2F Episode17 Business Design & Redesign Processes

Ever wondered whether your only issue with redesigning your business to improve performance is finding a big enough hammer or chainsaw? The current 'wisdom' when performance is poor or inadequate can seem to boil down to taking drastic measures. In reality true experts in business improvement will advise understanding the problem before selecting the most relevant and effective solution.

As we near the end of our journey around the Flow & Feedback (2F) Diagram we come to Processes for Design and Redesign of the whole business system, including focusing on individual processes within it.

2F Diagram highlighting Design & Redesign of the System and openness to ideas

2F Diagram highlighting Design & Redesign of the System and openness to ideas

The implication of the words design and redesign is that a rational process is involved. Intuition and experience may guide you, although it must be backed up with evidence and reason. However, quick-fixes, ideology, cant and dogma only damage your business. Those skilled in improvement of performance and quality will tell you that the key to it is the Study-Act-Plan-Do (SAPDo*) improvement cycle. You can apply this to an individual process or the whole organisation, indeed this 2F diagram is based around it.

SAPDo Cycle

SAPDo Cycle

*You may recognise this as Deming's PDSA cycle or even PDCA.

We like SAPDo because, usually, everyone of us is always and already in the middle of life, as some psychologists would say. Therefore it seems to us that to start at Study prompts us all to find out 'What is actually happening?', which provides better evidence for effective action. An evidence base for this means a sound understanding of how the work is working and customers are behaving. To do that requires a methodology and, ideally, good measures of performance and quality.

Once you have studied and have reliable performance and quality measurements you can develop your solutions for

(a) The cause of a particular drop off in performance and or quality

(b) Possible opportunities for performance and or quality improvement

Then you have to decide how and when to Act. It is true that sometimes a cause for a particular drop off in performance cannot be identified. The decision may then be to continue to monitor the situation until there is more data or perhaps the recurrence of a problem.

Then you need a Plan to implement the changes to the organisation or a particular process that you have decided upon. This must include how you continue to measure performance and perhaps quality to decide whether the change was an improvement.

So then you Do it, running the revised organisation or process in as near true operating conditions as possible. And after a representative trial period you are back to Study to see whether the change actually was an improvement that you can adopt, adapt or abandon it. Indeed you may find it necessary or desirable to repeat the cycle a number of times to achieve a particular outcome. Real life doesn't always come up with neat answers, solutions or outcomes. The really important thing is that everyone is open to learning and searching out a better way to make the working work and customers happy.

So hang up your hammer and or chainsaw. There are better ways to improve performance, that is, if you are truly interested in increasing performance.

Contact us if you would like to ask any questions about opportunities for improvement in your organisation.

2F16 Be a Leader of Leaders

Are you a leader of leaders? Ah leadership. Some might say that a leader needs to be a dictator. Some that a business leader needs to be a bit of a demagogue skilled in the art of politics who plays on people's desires and prejudices.

Truly effective leaders gets the right things done at the right time for the right reasons and take action based on facts or evidence. They know the benefit in creating leaders out of those who follow, which is being a leader of leaders. The point about the right time is particularly important. You cannot be everywhere at once. In business, as in life in general, timing is everything.

When a critical situation arises can it really be right for everything to wait while you get there or information is passed up the traditional chain of command and for a decision to come back down? Remembering what we said about the importance of situational awareness in the last blog, might it be better if people at the scene are empowered to take action?

To be those other leaders, everyone in the business must feel this is our business. That is, in both senses of the word. That is people both feel that they are truly part of the company or other organisation and, when they see a situation develop, that they are responsible for ensuring the necessary action is taken.

In the Flow & Feedback (2F) Diagram, below, the foundation for effective leadership anywhere in the organisation are the aims: the values, purpose and vision. A clear idea of what the organisation stands for, what is does for customers and where it is headed give leaders at any level strong guidance for taking timely, effective action.


