Identifying and Prioritizing Business Improvements
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By Bob Winrow
As a consulting agency to businesses of all sizes and industries, our engineering consultants are frequently asked, "Is there an effective process for identifying and prioritizing improvements needed in our business?" The answer is yes. Following is a process methodology that can be tailored and adapted to meet a company's specific organizational profile.
Every business has its own unique set of circumstances, culture, style, history, and individual characteristics. Each situation that arises requires the adaptability of proven techniques to meet specific methods, needs, and problems of the business.
Unfortunately, many businesspeople ask the question about identifying and prioritizing improvements only when they are confronted with problems. Typically, those problems have a number of conflicting, or interwoven, conditions that prohibit the understanding of what the "real" problems are.
Outlined here is a process for getting to the core issues, so that problems can be resolved effectively and business can be improved rapidly. Make certain to record all the results of each step taken in this process so the company can look back at what has been accomplished.
Step 1: This initial step should be limited to one to two hours. It is intended to identify problems and concerns that require improvement actions. Schedule a meeting of the people who are involved or affected by the problem and set the tone of what needs to be done. Tell them that you need their insights in order to identify the core problems or concerns that require improvement actions that will resolve, stimulate, or solve business growth issues.
Identify a group facilitator, the person who will act as the "gate-keeper," and a recorder of what transpires during the group's discussions. Next, define the ground rules of the meeting. These rules could include that all discussion should be focused, factual, positive, and constructive. The rules will be defined by what will need to be done to reach the goals of the discussion, and they should be outlined at the beginning of the meeting.
Remember that all participants in the discussion are important, that everyone will have an equal voice. Comments, ideas, problems, concerns, and suggestions should be recorded on a chart entitled "Problems and Concerns." Record the initials of the individual who provided the comment or idea next to each item listed. Some comments, ideas, etc., may be noted in a "parking area," an area of the chart containing non-immediate comments that can potentially be referred at a future time.
It is important to focus the discussion on issues; no comments should be directed toward individuals in the group. "War stories" should be welcomed if they illuminate a situation to be addressed. Stories should be brief and specific.
It should be made clear to the group that all areas and activities will be open to scrutiny and review, and that there will be no "closed doors" or areas considered to be "off-limits."
Step 2: Consolidation, clarification, and prioritization of the items identified in Step 1. Reaffirm the meeting rules. Scan, with the group, all the items noted on the "Problems and Concerns" chart. Wherever appropriate, consolidate and group together like items. Where further explanation or clarification is warranted, refer to the person who provided the idea, etc., to amplify and discuss. Capture the explanation and rationale on the chart.
Next, ask the participants to rank each identified item as: 1- High concern; 3 - Medium concern; or 5 - Low concern. The high-concern items should be the first to be discussed.
Step 3: Focus on each of the high-concern items, and facilitate a detailed discussion. Keep the other group-identified items saved in a "parking area" on the chart. The objective is to determine if each high item is considered a "core" problem or a symptom of another issue.
How do you accomplish this? A high concern item is usually identified as a "core issue" when there is consensus and no further questions. The facilitator should guide and direct the identification process. The following is a simple question-and-answer technique for facilitating discussion around a "high" issue such as "Sales are declining."
Q: What is the history of sales declining?
Q: What has changed in the market place?
Q: Did the competitor introduce a new product?
Q: Does the product have more function?
Q: Does the product have a lower price?
Q: Is this a product cost/price issue that results
in declining sales?
A: Over the past 6 months. Steady decline
A: New competitor
The core issue in this scenario is that "The cost to produce and the resulting price of the delivered product are not competitive." Each person's individual understanding and acceptance of this result is essential. This is the time and place for everyone in the group to express concerns, resolve them, and gain acceptance.
Step 4: This step is where action takes place. With the core issue identified as a product, cost, and/or price issue, action items and assignments can be made. These assignments may include gathering cost data, examining processes, applying value-stream mapping techniques, or examining assembly methods. Identifying the core issue also creates opportunities to look at enhancing a product's function, or evaluating the potential of introducing a new, higher-functioning product.
One option to resolve the "high" issue of "Sales are declining" could have been to eliminate the step of identifying the core problem, and the result may have been the initiation of a new sales and marketing campaign. Initiating a new campaign could result in added expenses, loss of valuable time, and further decline in sales. Unfortunately, the choice of not identifying the core problem could also result in a going-out-of-business scenario.
By choosing instead to first identify the core problem, the result will be a focused, detailed, scheduled, gathering of action items. These actions will be implemented as part of the Problem Resolution Process that has the goal of expanding sales and recapturing a leading position in the market place.
For further information, contact Bob Winrow at (845) 696-6934, x 3004, or by e-mail at email@example.com.
Bob Winrow is Field Services Director of the Hudson Valley Technology Development Center (HVTDC).
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