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The How Of Wow: Business Planning

Take a little ah note from from gandhi who said be the change you want to see in the world be it don't think about it some day from now don't become it don't don't envision it for tomorrow be it in the now so we actually do it now if you will we demonstrate it now we don't put it off for another day and uh in this in this session what we're going to do is we're going to examine strategies if you will for leading culture change particularly as it relates to the how well how do we really develop a culture of wow of true hype peak performance I will review kaizen and kaizen events a little bit I'm going to share some of the mechanics of that so even start up businesses sola preneurs wannabe entrepreneurs people thinking about starting up a business that's about making change so kaizen against about making good change it could be large and small so the same principles apply in kaizen as they do in business planning or isn't getting a new business off the ground and order changing a busines...

s as it exists now so we'll review that and go through some some more detail on it so you have that in your in your deck and you're in your library so to speak we're gonna examine some key components to leading those successful events what the roles responsibility some of the key tenants things like that so that you've got that and they're also going to look at some common failure moz so that what could go wrong with the hoops is so to speak so that we can anticipate and work our way around those we don't want to end up learning the hard way we can help it all right? So that's the purpose of this session we're going to start with culture just what is it? What is culture we hear that term a lot what is culture I'm actually commissioned by companies to come in and lead culture change lead habit change so this is like it's it's habit change at a macro level and cultures exist all around us whether we're running a one person a company or a hundred thousand person company 00:02:01.72 --> 00:02:05. families have different cultures households have different 00:02:05.37 --> 00:02:08. culture cities of different cultures certainly countries 00:02:08.17 --> 00:02:11. of different cultures cos industries cultures are 00:02:11.64 --> 00:02:15. it's it's it's the way we do things around here and 00:02:15.66 --> 00:02:17. so the way we do things around here in one household 00:02:17.87 --> 00:02:19. might be quite different than the way we do things 00:02:19.54 --> 00:02:22. around here in another household so we're surrounded 00:02:22.0 --> 00:02:24. and culture and we're always dealing with culture 00:02:24.6 --> 00:02:28. I like t describe culture is gravity's like gravity 00:02:28.52 --> 00:02:30. you might not feel it you know you might not even 00:02:30.78 --> 00:02:34. think about it day today until you try to fly or jump 00:02:34.39 --> 00:02:37. or something like that you don't necessarily think 00:02:37.24 --> 00:02:40. about it but it's very powerful and we need to know 00:02:40.32 --> 00:02:42. what we're up against culturally whether we're going 00:02:42.55 --> 00:02:44. into the navy or we're going into a bank we're going 00:02:44.89 --> 00:02:48. in tow our office and we're dealing with difficult 00:02:48.37 --> 00:02:51. people we gotta understand culture so that's what 00:02:51.54 --> 00:02:53. this is really all about so what drives culture how's 00:02:53.73 --> 00:02:55. it link to systems and structure some of the things 00:02:55.62 --> 00:02:58. we've already examined a bit you know systems and 00:02:58.17 --> 00:03:00. structure also the way we do things around here how 00:03:00.5 --> 00:03:03. did tools and culture impact one another so how does 00:03:03.15 --> 00:03:05. a cellphone potentially change a culture 00:03:07.28 --> 00:03:10. how does a cell phone that can now also be a gps system 00:03:10.74 --> 00:03:15. potentially changed the culture also b a of a camera 00:03:15.21 --> 00:03:17. potentially changed the culture if you're in the camorra 00:03:17.72 --> 00:03:20. business today if you look at the trends the trends 00:03:20.4 --> 00:03:25. that sales are going down why video cameras gps systems 00:03:25.32 --> 00:03:26. why are there sale's going down 00:03:28.15 --> 00:03:31. because the phones are taking them away why would 00:03:31.11 --> 00:03:33. I have three different tools if I've got one that 00:03:33.35 --> 00:03:35. can do all three things we got to pay attention to 00:03:35.77 --> 00:03:38. culture that's all that's going on around us all right 00:03:39.46 --> 00:03:41. and one of things peter drucker once said he's he's 00:03:41.16 --> 00:03:45. had culture eats strategy for breakfast think about 00:03:45.21 --> 00:03:48. that culture each strategy for breakfast we could 00:03:48.41 --> 00:03:50. be a strategically minded as we want to be is thoughtful 00:03:50.9 --> 00:03:52. with our business plan is we want to be but if we're 00:03:52.69 --> 00:03:57. not aware and savvy to culture be careful all right 00:03:57.29 --> 00:03:57. be careful 00:03:58.92 --> 00:04:01. so what about culture you know what key points about 00:04:01.08 --> 00:04:03. culture one is that it's a mindset it's it's what we see in the mind's eye and then we manifest that into a