Your Money is Frozen

Your Money is Frozen

your money is frozen header HLH edmontonWhere’s my cash?!

We’ve all had that moment while looking at the Balance Sheet or Cash Flow Report after a good quarter, thinking you’ll be flush with cash—then getting a big surprise. 

So what happened? Over-inventory happened. Getting comfortable happened, and you froze your money. 

Look around your office and ask yourself how much money is frozen in it. A couple grand of cash in your computer. Anywhere from a few hundred to a few thousand in your desk, depending on your taste. 

Lean thinking isn’t about being comfortable. It’s about seeing your money frozen all around you and looking for ways to:

1) thaw it so you can use it and

2) freeze less moving forward. 

 

Over-Inventory: Keep your Eyes on the Data

This is public enemy #1, and a classic killer of businesses across industries. It’s borne, ironically, from optimism.

Business is growing, therefore we can sell more product, therefore we need more product to sell. That’s both the way our businesses grow, and the way our businesses paralyze themselves.

We want more than anything for our businesses to grow. We want it so much that we let our hopes and dreams cloud the real picture of what’s happening. 

is it a long term trend, or is it a fluke?Whether you’re a manufacturer or a reseller, ask yourself this question when your revenue rises: is it a long term trend, or is it a fluke? 

(Hint: when you ask the first 10 times, your sense of hope will answer for you. Keep asking until you can give yourself an answer based on figures, not figments.)

When you buy or produce a widget, you’re voluntarily freezing your money into it. The widget is actually an ice cube, and you can’t access the money chilled into it until a customer buys it. Buying = thawing, and then you can use the money again. 

Follow the data. If your business is on a real growth trend, buy or ramp up accordingly. If it’s a fluke, you’re throwing wads of cash into the freezer. 

When all your cash is frozen, you’re paralyzed. You lose flexibility in your business decisions, lose the ability to add capital or improvements, and you become desperate. You discount harder than you should have to just to get some liquidity back. 

And that’s the business killing cycle.

 

Waste

If you’re not careful, it’s easy to freeze money in unrecoverable ways.

As an exercise, draw a line down the middle of the biggest white board you can find. On one side header write, “what my customers care about.”  On the other side write, “what my customers do not care about.” It is exactly that simple. 

 

waste exercise customer care HLH edmonton

 

Start writing down everything you spend money on. Your customers care about electricity because you can’t operate without it. Your customers do not care about your hockey tickets or new company iPhones. How many printers do you need in the office?  What sort of decorations? What does the customer care about? 

if you want to have the flexibility of being liquid, then you need to be brutal with wasteWhen it starts to feel uncomfortable, and you’re resisting putting things in the “don’t care” column because you’re afraid of losing  them—keep going. That means you’re on the right track.

Remember, everything in the “don’t care” column is waste. You’re not freezing that money so much as burning it.

If you want to be a cash rich company, if you want to have the flexibility of being liquid, then you need to be brutal with waste. Only freeze the money that customers need you to freeze in order to give them what they care about. 

 

Going forward, keep your findings in mind as you make new business purchases. Mentally place a purchase in the “care” or “don’t care” category before you pull out the credit card. Even if you still let a few “don’t care” purchases slide through (after all, you’re human), that extra filter can make the difference between staying cash liquid, or standing on thin ice.

Creating a Change Team in Professional Services

Creating a Change Team in Professional Services

change team professional services hlh edmontonChange can come slowly to an office. Processes get ingrained, habits form, and the pressures of doing extra—on top of a long list of daily tasks—can quickly quell cooperation. 

Process Improvement can change the bottom line, but it needs to be systemic. Change that’s top-down tends to make deep changes that aren’t sustainable and fall apart when the momentum wears off. Morale often falls apart shortly thereafter.

System-wide change is bottom-up. It’s about everyone sharing the same vision and being committed to incremental change that is, above all, sustainable. You can’t force that—it has to come from your internal Change Team.

Here’s how to build that team.

best people process improvement professional hlh edmonton

Find Your Change Leaders

Small changes don’t happen by themselves, especially if they’re to be consistent. Your Change Leaders are the ones who, hour after hour, keep Process Improvement top of mind.

Your change team needs to be as all-in as you are. They need to be talking up the need to be nimble and efficient in the hallways, lunchrooms, and job sites. 

But how will you find them?

Think of your existing staff. They drive your company and know its inner workings better than anyone. 

Who are your most engaged employees? The ones already coming to you with ideas on how to do better. The ones who care, not because they have to, but because it’s their nature. 

Start with them. Then let them inspire others to the challenge.

 

Roles in Change Leadership

 

roles change leadershipPeople have unique strengths. Embrace them. Here are the roles your Change Leaders need to fill. Put them into the roles they’re passionate about and they’ll bring their daily A-game. 

