Profits or Bust:  Inside the Mind of an Efficiency Expert

 

 

 

image credit: Shutterstock

 

If you could hire an efficiency expert, what would one say? Business-efficiency consultant Andrew Jensen finds himself repeating the same things to his clients over and over again.

Jensen, president & CEO of Shrewsbury, Pa.-based Sozo Firm Inc., goes into businesses, schools and organizations and makes recommendations on what their leaders can do streamline operations and increase productivity.
Here are the most common recommendations he makes to clients looking to do more with their existing resources.

1. Trim the overhead. Look at all of your fixed costs with a critical eye. Business owners operating for more than a dozen years tend to get into a routine with their overhead expense budget. Just because you have spent $100 on a particular good or service does not mean that you should keep doing it, says Jensen. "I encourage business owners to evaluate, evaluate, evaluate."
For example, look at your marketing budget, suggests Jensen. Ask yourself: Is the marketing that I am doing really bringing in more customers? If you are outsourcing your advertising to another agency, be sure that you are corresponding with the ad agency regularly to keep tabs on their progress, says Jensen. If you have been spending money to advertise on the radio, consider giving out a separate web address on the radio ads so that you can track whether the money you are spending is bringing in any new customers, says Jensen.

Related: Your Business Leaking Money? 5 Holes to Plug
With regards to the physical goods included in overhead, if you have a broken piece of equipment, consider repairing -- instead of replacing -- it, says Jensen. Decrease the amount of inventory you lose by installing a new security system. Overhaul your stock-management system to reduce waste.

2. Train your staff. Entrepreneurs often don't spend enough time training staff, says Jensen. Even when a small business hires a competent candidate with the best qualifications, if he or she doesn't spending enough time training, then the company isn't likely to get the most out of the new hire. Since staff costs money, you want to make sure to get the most that you can out of every employee.
Training does not end at the point of hire, says Jensen. You need to continue to devote resource to making sure your staff is fully up to speed on any new systems, operating systems or procedures. Entrepreneurs and managers tend to think of training as lost time or a waste of money. "They don't really focus on the benefits," says Jensen. "It will make a profound impact on how efficient your staff is."
Related: 3 Belt-Tightening Mistakes to Avoid

3. Cancel meetings. Technology has eliminated the need for many meetings, says Jensen. Often client meetings can happen over video conference to save money on travel expenses. Further, traditional meetings don't allow all types of thinkers to have an equal chance to respond. Workers who need time to read, think and digest before responding can be at a disadvantage amid the spontaneity of a meeting. While many meetings can be replaced by a digital communication, there is still a place for some face-to-face meeting time, says Jensen, to foster community and camaraderie among the staff.

4. Get organized. If the boss isn't focused, then the business won't be, either.

• First and foremost, do the simple stuff: Clean out your desk, briefcase and files.
• Cut out the digital noise: Turn off all messaging systems for a few hours at a time. Create a habit of checking messages every few hours. Between times, stay focused on the task at hand.
• Prioritize: Make to-do lists. Avoid the urge to grab for the low-hanging fruit first. Do what needs to be done first, first.
• Assign specific tasks to specific times of day. Do the hardest mental work when you have learned you are the most focused. Stagger rewards throughout your day to keep you on track.
• Get your homelife cleaned up. "If a person's home life is hectic and stressful then their productivity at work is also going to suffer," says Jensen. Eat right, exercise and get enough sleep.

 

By Beverly Kaye and Julie Winkle Giulioni
Where do I stand? How am I seen? What do you think? I don’t mean to sound needy … but a little bit of information could go a long way with me. — An employee (perhaps yours)?

Feedback.
How appropriate that the word begins with feed. Because for many employees, information from others about how they’re perceived and how they’re doing is currently a severe source of malnourishment in today’s workplace.
Yet in study after study, employees in every sector are starving for feedback. And, it’s a pretty human response. We spend 40+ hours each week at work, dedicating our bodies, minds, and souls to the cause. A little attention is not too much to ask.
Managers, beware. A low-feedback diet may be harmful to the health of your business. Side effects include:

• Disengagement;
• Stunted growth;
• Lack of clarity;
• Lost opportunities;
• Loss of talent.