way we do things around here it's driven by perceived expectations most of us do what we think we're supposed to it's perceived expectations well where do they come from perceived expectations come from systems and structure well we learn in the system and the structure that were in that this is how you do things around here this is how you shoot the catapult ball this is how you you draw diamonds so it's it's perceived expectations coming from systems and structural where the systems and structure come from and at the end of the day we have to admit that leaderships responsible for that or the entrepreneur who's starting up a new company you're designing a way to do that do things around here you're designing a system in a structure of some sort of larger small oh well okay then I better take responsibility for culture and if you look at the great start ups over the years the walt disney's you know the the hewlett packard's companies like that where the culture has been a certain way ah lot of times it comes from that original entrepreneur all right, what system structure and culture must be aligned and khun crew and other was get into all this dysfunction and they usually are because if you look at the bottom line here culture which is the way we do things around here is synonymous with systems and structure which is the way we do things around here so how do we change the way we do things around here we changed the way we do things around here that's what gandhi was talking about be the change you want to see in the world you want to change culture will be the change so the change culture we have to change the systems and structure that we have that's exactly what we demonstrated in both the lean sigma game and in the catapult exercise we changed the system and the structure to some extent and it gave us a whole different result particularly in the lean sigma game kurt 00:06:04.52 --> 00:06:07. because I love it culturally strategy for breakfast 00:06:07.21 --> 00:06:09. I didn't catch you said that but I want to use it 00:06:09.56 --> 00:06:12. it was a peter drucker thank you peter drucker and 00:06:12.87 --> 00:06:15. it's the last slide in this deck to so you'll have 00:06:15.51 --> 00:06:18. it in your course material as well yeah all right 00:06:19.32 --> 00:06:21. so once again you know our systems and structure are 00:06:21.77 --> 00:06:24. perfectly reflecting the results we're currently getting 00:06:24.69 --> 00:06:26. we're reaping what we're sewing so if we want to reach 00:06:26.67 --> 00:06:28. something different we gotta sew something different 00:06:29.17 --> 00:06:31. we gotta work upstream and the inputs to get better 00:06:31.81 --> 00:06:35. outputs it's it's basically that simple jake a jake 00:06:35.43 --> 00:06:38. was talking about earlier it's it's really not like 00:06:38.42 --> 00:06:42. complicated stuff it's all about understanding it 00:06:42.17 --> 00:06:45. in its simplest but yet pro forma profound form and 00:06:45.88 --> 00:06:48. then executing on and pulling the clubs out of the 00:06:48.94 --> 00:06:51. bag and swing on the swing and I'm getting better 00:06:51.26 --> 00:06:54. at it we were reviewed damning who said put good people 00:06:54.38 --> 00:06:58. in a bad system and who wins the bad system once well, 00:06:58.03 --> 00:07:00. that can be really frustrating so we owe it to our 00:07:00.81 --> 00:07:04. people we owe it to our business partners to put good 00:07:04.8 --> 00:07:08. people in a good system and they were more than more 00:07:08.22 --> 00:07:09. than appreciate that 00:07:10.49 --> 00:07:13. this is again just a review of this dynamic that's 00:07:13.24 --> 00:07:16. going on that we can continue to manage behavior trying 00:07:16.36 --> 00:07:18. to get results but until we drill down to where the 00:07:18.91 --> 00:07:22. rial action is the systems and structure piece 00:07:23.62 --> 00:07:26. we could be on a treadmill we could be exercising 00:07:26.86 --> 00:07:29. that that insanity you know, doing things over and 00:07:29.13 --> 00:07:31. over again and expecting different results so we've 00:07:31.43 --> 00:07:34. got to drill down so let's start with core values 00:07:34.26 --> 00:07:36. if you look at the great companies over the years 00:07:36.29 --> 00:07:39. again the disney's you know, the amazons they these 00:07:39.36 --> 00:07:42. cos they're very clear on their core values 00:07:43.92 --> 00:07:46. now there's not necessarily all that many of them 00:07:46.29 --> 00:07:49. I believe amazon has fourteen disney's got six but 00:07:49.69 --> 00:07:52. these air these air core values this is this is what 00:07:52.46 --> 00:07:55. gives it some call damming used to refer to it is 00:07:55.34 --> 00:07:59. constancy of purpose. This is in a world of change. 