Communicators: Don’t fool yourself – you’ll still have skeptics about this whole “Process Improvement thing” you’re up to. You need someone to not only share your vision, but articulate it with purpose when you’re not around. 

Advocates: Your skeptics will say they’ve heard this all before and swear it’ll fizzle soon enough. Change Leaders will need to be consistent about why change is vital and how to make it happen. Ideally, you’ll have an advocate at every step of your process.

Liaisons: Sustainable change is organizational. It affects employees and customers alike. No one likes surprises in business, so each group needs to be advised and guided through what is happening and how it benefits everyone. 

Coaches: Your team will need guidance and they’ll need to be challenged. Coaches do both. Coming from a peer, ongoing motivation is a powerful thing.

Resistance Managers: You’re going to get criticism. Rather than stifling it (which doesn’t end well), your Change Leaders can engage and respond constructively.

 

Empower Your Change Team

How many employees are driven every day to change your business for the better?  How many are doing the bare minimum until the end of their shift? And how many are somewhere in the middle? 

No one is going to be proactive about positive change unless you show them that the business is worth the investment of their energy. And that means investing in them first. 

Empowerment is a leap of faith. You need to give your employees the opportunity to contribute their perspective to the Process Improvement project. 

 

Not everyone will step up, and that’s normal. But give everyone the opportunity to be a part of a special initiative, and often your Change Team will come out of the woodwork organically. 

 

“Change is the law of life and those who look only to the past or present are sure to miss the future.”

 John F Kennedy

Creating a Change Team in Construction

Creating a Change Team in Construction

change team construction HLH edmonton

Staying profitable in the construction industry is about being able to adapt to change. Projects overrun, site conditions change, regulations close in: the businesses that stay nimble stay prosperous. 

Change management on a project-by-project scale is about building processes that both standardize best practices and anticipate changing conditions. Change management on a business-wide scale is no different.

To make your business more nimble and efficient, you need people to help you get there. You need a team dedicated to sustainable change.

 

 

creating a change team in construction

Find Your Change Leaders

Small changes don’t happen by themselves, especially if they’re to be consistent. Your Change Leaders are the ones who, hour after hour, keep Process Improvement top of mind.

Your change team needs to be as all-in as you are. They need to be talking up the need to be nimble and efficient in the hallways and lunchrooms and job sites. 

But how to find them?

Think of your existing staff. They drive your company and know its inner workings better than anyone. 

So think: Who are your most engaged employees? The ones already coming to you with ideas on how to do better. The ones who care, not because they have to, but because it’s their nature. 

Start with them. And let them inspire others to the challenge.

 

Roles in Change Leadership

 

roles change leadershipPeople have unique strengths. Embrace them. Here are the roles your Change Leaders need to fill. Put them into the roles they’re passionate about and they’ll bring their daily A-game. 

Communicators: Don’t fool yourself – you still have skeptics about this whole “Process Improvement thing” you’re up to. You need someone to not only share your vision, but articulate it with purpose when you’re not around. 

Advocates: Your skeptics will say they’ve heard this all before and swear it’ll fizzle soon enough. Change Leaders will need to be consistent about why change is vital and how to make it happen. Ideally, you’ll have an advocate at every step of your process—from the office, to the floor, to the trucks. 

Liaisons: Sustainable change is organizational. It affects employees and customers alike. No one likes surprises in business, so each group needs to be advised and guided through what is happening and how it benefits everyone. 

Coaches: Your team will need guidance and they’ll need to be challenged. Coaches do both. Coming from a peer, ongoing motivation is a powerful thing.

Resistance Managers: You’re going to get criticism. Rather than stifling it (which doesn’t end well), your Change Leaders can engage and respond constructively.

 

Empower Your Change Team

How many employees are driven every day to change your business for the better?  How many are doing the bare minimum until the end of their shift? And how many are somewhere in the middle? 

No one is going to be proactive about positive change unless you show them that the business is worth the investment of their energy. And that means investing in them first. 

Empowerment is a leap of faith. You need to give your employees the opportunity to contribute their perspective to the Process Improvement project. 

 

Not everyone will step up, and that’s normal. But give everyone the opportunity to be a part of a special initiative, and often your Change Team will come out of the woodwork organically. 

 

“Change is the law of life and those who look only to the past or present are sure to miss the future.”

 John F Kennedy

Creating a Change Team in Manufacturing

Creating a Change Team in Manufacturing

You see the ways your manufacturing business could change for the better. You can sense it like a change in air pressure. You know that your processes could be more efficient, and that more innovation would help you buffer supply disruptions and skill deficits. To accomplish this, people are the key.

In theory, Process Improvement can save the manufacturing industry a ton of money and increase the bottom line. I say “in theory” because, without a Change Team in place, it can’t become reality. 

