Friday, June 20, 2008

"You Can Observe a Lot Just by Watching"

Yogi Berra, one of the great philosophers of modern times, once said: "You can observe a lot just by watching." Are you regularly applying that lesson to your business?

I believe there are some readily observable indicators of excellence (or lack thereof) in almost every business. Ask any woman about how important the condition of the restroom is -- at a restaurant, theatre, department store, or anywhere, for that matter. If they can't keep the restroom in good order, what about the rest of the operation -- like the kitchen? Good observable indicator.

Here are some others I've observed (just by watching):

  • Restaurant -- Un-bussed tables are a crystal-clear indicator that the manager on duty isn't paying attention. It costs the restaurant customers several ways. First, you can't sell un-bussed tables. And a lot of customers (myself included) simply don't like an un-bussed table interfering with the visual experience of dining out. And we have other choices the next time.

  • Manufacturing -- Wire baskets full of parts sitting around the floor are a sure bet that a factory's operating margins are at least 2% to 5% lower than their competitors. If a wire basket (or skid or tote) sits still in a factory for more than a couple of hours, there's an operational problem. And probably others where that one came from. Perhaps too much raw material inventory. Perhaps a supply chain problem. In a factory with a lot of them sitting around, you can bet money that at least one is "lost" -- completely MIA from the ERP system -- it sits there because the person who needs the parts doesn't know where they are (and ordered some more to replace them).

  • Dusty Inventory -- Prowl through the stock room and look for dust on the items on the shelves. Your ERP system may not be furnishing a slow/no moving inventory report, or your operations manager may not be paying attention to it. Dust doesn't lie. Visible dust is worth at least 1 quarter. Heavy dust suggests it hasn't moved in at least a year. Check it out. I had a boss one time that said "There's no such thing as slow-moving inventory -- only slow-moving salesmen." He characterized any kind of inventory as "evil" -- there's nothing good that can happen to something in inventory. I've come to agree. Scrap it, sell it, or make it into something you can sell right away.

  • A stack of any kind of paper -- orders to be booked, invoices to be sent, payments to be processed. If you see this, you know that there are mistakes and delays waiting to happen within that stack. Unfilled orders aren't like wine -- they don't get better with age. They always get worse.

  • A line of anything -- Today's customer expectation is "immediate". If there's a line, there's usually a problem -- perhaps a process problem, a throughput problem, a staffing problem, an operational problem or a planning problem. Or some other problem -- the line is the indicator of the problem -- go for the root cause and fix that. Anything queued up waiting on the next activity qualifies as a line. See: "Competing Against Time" for more examples.

Keep in mind that these are just indicators. Perhaps there's no underlying problem. Usually there is. And it may take some digging to get to it. Have a look at: "The #1 Planning and Organizational Troubleshooting Question" for a great way to approach these kinds of symptoms with your people.

Tom Peters coined the term MBWA -- Management by wandering around. It's a leadership, communication and problem-finding strategy. And while you're wandering around, be mindful that "You can observe a lot just by watching."

If you've observed some useful things just by watching, please click Comment below and share them with us.

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Terry Weaver

Chief Executive Boards International
864 527-5917

Chief Executive Boards International: Freedom for business owners & CEOs -- Less Work, More Money, More Freedom to enjoy it

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