00:07:59.57 --> 00:08:02. This was this is what will not change this is what 00:08:02.99 --> 00:08:06. we can hold on to to give us some stability all right 00:08:07.11 --> 00:08:10. so in this world of change what's not going to change 00:08:10.79 --> 00:08:13. what are those core values so what do your core values 00:08:13.43 --> 00:08:15. and if you haven't identified him that could be step 00:08:15.68 --> 00:08:18. one of your business plan you see this a lot of times 00:08:18.45 --> 00:08:20. when you walk into a company they've cut their core 00:08:20.6 --> 00:08:24. values up up in the lobby all right what do we believe 00:08:24.18 --> 00:08:25. in what do we believe in 00:08:27.44 --> 00:08:29. all right how do these core values align with current 00:08:29.98 --> 00:08:32. behaviors now this is interesting because a lot of 00:08:32.28 --> 00:08:35. times we find that we've got this this talk on the 00:08:35.51 --> 00:08:39. wall and we as we get into the business the walk is 00:08:39.78 --> 00:08:42. very different than to talk so we say we believe in 00:08:42.99 --> 00:08:45. teamwork and we're all about teamwork and then we've 00:08:45.83 --> 00:08:48. got the dot game that the lead sigma game like and 00:08:48.6 --> 00:08:51. round one where it's it's nothing like a team 00:08:53.14 --> 00:08:55. so we've got these disconnects now that the great 00:08:55.2 --> 00:08:59. companies large and small a line there core values 00:08:59.4 --> 00:09:03. with their systems and structure so that they get 00:09:03.27 --> 00:09:05. that harmony and it's just the way we do things around 00:09:05.88 --> 00:09:09. your nut not doesn't mean everybody ah likes that 00:09:10.29 --> 00:09:13. maybe you don't like the atmosphere the culture, the 00:09:13.82 --> 00:09:16. environment, the expectations at at a company that's 00:09:16.99 --> 00:09:19. rigorous and discipline and you'd rather work for 00:09:19.22 --> 00:09:20. something that's 00:09:21.24 --> 00:09:23. not quite so rigorous or discipline that's that's 00:09:23.98 --> 00:09:27. your personal choice but the companies they're clear 00:09:27.46 --> 00:09:29. on their core values they're using them to hire people 00:09:29.85 --> 00:09:32. to train people to reward people to incent people 00:09:32.86 --> 00:09:35. to motivate people it's all about alignment at the 00:09:35.47 --> 00:09:38. end of the day so how do our current systems and structure 00:09:38.46 --> 00:09:40. align with our core values we have to think about 00:09:40.87 --> 00:09:44. that you design in teamwork you don't just talk about 00:09:44.79 --> 00:09:44. it 00:09:46.0 --> 00:09:48. you send people off to a team building retreat over 00:09:48.65 --> 00:09:51. the weekend ropes courses kayaking whatever it is 00:09:51.74 --> 00:09:54. you do and they come back to a dysfunctional system 00:09:55.54 --> 00:09:57. and structure guess what 00:09:59.24 --> 00:10:01. okay they might have had a good vacation but it's 00:10:01.77 --> 00:10:02. back tio 00:10:03.67 --> 00:10:05. that the system instruction that gravitational pull 00:10:05.96 --> 00:10:08. that in this case might pull us apart so what if anything needs to change we have to be conscious to that so we start by listening our core values and this is just a sample you khun you can list your court you whatever whatever you really believe in as an entrepreneur is a business owners household leader whatever but in this case we've said honesty respect you no integrity service innovation teamwork excellence responsibility these these are this cos core values this is what we believe in so we we believe in being truthful and honest all right ah but now do we have any deceiving practices going out are we are we uh fib in anywhere you know? We setting expectations we can't meet we promise is promising things to customers that we can't deliver on because they might say that's not honest I see this all the time again we've these air not uncommon examples by the way these are very common examples respect you know and then way see how disrespectful from people could be in an organization we say integrity you know let's be integrated let's be let's be harmonious let's work together things like that is it feeds into things like teamwork and service and we find out it's anything but that so we've got all of these conflicting behaviors to our core values well it's just a least identify those because those give us an opportunity now to step up our game and improve things and then let's do the same thing with reinforcing behavior so this kind of comes back to this show me the data thing prove it you say this is your talk and that you're walking your talk prove it give me examples and this is rice he disconnects all the time ah great cos they're very clear on their core values and they reinforce them with their systems and structure and when they find violations or conflicting behaviors the kaiser in it they improve it to do something about that alignment is going to give give your business great uh great synergy, great energy and is energy. This is like a little compass to use in this case so we say, all right, here are the core values, all right. And then here the results. We want high results, and we want embrace our core values. So where do we want to be? We want to be in quadrant. Hey! All right let's take john doe or a jane doe and uh whatever role or position they're in boy there are top sales person all right but they are not exactly living by our core values it's very cut throat they're not they're not team players or something like that what do we do? They're delivering results what do we do? A lot of companies will look the other way well yeah but they're making their numbers look good look at their performance so well we'll make a special rule for you know they don't have to show up on time to the meetings they don't