Going for Growth

Posted on 11 Jan 2011 by The Manufacturer

Anand Sharma reveals some critical elements of any growth orientated business improvement program.

Despite such positive impressions, in my experience only one out of every ten companies has really leveraged their business improvement efforts to achieve a competitive edge or grow sales. Most are simply doing it to reduce costs or as window dressing to impress their customers.

As top management focus turns outward once again in 2011, here are some of the critical elements of a growth-oriented business improvement program:

A clear vision and roadmap that’s aligned with financial objectives. To get anywhere you have to know two things: where you are and where you want to go. To understand where you are requires a reliable appraisal of market opportunities and your competition, which requires some form of benchmarking. Next, your vision should clearly articulate where you want to go and offer a compelling value proposition to your customers.

After your vision and strategy have been established, one of the best tools for executing the strategy and achieving the targeted financial objectives is Strategy Deployment (also known as Policy Deployment). The methodology links management strategy to Annual Improvement Priorities. It then helps allocate resources to the most important projects and halt the many trivial activities that consume resources but are not aligned with your strategic objectives.

Customer alignment. Whether it’s a formal voice-of-the-customer exercise, or a sales call, take advantage of every opportunity to capture the unarticulated needs of your customers. This intelligence gathering must be part of everyone’s job description.

The subsequent insights will reveal opportunities to delight your customers with new or enhanced product and service offerings that they value but did not ask for.

Supplier alignment. The efficiency gains, cost savings and enhanced responsiveness that result from working more closely with your suppliers can offer far greater returns than anything you do to improve processes internally. It’s more challenging, of course, but a CI program that works in partnership with your vendors to speed information and inventory flow will yield financial benefits for everyone. Today’s electronic communication and data sharing tools make it easier than ever before to build a supply chain that is lean, responsive and in sync.

Real respect for your people. Sure, higher unemployment rates have made people more grateful to simply have a job, but you want them to do more than just show up for work every day. If you think about it, your employees are your only appreciating asset.

Every day they become more and more effective at serving and anticipating the needs of your customers.

The best continuous improvement programs listen to and respond to employee ideas and frustrations, and tap into their creativity for finding solutions.

Progress on many fronts. I don’t have any patience, and neither should you, for organizations that continue to operate in functional silos. Every HR, quality, engineering, sales, procurement, marketing, customer service, warehouse, and plant manager must recognize that only by working together as a team can you serve customers better each day. A good CI program crosses reporting hierarchies and provides tools and coaching that can help improve teamwork and cross-functional cooperation.

Engaged senior leadership. When it comes to operational improvement, the expectations for senior leadership have evolved over the past several decades. At one time it was enough for executives to simply approve what the factory managers were doing, and run interference from time to time. But if you want such efforts to have a major impact on all areas of the business, and a noticeable impact on the bottom line, it requires a deeper commitment. That means more leadership time, visibility, attention and personal investment.

These are some of the practices that can help you build a company where the responsibility for business process improvement extends beyond the limited scope and resources of the continuous improvement team. They can help you build a culture that is never satisfied with the status quo, that embraces new opportunities to create customer value, and that drives organic growth by anticipating and solving customer’s problems.

Summary: Lean manufacturing has never been more popular.

Information and training about the tools for eliminating waste, process improvement and problem solving are available everywhere. Unfortunately, most of the subsequent initiatives are only focused on cost cutting. Your business improvement program should be helping you develop and commercialize new products and make other moves that win new customers and grow your business.

Anand Sharma is an international best selling business author and the founder of TBM Consulting