In a recent conversation, the “Ladies Who Lean” found themselves in what resulted in a
brainstorming session about leaning financial accountability using Lean Six Sigma methodology.
This ended up being a 36-minute dialogue between Gail Birks, Chief Efficiency Diva and Yvette Branch, The Executive Innovator. These ladies are seasoned Lean Practitioners who provided an information packed discussion of practical tips for Business and Industry, Government and Non-Profits regardless of the organization size.
The ladies discussed financial accountability from a holistic perspective that touched on all aspects of one's organization and the impacted. Specifically, three key arteries are noted...
*The cost of (poor) quality vs prevention
*Customer Return on Investment (ROI)
*Capturing a clear understanding of the right mix of production/distribution
and staffing with the associated scheduling or leveling as it is referred.
Cost of Poor Quality:
In our world of Lean, we seek to gravitate to the center of the Venn Diagram. While we strive to optimize our resources, processes and performance expectations, we also focus on managing "cheaper, faster and better.” The bottom line is we are working in a mode of continuous improvement that maximizes the customer's experience, internally and externally. When either of the factors impacting the customer’s experience is less than expected, there is a cost. The cost of poor quality will be manifest in terms of revenues, customer churn and lackluster reputation.
Solutions to consider when seeking to minimize Poor Quality as a “Norm” and Maximize Efficiency and Effectiveness are...
*Conduct a GEMBA (manage by walking around) to learn about the
operating chain and "players." You will be surprised at what you will find
on that "safari."
*Learn the cost of time spent on serving your Customer (wages, materials
and other resources). The lean toolbox is so valuable when it comes to
the visuals that tell the story that needs to be heard.
Customer Return on Investment (ROI):
More often, we forego calculating our Customer ROI. Not just for our external customers, but the internal as well. While we all appreciate knowing that we have customers, are we generating a positive return in the relationship? That could be the (64) million-dollar question.. Another thought to consider as a Lean Leader is your internal Customer. Are the morale and incentive offerings of our internal customers at the required levels to ensure that peak performance is sustained, again and again? Most leaders are not able to answer that last\ question. Leaders assume because everything and everyone is perceived to be operational that all is well. But the financial and operational goals continue to be missed. An evaluation of the customer ROI reveals opportunities for improvement in the business. Taking the time to calculate the ROI will help leaders determine where to focus efforts.
Considerations for making sure you are maximizing your ROI include...
*Tracking how much time you are spending with Customer relationships. Do a sampling of your largest, and smallest clients to determine where the greatest areas of potential and/or improvement can be facilitated.
*Learn the cost of time spent (or wasted by delays). This also applies to your workforce and leaders. If you repeatedly spend a lot of time troubleshooting in areas to the business with low return on investment, then it is appropriate to rethink your approach to your servicing strategies. Another strategy is to evaluate whether your team is properly trained or has the right leadership in place to execute your vision.
Production, Staffing and Leveling (Scheduling):
An escape door for profits is production and staff scheduling (or leveling, lean manufacturing). It is important to be able to balance your mix of resources, talent and timing. When leaders fully understand this concept, not only will you have optimized your effectiveness, but you will also begin to realize tangible success in terms of profits, performance and ultimately sustainable success. Failing to respond or passing on opportunities yield missed revenue streams that result in forfeited profits. But more so than anything, the client will never know how wonderful your value proposition really is. So, don't cheat them of that experience. Level the operation to ensure a steady flow or balance among all resources in the enterprise. Considerations to better manage this critical path to sustainable success as a Lean Leader in Business and Industry includes...
*Reviewing your actual staffing structure and/or production scheduling or
distribution practices in peak and down times. This will give you good insights
into how to adjust to efficiently and effectively manage customer demand,
internally and externally.
*By Charting your activities, you can "See It"... If you can see it, you can make
the right decision in creating the right "mix" for sustainable outcomes, again
If you would like more information on this and other Lean Topics, contact the "Ladies Who Lean" , Gail Birks at 954-476-3525 or firstname.lastname@example.org or Yvette Branch at 972-399-9385 or Yvette@ssbranch.com
Here is a bonus. The Conversation of the "Ladies Who Lean" chatting about Lean Financial Accountability.