Archive for the ‘Uncategorized’ Category

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Safety or Productivity?

In Productivity culture,The workforce,UK productivity,Uncategorized on June 5, 2011 by Tim Aikens

All too frequently we hear of major incidents where there has been loss of life, injury and considerable financial loss.  This week it was the turn of Chevron’s refinery in Wales. Last year we had the big blow out in the Gulf Of Mexico with BP.  These events often happen in the petrochemical industry – they also happen in many other industries where there is a big safety requirement – rail (Potters Bar), construction (Heathrow tunnel) to name a couple.

The reports emerge and there is often talk of ‘short cuts’ and process ignored.  Without taking a moral stance, my question is simply this.  Is good safety incompatible with high productivity?  From what we read it would sometimes seem that the answer is yes.  I believe the answer is absolutely not!   Good safety is good for business and good for productivity.

First take a look at these regular incidents.  If people were taking ‘short cuts’ then surely that is a sign that their processes were either inadequate or not optimised.  I don’t for a minute believe that anyone really encourages unsafe practice.  But most people want the job done.  So at this point the issue is one of process.  A lot of safety process is a ‘bolt on’. There is the work process and there is the safety process.  Rightly or wrongly they are sometimes seen as different and not an integral whole.  This presents a huge opportunity.  Firstly, to integrate the process.  Everything that is required for safe working needs to be fully integrated into a single ‘how we do this’ working practice.  When this is the case, safety becomes inherent and is much more likely to become part of the culture of an organisation instead of being an enforced extra.  In addition a single integrated process is much easier to optimise as part of a whole than as part of a separate process.

A dilemma that then arises is how exactly do you monitor a work process where the safety elements are integrated rather than as part of a separate process.  The answer to that is twofold.  Firstly, safety experts must be part of the process development.  Their expertise and the necessary requirements need to be built into the core process.  Secondly, ownership and oversight of the whole process should lie with the workforce not safety experts.  This will probably require supervisors to have a greater awareness of, expertise in and commitment to safety.  Surely this is no bad thing!

If we are to be really serious about safety and make the best of the overall process in terms of productivity, then those who do the work have to be accountable for the safety part of the process.  The safety experts need to be involved when a working process is set up.  They also need to be there to provide ongoing support and expertise, and they still need to have their functions of check and audit.

Much of this may not sound a lot different to today. It is! and it would make a big difference to performance both safety and business!

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Price up – bring cost down!

In Productivity and motivation,Productivity culture,UK productivity,Uncategorized on April 28, 2011 by Tim Aikens

The oil industry is fascinating for a number of reasons.  The ‘Upstream’ or Exploration and Production part of the industry has little control over the price it receives for each barrel sold. Oil is a commodity and so its price is largely determined by supply and demand.  In 1998 it fell as low as $10 a barrel. It has risen to over $140 and is currently about $125.  How do you manage in such a volatile price regime and what does this mean in terms of productivity?

This is where it gets interesting.  Whether $10 or $125 the industry – or at least the smart oil companies are always interested in doing more for less.  In the tough times they need to reduce cost just to generate some cash and hopefully a bit of profit.  In the good times it is all about getting more oil out of the ground to make more money whilst the price is high – for who knows when it could slump again.  The focus is not quite the same in both situations – the first one is on cost cutting – the second on efficiency and effectiveness.  However, from my experience of working in oil companies under both price regimes, the approach is fairly similar.  If you try to cut cost, you will almost inevitably improve efficiency and if you are focused on improving efficiency you will end up reducing cost.

It is because of this price volatility that the oil industry has had to be flexible and willing to change.  As an industry they still have some way to go, but they are working at it.

What makes them stand out is the determination to keep improving efficiency or cutting cost regardless of the cost/ profit environment.  This is not to say that no other industry does this.  On the contrary most successful organisations will have this mindset.  The real message is that every organisation has to be relentless in bringing cost down and improving the way it does things.  Even when business is good and you are getting a good price for your out put, seek to bring down price.  This comes full circle to one of my earlier blogs about productivity culture. If your organisation does not have it – then go out and develop it!

