£1.5m Order Lost – Growth Mindset

An SME Manufacturer £8m turnover, LOST an order worth £1.5 Million to a competitor that didn’t even manufacture, just outsourced. Due to their continuous learning, performance and mindset of not concentrating on what to shrink, but rather concentrating on what to grow they had no issues in recovering the situation. Now there may be a million and one reasons why they lost that order, but their growth mindset, drive to be the best and ability to react as team in the face of that situation is what counts. Their thirst to continually be better.

No matter how well you do what you do, someday somebody is going to come along and try to do it better. That’s the nature of competition.

growth mindset

I’ve spoken to so many businesses over the past few months where complacency seems to be present, we’re doing alright, we’re making money, why do we need to improve. FOR EXACTLY THAT REASON ABOVE. You cannot predict the future, but you can ensure you are giving yourself, your team, and business the best opportunity to react to the positive and negatives that come along. It’s been fantastic to support, work with and see the transformation of the team and business above, remember…

Strive to be better today than your were yesterday, plan to be better tomorrow than you are today.

#UKManufacturing #GrowthMindset #Improve #Leadership #manufacturing

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Miss that moment – and you start to decline.

“There is at least one point in the history of any company when you have to change dramatically to rise to the next level of performance. Miss that moment – and you start to decline.” – Andy Gove

My personal view and experience is that it’s more than one point in time.

SMEs are characterised by their ability to adapt easily to market changes and their lean organisational structure (not as in Lean Manufacturing), which results in a more dynamic environment and a quicker decision making process. Although SME businesses vary widely in size and capacity for growth generally they will all follow a similar path: going from Owner/Entrepreneur with two or three employees to a business aiming for £10m or even £20m per year, and experiencing 20%/30% year on year growth and upwards along this journey. The sketch below illustrates an example of this, showing where most businesses may feel the pinch points of growth at key intersections.

SME Journey and Growth

Zero to £5m

The hard work really kicks in here. This part of the journey is often the one that is the most lonely, but often the most exciting. But it is here that most business owners feel the pains. Because it can be a lonely place, it is easy for owners to doubt themselves, they also don’t know what they don’t know which can be a limiting factor. And as an owner one of the main areas of responsibility is simply getting things done, which means you are working in your business as a manufacturer, and not working on it as a strategic leader.

In smaller SMES, management structures are also small with most owners being very hands-on. People are stretched across all functions all processes. Systems are not in place, IT is minimal or non-existent and there is a lack of standard processes. Utilising the Continuous Improvement and Management graph we can see that all levels are being worked with a very lean structure. Small customer projects, odd-job shop style of working.

SME Zero to £5m

As we get closer to a turnover of £5m, it becomes clear that things need to change. We are then moving from that odd-job, one off customer delivery to a mix of bigger projects, possible increased volumes and an increase in market share from your customers. As we start to scale-up from the initial start-up, decisions have to be made about the organisational structure, the company’s technology infrastructure, its business and marketing strategy, etc. With regard to organisational structure, you might now start to see the requirement for supervisory position(s) to take on more of the owners duties, the labour force growing, new machines, loans, investment, functional departments, Operations, Quality, Sales, Technical, Finance. This is where it can be rise or decline with those decisions. In scaling and growth and the opportunities it also brings its own set of problems, (albeit they are nice problems to have because its growth).

£5m to £10m

IT Systems and Planning may start to become an issue here, Microsoft Excel may no longer be good enough to manage your shop floor requirements (although I have seen £100m business still using excel but it was beginning to creak), and you are likely at this level to be considering MRP/ERP implementations. You may also look at outsourcing some functions, like Sales, Human Resources, Engineering Support, Quality, Quality Accreditation. All this requires a lot of investment in terms of time, money and energy. You need to do your homework to avoid costly mistakes, especially where IT is concerned, but it’s all opportunity.

