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?

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE

Operationalise your Strategy – FREE Download

OOperationalise your Strategy
Benefits of Policy Deployment

Organisations with the capability to consistently execute their plans through the adoption of Strategy Execution outperform the market. Forget all the meaningless buzzwords and fancy dashboards, you need context and a trackable action plan to drive real performance improvements.

* indicates required






Your privacy is important to us, your details will never be shared with anyone else. Privacy & Cookie Policy

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

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE

Operationalise Your Strategy

Benefits of Policy Deployment

  • Organisations with the capability to consistently execute their plans through the adoption of Strategy Execution outperform the market.
  • Organisational capabilities will be aligned to support the achievement of your company objectives.
  • Resources will be allocated to business processes in priority order (according to the importance/contribution the process makes to your business)
  • Your company can excel in the business/commercial sector in which it operates.

The Policy Deployment process has yielded some unbelievable benefits for me in my career and it’s one of those processes I recommend all businesses leaders introduce, (but I will also state if you are not prepared to apply the rigorous PDCA management process that goes with it, it’s not for you). I’ve been using Policy Deployment for 15+ years across multiple businesses, as an example: £1bn Turnover business, achieving £200m EBITDA across 38 sites globally, including Lean Savings within the first year of £21m. Done well, it works!

Some of you are probably getting to the stage or are currently producing budgets for your coming year. Now wouldn’t it be worthwhile aligning your Strategy and your budget requirements and drive some break through thinking into the process.

The process itself comes from a technique called Hoshin Kanri, which is a method devised to capture and cement strategic goals, well for me it does more that cement goals, it disseminates those goals into tactical projects that are owned, timed bound and measured.

There have been a number of English translations Policy Deployment, Goal Deployment, Hoshin Planning. I prefer Policy Deployment Process or PDP, but as you probably know from me by now, call it what you want just as long as you use it.

So What DOES it do?

  • It forces the clear identification of “How” we move ourselves towards our Strategic objectives.
  • It creates an alignment of all facets of the organisation on the key strategic initiatives (cross-functional teamwork).
  • Fosters a data-oriented, fact-based culture.
  • Reinforces the vision, but also clearly defines how we will get there (Based on “Who” does “What”).

What it DOESN’T do!

  • Achieve results if the management process isn’t changed (Moved to rigorous PDCA).
  • Achieve results if the “How’s” (Improvement Priorities) aren’t the right ones.
  • Achieve results if the “How’s” aren’t clearly defined.
  • Replace the need for solid Business Fundamentals (also known as Daily Management).

The process is intended to help an organisation:

take the Company Vision (desired end state, aspirations, business scope); the Strategy (3-5 Year Strategic gaps/objectives, high level plans for competitive advantage) and creates a One year distillation of these 3-5 year objectives.

It creates improvement priorities and metrics for tracking progress and indicates the resource responsible and accountable for them. A tactical implementation project if you like (you can go further with the process and state which projects need to be completed within each quarter of the year, to add additional focus).

Detailed action plans (A3’s) are produced for each one of the improvement priorities and reviewed on weekly/monthly/quarterly basis through monitoring of the PDP metrics.

These reviews should be held by a cross functional team who challenge each other, learn from each other and drive execution of the improvement priorities.

Typical Strategy Objectives may be:

  • Double Top Line Sales in 5 yrs
  • Double OP % to Sales in 3 yrs
  • Reject PPM Reduction by 90% in 3 yrs
  • Reduce Lead-time by 75
  • On Time Delivery to 100% in 3 yrs

Typical Annual Objectives may be:

  • Grow Top Line Sales by 15%
  • Increase OP by 25%
  • Reject PPM Reduction by 50%
  • Reduce Lead-time by 50%
  • OTD +20%

Improvement Priorities may be:

  • Quality: Create & Implement Rapid Defect Reduction Process, Implement DFSS on Critical Products
  • Delivery: Apply Lean ‘Tools to XYZ to Reduce LT, Implement Back-Office LT Reduction Process
  • Cost: Develop & Implement LCR Sourcing Plan, Launch Productivity Improvement Std Work Series in Assembly

So Why Use it?