Good people move on — either psychologically or physically — when their hunger for feedback isn’t satisfied. And this loss of talent is completely unnecessary because feedback:

• Doesn’t cost anything except a little genuine attention to others.
• Lends itself to literally any setting — face-to-face or virtually — with no more than a moment’s preparation.
• Isn’t just the domain of managers — anyone who is willing or asked can get involved.

Feedback is a hindsight lens through which people can pass their self-perceptions — and in the process, it yields a clearer vision of who they are and the value they bring. Sounds good, right?
What about you?
Be honest. When it comes to giving and getting feedback, where do you stand?

It’s feeding time
Opportunities for feedback abound. And what probably comes to your mind first is performance feedback — job-related information about an employee’s behavior or results that helps to drive improvement. That’s certainly important — but it’s not what we’re talking about here. We’re talking about a broader and more expansive dialogue that drives development.

We’ve just discussed the value of hindsight conversations with employees, which surface essential information from their point of view. The problem is that an individual’s perspective is rarely a complete picture.
Employees need a reality check — an opportunity to expand their perspective beyond their own to round out their self-assessment. Voila! An opportunity for feedback.
When you help employees to proactively solicit the points of view of others, they get a two-fer:

1. They’re able to check their assumptions, balance their understanding of themselves, and discover who they are in the eyes of others.
2. They develop the capacity to independently initiate feedback conversations.

Do this well enough for long enough and pretty soon you’ll have a self-generating feeding frenzy (in a good way) in which employees become comfortable getting and volunteering feedback freely among themselves.

Who’s who in their zoo

So feedback is another sort of a hindsight conversation. The good, the bad, and the ugly need to be confirmed or dispelled as employees’ perspectives are checked against the points of view held by others.
To ensure the most complete picture, it’s important to tap into the broadest career audience possible. Ask employees who might have additional insight into them, their strengths, abilities, interests, and opportunities.
The answer will likely include some combination of:

• Peers;
• Employees;
• Customers;
• Family;
• Friends;
• Manager.

You’ll notice that you are last on the list. And that’s to make a point.
When it comes to career development, it takes a village!
Employees need to develop the broadest network possible to facilitate their career success. Co-workers and others within and outside the organization have potentially important information, ideas, and helpful contacts. And gathering feedback from them is an ideal way for employees to begin to engage others in creating the path forward.
As a manager, you have a unique perspective. But yours is one of many that will inform employees’ understanding of themselves and help to be the basis for effective planning.

Encourage employees to gather feedback from others before sharing your own. It’s not about politeness (e.g., letting the guests get their food first) but about power. You’ve got it and, as a result, your perspective may carry undue weight. When employees come to you with a plate full of feedback from others, they are better able to put your perspective into perspective.

Just remember: ABC

Soliciting and accepting feedback graciously are skills that distinguish successful and effective individuals. Yet, many people have not had the benefit of learning these skills. Your employees are likely among them.

Since the act of opening one’s self up to the opinions of others can be challenging, the agenda for such a discussion should be simple — as straightforward as ABC. Encourage employees to focus on just three things as they gather feedback from others: abilities, blind spots, and conditions.

Abilities

• What are my greatest strengths?
• Which of my skills are most valuable?
• What can you always count on me for?
• What value do I bring?

Blind spots

• What behaviors have you observed that might get in my way?
• How have I fallen short of expectations?
• How might my strengths work against me?
• What one change could I make that would have the greatest positive effect on my success?

Conditions

• In what settings or under what circumstances do I make the greatest contributions?
• Under what conditions have you observed me struggling?
• Do I tend to perform best when working with others or flying solo?
• What factors have you noticed trigger stress or other negative reactions for me?

Work with employees to select a question or two from each category to use as the starting point for feedback conversations with individuals in their career networks.
As you can imagine, live, face-to-face feedback conversations are ideal. But, given today’s distributed workforce, employees may need to resort to virtual means — phone or web-chat. Either way, this sort of real-time interaction can surface valuable information while strengthening relationships.