Next time we will look at the next to last step in closing the feedback loop in the 2F diagram. That is, taking action to improve the situation that we call 'Processes to design and redesign the system'. Does that sound a bit dramatic? Well, you know what they say:

“If you always do what you’ve always done, you always get what you’ve always gotten.”

So see you next time, when once again I will draw on both my book Picture Your Business and on our new ebook Simply Manage. Picture Your Business is available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or emailing me.

2F15 What Influences Your Business Success?

Ever wondered why you got that nasty surprise in your business due to outside events? It's a real tough one. On the one hand experts are telling you to keep scanning the horizon for the unexpected and on the other hand you must keep delivering on that great total customer experience.

Being aware of what is happening around you is called Situational Awareness. It applies both to what is happening literally around you and to the wider context or situation in which your business is operating. Situational awareness covers awareness of what is happening around you relative to where you are, where you are going (your vision) and the risks to your business from people or events around you on your journey between the two.

Your knowledge and experience do help you to understand what is happening around that might impact the successful development of your business. However, in addition to having to focusing on delivering a great customer experience, there are plenty of other distractions about.

So it helps to have a way of systematically recording and reviewing what is happening outside your business, which is where the Flow & Feedback (2F) diagram can help. BTW We are still looking at your business organisation using the Study phase of the Study-Act-Plan-Do (SAPDo) learning and improvement cycle in 2F.

In the top right hand corner of the 2F diagram above it talks of processes for understanding customers and context. A process that can give you situational awareness of your context or outside world is known as a PESTLE analysis. PESTLE is a mnemonic to help you remember to look around at your outside world under six headings. These are P for Political, E for Economic, S for Social, T for Technology, L for Legal and E for Environmental forces. Below is simplified example of this analysis from our ebook Simply Manage for a web tech company. It uses the 2F Worksheet format. It may be simplified but the idea is to start you thinking about your situation.

What forces are you noticing around your business? Have any of them changed? What might that mean for what you need to do to reach where you are heading (i.e. your vision)? 

So what action are you going to take having Studied what's happening? In my next blog as we continue to explore the 2F diagram I will be looking at leadership. Once again I will draw on both my book Picture Your Business and on our new ebook Simply Manage. Picture Your Business is available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing alanclark@keybiz.com.

2F14: Is Improvement Your Trump Card?

In our journey around the Flow & Feedback (2F) diagram in search of competitive advantage we are still in the Study phase of the Study-Act-Plan-Do (SAPDo) learning and improvement cycle.

But first a reminder of why we are all here:

To give a great total customer experience

And from that, a thought about enterprise excellence, which is when:

Everyone in a business or any other organisation really understands,
and takes responsibility for, keeping value flowing to their customers.

In this particular blog, as I continue to look at the 2F diagram step by step, I want to introduce you to how it can help you systematically improve performance and quality for your enterprise to become excellent. It is also worth pointing out that by improvement I mean both continual incremental improvement and innovation. This applies both at an organisational level and in detail at the process level.

Some people when talking about enterprise excellence give the impression that once you have achieved it then that’s it! Unfortunately the world is not standing still, which means that conditions will change over time inside and outside your business, in customers and in the supply chain. And anyway experience shows that decisions, about improvement and everything else, are compromises. Therefore later, further improvements are probably possible. And if you can see an opportunity to improve then so can your competitors.

We have been looking at using data properly processed in a PB chart as evidence to better understand performance throughout the organisation in both the value-adding and support processes. In this way we can make effective next steps of improvement to get and keep competitive advantage.

Let's now look at what your performance data might look like in a PB chart before you begin to improve your system of work or processes. In the graphic at the top, (A) is typical of many unimproved systems or processes. Unimproved systems or processes in the real world are often highly variable; sometimes to the extent that performance or quality in customers’ eyes is unacceptably unpredictable. This is a competitive disadvantage! Examples might be your customers experiencing highly variable outcomes in things like response times to enquiries or requests for quotation, in delivery times, in variable quality or in variable performance of specific characteristics that are important to them.