have toe show up it all there but but look at their numbers as soon as we start to violate these core values all right that the fabric of the team starts to just fall apart the great cos basically say you have no choice but to work your way here you're out of here change or be exchanged set the great cos no large and small that if you're going toe model the type of behavior and the results okay because what do we do it you know this is kind of an easy one look you're you just don't belong here fish out of water whatever um over here we've got somebody who's definitely buying into our core values but they're just not getting the results this is where we train a solution here would be training or maybe a repositioning, maybe we're in the wrong position we could put in a different position you could do a lot better this is what we handle this very differently than my handle this this person doesn't need training they already know how to do what they're doing okay but they need is accountability um motivation teo adopt the core values they did have a change or that you get exchanged so this is what really helps that team tighten up so corrective action we started to go back to his core values and we said to say say things all right well where do we need to make systems changes like we did in the lean signal game we need toe come up with a team system that's more visible or user friendly better flow better service okay better teamwork better quality in terms of excellence, that type of thing but we may also have some people in the equation that need teo we have to do some adjustments to so what are some individual changes that people need to make you think about this? Well, maybe I need to work on you know my my service skills a little bit more. I need some help with that. We use these tools than just to simply define and clarifying a liner are our cultures. This is a change formula and its ascent essentially pretty simple. But we again sometimes forget these things in order to really overcome resistance. You know this young yang balance if you will with change they're really three important factors we have to keep in mind number one we have to have a degree of dissatisfaction because if that zero and you know this is multiplication so to speak if this is a zero resistance is goingto win if people don't see a reason to change there's no discreet this degree of dissatisfaction we haven't clearly identified the you tease the undesirable effects we haven't uh we haven't we haven't showed the cost of poor quality we haven't done some of things we've already covered in in this workshop um we're not going to get the change so we used the data the brutal facts the you tease the ugly babies whatever you want to call it to say essentially here is a compelling reason to change okay I get it I get it I get it we need to change we need stabilize the catapult or whatever it is we're doing vision of the future so where we going what's what's the future state look like if the answer is I don't know thought you might have an idea on that that zero game over right oh all right so we paint a picture of the future this is what we want to do here is our business plan all right here's how we're gonna fill a need in the market or whatever now how do we get from current state to future state first steps I don't know. Game over all right so these three factors we have to have put some thought into them so the degree dissatisfactions all about getting the data and in a compelling reason for change look the risk of not changing is greater than the risk of changing so let's change and we're going to change from here to here better not best and here the steps were going to take to get that done and this is where a lot of you know kaizen comes in over here this is how we're going to execute on the change and my experience is that bin that resistance essentially just dissolved it just it just dissolved so this whole assumption this whole belief that while you change is tough and changes difficulty I've heard even very senior executives that change is difficult change is tough well it is if you think so so what henry ford once said whether you think you can or you think you can't you're right so what do you think yeah do you think change is going to be tough guess what you just signed up for a tough life cause you can't not not you know you can't chant not change so do you think it's difficult you just made your life very difficult so what is cais and this is just a again quick review we know it's a japanese term now use worldwide it's it's about making good change this is in your deck from before it's, just a little bit of you. So we're going to talk now in this session, a little bit more about how do we actually execute this? And what are some of the mechanics, rules, responsibilities, things like that and it's all about never really getting there. It's all about this continuous journey of improvement. So let's at least enjoy the journey and not get so focused on the destination that we miss the ride. A kaizen event is that quick blitz if you won't think of it as a blitz we're going to take a team of people getting together we're going to get the business plan written we're going to get the funding we need we're going to get the uh the location we need we're going to get the office set