And this stage, the business owner is now becoming more removed from the day to day operational tasks on the shop floor. This can be a very uncomfortable feeling in one or two ways. Firstly, the owner may want that hands-on role and not relinquish that part. It could be that the business is now at the stage where the owner is stopping it from growing, the entrepreneurial side is restricted as they are tied to the business. There a number of factors and variables in play, and having the right people is key, being a good leader is fundamental (at all stages).

SME £5m to £10m

£10m upwards

Financial Audits are required at this point (although some companies can be exempt if they satisfy certain criteria), so businesses need to be aware of the UK Audit requirements. Similar issues and opportunities still arise, but on a grander scale. Organisational structures are still fundamental, we might now start to see the need for Middle Management. We may also be looking to diversify into new markets, take on bigger orders, and higher volume. From £5m and up, some of your customers may not be the ones you want to deal with now, the one-off, low volume, job shop may not be your ideal customer. You might be seeing more of a need for Product Flow and Cells (Lean Manufacturing is a must from when you first start up), competition is high so you cannot stand still, even if your decision is to stay at a certain level. You will need to be driving for improvements to maintain the status quo, and your service has to be exceptional. Collaboration with a network of Manufacturers and or Partners, in my opinion, is key in this new world, and can bring some fantastic opportunities for growth. Again, IT infrastructure comes into play as the business is getting bigger: more employees, management leadership. The addition of new premises or additional buildings on the same industrial estate (this is where having a world class logistics operations pays dividends in not impacting your efficiency/productivity). The opportunities may now open up bringing the out-sourced services back in house, Sales and Human Resources, etc. At this level, you are likely to be making informed decisions based around data. Strategy alignment throughout the organisation is required, communicated and disseminated so everyone in the organisation knows the direction the company is going in and what the priorities are.

SME £10m upwards

Every business is different. One business’s pinch point may be at £3.5m another’s £7.5m but there will be very similar decisions to be made, but at this level the advantage is that businesses are likely to be able to make these decisions in a more informed way through data. Companies may not achieve sustained profitable growth unless they draft in the specialist skills required at the right time for the business. It’s the maxim that we don’t know what we don’t know. And the best advice is to seek advice from the experts in order to shift the dial in the right direction. This is something we can certainly help with, just contact the number below.

Ask yourself:

How much will it cost you not to resolve the issues that you are currently facing now or in the immediate future? How much will it cost you not to eliminate that pain? What are the lost opportunities on not taking your business to the next level or indeed keeping it at the level you want?

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The saying goes “Culture eats Strategy for Breakfast” Drucker

The weekend of October 22nd I was watching the Austin Texas F1 Grand Prix, this is one programme that everyone knows in my house not to disturb me watching. This weekend Mercedes were all but clear of winning the constructors championship as long as Ferrari didn’t outscore them by 17 points, something in the end that Ferrari couldn’t do. Congratulations MercedesAMGF1!

Now what pricked my ears up was the interview with James Allison at the end of the race, a number of questions were asked around the differences between Ferrari and Mercedes, James (Ferrari man from 2000-2005 and returning 2013-2016 to Mercedes 2017) an absolute professional and held in high regard within F1 would not be drawn on the comparison, but what he did say regarding Mercedes summed it up in 28 seconds of video (click the image below for the interview).

If you look at Ferrari’s take on things in the past few races when things have been going wrong, their behaviour seems to be one of blame and bullet a few people, you would almost say “Manage by Fear”.

As James Allison put, by being Brave to Ultimately Prosper and the culture they have embedded at Mercedes to succeed clarifies the saying “Culture eats Strategy for Breakfast

Culture is hard to collate, classify, categorise and it’s certainly hard to measure, it also seems one of those things Businesses seem to shy away from, even borderline not accept. It’s the invisible glue that you can’t touch or feel, so we’ll ignore it.

BUT IGNORE IT AT YOUR OWN RISK THOUGH!

