Is your business focused on your Value Proposition?
How much of your business activity is focused around adding value to your clients – i.e delivering your value proposition. The base logic behind Kaizen is removing waste, while optimising value to your clients.
Prior to commencing the valuable process of eliminating waste I suggest getting great clarity around your core value proposition and what target market you are taking on as well as your strategy to maximise it.
Kaizen or “Lean” has been popular in large business for some years now. Most of the evangelists like John Cook from Stainless Design in Waikato all come from the larger end of SME or big corporates. After attending an inspirational seminar with Julie Hazelhurst (Kaizen guru), she has got me thinking about the implications of this thinking to the smaller end of SME.
Waste (Muda) comes in 7 forms
- Motion – people movement, searching
- Waiting – stalled customer processes
- Transport – Information and material
- Storage – Information and material
- Defects – rework
- Over producing – doing more than client pays for
- Over processing – over engineering, more precision
Julie’s premise was “if you’re running short on time and money in your business perhaps you should tackle your waste first and maximise the value out of your talent in your team, before looking at taking on more staff”. She took us through the basic process of mapping your internal value chain and observing the “waste” processes typically interleaved with the activities that your client values.
Its interesting that in Business Dominoes we use a similar focus on value chains to spot new market opportunities and strategic alliance partners outside the business, where Kaizen uses the internal value chain to focus process improvement.
7 common waste areas that I continually see SME’s wasting time on:
- Potential & current clients not in your target market Get clear about what is and isn’t an ideal profitable customer. Create a bullet list of their characteristics : eg revenue, location, ability to “get” your value etc
- Distractions of activities off “piste” Get clear about your business competencies and larger goals, then “stick to your knitting”. Too many businesses never achieve anything because their visionary leader is always chasing the next big idea. Put some structure around your business and then say NO to stuff that will not achieve your goal.
- Poor performing staff. Failure to deal with non performing staff will scare off the bets performers. Despite the hassles of our employment law – act now.
- Over engineering products and services, rather than selling Get the balance between engineering and marketing spend right. Know when you have that minimum viable product and then go sell, sell, sell. Craftsmen are never satisfied and continue to tinker with the machine when they should be bringing in revenue. If you have zero sales stop everything and validate your market before progressing.
- False economy of not having or having a low performing professional service providers Get some great outside help to challenge you on your big decisions and to have a shoulder to cry on as well as celebrate success with. If you have zero budget start with a fellow entrepreneur and meet them for a coffee once a fortnight.
- Inefficient accounting systems If you are not using auto bank feeds to avoid entering transactions – try Xero with bank feeds –use bank accounts that auto feed transactions into your accounting system -link your credit card as well. Learn how to do your own GST return, it takes minutes and you get a great check point on your business.
- Outdated IT systems If technology is not helping your business you are doing it wrong – get a new IT supplier. If you have less than 50 staff throw out your email server and replace it with office 365 (a great cloud computing service). Share electronic contacts and calendars around your organisation and embrace smartphone technology.
What’s your biggest area of waste?
Add a comment below with the big saving areas that you have made in your business.