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Effort and Reward

In Public sector,UK productivity,Uncategorized on April 14, 2011 by Tim Aikens

As I watch a TV programme about some third world country, I am often taken aback by how much effort some people are prepared to put in for very little reward.  You see very upsetting scenes of children and adults spending all day scouring a rubbish dump either for food or some scrap metal that they can sell.  It is subsistence work.  A huge amount of effort for barely enough reward to live off.  In these countries it is a sad fact of life and one that is often hard to change.

Move west to an industrialised nation and here you have people working equally hard and some making millions od pounds a year.  This is often enough to feed scores of people! However, what goes unnoticed in many organisations is a vast amount of effort for very little reward.  In many areas of business, be it manufacturing or service there are loads of folk working hard and generating little reward for their employer.  In the ‘Lean’ world of productivity these activities are referred to as non value adding.  This is something that is part of a business process or value chain that does little or nothing to add value.  For example take invoice approval.  It is very important to make sure that an invoice is correct, the goods or services to be paid for have been delivered and the contract has been complied with.  But how many people need to review and approve this?  If, say five signatures are needed , how much value does each one add? What is the reward to the business for three of the five signatures?  More for less is about removing all those activities that provide the business with little or no reward.  In re-engineering a process each activity should be challenged in terms of the reward it brings for the effort applied.  If the reward is too small either cut the activity out all together or find an alternative approach that involves less effort.

A simple principle but there is still far too much effort for little reward in both the public and private sectors.  Both sectors are making more and better use of the ‘business case’ – identifying the financial benefit of taking a particular course of action.  Perhaps there needs to be more business case analysis of effort that has little or in a lot of cases no reward.  This, of course, is one of the principles of the ‘Lean’ approach.  However, you do not need to be a Lean practitioner or a time and motion expert to ask the simple question – what is the reward for an activity and how much does the effort cost?  The biggest hurdle to jump is breaking out from the in built inertia of an existing process and challenging activities that may have been in place for years.

A couple of examples from the public sector in the UK.  The government has finally decided to look at national Insurance.  Income tax by another name, but something that requires a huge effort from tax payer and taxman alike for no extra reward than if the same sum of money were to be recovered through an increase in income tax.  The problem has always been historical inertia (and perhaps the idea that NI is not income tax, so like Mr Blair and co you can raise revenue without increasing tax?!).  The other great example is car tax – the ‘Roadfund Licence’.  Again lots of effort to collect and police this tax.  Why not bin it and increase the petrol tax. People then pay on usage (fairer) AND a vast amount of extra income would be gained AND a huge amount of police effort would be better spent.  Again, inertia seems to be the order of the day.

So get out there and start to challenge.  Where is my organisation getting minimal reward for lots of effort?

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The same – but different!

In UK productivity,Uncategorized on April 4, 2011 by Tim Aikens

In quite a few of my posts I have talked about the need to think differently, behave differently or simply do differently.  Here’s a look at a different side of ‘different’.  Talk to any manufacturing company and they will tell you the secret of high productivity and quality is high volume, repeatable processes and well trained people.  In other words when you start to do the same thing over and over again, you get better at it!  You do it faster and better.  The other day I watched my daughter’s orthodontist apply the elastic bands to hold her new brace.  He completed both upper and lower jaws in a time that would have me struggling to finish the first tooth.  Then he told me he had done over 30,000 of them. So no wonder he is fast.

But today we have an issue. The wisdom is recognised, but many customers do  not want to be the same as everyone else.  How do we ‘make’ the same but make it different?  Look at a couple of industries.  Construction is one.  Such is the congested nature of the UK that it is difficult for even a company like Sainsburys to build two identical stores. The size and shape will have to vary to match the available space. Think of going into a clothes store, find something you like, but not in a colour you like, because you want to be different.  The manufacturer has a set range of colours – take it or leave it.

How can the supplier meet this need?  There seem to be two answers.  The first is to try to be as close to a ‘mass production’ factory as you can. Standardising process techniques and technology so that you get progressively better at whatever it is you do.  There is a hospital in India that only does open heart surgery.  It is now very, very good at this in terms of both cost and quality.  But that is all they do. Another example is in some of the modern farming techniques and specialisms we have.  Without them much of our meat and dairy produce would be substantially more expensive.