97% of Businesses have a Vision
80% have a clear Strategic Plan
52% some Execution/Success
33% Significant Execution Success
Where do you think Policy Deployment is having an Effect?

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE

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?

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE

Short Term Vs Long Term Results

Now in anybody’s mind the drive for short term results should be aligned with the long term. But why is it we struggle so much to get this balance right, and to add, it’s never been more needed as it is in the current economic way of the world.

One of the more obvious ways I’ve seen it manifest itself is between the overall corporate strategy and the operational behaviour of local teams. Here are just some of the examples I have seen…

First one, Corporate Strategy was to reduce internal costs, based on a Senior Leaders comment regarding a competitor’s costs, an assumption made with some questionable data. Now the local team had done analysis to show profitability in what they were producing and a significant growth improvement too which the corporate focus was fighting against. Which would you have had? Peter Drucker “preparing for tomorrow” springs to mind.

The second, Corporate Strategy to enter new markets with a new service, the local sales teams refusing to follow this as they believe it would be hard to hit their commissions so subsequently paying lip service to it when necessary. Interestingly the price and the margins for the older services were falling drastically, hence the focus on new service.

The third, Private Equity Investors driving the short term results against the Business Leader driving the long term vision, I’ve witnessed on numerous occasions where PE investors introduce a weekly operations call to review KPI’s (key performance indicators) they have introduced (35/week at one business), from Health and Safety, Productivity, On Time In Full, all the good stuff but driven at a behavioural level that can have a negative impact. KPI’s drive behaviour! When managed at a micro level from upon high every week begins to channel the focus on covering the past, we spend most of our time in answering questions that happened last week, not on where are we going, how are we going to achieve, how can I help.

This is one of the more obvious I have witnessed, the pressurised environment of the end of week/month/quarter / year period often creates behaviours that from an outside perspective at least, appear to be utter madness. Of course every business needs to keep the lights on but not to the extent that it sacrifices long-term value.

There has to be a balance between Visionary/Strategic leadership and Managerial Leadership. Managerial leaders are primarily immersed in the day-to-day activities of the organisation and lack an appropriate long-term vision for growth and change. Conversely, visionary leaders are primarily future-oriented, proactive and risk-taking. These leaders base their decisions and actions on their beliefs and values, and try to share their understanding of a desired vision with others in the organisation.

In essence a business needs to have both mind-sets present, a combination of the managerial and visionary styles. Having two leaders like this requires that they trust each other implicitly and are willing to listen to each other, the CEO and COO for example. It is possible to have a singular person with both mind-sets but they are few and far between.

The balance comes in how you “Operationalise that Strategy/Vision” so both styles work hand in hand.

Food for thought as we start to get closer to a new year.

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE

Why you should do this when looking at Business Performance

Raising Performance is always a challenge (many a sleepless night) but it’s not just about getting it right in your manufacturing processes, it’s about looking at your business as a whole.

Recently, we were asked to support a £40m turnover company with an objective to reduce costs.

Now, although Reducing Costs (and in particular eliminating waste) is an excellent focus, you can sometime lose sight of what other advantages/opportunities there may be, new market opportunities, sales optimisation, finance, etc.

During our detailed business diagnostic, it became apparent that there were some fantastic opportunities to be realised with particular projects on Increasing Growth and Efficiency Savings.

With TCMUK’s Business Practitioners coaching and mentoring our customers internal team, a total of £700K+ efficiency savings, £1M in cash flow improvement and a 17% growth opportunity have been realised so far within the business, with further projects being highlighted for implementation over the next 2/3 years.

So remember, step back and look at the whole business not just the usual suspects (this goes for any size organisation) and you’ll be confident (and hopefully sleeping) knowing you are focused on the right things.

And don’t forget, if getting results like this is on your agenda and you’re looking for some sector expertise, call on 0330 311 2820

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE

“Performance Rooms” a powerful Visual Management Tool.

