Hilton Head Island is a great place to Vacation
It is however, a better place to live!
Perfect for drawing lines in the wide sandy beaches. Like from the example yesterday.
So, get back out your piece of paper... the one with the line down the middle, and the list of UDEs on the left side. The UnDesirable Effects of your existing efforts. Items like "We cannot increase production without adding more personnel."
Adding more people can be a good thing. But it also can destroy your small business. As Jim Collins teaches, it is the RIGHT people that are your greatest assets. The wrong ones are huge liabilities!
Cost Accounting
Recently, I had lunch with one of my heroes: Dr. Howard Meeks. Of Iowa State University. At one point, he interrupted himself to share a thought: "Reporting is not decision making." Cost Accounting (and I would suggest GAAP) was designed to report on past activities. Not make decisions, which by definition are based in the future. It is too late to 'decide' about choosing a course of action for events that have already occurred. Does that make sense?
Without knowledge of the items on the left side of your paper, I can tell you that more than one item, perhaps as many as 50% of the items (or more!) that you have identified as holding your business back from significant growth, are a direct result of cost accounting.
Example
Supply chain. Business owners that do not know better, select (or insist that the purchasing department select) the low cost provider. They demand three quotes, and then pick solely based on price. Almost regardless of the delivery time table.
Regardless of the past performance of that vendor.
How stupid
What decisions like this example have crippled your ability to respond to opportunities?
Next Step
Take your list of items. In no particular order. And go out into the shop. Or out on the store showroom floor. Ask the "front line" individual that represents your company to the customer. Or performs that actual work that gets shipped to your customer. Ask them to review the list. Ask them if there are any other UDEs that you did not think to capture. If they are secure in their position, and/or genuinely concerned about the company, they will be able to offer twice as many items as you.
W. Edwards Deming said ask the guy (or gal) on the production floor why a problem occurred. But only if you want the real answer. The truth hurts. Lies hurt more. Stop lying to yourself. Make a decision to make a difference. That is the simple part. But it is not going to be easy.
Until you can consistently do more with the existing info-structure, more sales would only push you into bankruptcy. Make the decision that you will never again layoff employees. Why should their families suffer for your mistakes?
Too intense?
Sorry. Jump to the next blog. I assume you are here because you need help. Some
Logic
IF you have the right people on your payroll,
AND you think holistically about your company,
AND you value your customers and their requirements,
THEN you have little to fear.
Will it be easy? Of course not. Simple? Yes. Easy? No.
I really do think it is time to buy my book, if you haven't already. Then, we can intelligently discuss your options.
Jeff 'SKI' Kinsey, Jonah
Throughput.us LLC
(330) 432-3533
©2008 Jeff SKI Kinsey. All rights reserved.