By: Abe WalkingBear Sanchez

Save a step here and a penny there and then repeat it a hundred times, a thousand times,
a million times and they add up. Now use/invest the time saved and the money saved to do
something productive like looking for further improvements and it really starts to add up.
And along with enhanced profitability, people's lives are changed for the better.

The Japanese have a word, "Kaizen". Kai means on-going and zen means better...the
Chinese word Gaisan breaks down to gai, to correct and san, to benefit. These folks
have a history of struggle in order to survive and tend to be pragmatic. We Americans,
in our collective memory, believe that there's always a new virgin forest to be exploited
over the next hill. Our mindset about there always being "excess" makes us wasteful in
our private and business lives and is a OBSTACLE to on-going improvements.

This is my 25th year of avoiding a real job by conducting seminars and training for CEOs
and top business managers and I'm still taken aback to hear business executives say
that the purpose of being in business is to make a profit, without any further explanation.
There are many ways to make a profit, you can rip the employees off for their retirement
plan or fail to fully fund the plan...sound familiar? A company can also make a profit by
cheating customers and suppliers or by pulling an Enron. A better way to "earn" a profit
is by "Meeting or exceeding customer expectations...at a profit".

On average 25% of the Total Cost of Doing Business is tied to inefficiencies...the waste
of time, energy or materials, and I've had many CEOs tell me that 25% is on the low end
...that's a bunch. Nobel Prize winner Ronald Coase , of Coase's Law , says that there is
friction/costs involved with being in business. There is the original friction or cost of finding
suppliers, employees and customers. There's the on-going friction or transactional costs,
and then there's the greatest friction of all...the friction of failure.

Prior to entering the training field in 1982 I had a real job as the corporate credit manager
for a regional company based in Denver. My duties as the credit manager included the
approval of new credit customers and the management (not collection) of past due A/R.
I soon found that on average 70% plus of all past due customers had not paid on time
due to "something going wrong somewhere." In the process of fixing things that had
gone wrong I found that I could identify areas of opportunity for improvement throughout
the entire supply chain thus driving down everyone’s cost of doing business.

It may not be so in some companies, but all too often employees and business managers
still operate from a "They don't pay me enough to think." mindset...like automatons they
repeat how they do things over and over again until it becomes engrained. And all too
often CEOs and top management are complicit if not directly responsible. If you are
a business manager pull out your job description, if you're a CEO pull out your
managers' job descriptions and check to see if it/they say anything about "Constant
Improvement". A business manager not focused on improvement becomes an administrator
at best and a bureaucrat at worst.

Before improvement/change for the better can take place two thing must happen; first
there must be an acceptance or acknowledgement that a business doesn't have to be
sick in order to improve, there is always room for improvement. Then there must be a
commitment made as to who will do what when...and the efforts must be tracked and
measured. Change always generates resistance, expect it in others and in yourself. Tell
the affected employees of the changes to be made and then ask why the changes won't
work...take notes for this will become a "to do" list. Keep changes small so that people
can succeed, but once they mastered a change introduce the next small change...no stress
no change. And of course pay people for doing what you want done...like thinking and
coming up with improvements.

An old axiom says that "People respect (do) what is inspected (measured) not what is
expected" . Can you imagine the chaos that would result if traffic cops were pulled off the
roads? In much the same way business managers need to be told that a primary function
of their job is to think, to always be looking for ways to save a step, a minute or a
penny...and then they must be measured.

Twenty two years ago my younger son, Andres , was seven years old and one night he
was doing some school homework. He was sitting at the dinner table with a sheet of paper
and in the center he drew a box. Inside the box he wrote "A boy and his dogs". Then he
drew a line from each corner of the box toward the edge of the paper and at the end of
each line he wrote about something that had happened or been done, and by who. He
then numbered these "actions" in sequence of events or priority. He then took a second
sheet of paper and "A Boy and His Dogs" became the title and the "actions" became
paragraphs...he was organizing and writing a story. A couple of weeks later while working
with a distribution company on their Credit and A/R Management, the CEO asked if I
could help organize and improve on how things were done in the warehouse...not
knowing anything about warehouse operations I said "sure".

I thought the best place to start learning about the warehouse and about areas of opportunity
for improvement was to ask the experts, the warehouse guys. Not having a flip chart or
white board available we broke down a box and put it up on a warehouse wall. I then drew
a box in the center of the box and I drew lines from the center box toward the edges of the
flattened box...and then we called in the experts.

"Every business function must have a clearly stated purpose that addresses the costs
associated with the carrying out of that business function.", I said to warehouse experts.
They then led me through the costs involved with the warehouse function: inventory,
heating/cooling, buildings, their paychecks, taxes, equipment and shrinkage/obsolescence.
"So why incur the costs?, I asked. And of course one guy answered ,"To make a profit.".
"What's the best way to "earn" a profit?", I asked. We finally came down to "meeting or
exceeding customer expectations" as being the best way to earn a profit and for the
warehouse function that meant having "an acceptable on time fill rate". In the box at the
center of the flatten box I wrote "On-time Fill Rate".

The next step in organizing the "warehouse story" was to break it into "actions" or major
components. We came up with receiving, shipping, truck maintenance, and inventory
control, in sequence of events. The last thing we accomplished that day was to establish
a goal for each of the major components: receiving...take in right and put up right,
shipping...take down right and send out right, truck maintenance ...get what suppose
to be where it's suppose to be when it's suppose to be, and inventory control...know
what you need, what you have and where it's at. In a follow up session we establish
how the goals would be accomplished...the steps needed to be taken in order to
achieve the goals, and we also established who would do the work. The management
team and I were then able to establish "Performance Measures" based on the ''goals."
Over the years I found that this method for organizing and documenting the knowledge
needed to do things as right as possible the first time worked with any business function.

If the established goals are not achieved either the process is
wrong or you have the wrong guy in the job.

Financial profit is necessary for any business to stay in business and the best
way to improve on profit is to do things as right as possible the first time. We
will never achieve perfection because things keep changing and that's why Policies
and Procedures are never done and we need to place a cover sheet on them that
says "UNDER CONSTRUCTION".

One Size Does Not Fit All

Every person on the planet sees things differently, His Holiness,
The Dali Lama says that there are six and a half billion of us
and six and a half billion versions of reality and if you're married
you know what the Dali Lama is talking about...it's the same with
companies. Businesses are a collection of many different people,
none of whom define the business but collectively they make up
the business. And what works at one company may not work at
another... every company and it's people are unique . The process
for best business practices must be based on each company's
understanding of what is... is.

In Closing

It was time to rotate the tires on the pick-up and for an oil change and lube, I knew
it was time because of the sticker on the corner of the windshield. I've learned it's
best to make an appointment rather than just show up at the tire place and have
to wait if they're busy...guess what? ...no phone number on the sticker. This is a
national tire chain and yet I had to wait and remember to look up their phone number
when I got home. If I had been able to call them from the pick-up at the time I'd noticed
the sticker I'd might have been able to get in sooner, and at my age they were lucky
I didn't space it out altogether. I mentioned all this to the asst. manager when I was
checking in and he got it at once...he pulled out a note pad and wrote it all down
saying as he did so ,"This is one for corporate, we all use the same stickers."
Good for him...now lets see if Big O corporate gets it.

When people are told that on-going small improvements are desired and that
they will be measured on coming up with them, they become different people.
They find that they are capable of thinking outside the established box and that
it gives far more meaning to their work lives, than just a paycheck.