Sunday, June 15, 2014

Can you run your small business more efficiently?

improving small business efficiency Do you think there is any small business owner in the world who doesn’t at some point wonder how they can save money and how they can improve efficiency in their business?

Of course not - we all think about it! ... We want to save money and save time, as long as it’s not at the expense of quality,  because savings meansmore profit! …..  And we’ve all heard about the importance of working smarter instead of harder. But to do this means we have to be willing to take some time to step back, think and critically re-evaluate the way we are doing things.

So often in business, a common problem is that we can become so familiar and comfortable with a procedure or process we’ve always used – or the piece of equipment or software that we’ve always used – that we completely fail to recognise opportunities for improved efficiencies.

Well, I had the good fortune recently to chat with Rainer Busch, who run’s a small consulting business in Melbourne, Australia, called Raidho Solutions. He specialises in helping SME owners to identify, analyse and eliminate wasteful and inefficient practices. Additionally, he helps business owners with compliance related documentation requirements in order to satisfy national and international quality standards.

I asked Rainer a bit about his own experience in running a business – and also for some advice and tips on how small business owners can save money by identifying opportunities to improve efficiency and reduce wastage.  Here’s what he had to say ……..
  1. What motivated you to start up your own consulting business, specialising in productivity improvement?
I always liked to be in charge of my own destiny and was never somebody who would blindly ‘pull the chain’ when told to do so. My background is in mechanical engineering and I have actively worked towards getting things done with minimum effort and resources. I believe there is a saying: “If you want something done efficiently give it to a lazy person, s/he will find a way.”

Whilst I certainly do not classify myself as a lazy person I certainly do not like to waste my time and effort on tasks that I know can be done better, safer and more conveniently. Rather than just doing as I was told I tended to ask questions about why and how to do something, think things through and often come up with alternative methods. In the early days of my career this sort of behaviour did sometimes get me into trouble with some of my managers. I cannot count the number of times I took a new idea or method to a manager only to be questioned if anybody else had ever done it the way I suggested. If I answered in the negative my requests were often denied, however some of the more progressive leaders I have worked for gave me a go. They were usually very glad they did. This encouraged me, yet over time I become increasingly frustrated to work for people who seemed content to simply let things roll and keep doing the same old things in the same old ways. 

I dreamt of having my own consulting business where I could help and work with those people / businesses who genuinely wanted to improve their lot. Back in 1995 and between jobs I was given the opportunity to do just that when a long term consulting friend asked me if I was interested in helping one of his clients introduce a certified quality management system. - I have not looked back since.
  1. What have you found to be the upsides and the down-sides of running your own business?
The major upside is the relative independence, even though I don’t believe any of us can be truly independent. Clients can be more challenging than bosses. However I have the freedom to elect which clients I like to work with and that is a good thing. Running my own business means I am definitely in charge of my own destiny. There is no point in blaming anybody else when things go sour. The buck clearly stops with me.

One of the major downsides is that I constantly need to look for new work and I must admit that this is something that I do not enjoy doing. It is also something that after almost 19 years in business has not become much easier. I now obtain most of my work via referrals from clients.

I have met many other specialists who have set up their own consulting business who are just like me and also struggle with the necessity to sell and market their services

It was interesting when I came across some research into entrepreneurship conducted by Ernesto Sirolli from the Sirolli institute. He found that successful businesses were quite often started by more than one person. His book ‘How to start your own business & ignite your life’ talks about the three necessary skills to run a successful business - 1. Expertise in the relevant service or product(s) being offered;  2. Business Finance and  3. Business marketing.

According to his research, it is very rare to ever find a successful entrepreneur who is fully skilled and equally passionate about all three skills. Most business owners are good at one and some are good at up to any two. For me, this debunks the illusion that one can be a successful entrepreneur all by oneself. The formula for a business owner to achieve success is to find people who are passionate experts in the skills/passion that they themselves lack.

Running a home based business I sometimes feel isolated, especially during times between projects when the phone may not ring for a while. I believe that ‘loneliness’ can become a serious issue for many small business operators. ‘The black dog’ (as in depression) can be lurking closer than we may think. This may sound funny, but have you ever rung your own number to make sure your phone still works? The trick here is to get to know yourself (likes, dislikes, etc.) and to become an observer of yourself and your behaviour so you ‘know’ when to seek help.

One thing I’ve learned is to build up a good network of friends and colleagues. When I notice that I am spending too much time on my own at the office, then I make a conscious effort to reach out. I ring some of my trusted contacts, I meet up with people I know and I also seek out and connect with new people.
  1. From the consulting work that you have done with many small and large companies over the years – what are some of the common “un-productive” practices that you’ve observed and identified?
I cannot really think of any ‘common’ un-productive practices per se. However there is some behaviour that contributes to the development of un-productive practices in any business. The failure to take the time to truly engage and communicate between co-workers, management, suppliers and customers is one.

