By ALAN NICOL, Executive Member, AlanNicolSolutions
For decades, businesses have discovered or invented methodologies to improve business performance. When we see other business’ methods produce prosperity, we learn what they did and strive to emulate it. Hence we see programs such as Lean, Six Sigma, Total Quality, Value Innovation and a host of others.
While each of the familiar improvement systems targets a different source of lost profits, many have one root solution in common; they end up driving a simplification of processes and business structure. Whether your business has adopted a popular business improvement program or such things are not your style, you can improve your business performance by focusing your improvement strategy on simplifying everything.
The axiom, “simpler is better,” is a timeless and universal idea. The Lean methodology improves business by identifying and attacking waste in its many forms. As we use the Lean methodology to eliminate waste, we eliminate unnecessary steps, reduce effort, minimize work, and keep things visible and obvious. Likewise, Six Sigma strives to minimize variation. Things become much easier to control and less prone to vary when they are simple, and so we inevitably simplify processes in our quest to reduce variability.
A good test of your existing improvement program is to review and consider how well it simplifies work life, systems and processes for your business. If you do not use one of the popular improvement methodologies, you can develop your own discipline for process and business improvement around the simple idea of making things simpler.
Here are a few common scenarios in which we can apply the “simplicity principle” to make better decisions or otherwise improve performance. I offer them in no particular order.
1. Organize Simply
As our organizations grow, they naturally become more complex by the sheer nature of more personnel and more roles. The next time you roll out your organization map, look at it with a mindset of simplification. In particular, look for ways to simplify communications and decisions.
For example, if the person with the authority to make a decision is several links removed from the person who encounters the issue or needs the decision, then the process of making the decision will be more complex. It negotiates a long chain of communication and command. It also runs into social/political complexity as the feelings and opinions of everyone in that long chain of command come into play. Put the authority at the point of the problem as much as possible.
I am not a fan of matrix organizations for the simplicity principle. As our businesses grow, and we look at what it takes in the way of leadership and specialized roles to support multiple product lines, it begins to appear very burdensome to have individual resources devoted to specific channels. It appears more efficient to have fewer resources support multiple channels at once.
The matrix makes sense from a resource-sharing perspective. However, a phenomenon of matrix organizations is that no one person owns a product line or business channel, and so no one person may make a decision. Decision by collaboration or committee is not simple. It is complex, both in communication, and social/political motivations and perceptions. There is inefficiency associated with that complexity that many do not consider.
2. Simplify Processes
This one sounds obvious, but I have a few ideas to use as guidelines. Endeavor to define every process in terms of seven or fewer steps. Why seven steps? Seven represents the general number of things most of us can easily remember or track at one time. It’s obviously not a hard rule, just a good guideline to follow. If you can make it five or three steps, that’s even better.
Naturally some processes, such as developing a new product or designing a new production facility, cannot be accurately planned with a seven-step project plan. Try to define seven stages that describe the greater process and allow each stage to have sub-processes underneath.
The key is this: Keep each one simple, and be sure that everyone knows who (one person) is responsible for each process, sub-process or sub-sub-process. It keeps everything that someone manages simple to communicate and understand and follow, and it simplifies decision-making.
Another part of process simplification is to minimize checks and permissions. Every time that something requires approval, it is an opportunity for things to get complicated. There are times where it is a very good idea to stop the train long enough to do a sanity check, and these times should be observed, but they should be simple (minimal approvers) and easy to conduct. Examples might be safety reviews and checks, design reviews before testing or annual business strategy reviews.
3. Simplify Systems
As our businesses grow, we invest in more powerful systems to support greater demands for data storage and organization, resource management, project or client status, and a variety of other challenges. Unfortunately, complexity often accompanies increased capability.
When you are making decisions about incorporating new systems or system changes, ask and answer the following question: “How is this going to make things simpler?” If you can’t answer the question, dig deeper into how that system is really an improvement. Do the same throughout the process of integrating and configuring the system. Often it is how we use the system that determines its simplicity or complexity. Be sure that you set it up for simplicity. Fight against the axiom that “more is better.”
Please tune into the Chemical Equipment Daily for part two of this two-part series. For more information, please visit www.bizwizwithin.com.