Greater awareness and stronger relationships support career development. In this way, feedback really does help employees grow where they are, so they won’t go and grow somewhere else. As a bonus, they develop a critical skill that leads to greater success on the job and in life.
And, if you have an online tool that you love, keep using it — in addition to, not instead of, conversation.

Excerpted from the book Help Them Grow or Watch Them Go — Career Conversations Employees Want by Beverly Kaye & Julie Winkle Giulioni, with permission from Berrett Koehler Publishers 2012

It's Time To Burn Your Organization Chart



New technology has opened many business opportunities for industrial distributors. Customers, and your own sales people, are using smart phones, tablets, and many other devices to improve the ways that business is being conducted. Given this, how will new technology and practices alter your organizational chart? 
 
Sales and Marketing
Every distributor will need an "Eyeball Manager", the person responsible for tracking visitors to your web site, LinkedIn, Blog, and Facebook page as well as responding to tweets. Many large companies already have whole departments doing this for their brands and customers. How many sets of eyes are viewing your company's messages, advertisements, product offerings, etc. today? You need to know who is watching you and find ways to be sure your sales folks have the opportunity to turn them into customers.

Virtual Sales Person - Once you know which eyes are looking at your company, you need at least a sales person, maybe a sales manager, who is skilled in communicating with prospects and customers electronically. Billions of dollars of business is now conducted over the Internet. Companies are opening markets on a global basis and it may be impractical for you to conduct business in the traditional person-to-person way.

Virtual Marketing Manager - Your catalog used to be a virtual sales person on its own. Now it has likely become an on-line catalog. The text, pictures, price sheet, etc. are no longer printed, they have moved on-line. But is that the end game from a marketing perspective? How interactive is your on-line catalog? Can I conduct business through my iphone or android device? How quickly can you respond to texted or tweeted questions? Does your marketing material look the same on a tablet as it did in a glossy printed catalogue? What new virtual media will be available 5 years out? 
 
Electronic Trade Show Manager - It keeps getting harder to justify the cost and time invested in some trade shows. We have not seen many where that fact has not affected attendance. At some point, a virtual trade show is going to replace the old model. Booth duty will finally be a good assignment! Your trade show manager will need a different set of items to draw in prospects and to differentiate your "virtual booth" from your competitors.
Operations 
 
Virtual Warehouse Manager - We may not have virtual inventory anytime soon, but where your inventory is located is changing already. Many distributors buy or sell on a consignment basis. Many distributors hold stock outside of their own warehouses for key customers. Shared warehouse space, 3PL's, and other options exist today and are used by many distributors on a regular basis. Can your current manager also insure the proper handling and control of inventory spread across the country? Or across the globe? We think he/she might need a virtual counterpart, a person to manage inventory in locations other than your own warehouse.

Supplier Relationship Manager - Manufacturing companies have been working on developing collaborative relationships with their suppliers because they see it as a way to take cost out of the end-to-end process. Distributors buy products from their suppliers and those relationships need to be more collaborative, as well. Our view is that at least some of your suppliers will be open to looking for cost saving and efficiency options that will strengthen both of you to compete in the future.
Finance
Margin Manager - Every distributor understands the importance of margins, but not many have given a person the responsibility of looking for improvement opportunities. The margin manager will challenge sales on discounts and other margin reducing tactics. However, he/she will also be looking internally to find ways to improve margins, as well. Issues like managing margins through commodity cycles; tracking product line margins and specific item margins across the company and working with purchasing on competitive analysis will be tasks that your margin manager will accomplish.
Update the Hiring Process
You may need to hire people to fill at least some of these new positions. Here are some tips for you to consider when filling any new positions:

• Hire people with the skill set that the job requires, don't hire based on industry experience. Many small to mid-size companies operate under the assumption that a new employee must have worked in their industry segment - i.e. MRO distributor. Large companies benefit greatly from new employees with different backgrounds and experiences. A person with the right skills can learn about your products and customers. And, they may be able to add valuable insight based on what they previously learned in other companies or industries. We helped an industrial distributor hire a warehouse manager from the consumer products industry. That individual brought a wealth of different ideas that led to many improvements in warehouse operations.
• Hire a person who will "fit" in your company and culture. Said another way, if you are the owner, don't hire somebody that you don't like as a person, it will not work.
• Involve other key managers/employees in the interview process. That will give you some additional perspectives on the potential new employee and, importantly, people will buy in to the new person if they participated in the hiring process.