up we're going to we're going to change the process uh we're gonna prove the diamond department we're gonna prove the catapult department department whatever it is that's that quick event knowing that it's better not best that we're after here where we won't get it perfect but we'll make it better and we'll do it fast and we used um act is a discipline to get it right it is best we can there's ten basic steps again a quick review I'm going to move some of them through some of these that we've already seen before just quickly is reviews that we get into some of the meeting more of the meat of it but we define the event all right what do we what we basically trying to accomplish in this event let's make sure we're clear on that we can use a tool called a charter which I'll cover and a little bit as well we prepare the team maybe we get him trained we run the simulation and incidentally that simulation I said this earlier is a great tool uh for caisson team training, the leans the lane sigma simulation we collect our date and we typically take a couple of weeks maybe a month to get the data collected ahead of the event so that we come in armed with the brutal fax the maps that charts the grafts whatever all right and in the event in the purple section that's represents a typical event we've we've got the process mapped we're looking at the the you know for those that those you tease those undesirable effects were analyzing the data using cause and effect we're looking for those uh those leverage points we begin to brainstorm solutions we could do this we could do this we could do this option a b and c lots of times at liza's option d and e that z let's agree on one let's let's pull together and agree on something here and let's go ahead and test it out let's implement it so that's the most exciting thing about about changes we're actually we're actually implementing fast it's doing a kaizen event with the navy years ago and it in this particular event involved we had to we had to rethink and rewrite policy five in particular so five policies were root causes to a lot of the beauties that we had rest of the team are we gotta we gotta write new policy they looked at me like I was crazy we don't write policy for the navy the admiral you know admiral does that. The general doesn't write policy admiral proves policy so we're going to get the admiral to come in here prove the policies that we've written but we gotta write him first we're going to try again they thought I was crazy but we wrote the five policies and had four out of five signed off by friday fifth one needed a little bit more socialising with the board of directors and some other people but we have four out of five policy signed within a week with a team that didn't think they could do that that that wasn't within their scope of their capability their work their influence what was leadership again about influencing change okay and movement so we brought the policies we're so we're doing that kind of thing all the time where it's it's just do it just get after it kind of ah approach and you have been built in um you know approvals and things like that to make sure that checks and balances all right and then you know following a typical event is that we gotta follow up we've gotta monitor it we've got you know get the data we've got to see if it's working the way we wanted it to and it's not uncommon and also be uh already planning your next guy's an event and then when people start to realize oh this isn't a one time thing it's not just a quick fix it's uh it's part of an overall process, in fact, it's, part of an overall business strategy. Well, that's, that's, pretty significant. So we're using to make to do all of this, and we've seen this now over and over again. So hopefully, a lot of you talked about. This is a major takeaway. It's, certainly a very useful tool belt for me. I've been using it for many years, and I have to say, I think it's had a lot to do with my success in my business. So what do we define no all right just again we've got to find a target area so what are we what are we targeting for this event all right what's what is it where we want to accomplish we have to be very clear on our target we got to define the team we're going to work with including outsiders of virtual team members even customers and suppliers or vendors that's who's going who's going home we're going to need given the scope of work whose we're going to need to get this done that's right a charter and I walk it through us it's just a sample charter document it's just a one page document that just helps us get focused let's make sure we have the current state mapped we don't have to get every bit by the way we were doing a bassline years ago on on the nuclear missile in the navy and uh if they thought I was crazy when I said we're gonna do this in a month huh you can't do it in a month there's no way you can get all the data in a month there's no way you can hear the yeah but yeah but yeah but yeah but we're going to and I had the admiral support to commission this team and lead it and get it done and ah did we need all the data to prove there were problems? No, you can run. You can run a very effective change with with a half a dozen beauties I got you tease you got an opportunity to change things right so