The two green dashed decision lines in PB charts help you to understand the degree of variability and predictability of your systems and processes. It is the spread or distance between these two lines that tells you the degree of variability of the performance measure you are looking at. Basically, relative to the average (red) line the narrower the distance the better. Points outside the two green lines alert you to exceptional or unusual events that signal unpredictability in the system or process. They are signals for action. The advantage of a PB chart is that you know when the event occurred so you have a better opportunity to understand why it occurred and put in place countermeasures or improvements.

In the food industry I came across an example of seven inch sausage rolls that were noticeably shorter. I kid you not! Result: unhappy customers. Definitely an uh-oh moment in the graphic at the top. In fact the sausage rolls were all of the correct weight. The problem was with a change in the consistency of the pastry before it was baked. Once this was sorted performance returned to the proper level.

You might see data points above the top green line of PB chart as in (A) above, which are a nice surprise of exceptionally high performance. For example, production output or the yield of a manufacturing or chemical process plant might be higher than usual. It is as important to understand why things have gone exceptionally well as it is why they have gone exceptionally badly. You can learn from such opportunities to improve the supply of your products or services.

Having used the PB charts to understand the reason for either wide variations or exceptional events, possibly combined with insights from other methods, you proceed around the SAPDo cycle. First deciding, in Act, what remedial or improvement action to take based on the evidence. It helps then to carefully Plan the test conditions and length to ensure that you are properly testing whether your change was an improvement. Then you are into the Do stage actually running, if possible, live. It then pays to return to the previous conditions to make sure that what you have observed in the test was not due to some other factor. And so you are back to Study comparing performance to see whether the change was an improvement. If not, it’s off around the cycle again with another change.

When your improvements work and they move you from (A) to (B) it usually brings the decision lines closer together and raises the average. This means that there is higher average performance, less variability and hence more predictability. You should not stop there. You and your whole organisation need to continue to look for opportunities to improve. Although future gains might be smaller, as suggested by (C), they are nevertheless critical to keeping your organisation's performance the best it can be.

The 2F diagram can represent a team, a department, a unit or a whole organisation. Remember, the SAPDo learning and improvement cycle can be used at a detailed activity or process level just as much as the whole business, which is implied by the 2F diagram itself. Continually renewing your understanding of and improving how your business or any other type of organisation is performing can be your trump card.

As we continue to explore the 2F diagram we will next look at outside influences on your business. We’ll draw on both my book Picture Your Business and on our new ebook Simply Manage. Picture Your Business is available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing me.

2F13 Ever Played the Numbers Game to Look Good?

Well have you? Played the numbers game to look good and not necessarily doing good? No of course you wouldn’t. Would you? Naturally sometimes there is immense pressure to ‘hit the numbers/target’ isn’t there? Your survival may be at stake. But then you have to think, do I really want to spend my life working in an environment like this, especially if you care about how customers get treated.

I know. You don’t believe me. For all that I was saying in my last blog about processing performance data to properly understand your how your business works, you think, Nah! That’ll never work. Particularly as it means moving from a short-term target-driven way of thinking to long term customer-focused and improvement one.

OK, so what about the story of Jim ‘Mattress Mack’ McIngvale of Gallery Furniture a retail store in Houston, Texas. Now Mack’s full story fills a whole book, Always Think Big, but one incident (of many) before he got on the right track typifies the way you should not make customers the fall guys for your arbitrary sales targets. Oh yes, and they are arbitrary because you just make them up don’t you? Nobody knows what is going to happen tomorrow.

Before Mack transformed his organisation the salespeople were paid on commission. This had many bad consequences. For example, when it came to the end of a sales week you might see some unfortunate customers staggering out of the store with armfuls of furniture treatment products. Why? Well the salespeople had sales targets to hit. If it looked like they were not going to make target the salespeople would pressurise customers into buying products, sometimes any products, in order to meet their target.