Change is a given these days in every aspect of a business. It is important to keep your organization current in terms of roles and responsibilities. Talk to every level of your organization and ask these questions: "How do we need to change our organization to remain competitive?" "Who do we need to hire next?" What positions are obsolete and which ones need to be added." What is going on in our markets that will affect our people in every position in the company?" When you have answers to these and other organizational

Hackers Go After Small Business!

August 7, 2012

Computer hackers are focusing more on small businesses than ever before, with more than a third of targeted attacks aimed at companies with fewer than 250 employees, says a new report.

The percentage of attacks on small business in the first six months of 2012 is double that of the same period in 2011, according to the report from security software provider Symantec. The company said it blocked an average of 58 attacks per day aimed at small businesses in the first half of the year. Daily attacks on all businesses leaped 24 percent to around 154.

Prime Targets

Companies in the defense industry are cybercriminals' top targets, followed by chemical, pharmaceutical and manufacturing firms. If you're a small company with large company partners or customers, you are a particularly tempting target; hackers know that small firms often are the weakest link in the security chain, and thus use them to gain access to their partners' or customers' data. (Large companies with more than 2,500 employees remain the most popular targets: They account for 44 percent of all targeted attacks.)

Defining a 'Targeted Attack'

What's a targeted attack? Pretty much what it sounds like: An attack that's customized for a specific company and its vulnerabilities. Hackers will use publicly available information—or in some cases, information stolen from other companies—to create e-mails with malicious attachments they hope have a better chance of tricking employees into opening them. This technique, called social engineering, is sophisticated enough that just warning employees about thinking twice about opening e-mails with attachments is not enough.

Staying Safe

What can you do? The report puts some of the blame squarely on small businesses, saying that many are not taking the basic safety precautions that would help them keep out cybercriminals.

Kevin Haley, director of Symantec's Security Response unit told PC World: "[Small businesses] are not prepared, because they don't think they have to be, and that's left them vulnerable."

And Eric Maiwald, an analyst for Gartner says that "SMBs [small and mid-size businesses] tend not to have the resources to implement the same types of security programs large enterprises do."

But small businesses often are not taking even the simplest (and cheapest) of precautions, such as making sure all software is up-to-date and patched. If there is a known crack in the software and you haven't spackled it, you're basically leaving the back door open.

Haley added that "They don't have to be genius hackers, because a lot of small businesses are not taking the basic steps to protect themselves."

How to boost the efficiency of your warehouse

When it comes to a successful supply chain process, warehouse efficiency is a critical key to success. From design to management, an efficient warehouse can improve safety, efficiency and overall quality of a company’s supply chain. While there are many ways to streamline the warehouse-related components of an effective supply chain, we’ll briefly examine a few design and management ideas below.

Design upgrades
Without question, meeting the highest safety and health standards must be part of the warehouse design process from the very start. Location, occupancy, function and potential dangers must all be considered, in addition to the impact of environmental issues, waste disposal, site drainage and neighboring businesses or residences.

Flooring is an important key to warehouse design. What type of floor will best match the specific demands of your warehouse? The best floor will offer the least maintenance while providing the greatest flexibility, performance and safety.
With an increasing amount of products on the market—especially Fast Moving Consumer Goods (FMCG) and chemicals—cold storage has become a necessity in many warehouses.

While it may not seem obvious to consider doors in warehouse design, they are a highly relevant component of warehouse efficiency. Doors are in operation constantly and each must provide the best fit for its sole purpose. Will they be used internally or externally? Is insulation required? How heavy is the traffic pattern? Do they meet safety standards?

Improvement management
Keeping machinery in proper running order through scheduled maintenance will save time, money and frustration over the long term. Keep all equipment, such as lifts, in good repair. Don’t neglect regularly scheduled updates and maintenance, especially in regards to machinery that will slow or even stop production if it breaks.

Carve out time to interact with and motivate employees. A short motivational boost can exponentially increase worker morale and consequently, their productivity. Be aware of factors that cause boredom and demotivation.