Quite often, businesses think culture is some flowery-fluffy stuff that doesn’t make any difference in the end, or even if they think it does matter, they have an excruciatingly hard time describing what theirs is.

This invisible glue that holds the organisation together is probably the most powerful entity you can tap into, it’s part of your businesses DNA, the same as how I describe Policy Deployment, it becomes part of your business DNA. The “How you get things done”

The “How you get things done” drives performance.

Culture is not what we say, but what we do without asking. A healthy culture allows us to produce something with each other, not in spite of each other. That is how a group of people generates something much bigger than the sum of the individuals involved.

So don’t underestimate “YOUR BUSINESSES CULTURE

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Attention! – your Customers could be gone in 60 secs or less

Sales and Marketing

None of this is new and you probably heard it all before, but in my eyes that’s why it’s so important.

Sales and Marketing go hand in hand within any business, and every leader/owner should be working on their business (not in it) for a few hours a day.

But what do I mean working on your business.

Most businesses want to grow, so, you will have stated somewhere “I’m going to get from here to there by then”, now as an example this may be “Sales from £1m to £1.25m by end of 2018”.

So the working on your business (couple of hours/day), is all about the things you are going to do to get there. Now, you may have sales people, teams, etc.. this does not excuse you or absolve you of all responsibility in how, what, when, where, who and why in getting to that £1.25m.

Getting and Keeping Customers

This about your existing customers, new customers, finding new customers. (and attention is key, at 60 secs half your audience will have gone)

Examples may be:

  • Email campaigns, content, using the AIDA formula. (Attention, Interest, Desire, Action)
  • Sniper Marketing
  • New Products and Services
  • Reviewing your Social Media Impact (Google Adwords, facebook, twitter)

And don’t not underestimate the power of social media all because you are manufacturers, first port of call is having a website that is optimised and use friendly, something I’m currently sorting.

Sales Stats and Tips:

  • Over 60% of traffic is through mobile (phone/tablet). So, ensure optimised Mobile view first.
  • Over 50% of email is managed from mobile. Again, optimise for mobile viewing
  • At 60 secs half your audience will have gone (Attention is single most important word in marketing)
  • Your website load speed matters, big impact on ranking with Google.
  • Optimise your Linkedin profile, it’s not a CV, tell them where you add value.
  • 50 million Small Business on Facebook, 1.86bn active users, 66% log on every day. Search options are superb, but only 49% will support a brand liking, so how do we get in front of the others?
  • 56% of people would rather chat online than phone, you can now add chat boxes, Facebook messenger button, and more.
  • 67% will interact online with businesses.

But above all

DON’T FORGET TO ANSWER THE PHONE OR MAKE A CALL! (again remember attention, don’t answer in more than 5 rings and they’re probably gone.)

PS: It’s not the responsibility of your customers to keep you in mind, it’s your responsibility to keep you in their mind.

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Do you have a Growth Mindset or a Fixed Mindset?

The past week or so I have come across the Growth Mindset in two different scenarios’, which made me think how this should be applied to business.

The first was with my son and his school, he was invited to an awards ceremony for “Achievement in Excellence”. This was a formal ceremony, smart dress, round tables, the lot. The school made a massive deal, and so they should.

What got me intrigued was the first presentation, “having a Growth Mindset”, the number one priority of the school was endeavouring to give all pupils a “growth mindset”, as opposed to a “fixed mindset”.

Now following on from that a few days later, I had a monthly magazine delivered and low and behold there is an article on the same subject, and the example given was regarding another school implementing the same principle.

Now, in the presentation and article they spoke about some of the behaviours that demonstrate a fixed mindset, for example “I can’t do that…”, “it’s alright for her, she does xxxx”, “you either got it or you haven’t”.

To be direct, when people with fixed mindsets come to an issue that requires more effort, more hard work, they conclude that they are no good at it. Does this sound familiar? It ultimately holds them back, not only in school but in BUSINESS!

