumptions Ask the right questions.... 2014 Woodland Park Research Group, LLC. All Rights Reserved. 42 43. Paradigm Paralysis is... The condition of not being able to see beyond your assumptions What are the symptoms? 2014 Woodland Park Research Group, LLC. All Rights Reserved. 43 44. Paradigm Paralysis This is the way weve always done it. We already have an SOP. This is a matter of company policy. No one is allowed to question that. 2014 Woodland Park Research Group, LLC. All Rights Reserved. 44 45. Paradigm Paralysis We tend to ignore or dismiss information we dont like Reality doesnt go awayso we might as well confront it 2014 Woodland Park Research Group, LLC. All Rights Reserved. 45 46. Sacred Cows Sacred cow: something that no longer serves a useful purpose Worse: no one is allowed to question it Needless waste of resources 2014 Woodland Park Research Group, LLC. All Rights Reserved. 46 47. Sacred Cows How to find them? Start from scratchthink like a beginner Ask, Why? 2014 Woodland Park Research Group, LLC. All Rights Reserved. 47 48. Sacred Cows Thinking like a beginner means putting aside your assumptions 2014 Woodland Park Research Group, LLC. All Rights Reserved. 48 49. Strategic View Look at your business from 10,000 feet (or 20,000 feet, if you live in WP) SWOT with an extra T Strengths Weakness Opportunities Threats Trends 2014 Woodland Park Research Group, LLC. All Rights Reserved. 49 50. SWOT/T Strengthswhat you already do, well Weaknesseswhat you already do, poorly Opportunitieswhat you could do, in the future Threatsconditions that pose an imminent danger Trendsthe general direction of things that affect your business (good and bad) 2014 Woodland Park Research Group, LLC. All Rights Reserved. 50 51. SWOT/T Helps you look inside and outside Helps you think strategicallywhere you are, where youre going Reality checknot intended to be a feel-good exercise 2014 Woodland

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