Improvement is Intentional
Improvement in your businesses is not an accident. It's not something you just pay other people to do (although skillful consultants can make a huge difference). It's not even something that happens out of the outcome of a meeting. Improvement in your business is an investment you make. And just like any other investment you make, it should be based on empirical information, carefully thought out, and timely. One way to achieve each of these dynamics of improvement is by practicing continuous improvement within your enterprise.
Continuous improvement is one of the principles in lean manufacturing, which has now spread to become lean enterprise management. Lean principals are used in everything from nurse staffing to building a Silicon Valley startup. Continuous improvement means to improve incrementally based on observations as opposed to large sweeping improvements based on theory. And for the uninitiated, lean business management just means to add as much value to the customer with minimal resources.
The Cost of Improvement
In my own life, I make investments to that impact how well an arena will thrive. It’s time, energy, and money. If I'm spending time and money on my kids, but I'm putting in no energy (I'm watching TV, or on my phone for example), then I will surely fail in my family life. If I'm putting effort and time into cleaning and maintaining truck, but not spending money on the needed materials (oil, filter, tires, etc.) for regular maintenance then I will fail as a truck owner. The same goes for any arena of your life; spiritual, work, health or whatever. This is how I juggle priorities in my own life.
In business, there's a similar matrix that can be used for improvement. Consider the mix of time, money, and people that must go into improvement. If you're a manufacturer and considering adding a new assembly line, you will need to know how many people the line requires, how long it takes a product to get down the line, and how much money you will need to invest in the machines to do so. Maybe you can half the time by doubling the manpower or you can double the investment in robotics to reduce the needed people.
Maybe that's an oversimplified example, but I think the same goes for every dynamic of business. Time has many layers of costs associated with it, but most specifically it’s what economists refer to as opportunity cost. What could you be using the time on the assembly line to be manufacturing instead? Money has a relative cost depending on the marketplace. A dollar in Manhattan is not worth as much as a Dollar in Cincinnati. Also, there is an opportunity cost associated with a dollar spent on this assembly line versus spending that dollar on a different project. People are not equal. In software development, it's often cited that a good programmer is somewhere between five and ten times more productive than an average programmer. So spending time and money on the right people will throw your business into overdrive.
I’m not sure about this part – I’m envisioning this person sitting around with a spreadsheet determining if investing time with his kids is a big enough return on the investment. I get where you’re going with it and like the concept, just not getting a good visual. Could you possibly combine this paragraph and the next and talk about in Your Own Business, you do these things, then apply that to examples of how manufacturer can use the same concept?
Improvement as an Investment
The goal here is to encourage you to view improvement not as something your organization does but is instead an investment you make. Therefore, as you line out issues in your leadership meeting or you complete 5-why analysis to define root causes of your problems, you need to accumulate all these potential investments in your business together. Decide which ones yield the highest return on investment. You may be surprised when you view your business as an investment portfolio just how much you're leaving on the table by making investments in the wrong places.
There are many places to accumulate your collective investment opportunities for improvement. It can be on your Traction L10 meetings issues list, a company-wide forum for colleagues to post their issues, or can be tracked at the manager level. Whatever the mechanism and whatever the way. Collect them, consider them, and invest wisely.