The second solution is to ‘move’ the factory as close to the customer as you can.  An early adopter of this approach was Dulux with their in shop colour mixing, which has been available for years.  Standard paint, but whatever colour you want.  The construction industry is just beginning to take this on board more than it has done in the past.  More precast concrete units, more factory based products.  This increases the amount of logistics management needed in the industry, but so what if it creates a better more cost effective result.  Another good example is insurance. The industry has recognised the need to standardise .  The process (online) is the same for everyone, yet every policy is bespoke to a particular set of circumstances and can be sold and maintained much more cheaply than in the past.

These concepts are not new. However, I suspect that far too few people think this way at present.  If someone wants something different, the belief is that it has to be ‘bespoke’ and attract the price and low productivity that goes with it.

Is your factory close to the customer, have you refined and specialised as much as you can?

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Get More, Use Less – Go Green

In Productivity and motivation,Uncategorized on March 28, 2011 by Tim Aikens

How green is your business?  Is going green a boon or a burden?  A lot of received wisdom is that getting good environmental credentials costs money.  Being environmentally friendly is expensive.  But a little logic and research seems to say quite the opposite.  There are an increasing number of organisations out there who, as a result of an overt ‘Green’ strategy, are saving big money.  In addition they are boosting their Corporate Social Responsibility (CSR) credentials at the same time.

The logic appears almost trivial.  Energy costs money, adopt energy-saving devices or policies you will save money.  However, you only have to look at large office blocks, lights blazing at 2:00 a.m. to see that a lot of people have yet to grasp that particular piece of logic.  The same with major equipment.  Turn off copiers and printers and PCs and laptops and so on.  Of course, for many companies this might be seen as a small amount of money to save.  But it all adds up!  I believe that adopting a philosophy that starts to address the energy issue can soon create a culture all about getting more with less.

There is a lot more than lighting and equipment that can and should be addressed.  Take packaging for example. Whether supermarket meat or HD TVs, they all come with a lot of packaging that takes time to wrap and costs money.  There are good reasons for some packaging, but think of the benefit in labour, time, money and carbon if it were to be sensibly reduced.  Another example is warehousing.  Warehouses cost money (and carbon) to build, use up land and have to be maintained.  The more the world can move to a Just In Time (JIT) culture and philosophy, the more money can be saved through less warehousing.

Now here is an interesting thought.  The UK and most other Western countries are drowning under an ever increasing pile of compliance and bureaucracy.  All of this has to be dealt with. It comes at great cost and the added value of much of it is debatable.  It also has a huge environmental cost.  Think of the paper, energy, heat, time, and labour involved in dealing with compliance or bureaucracy.  Governments need to be pushed really hard to justify their compliance legislation and bureaucracy if for no other reason than the cost to the planet!

One of the fundamentals of any process re-engineering in any business is to reduce idle time or non value adding time.  Taking a green approach to this can force change that will not only reduce non value adding time, it will result in significant financial and carbon gain, because of energy that is no longer wasted – for one thing.

So the message is clear.  When seeking to do more with less, make sure you also seek to improve your ‘green credentials’ at the same time.  Not only will this probably increase the financial benefit, but you will save carbon and be seen by your customers to be doing the right thing!

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Growth through productivity

In UK productivity,Uncategorized on March 7, 2011 by Tim Aikens

Just before Christmas I shared some statistics about how far productivity in the UK  is behind the USA and other countries .  The current rhetoric from both the Government and CBI is about growth.  Mr Cameron says the only way out of the recession is to boost growth and the budget in March is aimed at doing that.  The CBI says that economic policy has to focus relentlessly on growth.  Its hard to fault both of these comments and good to see that they are in accord.  However there are two issues that are raised by these comments.  The first is that a government can only create an environment to encourage growth, the second is that business cannot expect government to wave a magic wand and growth will ‘happen’.