At the root of the target-driven numbers game is short-term thinking. But, if you are seriously interested in profit, you have to take a longer term view and make the total customer experience your absolute focus!

Fortunately Mack came across the renowned management and quality guru Dr W Edwards Deming whose work advocates taking a longer term view. Eventually this resulted in Mack moving his people from commission to salary. Taking a longer term view and bringing the focus to putting the customer first literally paid off! They were able to decrease costs, improve productivity. When they went from commission to salary, the sales per employee went through the roof! In the 1990’s Gallery Furniture achieved sales of $100 million per year, which translated into the highest sales per square foot of a mid-size store in the USA. Hmm? So are you seriously interested in profit?

There is a stark contrast between looking good and doing good. Try making the work work better. In addition to taking a longer term view and removing arbitrary sales targets you need to use numbers more effectively. You need to use numbers to literally understand what is happening in your business so that you can make the work work better.

So how might you go about making the work work better? That will be the subject of my next blog as we continue to explore the 2F diagram. We’ll be looking at how to make work work better, drawing on both my book Picture Your Business and on our new ebook Simply Manage. Picture Your Business is available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing alanclark@keybiz.com.

2F12 Do You Use Data to Improve Performance?

© Alan C Clark 2017

© Alan C Clark 2017

Have you ever wondered why it seems that so many companies find it difficult to improve performance or do not even bother? Experts say all you need is the latest tech or app because they seem to want you to believe that is the problem. But the facts shows us that is not quite true.

Even in the early 2000’s when the tech was not that bad, research published by Cardiff University showed that only 5% of the things they did in manufacturing added value for customers! It was worse in information-based industries where only 1% of activity added value!! Consider then that in Toyota 20% of activity is value-adding! Wow! Just think what improving from even 5% to 20% will do to your company’s performance. The problem really is that many companies are unaware of this enormous potential that there is to improve their performance, whatever sector they are in.

Understanding what is actually happening in a company is the key to improving performance. You can get this understanding most powerfully by properly interpreting your performance data. Too often any performance data that is collected is used to ‘beat up’ people. The intimidation becomes worse when s-t-r-e-t-c-h targets are attached to performance data of, which is utter nonsense.

So if the key to performance improvement is using data to learn what is actually happening, how do you do that? Well you need a method or process that clarifies what is actually happening, which will help you to take the most effective improvement action.

First it may be helpful to realise that that there are different levels in the the learning that you can get from measuring performance. In his book, Re-Creating the Corporation: A Design of Organizations for the 21st Century, Russell L. Ackoff set measured performance data as the lowest of five levels for learning. In increasing power they are:

  1. Data is numbers and words representing objects, events and their properties.
  2. Information is contained in answers to questions of who, what, where, when and how many- it is processed data.
  3. Knowledge is contained in instructions, know-how – you might think of it as organised information.
  4. Understanding is contained in answers to why questions.
  5. Wisdom is being able to recognise and judge long-term possible consequences. Wisdom is also said to be knowing when and how to act effectively.

So what process can you use to increase your level of your learning and hence performance? Tabulating data will not do it because it is just presentation. Bar charts are again presentation, but certain types can provide some insights. Pie and doughnut charts… hmm, risky and may lack clarity. Personally I wouldn’t go there and prefer bar charts.

To use data to improve performance requires a process to analyse it. Data analysis authority Dr Donald J. Wheeler has long advocated what he calls the process behaviour chart (PB chart), which both presents and analyses data at the same time. Some people also known it as a control chart, though it cannot control anything, and also as a Six Sigma chart. The latter comes with some unnecessary complication.

Let’s look at an example of a PB chart, which keeps data in time order sequence and adds three decision lines. The x-axis is in time or date units and the y-axis in in the units of performance data.

