Improvement Processes - Ze'ev Ronen - Business Excellence

A company gave its employees a quarterly bonus. The bonuses were granted to employees who met their personal targets, which were determined according to an agreed scale. The employees were used to receiving the quarterly bonus and eagerly anticipated it at the end of each quarter.

Do you remember the days when we worked six days a week? Has moving to five days had a bad effect on employers or employees? Has efficiency decreased? Have we been achieving less?

The current series of articles focuses on the important KPIs every business must monitor. I have written articles regarding this very important issue over the past few years. However, the current series presents KPIs in a concise form, easily expanded, when required.

This article will present the KPIs under the responsibility of Quality and Marketing managers. Annual and special KPIs will follow at the end of the article.

This article presents the KPIs under the responsibility of Production managers, Quality managers, Sales managers, Marketing managers and Engineering & Research, development managers. The KPIs are shortly presented with links to learn more about them in greater detail.

This article is about the challenges managers face when trying to implement decisions and assignments reached during these meetings.

Today I present five CEO’s excellent decisions that led them to great achievements. Some of those decisions were taken at a moment of crisis and turned things around. Others were taken by intuition and led the way to success. Making these decisions required courage and determination.

I was on my way to a meeting with Ilan, Dovi and a few other people when I received a message from Yigal asking me to check something for him. Before joining the meeting, a few minutes too late, I opened my messages for a brief glance. I then entered the meeting noting to myself to get back to Yigal right after the meeting.

Let us assume that we wish to improve the company’s profitability. The company sells 20 products. We then insert those items into a table - the product generating the highest profit will appear at the top row of the list, and the product generating the lowest profit will be the last item on the list. According to the Pareto principle, there is a good chance that the first four products on the list produce around 80% of the company’s revenues.

Every year, CofaceBDI conducts a survey in collaboration with The Marker magazine, on the question "Who are the 100 companies that are most worth working for in Israel?" The survey was conducted among about 300,000 employees and is also based on internal surveys of the companies.

Work meetings take up time, and it's often wasted time. But there are also efficient meetings, that give a sense of purpose and a drive for change. I assume many of you are among those whose experience with meetings is that they're a waste of time. You leave every meeting frustrated, and have learned to stay quiet to make the meeting go faster.

One of the questions I routinely ask managers is, how much of their time they spend doing their employees’ jobs (putting out fires, problem solving, answering questions). Most, almost all, say they spend 70% to 95% of their time at the operational level. A level which includes mostly activities which could be delegated, or have officially been delegated.

Aviv was the owner and CEO of a company, and led marketing and business development. Most sales and growth were in overseas markets, and Aviv personally managed activity in key countries. He spent a lot of time on marketing trips and knew all the overseas clients and distributors.

While hiking the Israel Trail near Dimona, we often use Patrick’s services, to drive us to the starting point, and from the end point. We found Patrick a year ago, when we were looking for a driver and compared prices. But now we don’t compare the prices Patrick quotes us with other offers. Patrick has excellent customer service. Comes anywhere, always a few minutes early, and is flexible enough to change the time if we’re early or late.

I don’t know about your specific company, but usually the first step is layoffs. Most often, labor costs aren’t the biggest expense, but it always seems simplest, fastest, and easiest to fire employees - and if and when sales are back up, recruit new ones. Furthermore, we know there is always latent redundancy, so we assume any reduction in the workforce will lead to greater efficiency.

In the past, when I managed Osem-Nestle’s factory in Yokne’am, we often had improvement teams working with internal leaders. For four years, we had a yearly workshop teaching employees how to lead improvements teams. The woman leading these workshops then led and managed the improvement teams, and coached the leaders. After four years, we transitioned to doing that internally as well.

It might seem odd, but some businesses and people benefited from the global effects of the pandemic. For example, let's say you're a manufacturer of a niche product like facemasks, and suddenly it becomes the most sought after product worldwide, sold for exorbitant prices. It can seem as if luck fell out of the sky, into your lap. What will you do?

Javier is a young tour guide, Until recently, he had a lot of work. He speaks Spanish fluently, and as a result he had, among is other clients, many Birthright groups from South America.
And then came the Coronavirus, and Javier found himself without work, and with the realisation that life is unlikely to return to how it was anytime soon.

Ei'lam and I analyzed the company's operations, and for all other fields managed to create a profit generating work-plan with reasonable effort. Contrastingly, it seemed impossible to create such a work-plan for the import and distribution side of the business.

In my last article I discussed strategies for businesses during the Coronavirus crisis: the gazelle and the hedgehog strategies. When the gazelle senses danger it raises its head, looks around, and runs forward. At times it will change direction, but will always continue moving and keep its head up. 

In some companies, working with improvement teams brings quick, clear, and considerable success. On the other hand, in others the work done by improvement teams is accompanied by frustration, and has no quick and clear results. Why? What's the difference?

One of the immediate and daily examples for this technique, also mentioned in the book, is shaving razors. Until 1971 only one blade was commonly used. Then Gillette released a razor with two blades: one pulls the hair and the second cuts it.
Later, they added a third, and even fourth, blades. I stopped at three blades.

The subtraction used by Itamar isn’t only of a key or other accessory whose role in opening the door is eliminated. The essence is simple and smart management of the right to open the lock and enter a home, club, center, pool, etc. Instead of the subtracted key, the system utilizes an accessory most of us already have: a smartphone. I believe anyone managing a community center or using one often appreciates Nemlock's use.

Facit is a famous example, but there were others. A recent example from Israel comes from the world of cellular parking services. I heard it from Ro'ee Elbaz, Pango's CEO ever since it was a small startup of four employees. In 2007 a tender for cellular paying services for parking was published by the center for local government.

The local market is growing more competitive and diminishing, customs defenses are disappearing and imports make sales harder. Both Gad and Shim'on have turned to exports. They don't only compete with each other, but with the global market.

American companies reward participants based on how much money was saved for the company as a result of their proposal. The rewards average 458 USD. Comparatively, Japanese rewards average 3.88 USD (less than a hundredth of American rewards).

I used to manage an organization with several hundred employees, under a collective agreement. The premium paid to employees who exceeded production goal was set in the collective agreement, old an anachronistic. It wasn’t a real encouragement and it didn’t contribute to motivation, and didn’t change employees' way of doing their work. 

Our event focused on changing the production department and increasing efficiency. The team led a radical change in the department, including opening a wall which separated the two parts of the production space. On the third day, Osnat, one of the team members, burst into tears and couldn’t continue. She went home and returned to work only after a week of sick-leave.

I write a lot about getting employees invested, about efficiency, improved service, measuring indicators, and precision work with employees and clients. But if, at the same time, you have to lower prices in order to preserve clients in a competitive market, and to supply custom products to every client – you might find yourselves running fast in order to stand still. There's a danger that increased profit as a result of improvements in production will disappear compared to competition in the market, and at best you'll maintain low profit margins.

In it they could see how, at the end of the work day on Thursday, at three in the afternoon, the door to one of the departments was left open. Actually, it wasn’t a door, but a wide gate, made of two metal doors. Its width is about three meters, its height about four meters.