I’ve come across this so much within businesses, “I can’t do that because”, “we’re different, it won’t work here”, “we can’t do that of x,y,z”.

A “Growth Mindset” works around those obstacles; learns from those obstacles; sees mistakes as interesting and grows from them; they have a genuine thirst for learning and developing.

One of the comments by the writer said “my dad always told me nothing worth having comes easy”. What we think about affects how we feel and how feel determines how we act and the actions we take.

Remember,
You have a choice of what to think about which ultimately determines your outcome.

For more on Growth Mindset click “Dr. Dweck’s discovery of fixed and growth mindsets have shaped our understanding of learning

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Education and Industry, how do we get it so wrong?

Interesting discussion this week, especially regarding skills for industry.

On three occasions this week I’ve been in conversations where comments have been raised by business owners/leaders that the school curriculum is not aligned with what industry needs. How can this be?

But, when I think of my own experiences with my children, I’m not surprised.

My two kids go to different schools, the age gap between them is 2 years. If I take my eldest, he has just moved schools (based on his own fact based audit), his belief is that the new school gives him more options and a better chance of progression. This is his first year and if I use English as an example, his previous school never progressed him over 3 years, and at one point awarded him for his extra effort, he did extra lessons and again they awarded him but at the same time notified him he was moving down a set. This didn’t make sense to my son at all, nor to us. (We did question this, but that is another discussion).

The new school in less than half a term has progressed him up two grades, how can two schools be so different in approach and teaching????

Another example is science, he was in the top set at his previous school, but based on what information had been sent to his new school, he was placed in the lowest set? This was rectified after a few weeks as the teacher realised his potential and was even given and extra lesson.

The Education System is meant to be one of the most standardised/audited processes in the UK? How do we get it so wrong?

In one of the conversations we had 3 graduates (this was a round-table discussion for a future article by Stirling Media), these young adults were full of passion for engineering, manufacturing, the digital age but remarked on how little is taught on new technology or told about what future careers can be taken.

This too me is madness, particularly when we have stated as a country we need to bridge the skills gap.

When I was at Unipart my engineers use to link with a local girl school and we set tasks for them to do each year, as an example this could be a SMED project on a robot. The engineers would take them through the problem-solving roadmap and into implementation to see their results.

Not of all of them wanted to be engineers, but it certainly opened their eyes to what engineering and manufacturing can be as a career.

I know there are a lot of schemes regarding bringing Industry and schooling closer together, but how are we measuring their effectiveness? Because at the minute I don’t see it, and when I hear the comments from students like I have this week, I do begin to question.

I know this is crucial I just wish it was more of a policy, strategy within the government. Again, it may be, but a lot of us don’t see it.

Anybody else have any thoughts?

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Teamwork – Wales & Leicester Prove the Point

I’ve never been one for football, but the two recent examples of how teamwork and purpose make an absolute difference comes in the form of Leicester City winning the Premier League and Wales currently in Euro 2016. You only have to see the camaraderie within both teams, the celebration in achievement with Wales, and seeing most of the players watching the result of the premier league pan out at Vardy’s house with the celebrations that entailed.

Now a common factor in this, is the role of the leader, both Chris Coleman (Wales) and Claudio Ranieri (Leicester) have set a purpose and belief within their teams which was unstoppable for Leicester and proving so for Wales. These leaders have set the tone for what they want from the team, the goal. They also have what most good leaders have which is ‘Charisma’, but these leaders offer much more than that. Noteworthy leaders also deliver some combination of expertise, commitment, dedication, motivation, focus and concern for others. These leaders are naturally goal orientated and understand the need and the best way to communicate the objective to the team.

 

The Five DYSFUNCTIONS of a Team

 

Absence of Trust

The failure to build trust is damaging because it sets the tone for the second dysfunction:

Fear of Conflict

A lack of healthy conflict is a problem because it ensures the third dysfunction of a team:

Lack of Commitment

Because of this lack of real commitment and buy-in, team members develop the fourth dysfunction:

Avoidance of Accountability

Failure to hold one another accountable creates an environment where the fifth dysfunction can thrive:

Inattention to Results

Team members put their individual needs or even the needs of their organisations above the collective goals of the team.

