If You Are Not Satisfied With the Way Your Business Is Running, Change the Design

Every once in a while a defining moment presents itself. Several years ago, I attended a program with 20 company presidents. The featured speaker was Max Carey, noted author and national speaker.

He started his three-hour program with a direct question to the group: how many of you are not satisfied with the way your business is running, and feel that there is a lot of room for improvement? Everyone raised their hand. He followed that question with this statement, while pointing an accusatory, but friendly, index finger at all of us:

“Your business is running exactly the way you have designed it to run. If you are not satisfied with the way your business is running, change the design. If you change the design, behavior will follow.”

Change the design! Sounds logical, but what should the new design look like? How do you even begin to entertain the notion of a new design for your business? What does new design really mean?

Is Max Carey’s statement a convenient and catchy phrase that, in reality, is a Herculean undertaking when attempting to put it into practice?

It is interesting that when I talk with company presidents about their businesses, almost all of themto a one they will state that they want to grow their businesses and improve their bottom lines. Business owners are very competitive. They like to win. Market penetration is a form of winning and when a company is penetrating a market, this growth is intoxicating for both the business owner and the employees. Profitable growth is energizing for all company stakeholders!

Most companies have less than 3%-5% of their served available market (SAM, defined as the total market for the product or service a company provides within the geographic region they cover). In most cases, management talks about growing 5%-10% a year rather than strategically discussing how they can capture another 1%-2% of the market representing double digit growth of 15%, or more.

What is stopping them from this level of growth? Two prime reasons:

1) Not taking the time to step back and think strategically

2) An ineffective business design

Most markets are relatively mature, making it difficult to differentiate the core product or service your business was founded on to deliver. Competition has the same challenge.

Capturing market share, and differentiation, go hand in hand. As markets mature, differentiation must be established by changing the way your company runs internally, resulting in a customer experience that is measurably different.

Differentiation is all about the looking at your product in a more holistic manner, defining it as the total interaction, or touch points, between your customers and your company. Defining the current output, the “As Is” is the first step.

How good is your company’s output relative to competition? It is good enough to hold on to your 3% of the SAM, but certainly not exciting enough to capture additional share, or it would have happened by now.

OK, it’s time to start thinking about a new business design. Why? Because the current design has allowed you to capture, and hold, a 3% share of your SAM. Customers will not switch suppliers or providers unless they are given a real reason to do so.

Here is a thought that I would like to leave you with:

If you take the time to list all the elements of the current output of your company, and distribute this list to all your employees to review, comment on, and make additions, this will begin the process of changing the business design. This output list is comprised of all the needs, wants and complaints that your customers have. Some examples on the list might be on-time-delivery, live operator, quick response to a customer request, professional communication on projects, electronic billing, quality, and lead times. This list will easily exceed 30 separate items.

Because employees add most of the value to the company output, they must have most of the input into the change process, or the new design will not be sustainable.

Having your employees look at your company through the current output lens, or the customer’s view, has the tendency to not make this approach personal to any single employee. For example, if lead times are three to four weeks (the “As Is”), and the goal is to reduce this to two weeks (the To Be”), this transition is not the result of one employee’s actions, or inaction.

Having your team of employees look at the existing overall company process that impacts lead times will naturally result in discussions, and suggestions, that positively impact the work flow through the company.

The existing “As Is” process in the company yields a three- to four-week lead time. Most efficiency gains are realized through the employees’ suggestions that result in time and motion compression in the way they personally work, and how all employees work together. Management and employees can use the many common sense tools to provide them with guidelines to drive the change process.

In the world of lean (based on the Toyota Production System), it is stated that 95% of all the actions that we do in our companies are considered non-value added by our customers! Driving internal efficiencies through the elimination, or reduction of waste, will have a positive impact of your company’s output. Changing corporate processes that directly link to improving elements of the corporate output provides marketing with a value proposition that is quantifiable leading to real differentiation.

The opportunities to dramatically improve your company’s output are profound. Differentiation starts with process optimization driven by the employees. Pick a process within your company as a beta test.  Have the employees drive the process modifications and measure the improvement. You will be surprised with the results.

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Avatar About the Author: The Rhode Island Small Business Journal is a printed monthly magazine and an online resource for the aspiring and start-up entrepreneur and small business owner.

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