Over the last few months I had a number of discussions regarding what I call “Performance Rooms” others call “War Rooms” (never really been keen on that expression but as long as the process is followed what does it matter) or the Japanese term “Obeya Rooms”. I will use Obeya in this article.

These rooms and the disciplined approach to the process behind them helps businesses to reach their strategic/tactical goals and promotes the creation of solutions and actions that can be developed and implemented quickly. The aspect of Managing Performance Improvement for any business undertaking Growth or Lean.

Strategy Room

The following is an overview to understand the theory behind it.

Obeya is based on a simple idea that we dedicate: time, space, the coordination to root cause analysis and problem solving so that organisational barriers are minimised. This ability to maintain a disciplined approach to real-time problem awareness, listening to team members concerns, making discoveries, resolving problems, collaborating and above all developing/mentoring our people is critical to the success of a business.

They promote the coordination and implementation of Strategic and Tactical issues by mobilising and pulling together the intellectual resources of all employees in the service of the firm.

The following are different types of Obeya Rooms (not limited to):

Product Launch; when developing a new product, managers responsible for decision making in design, production engineering, and manufacturing gather in one place to shorten the lead-time through real-time problem resolution.

Business Process Layout: Centralised data collection, prioritising and action planning.

Focused: Project Performance Rooms, SQPDC, A3 Problem Solving, Continuous Improvement rooms.

Observations to consider when looking at Obeya Rooms :

  • Use two colors when tracking status, Red and Green. This avoids ambiguities; the status is ON TARGET or NOT.
  • Define SMART metrics (Specific, Measurable, Attainable, Realistic, Timely), no more than 3-5 focused metrics as more would be impractical for every day review.
  • Problem, Follow-Up and Countermeasure Boards are mandatory, the team must be prompted to solve issues immediately. The deferment/stalling to solving the problem is not allowed.
  • Meeting Discipline – Punctuality, Question and Challenge with dignity and Respect and the meeting should last no more than 30mins.
  • The flow for review takes the shape of Check, Plan, Do, Check, Act instead of the normal PDCA.

0330 311 2820

Book a Return Call at a time that Best Suits You “HERE

Leadership Alignment

Leadership teams still operate in silos. Commercial don’t talk to operations and vice versa, individual objectives are not aligned to the business needs, Quality stands alone. Your business may have a company vision but is this realised/disseminated throughout the organisation and most importantly of all, is your leadership team aligned to it.

Creating a clear company vision is key to your organisation’s success, but how do you make sure everyone on your leadership team agrees? Now this doesn’t mean that your team need to get on together but it does mean they are fully focussed and completely in agreement on what needs to be delivered.

Make sure everyone on your leadership team is on the same page with a crystal-clear vision for your organisation by AGREEING on the answers to these questions. REMEMBER AGREEING AS A TEAM!.

This walk-through helps your team clarify and agree on your company vision and priorities.

 

What are your Core Values?

What are the 3-5 characteristics that define who you are as a company, culture and leadership team?

 

What is your Focus?

What is it your business excels at? What is its core competence? What’s your purpose?

 

What is your 10 year Vision?

What is the goal you are all working towards? What does the finish line look like?

 

What is your Marketing Strategy?

Who is your ideal target market? What are your Unique Selling Points you need to tell to the world? What is your proven process for doing business with your customers? What’s your guarantee?

 

What is your 3 year Strategy

What is the Revenue, Profit and Measurable goals (remembering KPI’s drive behaviour so make sure you have the correct ones)? 3-5 bullet points on what your business will look like in 3 years.

 

What is your 1 year plan?

What IS the plan, what are the 3-7 most important things that must be done within the next 12 months? (Less is More)

 

Quarterly Milestones

What are the most important things your team must do in the next 90 days to ensure they hit the 1 year plan to put you on track to make your 3 year Strategy a Reality?

 

Implement a governance process to ensure execution.

Give time, Space and co-ordination of problem solving so that the organisational barriers are removed.

REMEMBER AGREEMENT AT EVERY QUESTION BEFORE YOU MOVE ON

0330 311 2820

Book a Return Call at a time that Best Suites You “HERE