Posted in Boost Your Brainpower, Design Thinking, Influencing people, Launch Your Business, Lead Your Team, Self confidence, Study Success by Jo North
CREATIVE THINKING FOR COST EFFICIENCY
OBJECTIVE FOR TODAY
The purpose of the session is to introduce you to some techniques that you can use to help you make cost efficiencies in your business, without negatively impacting the customer experience.
OVERVIEW
In the Crucial Core you will learn about three creative thinking approaches that you can use to identify areas to reduce costs in your business, without affecting your product or service delivery.
The approaches are:
- Reducing error, duplication and unnecessary effort in your business processes.
- Seeing your proposition from the customer perspective, strengthening the items that add value, and removing or reducing those that don’t.
- Improving your productivity through virtual working, apps and technology.
In today’s Idea Time®, you will create your own efficiency plan that will save you time and money when you put it into action.
Because habit and learned behaviours influence people’s choices of what they do, and how they do it, you will also consider some tips and techniques to help you, and others, stop doing the things that hinder your efficiency, and start doing the things that help.
You might want to gather some sticky notes and pens before you begin.
TOP TAKEAWAYS
1. Most activities can be done more cheaply, quickly or efficiently with no negative effect.
2. By stepping back and viewing how we operate from a fresh perspective, we can find new ways to improve productivity.
3. Doing routine things differently, especially when they have been done the same way for a long time, can be a challenge until new habits are formed.
4. Awareness of this, and using helpful techniques to support the change, can help to accelerate and embed the more efficient way of working.
CRUCIAL CORE
For the purposes of this session, cost efficiency means creating and delivering your work, product or service to the right standard, with minimum waste and at the lowest achievable cost.
CONTINUOUS IMPROVEMENT
To achieve the most cost efficient and effective results for yourself as a leader, and for your business, an essential practice is to focus on continuously improving what you do, to reduce waste and unnecessary cost and effort, and improve the productivity of yourself, and those who work with you.
Whilst reading this section, you might think that some of the suggestions are common
sense, and I would, in the main, agree with you. That said, just knowing something does not mean that we always apply it!
If we all are really honest (myself included), there are projects, tasks and approaches we all take to our work that contain inefficiencies. Sometimes these are obvious, sometimes
they become visible to us only when we step back, challenge and be more creative about
what we are doing.
3 APPROACHES FOR COST EFFICIENCY IDEAS
If you want to become more efficient either in your individual professional work, or as a team or business (or all three), these 3 approaches could really help you:
- Spotting opportunities to make your processes slicker, quicker and more reliable.
- Sharpening your customer offer by focusing on your strengths, and removing or reducing any additional elements that your customers either don’t find valuable, or wouldn’t miss if they were gone.
- Honing your productivity by selecting inexpensive, easy-to-use digital solutions that could really work for you.
MAKING YOUR PROCESSES SLICKER
Both our individual and business processes evolve over time, due to changing needs and opportunities. When I work with client teams I often find that they are running elements of their processes that no longer serve a purpose. These elements were introduced to serve a need which does not exist anymore, but perhaps due to routine and habit, the unnecessary steps were not removed, and the process was not updated to reflect the new situation.
Here are some good places to look for cost inefficiency in what you do:
- Movement – is there any unnecessary movement or transportation of products, materials or parts? For example, a train company I know found that train engineers were wasting a lot of time walking backwards and forwards from the engineering stores to the train maintenance sheds. Following feedback from the engineers, the company moved the stores much closer to the sheds, saving a significant amount of time and money by improving productivity.
- Waiting – is there any unproductive downtime that happens because people or machinery needs to stand idle until an earlier part of the process is completed? A manufacturer I work with identified that one of their processes was being slowed significantly by literally waiting for paint to dry. This was resolved by introducing inexpensive and effective drying machines.
- Defects or errors – do you need to redo work on a recurring basis because it is not up to standard? For example, a service company’s invoicing was causing issues due to repeated inaccuracy, meaning that the invoices were frequently rejected and had to be resubmitted. This was resolved by retraining the staff involved.
- Duplication – do you double up on any activities, for example checking things more than you need to, or filing duplicate copies? Are multiple inspections and signatures required when fewer would suffice?
- Spending more money than you need to on products and services. Making more stuff than you need to – for example, printing extra handouts in case you need extra.
- Having more stuff than you need, for example too much stock, or even general clutter in your office, on your shop floor, or even your laptop.
- Not making the most of employees’ talents and capabilities. This means that you are underutilizing the resources available to you.
SHARPENING YOUR CUSTOMER OFFER
Your customers – whether they are external, i.e. the people who buy from you, or internal, i.e. colleagues who need your expertise – are the ones who define what they see as being value from you. Usually they will only buy from you when they believe they are getting a fair exchange, unless they have no other option. This also applies internally, too. I think we have all avoided asking a certain colleague or department to do something at some point and gone round them, or done it ourselves, because the thought of dealing with them was so off-putting. I know I have!