Encourage a healthy sense of competition among the different zones, facilities and departments by publishing metrics for everyone to see. What types of incentives and rewards can be used to increase overall productivity?
Be sure to have plenty of supplies such as carts, tape, totes, pallets and batteries on hand. Keep track of when items are low and restock regularly.
Minimize how often items are touched in your processes. Consider taking away staging areas and unload, receive and put products away with a single touch. Don’t pick and stage, but live load instead.

The efficiency of a warehouse depends on a wide and varied number of factors. From seemingly simple design issues such as climate, doors and floors to the more complex areas such as meeting safety and health regulations—smart warehouse management and a well-planned design are key for optimal supply chain results. Pay attention to your workers and keep them motivated, invested and interested. Their commitment to the warehouse will inevitably result in the higher production you’re aiming for.
Pete Kontakos is a contributor from Michigan State University.

What biz leaders can learn from astronauts

By Shelley DuBois, writer

Former astronaut Jeffrey Ashby discusses what it takes to make last-minute judgment calls in space and building a solid team.

 

FORTUNE -- The corner office can be a high-pressure environment, but imagine calling the shots in a cramped shuttle in orbit 100 kilometers above the planet.
Jeffrey Ashby made some split-second decisions while space-sick and weightless. He was commander of the shuttle Atlantis on its 2002 mission to bring equipment to the International Space Station. He made the tough choice to manually dock Atlantis to the Space Station, bucking protocol, when he feared the mission might fail.

Yet he felt confident, he says, because of the chemistry he built with his team during the nine months prior to launch. Ashby insisted that his group complete a grueling outdoor course with National Outdoor Leadership School in southeastern Utah's desolate canyon country.

Ashby's resume reads like the dreams of a third-grader: he flew jets in the Navy and commanded a squadron of fighter pilots before he became an astronaut. He's seen our planet from space three times. For now, the career of 58-year-old Ashby has taken a more terrestrial turn. Ashby is the Chief of Mission Assurance for Blue Origin, a company that aims to make commercial space flight affordable. Ashby talked to Fortune about leadership in the Final Frontier at a recent conference at the Wharton School.

Fortune: You don't seem to be afraid of leading in life-threatening situations. So, what scares you?

Jeffrey Ashby: A lot of people ask if I'm afraid during a launch. My stock answer is, not of dying, because you've sort of accepted your destiny at that point, but I am afraid of making a mistake that will either cost lives or cost the mission. Alan Shepard started a tradition where, on the way up to the launch pad, the astronauts recite the astronaut prayer, which is, "Please God, don't let us screw this up."

That is a very team-oriented philosophy to apply in a scary situation.

Oh. I mean, if you put yourself above the cause and your team, you will eventually fail. I see leaders who are screamers, who lead by fear, and that's all ego-driven. You have to be selfless to be a truly great leader. That kind of leader, people will follow, and even if they don't agree with decisions, they'll disagree and commit.

Don't the problems that business leaders face from the safety of their offices seem relatively minor?

No. We all have different sets of talents. I happen to be pretty good at flying off of aircraft carriers and, I like to think, flying shuttles.

Those are inherently more badass than most talents.

Well, they certainly look badass on paper, but you know, I look at my resume, and I'm proud of what I've done, but also recognize that there's a lot of things that I'm not the best person to do. Leaders need to recognize where their strengths and weaknesses are, and where the weaknesses are, they really want active followers to step up and help cover them.

For example, Pam [Melroy] and I were co-leaders one day in the canyons. I got dehydrated. I looked at her, and I said, 'Pam, I feel really bad. You need to be the leader until I can regroup.' Of course, Pam didn't bat an eye. That was a very powerful lesson for me. For a man especially, for a fighter pilot more so. But what a great lesson, to swallow my pride and see how well it comes out, and go, 'Man, maybe I should do that more often.'

You've spoken about how Melroy helped in the crucial decision aboard the Atlantis to manually dock the spaceship at the International Space Station. How did your crew work together?