let's not worry about getting every detail and fallen into this analysis paralysis thing let's uncover the beauties let's do the root cause analysis let's make some policy change or do some things that they're going to make it a lot better more lean more clean more efficient whatever and get it done and uh you know, thirty days later after this uh after we launched and got the team trained we ran a an event of what's called a baseline event it's it's to identify project areas that really are high impact we got it done and I actually was given an award from the navy for that and the most skeptical guy of all the nuclear engineer came up to me afterwards and said john I I gotta tell you made a believer out of me I think there was a chance in heck that we were going get this done and we did so thank you that that you know that means a lot to me but it's more important that that it was something that changed his life and he was more than sceptical have to talk so you know we've got to have our voice of customer we gotta have those critical the qualities we've been through a lot of these we've got common tools across the bottom again this is in your deck just a za guideline so the charter itself is generally very quick in fact, we developed a charter for the navy because their charter before we did did one like this was pages and pages and pages long the charters the idea of the charter in fact if I come in and you say we're working on this project and we'd like your help first thing I'll ask force the charter what condition what charter? Well, do you have a do you have anything that describes the project in simple terms with a start day to finish data scope you know a purpose a mission expectations deliver bols things like that who's now we don't have any of that guess what? You don't have any of that chances are your projects are going to be a mess they're going to be all over the place because there's no accountability how do you hold people accountable if there isn't clear ownership clear timing dates things like that so a typical charter is the name of the project or you could do it you could do something like this on your business here is the name of the business I'm gonna have my business plan completed on certain date or my project completed on a certain date here's a one or two line description of it here's the business case you know this is often the problem statement or something like that. You know here the delivery bols, this is this is what we expect us to get out of this project you have to list them all but here are some of the top deliverables here's a major milestones times dates things like that where we're gonna do we're gonna know we're on track okay here's the scope of work we're not gonna try to eat the whole elephant we're gonna boil the whole ocean you know we're gonna take certain certain bites here's the executive sponsor project sponsor here's who's gonna lead this project to use was on the team and we've got a commission an authorization it doesn't have to be a whole lot more than that you could list the beauties if you wanted to is part of this but they usually they're built into the business case generally pretty simple then we could lay out of simple gant charter project planets this says it's okay we got here's your d m a you know we're gonna define measure analysed prior to the event and then we're going to hold a kai's an event out here and you know on the march early april something like that and we're going to follow up for a period of time and all by the way we're going to actually run another event and that gets people thinking about oh you know this is this is continuous so no simple tool but gives the team clarity gives us some definition gives us some time what do we measure we measure those key process output variables on the aipo what are those output variables look like we measure the current state the measurement system itself like the catapult game to do we have a good measurement system if not, we need teo we need to work through that measure current costs things like that cost the poor quality for example measure the udi's undesirable effects that's come in armed with with good data quantifiable measurable baseline type data and then again we've got plenty of tools to pull our from our tool kit are golf bag to get that done so there's your cape keep process output variables on the aipo what's what's absolutely critical to measure critical to quality all right and then we do the same thing ah with the keep process input variables but these air some examples of the output variables we might want to consider there was a question earlier about you know how much should you have on that dashboard that balance scorecard it could be something like this there's the measure everything but you want to measure certainly the important variables to tell whether you're safe or not you're healthy or not you're you're in good standing so let's measure on time delivery let's measure our asset utilisation things like that let's measure times do we have back orders? How long are the backwards if we've got customers waiting for uh us our service, our product how long are they waiting how many are waiting that could be a uti. All right, um, I've gone in organizations where they just have massive back orders because they can't get the