Improve or get left behind! This pressure, whether it be driven from the competitors in your market, or driven by your own desire to make your company better, is faced daily by all business owners.
The right approach to performance improvement will pay off multiple times over, the wrong approach will set you back further than where you started from.
The most common mistake we see businesses make is to solve the wrong problems all at once.
There are only so many hours in the day, so many resources available, and so much money we can spend on performance improvement. So we better make sure we’re dedicating those resources to the problems that are having the largest impact on our performance and profits.
Sounds logical right? The problem with logic is that it tends to go out the door when unexpected problems arise and the pressure to resolve them ramps up.
A mining services organisation had experienced terrible dump truck availability for the last three weeks. Break down after break down had ramped up the pressure on the management team to improve performance. It invested significant funding and worked tirelessly to improve maintenance practices. Unfortunately, the improvements they made in availability had no impact on total performance. By focussing on a short term, noisy problem, they failed to realise that the real problem that limited their performance was having enough people to operate the machinery.
A professional services organisation started new projects weekly. Every time an issue came up there would be a project to resolve it. The people managing the projects were spread so thinly that barely anything got finished, and the things that did had no major impact on performance. A lot of effort, for no return.
These organisations aren’t bad performers. In fact, both of them are profitable, are well led, have great people, and offer great products and services to their customers. Nor are they unique. These mistakes are commonly made by even the best businesses, and keep performance improvement organisations like ourselves gainfully employed.
Here are our 6 tips for finding and selecting the right problems to solve in your business. Follow these and ensure you get the best bang for your performance improvement buck.
Know Your Business Goals
What you want to achieve dictates the problems you need to resolve, and not resolve. Have a set of well-defined business goals and use these to prioritise the areas of the business you aim to improve.
Map Your Business & Measure How It’s Performing
Without mapping and measurement it’s all here-say and speculation. Everyone has an opinion on what the major problems are, but accurate process mapping & data directs you to the key problems that you need to resolve.
Break your business down into its parts, and determine those parts that have the largest impact on your performance.
Seek to identify & resolve problems in these high impact parts of your business.
Talk to Your Team & Customers
Mapping and measurement needs to be confirmed by your team and your customers.
Actively ask your team and customers about their experiences in those key problem areas of your business. Make note of the challenges they face, what is going wrong, and what they think could be improved.
Prioritise
We will borrow money and bet that you will have more key problems to resolve than resources available to resolve them with. You will need to prioritise.
Prioritise key problems that have the greatest impact on the achievement of your business goals.
Then allocate your available resources to address these key problems.
Stick to It
Spot fires will arise, and it will be tempting to move resources from the key problems to deal with these emerging issues.
You have all your resources allocated. So if you want to take on a new problem you need to stop working on an existing one.
Make these decisions based on the impact on your business goals. From our experience, resolving your key problems tends to have a much greater impact on your business goals than resolving spot fire issues.
Celebrate & Reload
Celebrate resolving key problems and the improvement in business performance. Momentum is the key to keeping everyone focused and motivated.
About 3 Ps in Profit
Our Vision: Enabling more Australian small & medium businesses to succeed & thrive through genuine partnerships that deliver performance improvement & growth.
Our Mission: Improving & growing Australian small & medium businesses by focusing on the three fundamental elements that drive performance; planning & alignment, processes & systems, and people.
Want to find our more? We would welcome the opportunity to discuss your performance improvement objectives and how we can help you achieve them.