Magic Elixirs for Business. How to succeed in business.
April 26, 2022
by Lance

As one explores the dark and dangerous corridors of business one sometimes chances upon magic elixirs that can reduce monstrous challenges to a more manageable size.  A few of these elixirs are illuminated below.

The first magic elixir is, of course, great motivated people.  I won’t say more about this other than to observe that great people have good judgment and can be selective about where they work.  What are you doing to motivate great people to want to work for you?

A second magic elixir is focus.  Even the great motivated people lose their impact when their efforts are scattered across many fronts.  If you keep focus, then the quote I heard attributed to Bob Noyce, one of the founders of Intel, resonates, “Most people overestimate what they can do in a day and underestimate what they can do in a year.”  Focus enables the coherent and timely application of resources to a problem and thus enables you to gain a commanding advantage over the competition.  Such advantages can engender nonlinearly increased profits.

A third magic elixir is clean ownership models.  In many organizations it is unclear who actually owns making sure something gets done.  If everyone owns it, no one owns it.  This is one of the reasons people have an innate distrust of committees.  Who is going to get reprimanded for fired or yelled at if something does not get done?  Not clear?  Then you are doomed.  Not so important that “doomed” is the right word; please see the previous elixir on focus.  Can people play Mommy off Daddy to get the decision they want?  Then here comes office politics and a pandemic of passive resistance.

Another magic elixir is shorter cycle time.  Whether you are doing manufacturing or development or service, cycle time is magic.  Time is a unique resource.  It is the only one that cannot be replaced.  Everything gets better with improved cycle time and, going back to our comment on focus, targets tend to move less.  For instance, when developments take a long time, the requirements inevitably change from the beginning to the end, requiring rework and redesign.  For operations, people tend to change their orders and configurations given half a chance.  Not to mention that taking more time means tying up more resources (think inventory).  Innumerable meetings have been called to chew over why the forecast turned out to be wrong and allocate blame.  Shorten your cycle time and the forecast horizon can shrink. Develop an obsession with cycle time and win.

One of the key ways to improve cycle time is to cross-train.  While the operations manager desires nothing more than a smoothly flowing manufacturing line, reality never complies.  A great way to survive the slings and arrows of outrageous fortune is be able to instantly move resources to where they are needed.  The same is true for development, research, marketing, etc.

Cycle time is also improved with focus.  Do fewer things and improve cycle time by lowering queuing times.

While there are many bumps in the business road, one way to smooth them out some is to have a healthy order backlog. Backlogs not only filter out short-term fluctuations in demand, but also provide a buffer that can help one be less needy in a negotiation.  Many customers will, of course, wait until the end of a quarter or other significant event to try to negotiate the best price when you need the order most.  Keeping yourself from being needy is one of the best ways to defend the price.  Having a backlog of product waiting for orders is the opposite situation, and can be very expensive and painful.  (From a math standpoint, order backlog is an integration of orders and the integration operator performs the function of a low-pass filter, filtering out the high-frequency fluctuations in the input.)

One of the magic elixirs of business is the commandment to go see.  I don’t mean go see PowerPoint presentations; I mean go see real stuff, real people, real customers, real problems.  Every time you go see you learn something new and that goes double for going to see a customer.  These two words were the most important piece of advice I got going into business.

Like cycle time, improved quality has a compounding positive effect on business.  Higher quality leads to faster cycle time, better ability to focus, better use of resources, etc., etc., etc.  Most wasted effort in business is spent on dealing with exceptions and quality problems create exceptions like a cancer.  Get the religion.

The value of the visual workplace is underestimated in this internet age.  By creating a visual workplace you improve the common understanding of the problem and a standardized (disciplined) way for how things are done, improving quality.  With a common understanding of the problem, you can get everyone’s effort focused on the solution.  You also create both recognition and peer pressure on folks in the critical path, lowering cycle time.  A visible process (and the right culture) also invites people to invent improvements.  The visual workplace is aligned with the goals of creating focus and lowering cycle time.