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Why fewer choices can provide higher profits

How many variations of products or services does your company offer?  A few?  A dozen?  A hundred? More?  Are all of these products really required to meet customer demand?  Does it make sense to provide all these choices to your customers?

choiceMany companies have embarked on a journey of product proliferation.  In an effort to capture more market share, we have seen an explosion of customization and niche marketing.  A trip to your local grocery or large retail store confirms this. For example, 352 distinct types of toothpaste were sold in 2010. There are entire aisles dedicated to cereal, dog food, and toilet paper. Have these companies enjoyed increased profits by offering all these new products?  Not necessarily…

In this post, we will briefly discuss the implications of having too many products (choices) on both (1) revenue and (2) costs.

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Three Ways to “Manage Up”

Manage UpWhat words would describe the relationship with your manager or supervisor?  Would you use words like subservient, directed, chain-of-command, or authoritative? If so, it is unlikely that you are providing the greatest value to either your boss or the organization as a whole.  It could be that you don’t know how to effectively manage up.

In their recent book Influencing Up, David Bradford and Allan Cohen advocate that employees have greater capacity to influence their boss than they might believe.  Their contention is that powerful people need powerful direct reports.  More specifically, leaders need people who take initiative and get things done.  They also contend that leaders need direct reports who are willing to speak truth-to-power in a way that is respectful. So how can direct reports manage up more effectively?  It starts with understanding how to be more influential with their manager.

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Is it OK to be foolish?

Innovation, Risk, Creativity, InnovativeWhen was the last time that you or someone on your team proposed a crazy, unique, absurd, outlandish, or otherwise unconventional idea?  Has this ever happened?  What kind of reception did the innovative idea (and the person who proposed it) receive?

William Barnett, Professor of Business Leadership, Strategy, and Organizations at Stanford, discussed this topic as part of a recent webinar.  He described a “thought experiment” that helps us to consider what happens when someone comes up with a novel idea.  This concept aligns with the notion of how the fear of failure can influence whether innovative ideas are surfaced.

Barnett asked the hypothetical question, “When you have a good idea, does everybody have to agree with that idea for it to be correct?”  (Most people would say, “No”).

Barnett then asked, “When we have an innovative idea, what is often the first thing we do?  We ask others, ‘What do you think?’  “If the people we ask don’t like our innovative idea, what do we do then?  We often ask someone else.  Basically, we are looking for affirmation that the idea that we have is a good one.”

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Why bad habits are hard to break

Habits.  We all develop them.  Good habits can be helpful in our daily lives, while poor habits can result in unintended consequences which may not be known for a long time. This discussion will briefly review how habits can influence risk-taking, as well as the basic neuroscience of habit formation. habitLet’s start with a definition. A habit can be defined as something that a person does often in a regular and repeated way so that it becomes involuntary. Examples of some common habits include brushing your teeth, answering the phone when it rings, stopping at a favorite coffee shop each morning, or washing your hands after using the restroom (although this is not a habit for a surprisingly large proportion of the American population). We also develop habits in the way that we do work.  Most times, these work habits are beneficial, as it frees our mind for activities that require more conscious thought. However, there are situations where a habit can have negative outcomes.  Examples include the long-term habit of smoking or perhaps eating a high calorie dessert after every meal.

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Control Plans are not very sexy, but are necessary!

It’s human nature to feel good about effecting positive change.  Perhaps you have removed some unnecessary steps from a process and now it is easier to perform a task.  Or you have modified the way that work was being done and now there is less rework.  Maybe your team has agreed on a more effective way to communicate and share information among various working groups.  It could be that you identified some “critical X’s” to control and now there is less variation in the process.  In any case, making small improvements that have a large effect can produce a great deal of satisfaction.  After all, this is why we invested time and effort – to become better at whatever we do.  It’s time to celebrate!

Unfortunately, improvements can be temporary.  After the team disbands, the process can revert back to the previous condition or people drift back to the old way of doing things.  Without something to prevent this regression, it is only a matter of time before any improvements (and the associated benefits) are in the rear view mirror. In the Lean Six Sigma world, the tool that is most often used to maintain the gains is a Control Plan.  It is the centerpiece of the “C” step in the DMAIC methodology.  A control plan should be used whenever you want to keep hard-won improvements in place.

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Think Quick! Can you work faster AND safer?

 “You can observe a lot just by watching”

Yogi Berra

faster and saferOne of the foundational Lean tools is QCO (quick changeover), which is also sometimes referred to as SMED (single minute exchange of die).  SMED includes a set of techniques that make it possible to perform equipment set-up and changeover operations in less than 10 minutes.  Not every changeover can be completed in this amount of time.  However, any operation would benefit from using this Lean tool if there is a requirement for:

  • a change in “lot” types
  • a process or set-up change

For this discussion, I will use the term QCO as being interchangeable with SMED. Most of the time, the opportunity for implementing QCO in a process is driven by the need for greater flexibility, quicker delivery, better quality, or higher productivity.  These are indeed significant benefits that are realized –  because this approach identifies and removes some of the eight sources of waste.  But there is an equally significant benefit to assessing a process and implementing QCO: the resulting process changes often make setups simpler & easier – and therefore faster and safer. The following case studies demonstrate how using QCO principles can lead to work which is not only completed in less time, but is also safer. Continue Reading