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Every business owner I know is short on key resources, including time, money, and relevant skills. The last thing they can afford is to waste any of these, but in my mentoring and coaching activities, I see it happening all too often. Waste in any business is any activity that burns resources, but creates no value or competitive advantage in the eyes of customers.
Much has been written about this subject in the world of manufacturing, stemming primarily from the 1990’s work by Taiichi Ohno, called the Toyota Production System (“Lean”). More recently, the concepts have been applied to the general business management context, in a classic book by Certified Turnaround Professional, Thomas H. Gray, titled “Business Techniques for Growth.”
While his book goes well beyond controlling waste as an element of growth and success, I was struck by how relevant the waste points are for every new venture and every small business. Thus I am paraphrasing the key points here, with specific focus on new venture creators, who would never think of themselves in the context of automobile manufacturing:
- Offering too many products and services concurrently. In the new business world, this is often seen as a lack of focus. Trying to do too many things with too few resources, usually means the new business will not shine at anything, and will not survive the competition. That’s a deadly waste you can’t afford. My advice is to keep it simple, and do it well.
- Inventory and features added too soon. Inventory is money sitting idly by, adding no value. For market changing products, build first a minimally viable product (MVP), and never build products for sale until you have real orders in hand. More features and inventory added early will be wasted as you will likely need to pivot to match the market.
- Bottlenecks to team productivity. Time utilization inefficiency is wasted time. Make sure you are not the bottleneck for your team. Many business leaders insist on making every decision, and spend too much time working in the business, rather than on the business. The result is lower productivity all around. Hire real help and learn to delegate.
- Lack of communication. Communication is the fuel that controls the speed of business action. Delays in sharing, or lack of communication from the top, result in time and effort wasted, adding no value to the business. As a new owner, you need a visible business plan and weekly team meetings, so everyone is working on current issues and real goals.
- Poor or too many business processes. Business processes can be your biggest time saver, or your biggest waste. Productive processes start with a plan, and end with metrics that measure value delivered. New business managers have to embrace creativity and change, yet move quickly with trained teams who can deliver repeatable processes.
- Focus on activities rather than results. Too many passionate owners confuse action with momentum and results. Focus on the 20% of your important tasks that will deliver 80% of the results. Judiciously apply 20% of your energy where it will achieve 80% of the momentum you desire. Then always measure customer results, not work.
- Defective products and services. Poor quality products and poor customer service are doubly deadly wastes. You lose the customer you paid to acquire, and the unhappy customer spreads the word to potential customers that you are spending marketing resources on, but will never win. Recovery efforts are wasted resources which rarely succeed.
- Underutilizing people skills. When people can do more than they are asked or motivated to do, the money spent on others doing that work is wasted. The solution is to maximize your own staff productivity first. Recognize and reward the people who excel, provide training, and challenge the team to invent new methods for significant change.
Successful leaders and small business always operate on the edge. There is no cushion. Waste means death. Are you as an owner really ready to deal with the new technology, new regulations, and a new workforce schooled in the digital age? How much time have you spent learning to use the practical techniques and new tools available? It won’t be wasted.
Related: Unveiling Hidden Challenges: 7 Strategies Through Questioning