The first ting to notice is that by keeping the data in time order, particular data points or patterns in the data can be related to real-world events. These may be a signal for corrective action and or of learning about the business system or process that leads to an improvement action. Visual presentation of the data makes this easier than tabulations. There is almost always point-to-point variation as this set of real-world data shows, i.e. some days are better than others. If your improvement action can reduce this variation you can improve your total customer experience by delivering more consistent products or services.

The green decision line is the average of the data. The two red dashed lines show the limit of variation if, and it is a big IF, the business process is stable and predictable. The data will go on randomly varying about the average and between the two dashed lines. If it is stable the chances of a point outside these lines is would be very, very low. Unless, that is, something changes in the environment or the process or you make a deliberate change to the process. In the chart above in week 30 the data point is actually on the line and so this could be a signal of a change and so an opportunity to learn.

The thing is, if you try to take action based on tabulated data you are missing all sorts of important learning and really could be just guessing. This is as true of food manufacture, as it is of airline services or sales processes. If you use a PB chart you will learn:

  1. If it is safe to take action on or to make a prediction from a set of performance data from a business process.
  2. You can separate signals for action from the noise or random variation in performance data.
  3. You will be able to tell whether any process change that you have made makes an improvement or not.

So you see just producing a table of data is misleading if you think you are really monitoring performance. By putting your data in PB chart you both present and analyse data providing an evidence base for performance improvement. You can get all sorts of specialist software to do this, but you can also use a spreadsheet. It is also so simple that you can even use good old pencil and graph paper. Good eh?

In the next blog we'll continue to expand on the 2F diagram by looking at processes for understanding the situation that you are currently in, drawing from my book Picture Your Business. This is available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing alanclark@keybiz.com.

2F11 How Is Your Performance Measuring Up?


Happy New Year! Hopefully you have all returned refreshed from the festivities. I am returning to my blog series based on the Flow & Feedback (2F) Diagram. Remember that we had started to Study what is actually happening before taking action to improve performance.

Some business people count and scrutinise every little thing and every last penny but don’t know what is truly happening. Some just wing it and eventually end up with nasty surprises. There are some who understand why, where, how and what to measure to understand performance. This means they even know when it is the right time to take action based on a proper understanding of the numbers they get. These people become the highest performers in their field over the long term. If there is such a thing as an Anglo-American business disease it is short-termism.

Are you measuring your business performance properly and drawing the right conclusions before taking action? Are you seriously interested in reaching the highest levels of performance over the long term?

If you are serious about sustainable high performance there is a critical thing that you should know. The required effective decision-making and the action taken as a result must be based on a proper understanding of how our brains work. As we saw in the last blog, there is the ever-present danger of biased intuition that psychologist Daniel Kahneman has highlighted. To counteract this, if you seek the highest performance from your business, it pays to have facts like measurements of performance, upon which you can base effective decisions and actions.

The trouble is that too many people who do use data from measuring business performance don’t get the best out of it. Here are three critical questions for you about performance measurement. Assuming, of course, that you are doing it…

  1. Are you measuring the right things in the right place at the right time?
  2. Are you measuring them the right way?
  3. Are you interpreting the data the right way so that you take the right action at the right time?

Some final thoughts

OK, in answer to those three questions you might be saying, ‘How would I know?’ I am not proposing here to give a whole workshop on this topic. That is either the job of my book Simply Manage or my workshop Hands-on Measuring Performance.

Instead, as a here is your ‘Starter for 10’. Here are two tips that link to points above:

  • It really helps to understand what work is being done to deliver value to your customers
  • It also helps to really know who does what before whom

Swim-lane flowcharts (below) map out the activities, decisions, sequence, people and relationships of work processes more powerfully that written purely procedures.

They help you understand where, in addition to any outcome measures, there are the powerful places to make in-process measures that can help you make improvements and so get higher performance.

In the next blogs we'll continue to look deeper into good data and performance measurement as I continue to expand on the 2F diagram, drawing from my book Picture Your Business. This is available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing alanclark@keybiz.com.