 

The above you could witness in England within the Euro’s, this is only my opinion, but for comparison look at the England RFU team and what Eddie Jones has achieved in a short time. Again a leader that builds purpose and teamwork, they haven’t lost yet under Jones and did something that has not been done since 1971, white wash Australia in Australia.

FOOD FOR THOUGHT!

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Leadership Standard Work

Now most of us know and understand Standard Work, and hopefully when I say standard work your thinking of Process Capacity Tables (PCT), Standard Work Combination Tables (SWC), Standard Work Layout (SWL) and Standard Operating Procedures (SOP) and NOT just standard operating procedures????.

As a refresher

  • PCT – illustrates the production capacity of each process involved in producing a part.
  • SWC – combines human movement and machines cycle times based on Takt time.
  • SWL – A cell which is able to meet changing Customer requirements, as identified by Takt Time, with any number of Team Members, whilst maintaining productivity, without the waste of waiting.
  • SOP – is the document that details the current best method of operation. It includes quality checks, safety checks and any other activities that are included in the standard operation.

Now standard work also applies to management! Known as Leadership Standard Work.

Not to be confused:

Standard Work = a tool used to provide consistency of outcome

Leadership Standard Work = provides a structure and routine

It follows these three keys to leadership

  • Go See – spend time on the frontlines, be it, manufacturing, service, health sector, finance, etc.
  • Ask Why – use the “Why technique daily”
  • Show Respect – Respect your people

Leadership standard work is about walking the frontlines, seeing the abnormal from normal conditions. What is the work that’s is being done? What is the process? Is it adhered to? Are the business results being achieved? What is the next improvement that has been identified?

Leadership Standard Work in the case of a Production Manager may involve

  • A daily plan
  • A workplace walk across all areas
  • A conversation with a person from each area
  • Checking that Senior Management walks are completed
  • Is the 5S to the agreed standard?
  • Are actions being closed out?
  • Etc.

As we go up the hierarchy the standard work may become weekly, monthly, quarterly, etc.
A Senior Manager or General Manager may do the following:

  • Weekly frontline walk to touch base with associates, supervisors in each area to understand how the plant is running.
  • Spend time in the problem solving meetings, asking why, coaching and mentoring
  • Checking all critical audits are complete?
  • Are standards being adhered to?
  • Etc.

Leadership Standard Work Audit

Frontline associates see things first and we want to let them know what to do and feel at ease in highlighting the abnormal from normal conditions.

Leadership Standard Work is based on walking the frontline, observing waste and abnormalities, asking questions and supporting the improvement process.

By embedding this practice, leaders can begin to create a culture that:

  • Solves problems quickly and permanently.
  • Drives continuous improvement.
  • Develops the next generation of leaders.
  • Make continual gains in performance.
  • Embeds the culture of team working.

My early appreciation and benefit of this practice was implementing it at Unipart early 2000’s. It was implemented throughout the structure, from Team Leader to Managing Director, an example of which is the image above, showing the leadership pyramid/timing and Senior Manager standard work. Due Diligence is key to this practice, not paying it lip service or tick in the box mentality.

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World Class Traits

Committed LEADERSHIP is essential to success

Maintaining a strong CUSTOMER FOCUS assures we’re fixing the right things and going in the right direction

Effective PROCESS MANAGEMENT accelerates improvement & helps us keep ahead of our competitors

Drive improvement goals through the enterprise using effective STRATEGY DEVELOPMENT & REVIEW

Careful attention to ORGANISATIONAL DEVELOPMENT builds important foundations for continued success

Carefully chosen METRICS help us monitor our rate of improvement & make course corrections when needed

Rigorous & Structured USE OF CI TOOLS is the engine that propels improvement

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