The Business Paradox – How not to get crushed by your business growth

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We know your main goal as a business owner: achieve sustainable growth. But sometimes things take unexpected turns. For example, you may face a certain paradox that has been plaguing the modern business world for quite a while. Your business grows explosively – and then crashes and burns just as rapidly. Why? Because if you aren’t properly prepared to support that growth, it can be a nightmare situation. First, you start your company. You start taking on more responsibilities, thinking you can handle them with ease. You begin signing more lucrative contracts and everything seems to be blossoming. Orders are growing and you feel like you are on top of the world!

But then reality sets in. You’re overextended and overcommitted, understaffed and understocked. If you are a rookie leader, there are a ton of things you haven’t considered yet, and relaxing is unfortunately not an option. You should be thinking about managing cash flow, creating efficient procedures, planning for growth, and handling important data properly. If your business is growing too fast, you will face certain problems. So as a future leader, what are the most important steps you need to take, in order to gain momentum and use it to your advantage?

You as a leader

As a business owner need, try to think a step ahead of each operation.  Adjust to your new and different role as a leader. Accept that you will make mistakes and learn a lot. Look to leaders in your industry and mentors you have to guide you as you approach new steps in your business. It is important to be realistic about your company and it’s onset. Ask first: do you have enough capital for starters? Payroll, supplies, bills, inventory – these are the bare minimum expenses to be covered, no matter what. Next, it’s time to consider if your business expanding too fast: Is your inventory keeping up with the pace? Are your products or services efficient and meet customers’ expectations? Do you have consistent cash flow? Are you hiring too fast? Can you handle all the data and documents that are constantly growing day by the day? Some of the biggest mistakes are made in business because the right questions are not being asked at the right time. Timing is everything so take advantage of your fresh start.

Proper growth strategy

We assume that when you started your business, you also had a concrete plan for short-term and long-term goals. If this is not the case, and growth actually came as a pleasant surprise to you, that might be bad news. Growth strategy and strategically planned steps are recommended methods for business because they work.  Remember that the goal is sustainable growth. First, do a complete analysis of your sales, overhead, receivables, inventory, and assets. If you have an issue, like inventory and capital assets absorbing too much of your cash flow, make a plan to regain control over it. After you’ve assessed everything internally, analyze important external factors, like the current situation on the market, competition, and your target audience. After you have all the data gathered, set long-term and short-term goals. Remember the old Benjamin Franklin adage, “If you fail to plan, you are planning to fail.”

Data is the future – use it wisely

Data flow is something that all businesses, small and large, find very challenging. There are a few obvious issues with proper handling of sensitive data. Data storing can become a major problem as your business grows. With businesses turning to cloud storage and other sharing platforms such as Google Drive, Dropbox, or other cloud-based solutions, data leaks are an increasing concern.

Not only do data leaks seem eventual, but there is also a concern about who should manage this vast data. In a worst-case scenario, valuable data can be exposed or lost and you can lose the momentum of your growth. In order to take firm steps away from data mismanagement, estimate your true need for data storage. After that’s been decided, think about content management within your company and distribute content management leadership roles. Determine which data will be available for public use and which documents are classified. One of the biggest mistakes in new businesses is exposing data to third parties by accident or by losing control over important documents. Automatic redaction software could help in situations like this – it can protect every type of sensitive data your company has collected from every kind of breach.

Remember to use data to your company’s advantage. Learn to distinguish the important data from the fluff. This could help you with predicting the best outcomes for you and your business.

Take control

In order to control your costs better, it’s important to stay vigilant about hard expenses. For example, instead of buying equipment for your office, consider renting it. In doing so, you will ensure that everything looks and works wonderfully. This also applies to office space, because the shared “community” office is a popular option now in workplaces. Also, perhaps it’s time to consider outsourcing talents. Team communication is important – encourage communication among your staff to work as a cohesive cohort and to avoid phantom workflow.

Set your expectations realistically and set rules that are clearly communicated and enforced. We mean that for both your employees and your clients. Do research on your clients and their credit history to set a strict schedule for payment methods. Learn to choose your battles and don’t accept every account or business opportunity, solely for the sake of rapid growth. It is great to be an optimist who shoots for the moon, but it can often backfire. Most importantly, monitor everything and commit to consistent reporting. Having all aspects covered will bring you that sustainable growth you want to see, not just the one-time explosion that will slowly fade away.