orders through, so that doesn't make customers real happy. If they stand in line for too long, they leave about cycle times throughput, time's, replenishment times, things like that yields. We talked the other day about first past yields, right rolled through, put yields cost of poor quality. We certainly wanna measure quality in one way or another. We want to measure productivity, we want to measure inventory. Um, if we have it in, most businesses have some form of inventory and in safety, that would be an example of a balanced scorecard. I measured those things pretty good chance. Ah, I'm gonna have you have, you know, a heck of a lot about my my state of health is a business, all right. So then we shift gears to the input variables and we've seen this tool before the people the material the equipment the policies procedures methods and environment so let's take a look inside those and there's an exercise for you to do at home or or or make a note of uh well we won't do it right now but that common exercise I have people do is identify two or three of your most critical output variables your most critical measures okay what do we really wanna pay attention to that's going to be important to me okay it could be you know things like the amount of time I spent on value added activity because a lot of us waste a lot of time so it could be any number of things are yields are performance yields are quality yields things like that and then see if you can trace that upstream into five to seven you know a number of input variables that affect that output variable and just draw yourself a little simple lipo on whatever it is you're trying to improve and begin to look for that that correlation between the exes and the wise all right what why? Because the secret if you will to the to the two that's true high performance is your work on the input variables and the output variables take care of themselves some refer to that is lagging indicators ok, we'll follow it was like the output variables it's. Too late. They're already there already happening, but the accidents already happening. What's causing them and let's, figure out howto control those like we did with the catapult, because if I can't control the input variables, the pullback poco io kit I can, I can control everything on the input side. They'll put variables are going to take care of themselves. It's still measure him to prove it, but the opportunity. I'm going to be shooting the ball in the cup. We now start looking at some that some of the data so this is particularly important for business entrepreneurs solo preneurs startups it's also very important to mature business is because we want to make sure we're asking the right questions we're looking at the right data as we go forward so we think about these different buckets the markets where we always start what's going on in the market all right market trends maybe we see an opportunity to start up a a new business or a new product or new service because there's a need or a trend in the market so let's look at the market let's look att customer expectations and experience what's that look like we're searching for opportunity is what we're doing so that this is entropy endure the entrepreneur the solo preneurs is always looking for opportunity where can I find a need that's not yet filled and get their first or get there soon get to the party early because that's when the that's when the real feeding is good all right so uh competitors data you know things like what what what what people the market complain about as it relates perhaps to the compact competition maybe we can do it better faster leaner but this is all about distribution packaging finished goods way have to sort through all of that all right so where were we? Where do we ah how do we get our products and services to market presence marketing advertising brand all of that falls into into this with process and we've played with this throughout the last few sessions is you know the value stream itself we can map that out we can start to look at how it where's the value add non value add a lot of you've taken that away already the process steps the physical flow you know that spaghetti charts so to speak what's our process looked like or if we're started what do we want it to look like let's draw that future state map what would be ideal incidentally if we're not aware value add non value add distinction and terminology we're not aware of lean thinking and the counter intuitive nature of it chances are for starting up a business will start it up not lean I've gone and the company's after cos after companies over the years that's a yeah we've we tried that before we we would have been working on that for a couple of years I said did you we educated in lien when you did it no then the well then how would you expect it to be lean because lane's counterintuitive if you've been working on something that's counterintuitive you've probably check me on this but you've probably done it a non lean way not even know it so you've divided the labor you've batch tanned, cued you've come up with policies and metrics and systems teo for functional efficiencies. It's no wonder your system's, not lean. You don't know what loneliness. You're ignorant, you don't know it, it's a not exactly how you want a word it