Taking things for granted and making assumptions about how things work or ought to work are another. One thing that always amazes me is how many different ways organisations use to perform common tasks. How many ways do you believe there are to take and process an order, pick and despatch a product and process an invoice? - You would be surprised! Despite a number of so called ‘best practice’ process models and organisational structures for all kinds of businesses no two organisations operate the same way.

I believe the reason for this to be that each organisation is made up of different people with different traits and views of the world. I have learned over time that there is no ‘one fits all’ solution for anything.

Therefore I work with my clients to come up with process optimisations that work best for them and their particular circumstances. Whilst I have gathered a lot of process and people knowledge over the years, I always enter every new client organisation as ‘an expert in not knowing’. This means I go in with a ‘blank canvas’ mindset just listening, questioning and observing what happens.

In many cases the clients/staff already have the solutions right there in front of them, but just cannot see or realize them. They have often become blindsided by ‘business as usual’. I help them to visualize and realize these ideas with the ‘odd sprinkling’ of my own by sharing my experiences and expertise. 
  1. What are some ways small business owners can spot opportunities for process improvement within their operations?
One of the biggest problems in small and big businesses alike, especially those that have grown or are quickly growing from an initial handful of people, is that most of the process knowledge (eg. How things are being done) are in people’s heads. Add to this the practice of people making assumptions about what they and their co-workers know and see plus poor communication methods and it will become very difficult for a business owner to readily spot potential process improvements.

One way to enable business owners to spot opportunities for process improvement is to prepare a step by step graphical representation of each process (via process maps) that show what is being done where and by whom using what type of resources and skills. Seeing a process drawn up (remember that ‘a picture is worth a thousand words’) helps business owners and their staff to understand the whole process end to end and the role they play in it as individuals.

When done as a ‘workshop’ exercise involving all staff and stakeholders that are part of a particular process, the ideas for improvement usually start flowing very quickly. This is because people start to understand the bigger picture and how what they do contributes to the process outcome. I have found that most people who go to work want to do a good job. Nobody really wants to waste their time and effort on tasks that do not contribute to a common goal and this means that most staff will usually freely contribute their ideas when given the opportunity.
(Interviewer's note - for some tips on people management, see "How to manage staff")
  1. When a business owner identifies changes that will help to improve their methods, processes or procedures – it’s not always easy to gain the commitment and support of staff that may be used to the “old ways”. So how should any changes be implemented, so as to reduce staff resistance?
I suggest that business owners should always ‘involve’ their staff in the process of change. Many people do not like being told what to do without being given an opportunity to ‘understand’ why changes are necessary (I am one of them!). I recently read that 75% or all change management efforts are poorly executed. The reasons are varied; however, my experience suggests the following do’s and don’ts when it comes to introducing change:

·       Do explain to all staff why changes are deemed necessary, even those who are not directly affected.
·       Do be honest with your staff. Show respect by keeping them informed and being responsive to their concerns.
·       Do explain the type of changes you are looking for and the expected implementation time frame. Spell out the objectives of the change(s)
·       Do ask for volunteers to be part of a change working group or, if feasible, invite all staff to be part of the change initiative / ideas contributions.
·       Do review progress along the way, towards the final change outcome scenario and invite continual feedback from staff.
·       Do be willing to spend extra time and effort with those staff who have problems understanding the reason(s) for change.
·       Do thank staff for their input to the change initiative.
·       Do measure and show how the change(s) are delivering benefits  
·       Don’t ever develop changes ‘behind closed doors’ (eg. with consultants).
·       Don’t announce changes to staff without genuine prior consultation (people quickly realise if consultation efforts are genuine or not). 
(Interviewer's note - more tips on this can be found at "How to manage change")
  1. Any final tips on what business owners can do to improve their business productivity
Business owners should always be on the lookout for any type of waste. Every dollar that can be saved through waste reduction can add several dollars to business profitability. Waste to look out for includes:
·       time (process time, loss through staff injury and illness, etc.),
·       effort,
·       energy (gas, electricity, fuel),
·       water,
·       labour,
·       materials,
·       unused space,
·       clutter,
·       unused equipment,
·       waste disposal methods (what type of waste is generated and how may this be reduced, recycled, given away to a 3rd party, etc.)
Thank you Rainer, for sharing some of your business experience with us - and for the simple tips you've offered on what SME owners can do to help their business run more efficiently.
About the author
Brian Carroll is the founder of Performance Development, a corporate training business in Melbourne, Australia.  He is a qualified psychologist and experienced management coach with a passion for helping people reach their full potential. You can find out more about Brian at his Google + profile