Don’t assume that bigger is always better. Steady improvement is much more crucial than expansion.
What most business people think about growth, like “grow or die” or “growth is always good,” is not supported by research. Most business executives accept without question that bigger is always better and that they should have growth that is continuous and linear. But that’s just flat-out wrong.
Growth that’s not managed properly can lead to dilution of your customer value proposition and risks your reputation and brand. You should approach growth not as an assumption but as a well-thought-out decision. Understand the difficulty involved and go into it with eyes wide open, knowing that you can stop at any time.
Companies don’t necessarily have to grow or die, but they must improve or die.
Improvement spans from simple ideas of doing things better to more coherent Continuous Improvement Systems (CIS).
Just a few examples of the basics, you can
- Review and revive your business plan. See how far (or little) your business has taken shape from your original idea. Since your business’ inception, a number of factors must have changed – from the overall business climate to your product line. Take all those changes into consideration, and get a clear assessment of the direction of your business.
- Rekindle your relationship with your customers. Whether by phone, email or letter, contact your customers and remind them that your business is ready to serve them this year. You need to constantly look for ways to encourage repeat business.
- Re-evaluate pricing. You don’t want to price yourself out of the market, yet you should not bear the burden of a cash flow shortage. Give your customers a month or two advance notice should you decide to increase your rates.
- Find ways to cut costs. Constantly look for ways to reduce your costs. From making double-sided paper copies to ordering shipping supplies in bulk, you can reduce wasted material, effort, and time in making, selling, and delivering your product. The result is an improvement in your company’s bottom line and an increased competitive advantage.
- Resolve to improve your weak spots. Take stock of all aspects of your business operation and list the areas that you want to improve.
- Institute measures to assess the performance of your business. Setting clear standards for your business allows you to determine the effectiveness and efficiency of your strategies. Set some benchmarks and periodically assess how your business is doing. You need to know what you consider an improvement before you can start to improve on it.
- Explore new markets or improve marketing. Whether you are looking at targeting a new demographic or getting your business up on the social web, take time to plan how you can expand your existing market.
A more complex approach, a philosophy of continuous improvement enables a service firm to cultivate “a process-oriented way of thinking and developing strategies that assure continuous improvement involving people at all levels of the organizational hierarchy” (Imai 1986). Such a system requires a new organizational culture that considers change, rather than stability, the norm. Under this ethic, complacency with the current “way of doing things” is banished from the firm.
Although it is beyond the scope of this introduction to assess the intrinsic relative merits of Continuous Improvement Systems (CIS), it is important to realize that those systems exist in a variety of forms. The CIS depends on the specific needs and orientation of the firm. The various systems, popularized over the years, fall under a number of different guises. Some of the more familiar are:
- Quality circles: composed of small, voluntary groups of employees who focus on solving process-oriented problems within the scope of their work environment.
- Suggestion systems: designed to capture, evaluate, and implement individual/group suggestions for improving the processes of the organization.
- Total quality management: individual and team-based process-oriented problem solving at all levels and areas of the organization.
- Just-in-time (JIT): a system focused on the elimination of all waste in a processing system (the kanban is considered a tool for facilitating communication in such a JIT environment).
- Time-based competition: system of problem solving focusing on cycle time reductions through eliminating non-value-added activities performed along the supplier-customer chain.
- Customer-driven: a system that captures customers’ product and service needs and uses that information to manage the organization.
- Interactive planning: tries to bring about a desirable future. It is based on three principles: (i) participation–all relevant parties to a plan should be involved in its development, (ii) continuity–emphasizes the iterative nature of the process, and (iii) holism–all parts of the organization should be involved in the planning process simultaneously and interdependently.
- Learning organization: creates an environment in which people are continually motivated to expand their capabilities to shape their future to produce a learning organization adaptable to a changing competitive environment.
- Peak performance: a system that creates an environment enabling individuals to become peak performers capable of adapting their organization to a changing competitive environment.
Contrary to expectation, all of these systems are more similar than dissimilar. They share the common objective of achieving ongoing, never ending improvement in the organization’s work processes.
We believe that every company, firm or organization requires a tailored approach to improve and pave their future by balanced improvement and growth. Please don’t hesitate contact us for a free consultation to discuss how we can support improvement at your organization.