THE MVP PRINCIPLE
That said, sometimes we can over-deliver for customers, often without realizing it. This is great if customers genuinely appreciate it, and it’s costed in to your business model and pricing. Surprisingly, though, that’s not always the case with over-delivery, and using the concept of MVP – Minimum Viable Product – can help us to see our customer offer creatively through fresh eyes.
In product development, the minimum viable product (MVP) is a product with just enough features to satisfy early customers, and to provide feedback for future development. The idea is that rather than waiting to perfect and polish every aspect of a product before it gets tested, or goes to market, the MVP helps entrepreneurs and corporates alike be more agile, ship their concepts much more rapidly, and get customer feedback that helps them to continuously improve the product to make it better, stronger and more attractive more quickly. Waiting until the business has developed the ‘perfect’ product often means wasting time and money, and in some cases allows the competition to get there before you do.
In product development, the minimum viable product (MVP) is a product with just enough features to satisfy early customers, and to provide feedback for future development
I find it really helpful to remember, for every product, service, task or project, that it’s important to invest just the right amount of time and effort to get the outcome that my customers want. Any more is a waste. Any less is failing to deliver.
For some things it means really pushing to do the most amazing, ‘delight-ing’ and stellar job I can because the outcome I want is to blow people away. This is my aim, for example, for the events I design and facilitate, and the coaching I do with clients, and I get intrinsic reward from doing so as my aim is to make a real and positive difference. This outcome makes me happy, too.
For other things, quick, decisive action is more important, and it’s better to do something and get it mostly right than do nothing at all. For example, sending through action notes from most meetings promptly is often better than sending a wordperfect document two weeks later, meaning that progress and momentum fade away.
MVP PROMPTS
Key prompts that are helpful when considering your MVP are:
- Functionality
- Packaging
- Form and fit
- Price
- Customer buying experience
- Performance
- Reliability
- Support and maintenance requirements
- Perception
- Speed
- Accuracy
- Convenience
- Customer service
It is worth revisiting this periodically, as customers’ needs do not stay the same. For example, business travellers who were accustomed to inflight meals and higher service standards from the classic airlines were soon happy to migrate to low cost airlines such as Easyjet as availability grew.
HONING YOUR PRODUCTIVITY WITH TECHNOLOGY
THE FOURTH INDUSTRIAL REVOLUTION
In the previous session, you may have read about the era of Customer 4.0 in the Bumper Bonus Bits. Connected with that is Industry 4.0.
The World Economic Forum has described the current age as the fourth Industrial Revolution, or Industry 4.0 – often shortened to 4IR, which is all about digital. The technology opportunity now available to businesses means that countless processes, for example in mass production manufacturing, can benefit from huge streamlining and productivity enhancement with capital investment.
It’s important to invest just the right amount of time and effort to get the outcome that customers want.
These technologies include:
- Additive manufacturing, more commonly known as 3D printing, but also rapid prototyping and direct digital manufacturing (DDM)
- Robotics and autonomous systems
- Modelling and simulation
- Augmented and virtual reality
- Data analytics
- Artificial intelligence
- IoT, or ‘Internet of Things’, which is the connection of devices (other than usual items such as computers and smartphones) to the Internet. Cars, kitchen appliances, and health monitors can all be connected through the IoT.
Businesses could significantly increase productivity and competitiveness by increasing the 4IR technologies to enable connectivity, flexibility and agility.
Examples of companies that are famously using these technologies in manufacturing are:
- Bosch
- Siemens
- Audi
4IR is also being adopted in wider society, for example there are numerous Smart City projects around the world. (A smart city is an urban area that uses different types of
electronic data collection sensors to supply information which is used to manage assets and resources efficiently). Examples of smart city projects include:
- Singapore
- Barcelona
- London
- San Francisco & Las Vegas
- Oslo
- Eindhoven, Utrecht and Assen in Holland.
The World Economic Forum has described the current age as the fourth Industrial Revolution, or Industry 4.0
DIGITAL OPPORTUNITIES FOR PERSONAL AND TEAM PRODUCTIVITY
It all doesn’t have to be about the big investment initiatives, though. Technology can really help with productivity, including at the individual, team and business levels. In some cases, using technology might be a natural progression for processes you may already have in place in your business. In others, you may need to make some tweaks to get all the benefits of the digital options.
Whilst you may need to make some changes, it’s important to remember that the benefits will often make the temporary challenges of making the change well worth it, once your new systems are in place.