The essential Lean Six Sigma strategies – Jane Thomson

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Lean six sigma is a combination of two concepts, which forms a strong tool for improving business processes. It is applied in various industries all over the world. Healthcare, finance, sales, IT, etc are few such industries where the implementation of Lean Six Sigma is successful. And for other industries to succeed as well, there are few strategies that are to be followed.These strategies are implemented so that the amount of waste can be reduced and the final outcome of the process can be improved. The essential lean six sigma strategies are:

  1. Standardized Work:It is an easy concept. The process of documenting tools, methods, processes, processing times and materials are referred to as Standardized work. This strategy is to ensure that the operations are running smoothly and the process improvement methods used are utilized by the employees in an organization and these methods are developing continually. It is also very essential in reaching the fitting takt time.

Advantages of standardized work:

  • The practices followed are few of the best
  • The improvement of the process never ends
  • Waste reduction
  • Improves estimating efforts
  • Anomalies or irregularities are visible
  1. Total Productive Maintenance (TPM):TPM is a team-based approach for enhancing the effectiveness of the overall equipment. It includes performance, quality, and availability of the process. It also helps in building a strategy for creating autonomous employee ownership for the maintenance of equipment.
  2. 5 S:It is a methodology which consists of 5 steps that intended to create and maintain a workplace that is organized for continuous improvement of the process and its efficiency. It is practically useful as it analyzes the present organization’s scope and removes the waste that is not necessary. The five-step process is done by:
  • Sorting – In this step, the materials and tools are examined to determine whether they are required. The value of each tool or material is determined by asking a few questions such as:
  • Why is the tool used?
  • Is it required here?
  • How frequently is the tool used?
  • Who uses the tool?

If the answers to these questions are not beneficial, you might not need it.

  • Set in order – After removing the redundant tools and methods, The remaining ones can be rearranged regulate the requests and goals of the team.
  • Sweep – Build a strategy for cleaning and maintaining the various tools and equipment regularly.
  • Standardize – Make this a routine.
  • Sustain – Guarantee long-term support. Documenting methods and assuring they are simple to achieve is necessary for the improvement of the process.
  1. Plan-Do-Check-Act: Plan-Do-Check-Act cycle is a four-step model for promoting change in a company. As this method is carried out in a cycle, each step is repeated again and again so the end result is effective. Using this cycle at the beginning of a project is useful, especially if the process is repeated.
  • Plan – Discover the issue, determine the root cause, generate a hypothesis and set a plan for continuous process improvement.
  • Do – The plan is tested in this phase. It is usually done in small scale as results can be measured easily and further hypothesis can be made if necessary.
  • Check – Evaluate if the issue is fixed.
  • Act – Implement the hypothesis generated on a larger scale if the primary step was successful.
  1. Takt Time: The average time between the beginning of production of one segment and the beginning of production of the next segment is defined as Takt time. It indicates the frequency at which the end product is developed to meet the demands of the customer. It is an important tool which is used to determine the efficiency of the products that are delivered to the customer and ensure the continuous flow of machines and processes.

Advantages of Takt Time

  • Support the growth of standardized work, therefore, boosting efficiency and quality.
  • Overproduction of resources can be limited.
  • The tasks are balanced.
  • Takt time promotes efficiency.
  • Allow managers to set real-time objectives for the product.
  1. 5 Whys: The 5 why’s an effective method used for analyzing and solving a problem. With the 5 Whys tool, the root cause of the problem can be determined. This tool is used for troubleshooting, problem-solving, and quality improvement. It is simple, flexible and blends well with other techniques, like Root Cause Analysis.

Example of the 5 whys

Problem – Deadline for delivering the product to the customer was missed.

  • Why did the deadline miss? The product was sent 1 day late.
  • Why was the product sent late? New orders were not updated in the system.
  • Why was the system not updated? The system was under maintenance
  • Why was the system under maintenance? The turnaround times have been increased as the IT department has empty positions.
  • Why were the positions empty? Most of the staff was on holiday.

Conclusion:

Lean Six Sigma is an effective approach to reduce waste and redundancy while streamlining the processes that increase profitability and workflow. In today’s world, changing with respect to the environment while improving the standards of performance continually is necessary. In order to enhance the approaches to manage the organizations effectively, Lean Six Sigma training is a smart choice.

Author Bio:

Jane Thomson is a Content Marketing Manager at GreyCampus with five years rich experience on developing content for professional certification courses like PMP- Project Management Professional, PMI-ACP, Six Sigma, Prince2, and ITIL (Information Technology Infrastructure Library).