Your Change Team is the front line of Process Improvement. They articulate and implement your vision on the shop floor, in the lunch rooms, and even to your customers. You sense the change; they make it real. 

creating a change team in manufacturing

Find Your Change Leaders

Small changes don’t happen by themselves, especially if they’re to be consistent. Your Change Leaders are the ones who, hour after hour, keep Process Improvement top of mind.

Think of your existing staff. They drive your company and know its inner workings better than anyone. Hopefully, your Change Leaders are there. 

Who are your most engaged employees? The ones already coming to you with ideas on how to do better. The ones who care, not because they have to, but because it’s their nature. 

Start with them. And let them inspire others to the challenge.

 

Roles in Change Leadership

 

roles change leadershipPeople have unique strengths. Don’t be an obstacle to that; embrace it. Here are the roles your Change Leaders need to fill. Put them into the roles they’re passionate about and they’ll bring their daily A-game. 

Communicators: Don’t fool yourself – you still have skeptics about this whole “Process Improvement thing” you’re up to. You need someone to not only share your vision, but articulate it with purpose when you’re not around. 

Advocates: Your skeptics will say they’ve heard this all before and swear it’ll fizzle soon enough. Change Leaders will need to be consistent about why change is vital and how to make it happen. Ideally, you’ll have an advocate at every step of your process—from the office, to the floor, to the trucks. 

Liaisons: Sustainable change is organizational. It affects employees and customers alike. No one likes surprises in business, so each group needs to be advised and guided through what is happening and how it benefits everyone. 

Coaches: Your team will need guidance and they’ll need to be challenged. Coaches do both. Coming from a peer, ongoing motivation is a powerful thing.

Resistance Managers: You’re going to get criticism. Rather than stifling it (which doesn’t end well), your Change Leaders can engage and respond constructively.

 

Empower Your Change Team

How many employees are driven every day to change your business for the better?  How many are doing the bare minimum until the end of their shift? And how many are somewhere in the middle? 

No one is going to be proactive about positive change unless you show them that the business is worth the investment of their energy. And that means investing in them first. 

Empowerment is a leap of faith. You need to give your employees the opportunity to contribute their perspective to the Process Improvement project. 

 

Not everyone will step up, and that’s normal. But give everyone the opportunity to be a part of a special initiative, and often your Change Team will come out of the woodwork organically.

 

“Change is the law of life and those who look only to the past or present are sure to miss the future.”

 John F Kennedy

Finding the Best People for Process Improvement

Finding the Best People for Process Improvement

best people for process improvement

 

Any business, from Google to the hot dog cart guy, is defined by the people working in it. No matter how slick or strict your processes are, the people using them will adapt and (hopefully) improve them in their own image. 

It stands to reason, then, that you need the best people. You need people who won’t let any inefficiency escape without attacking it and rooting it out. You need an A-Team for Process Improvement. And that, of course, is the rub.

So how do you hire the people to get you there?  In another article we gave you some unique interview questions to try. Now, here are some outside-the-box tips to help get you there…

finding the best people steps

1) Listen to the People You Have

If you’re the Owner, I have some bad news for you. Statistically speaking, you probably make pretty terrible hiring decisions. 

You know what you need more than anything else. You also know how expensive it is every day that position isn’t filled. So, you look for the right stuff in the wrong people. You don’t think you do, but you do. You might ask leading questions or look for nuggets you only think are there. In short, it’s hard for an Owner to make a disinterested decision. 

If you want to be part of the interviews, have someone there with you whose opinion you genuinely trust. Create a script and stick to it, and keep those questions the same for everyone. Also, never hire without sleeping on it first.

 

2) Seek the Right Attributes

KASH box

If you haven’t heard of the KASH Box, look it up. Read our KASH box article for the details, but here’s the summary. You hire on 4 qualities:

  • K – knowledge. What they know coming in.
  • A – attitude. Their perspective on life.
  • S – skills. What they can do coming in.
  • H – habits. How they live their lives.

K and S are easy to test, ask questions about, and hire on. It’s appealing to be able to bring a front-end loader operator on day 1 and they’re rocking. And for many jobs – the jobs that require specific and detailed day 1 skill sets, K and S are key.

A and H are harder to unearth. It’s more than their words, it’s also how they respond to your questions. 

You’re not trying to measure how well they’ll perform a process anymore. You’re measuring what they will do when they see a potential improvement for the process. Will they let it slide and just keep doing their job, or will they tackle it, mentally wrestle with it, and come to you with a potential fix?

If you want someone to be good at their job on day 1, hire for Skills and Knowledge. If you want them to grow into their job over time, and help you grow your business with you as they get to know the inner workings better, hire for Attitude and Habits. 

Ultimately, you can train any skill you need. But you can’t train habits, nor can you train attitude. 

 

Remember that every new hire has the potential to be with you for a long time—for better or worse. The right people aren’t just capable. They care about being a real part of your business’ success.