How to Keep Good Ideas Alive (and Save Your Money)

How to Keep Good Ideas Alive (and Save Your Money)

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keep good ideas alive save money hlh edmonton A lot of us have attempted Process Improvement. The reality is that most of us have failed. 

For the most part, we didn’t fail because we lacked the talent, the team, or the hunger. We failed because it fizzled out. We started out excited, with people pitching in ideas left and right, and then we got even more excited when the early wins start rolling in.

But, when the adrenaline of success wore off, the processes started slipping. Eventually, we stop following them, and all excitement melts away. Disillusionment sets in, and although no one officially calls the time of death, the initiative stalls and doesn’t restart.

Does this sound familiar?  It should, because it happens to pretty much all businesses who attempt long term Process Improvement.

The mistake we make is not institutionalizing our Process Improvement ideas as they emerge. 

How do you prevent your great ideas from dissipating? Here are the basics of how to institutionalize Process Improvement:  

 

Align the Idea with your Business Goals

No idea can survive as an island. Here’s the life cycle that a failed idea for Process Improvement typically takes:

failed idea life cycle hlh edmonton

As exciting as they are, ideas are cheap. It’s how we sustain them that makes them valuable.

Once the new process improvement is agreed upon, Management’s responsibility is to align it with the business goals that guide the company daily. Doing that will assimilate it into the process framework of the company so that it stops becoming an additional task.

Eventually, stand-alone tasks are always left behind, no matter how profitable they once were.

 

Get the Idea Away from its Creator

This can get awkward. Someone contributes an idea and it’s a good one. The natural inclination is to “empower” that person to be its caretaker. That’s when good intentions lead to dead ends.

“Empowerment” becomes imprisonment when the idea’s creator becomes responsible for its implementation. It also guarantees that the idea, and any money it’s saving the company, will be quashed if any of the following happen:

 

empowerment becomes imprisonment hlh edmonton

And et cetera. 

If you want a good idea to survive, it must evolve away from its creator and be assimilated into a business’s daily tasks. Of course the person should be recognized, and potentially rewarded, but don’t saddle an albatross around their necks because they stepped forward with initiative. 

 

Make it Boring

The processes in a business that truly endure, from daily mail pick up to how we organize files, are boring by nature. When a process becomes so ingrained in our habitual, daily routine that we barely think about it anymore, then it becomes truly sustainable. 

Ideas need to start out exciting to get everyone on board. Visions of a slightly better profit margin needs to dance in our heads. 

But, new ideas won’t stay exciting for long, and before the crash it’s up to you to make the initiative deliberately boring. Once you align it with published business goals, merge it into routine daily processes.

Make saving money part of your most boring daily routines. Institutionalizing process improvements is what will engrain the new processes into the culture.

 

When a process improvement is introduced, we all start out with the best of intentions. The key isn’t to stay excited about those great ideas—it’s to own them. Even after the novelty wears off.

 

“Ideas are easy. It’s the execution of the idea that really separates the sheep from the goats.”

– Sue Grafton

Your Money is Frozen

Your Money is Frozen

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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.