but that's exactly what's going on. So these principles, as you're starting up a business, will allow you to design a very lean business. So I've run a very lean business for twenty six years because I know these things and a lot of people don't eat za differentiator the very diff it's a differentiator despite whatever business size you are. All right, so information flow, how are we going to do that? How we going to know what's going on? How we gonna know how we're doing? You know, visual scorecards, tracking systems, all that kind of thing. We gotta think this stuff through the whole time value map, the inventory, these air, the critical data points to collect. All right, as we explore guys, um and change organization date, everything for morgan is how we're going to organize the business or how are we organized in the business? Who does what? How many touch points do we have? How's the labor distributed just again imagine that lean sigma game and how that was organized, and then how different it was when we, uh, we ran it in around three productivity measures, overtime measures, job classifications, everything we don't leave anything untouched. Measurement systems is part of the support systems are. We're going to measure stuff, how are we going toe incent people were going to reward people what policies and governance are we gonna operate under? This is where we wait. This is where a lot of the action is right here, how we're going to buy things where we're going to buy them from. How are we going to pay pay for them? This is a lot of the how to stuff. What are equality system's going to look like how we gonna ensure ensure and usher quality we're going to make sure that our customers are getting it right we're getting it right for them what's our quality system looked like are we going to add a bunch of inspection in or we're going to find ways to design it great questions to ask you contemplate you know improving your businesses people finance recognition in reward laboratory's things like that how we're gonna if we were working with laboratories or what what's that what's that gonna look like we're gonna subcontracted who were going to subcontract it with these air all business decisions and at the end of the day this is all about relationships we're going to inter relate with people to get it right contractors things like that facilities maintenance etcetera and the financial data now if we don't know this stuff ourselves we can find someone who does we confined a c p a or an accountant to help us out with the to teach me about cash flow those books and there's literature there's youtube clips there's all kinds of right resource is available on how to manage a our financials and learn about it accounting for the non accounting person finance for the nonfinancial person you've seen things like that so pay attention to that because at the end of the day this is the lifeblood of the business and we got to know whether or not we're getting a good return on investment and this is where a lot of businesses go broke in a couple of your start ups because they haven't thought through the financial piece so we've got to make sure we get the data we take the data we analyze it we're looking for that non value added waste so to speak and uh we're using our cause and effect tools are finding those critical fuse using things like peredo analysis we're finding the most common failure mode using things that give me a and the tools our listeners across the bottom and we're coming up with options and alternatives again just a guideline through and we'll talk in the next segment with the hot seats and things like that about about a lot of this to improve theirs are value stream we're going to do a flow kaiser are we going to do a point? Kaizen what what makes the most sense based on the data and the analysis we've we've illustrated both in the in the workshop is there a specific process that we need to really aim at like the diamond department or the catapult that we would appoint kaizen would make sense or is the whole thing dysfunctional or a slice of it that makes more sense? We've gotta look at policy we've gotta look att procedure there's a common root causes we've played with both of those we gotta come up with a way to mistake proof or polka yo car business so that common mistakes cannot be made way. Outsmart him. We outsmart the human error element, and then how we're going to structure organisation for flow, because a lot of organizations are structured for anything but flow, they're dysfunctional. We can do all the team building training we want to up. But do we designed it into our system and our structure and our incentives and some of these things? It could quite possibly be a a waste of time and money. What to control the control. The new process control the existing process. If it's working for us control the structure, control the input variables, those key process input variables like we did in the static paul exercise control the measurements. Make sure we've got good controls around the measurements and then the change management process itself, which would be, in many cases, the cais and process. All right, so some of the tools they're the standard work that the organization charred, visual control, statistical process control and things like that.