They key was that she knew me and could tell that I was vacillating. The obvious choice was to do what we were trained to do. She knew it was my decision, and so did every person on that crew. They all fed me information to let me know a) we had enough capability on the crew to pull off a manual rendezvous and b) that it was okay with them. I mean, that is powerful. And it came from a team that had been built only nine months before.

Will you fly again?

I will, but in a new private space vehicle. I'm telling everyone that I'm number one to fly at the little company I work at, and I won't go unless I think it's safe. I'm there to represent the safety of the human beings, so no one else should fly until I do.

Why does space travel matter to humankind?

I think, and this is my personal belief now, that space is written in our DNA as a survival mechanism. It can ignite passion in us when properly incited. I think that we see that passion ebb and flow in society and individuals as they go through their lives and they have other priorities.

Will I go to space?

I would say with near certainty, yes. You'll fly some day. What you should strive for -- because the suborbital thing is easy for you, right? -- is an orbital flight. First of all, you're two to three times as high. You're going to sit there and cross over lines of thunderstorms and the lights of cities and plumes of the Amazon flowing into the ocean. You'll see the Rocky Mountains as a series of tiny little bumps on the surface of the earth. And you'll see the great forests as little strips of green. You'll look at the atmosphere, this thin little band, and you'll say, 'all of human kind lives in that little band?' And you'll think. Wow. First, we better take care of that little band, and second of all, we better have an out. You will be astounded at the fragility of humankind. Life is clinging to the surface of this earth like a little plant would cling to a cliff side in a tiny bit of dirt.

Maybe if we sent our CEOs into orbit, they would put everything in perspective and stop making ego-driven mistakes.

(Laughs) I doubt it.

 

 

Top Level Communications Can Improve Trust, Performance in Companies

The IABC World Conference this week heard from the winner of the IABC 2012 Excellence in Communication Leadership (EXCEL) Award, Irene Lewis, president and CEO of SAIT Polytechnic, Canada’s first publicly funded polytechnic institute.
No stranger to recognition, Lewis was named one of Canada’s 100 most powerful women in 2010. She discussed the transformation of SAIT under her leadership from a “trade school on the hill” in crumbling disrepair with a disengaged workforce to a majestic, award-winning institution that is globally recognized and has received accolades as a top employer in Canada.

Lewis credited communications as a key part of that transformation, emphasizing the role of the CEO in carrying that out. The best things a leader can do are:

• Listen closely and look people in eye.
• Be authentic and lead from the heart.
• Tell and reinforce the organization’s story.
• Acknowledge hard work, never forget to say thanks and give credit where it’s due.

She challenged audience members to create communications structures that help leaders make authentic personal connections and establish relationships. She did this when she arrived at SAIT, when trust was at an all-time low. She called it her “conversation, connection and collaboration” stage, asking employees three simple questions:

• What’s working well?
• What’s not working well?
• How can we fix it?

She read every reply and set up discussion groups, creating a springboard for an employee engagement and participation program that helped define company culture. SAIT compares itself against its own progress and that of other organizations using a survey administered by The Hay Group.

After dismal scores the first time around, SAIT is now at or above the public-sector norm with communications in the best practices category. Lewis credits the success to requiring all departments to submit a plan that addresses weaknesses, is linked to compensation and comes with a commitment to communicate those plans widely.
Lewis says the biggest gains from corporate communications came in 2005, when she separated communications and marketing, as she had yet to see an organization that does both well when they are combined.
Today, SAIT corporate communications’ role is to:

• Provide leadership in telling the SAIT story.
• Safeguard the SAIT reputation.
• Put a face and heart to the organizations’ leadership.
• Tell the employees where SAIT is going and how they expect to get there and how employees can help.
• Recognize organizational and individual accomplishments.

SAIT Communications carries out this role using vehicles such as creative videos and events, a world-class intranet and an ice cream party where the leaders serve up scoops.

The SAIT communications department is able to do this and more because they’ve earned the trust of leadership. As part of earning this trust, Lewis provide resources and makes herself available to carry out communications. The SAIT leadership team willingly participates in innovative communications — including zany things such as parody videos — and they do these things because the communications are authentic and from the heart.

In Lewis’ words, “Employees don’t care what you have to say until they know you care.”