Taking the first issue.  There are some things that the government can (and hopefully plan to ) do.  Removing yards of red tape would be a start.  Ask any senior manager of any size firm and they will complain about the non value adding activity they have to do to ‘satisfy’ regulation of one form or another.  Then there is waiting.  Mostly this has to do with planning, licensing or approval of some form.  Whilst a business is waiting, staff, capital, and resources are all tied up, but not adding value.  Cameron has offered to streamline planning in key enterprise areas.  How about everywhere?  There is a concept in business called Zero Based Budgetting.  This is aimed at developing realistic budgets to fit only what is going to happen, instead of taking last year’s budget adding 5% for inflation and there you go!  The latter approach is quick and easy but often ends up with inflated budgets and little incentive to cut them.  A zero based approach forces the budget owner to build and justify a budget from scratch.  It’s about time we introduced Zero Based Regulation.  Every piece of legislation and regulation has to demonstrate its value added from the ground up!

The second issue is one I have mentioned before, but it is worth raising again.  If UK plc wants to grow (given that there is a market), then one of the best ways to do this is to offer better products and services – at lower prices.  This will only happen through improved productivity.  Cutting regulation  will help, but businesses themselves have to take the lead in working out how they are going to do more for less.  Relying on tax breaks, soft loans, preferential treatment and other devices will provide some respite, but they will never solve the problem.

There are plenty of business in the UK who are showing that it can be done.  As well as his budget for growth Mr Cameron also needs to incentivise productivity.  Perhaps in future, government should not spend money on failing businesses (like Northern Rock) but spend the money on those businesses that succeed by improving productivity and performance!

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Motivation – what do I want? (2 of 2)

In Productivity and motivation,Uncategorized on February 15, 2011 by Tim Aikens

Picking up from last week, let’s imagine that you have decided to do something about helping your team or staff to make a positive move towards achieving what they ‘really want’!  What are you going to do?  All thought and no action gets no results, you have to make a start somewhere.

Of course if you simply started going up to your staff and saying ‘what’s your dream?’ you might be met with some strange looks and a few unappreciated comments.  The first step is to build relationship with your staff.  They need to get used to you talking to them – beyond work and believing that you really took an interest in their lives not just what they are up to.  You might already be there, but sadly all too many organisations take too little interest in their staff beyond their direct effort and contribution at work. This might take some time (depending on where you are starting from).  In one organisation I used to work for, one of the senior directors knew everyone. He always spoke to the office cleaners, canteen staff and knew all their names.  He would be in a position to start straight away.  Ask yourself, how genuine is my relationship with my staff?  Until you get to a real relationship you will not be taken too seriously.

Even at this stage you will benefit.  Staff will see the change and, as long as it is REAL, it will be appreciated.  Now you can start to move forward.  As your relationships build you move into a position to start asking about dreams and hopes for the future.  Keep a short, very private, record – Fred wants a house that will hold his seven kids without four in a bedroom; Joe wants to sky dive; Alice wants to work part-time, Anne wants to be a software engineer – and so on.   When you begin to get traction you can then think about talking to staff in general terms.  Not about individual dreams, that would be a breach of confidence, but you can talk about the fact that we all have dreams and that you would like to see how you can help your staff achieve them. In his book, the firm that Matthew Kelly describes appointed a ‘Dream Manager’.  That might be the right way to go.  You may only have a small company or department and may not need someone full-time (which is of course expensive. It would be a good idea to see what a business case might look like i.e if we hired a part-time Dream Manager, what is the increase in performance we need to achieve in order to break even?).

Who would be best in this key support role.  You need someone who is passionate about people, believes in moving mountains, highly practical and does not readily take no for an answer!  Their role is to take time with each person, identify a key dream and build a plan with them to turn it into reality.  It is not to do it all for them, although many will need help.  Get several dreams, with some more short-term than others.  You need to be able to see some early results, however small, as an encouragement to everyone.  Then see what happens!

Will it work? I honestly don’t know, but I believe strongly ij the idea, otherwise I would not be writing about it. I doubt if it will have any detrimental effect. At the very least it will enhance your relationship with your staff and the organisation’s reputation as a good place to work. That alone has to be good.

Let me know what happens in your business!