For example, when I founded my business, The Big Bang Partnership Ltd, the accounting software packages available were costly and over-specified for what I needed, so we developed manual processes. As technology has developed there is now a whole range of inexpensive book keeping apps and cloud solutions for businesses that make life much easier. It took a couple of weeks, and we had to develop new ways of doing a few things, but we successfully moved our accounting from being manual to using Xero.com online software. Everything is now much more streamlined, we don’t spend hours reconciling invoices, payments and bank statements. As a result, my team saves at least one full day each month on our accounting processes, and they are now more accurate and timely, too.
IDEA TIME
MAKING YOUR PROCESSES SLICKER
Think about a regular process that you do that takes time, and isn’t straightforward. Jot down the key stages here, or use a separate piece of paper if you prefer.
Alternatively you could do this activity with your team, and use sticky notes and flipchart paper to map your process together.
Now go back and review your process, using the checklist below to identify any potential
efficiencies. Not all of the potential efficiency areas may apply to your process, so focus on those that have the most benefits to you. Again, you can work through this individually or as a team.
PROCESS EFFICIENCY CHECKLIST
How well are you achieving the most effective and efficient solution using this checklist?
SHARPENING YOUR CUSTOMER OFFER
For this exercise, you could choose to focus either on external customers, i.e. the ones who pay for your products and services, or internal customers, i.e. your colleagues.
For a core product or service, review how well you are achieving the most effective and efficient solution using this checklist.
Look for anything that you could either eliminate completely or reduce without negatively affecting customers’ perceptions of your product or service.
Once again, focus on those elements that are most relevant to you and your business.
SHARPENING YOUR CUSTOMER OFFER CHECKLIST
BUMPER BONUS BITS
There is a lot of great material that can help you to go into much more detail on the themes
that you have been working on in this session. If you’d like to delve deeper, here are some
resources that I recommend:
1. MAKING PROCESSES SLICKER
Many of the principles in the Crucial Core section above are taken from the philosophy of Lean Thinking. This is a really rich, detailed and well documented approach, and I have only provided a very, very high level introduction in this session.
If you’re new to Lean Thinking and would like to learn more, I recommend that you take a look at one or more of these books:
- Lean for Dummies, by Natalie J. Sayer and Bruce Williams
- The Lean Manager: A Novel of Lean Transformation, by Freddy Balle and Michael Balle
- Lean Thinking: Banish Waster and Create Wealth in Your Corporation, by James P. Womack and Daniel T. Jones
- The Toyota Way, by Jeffrey Liker
2. SHARPENING YOUR CUSTOMER OFFER
ff you’d like to learn more about the concept of eliminating and reducing, you may be interested in exploring the ERRC grid (Eliminate, Reduce, Raise, Create) which is a Blue Ocean Strategy tool.
Check out the Blue Ocean website at www.blueocean.com, or have a look at the book: Blue Ocean Strategy, by Kim and Mauborgne
3. HONING YOUR PRODUCTIVITY WITH TECHNOLOGY
If you’d like to learn more about 4IR, try this book: The Fourth Industrial Revolution, by Klaus Schwab.
LOOKING FOR MORE?
If you’re interested in improving your personal or team productivity, here is a bonus Idea Time activity. These ideas will help you use technology to do more with less and become more efficient and versatile. Don’t worry if you don’t feel confident with tech. Many of these suggestions are really intuitive and easy to use, and they all have online guides that will help you get up and running quickly and easily.
Go through these suggestions (you’re probably doing some of them already) and identify a couple that you could either:
- Start to use
- Use more effectively, and more consistently, if you already have them in place.
GETTING WORK DONE
Use time tracking software to see where you are spending your time so you can become more productive.
Examples to explore:
Accelerate your work processes, especially written tasks, with digital dictation.
Examples to explore:
Use project management and task management tools to stay on top of your daily business responsibilities.
Examples to explore:
Create a digital filing system to make it easier to sort, save, share and find documents. Develop an efficient email management process that makes it easier to stay on top of the flow of messages.
FINANCES AND BUDGETS
Use online book-keeping to streamline your financial management tasks.
Examples to explore:
Set up the facility for online banking and card payments for your clients.Examples to explore:
Create a new income stream by selling your products online.Examples to explore:
COLLABORATION AND LEARNING
Before you book a meeting, or decide to travel to see colleagues or clients, consider if a telephone conference or video call would be appropriate instead.
If you’re running some internal training, or doing a briefing, consider holding a webinar or
web conference for travel-free face-to-face time.
Examples to explore:
Explore online courses and coaching that are more flexible than traditional classroom options.
Share files and data with the Cloud.
Communicate quickly with your team through instant messaging.
Examples to explore:
MOBILE WORKING AND TELECOMMUTING
Create a mobile office that allows you to work productively from anywhere, and get started fast.
Use remote desktop applications to access files on your office computer.
Examples to explore:
Go paperless to save money on supplies and storage in your office.
Use your smartphone and select apps (that sync with the Cloud) to stay connected when you’re out and about.
