THE ENTERPRISE-1/09/05--16 Useful Tips for All Kinds of Businesses
©John L. Mariotti, 2005
THE ENTERPRISE
Last week I focused on the "big picture" and some predictions--that have as much chance of being wrong as right. This week, I decided to dig deeper and provide information that I know is useful.
There is no particular logical flow to this. I didn't take a lot of time to "wordsmith" these. You will get the idea. It is just a list of 15 points I believe to be both true and useful--especially in product businesses--but for most of them, in any organization or business.
Design:
• Quality must be "designed in" or it cannot be "built in."
• If two parts don’t move relative to one another, they might as well be made as one part; the best way to reduce or eliminate missing or bad parts is to have fewer parts.
• Many commodities are bought by the pound and used by the cubic inch—understand the difference.
Operations:
• Quality depends on the reduction of variability. Bright lighting leads to better quality.
• Moving parts around seldom adds value. Extra motions cost time, which costs money and usually adds little value.
• Inventory is a more often a "liability" not an asset, because nothing good can come of it except to finish it and sell it. Storing parts unnecessarily usually adds cost and no value.
Marketing
• Understand why you "deserve to be in business", then build on that.
• Mix usually has a greater impact on margin and profitability than pricing.
• A brand is a promise of value and a relationship of trust—don’t break either.
Profitability
• Write the same information only once; to do otherwise adds cost and potential for error—and reduces profits.
• Product profitability is important, but customer profitability (or lack thereof) is more important.
• Complexity adds costs that are not measured—and remain hidden until the balance sheet and income statement are compiled.
People
• It is best to have fewer, better people. Mediocrity is contagious. So is excellence. Many organizations screen and hire people cheaply/poorly and then pay dearly for bad hires, turnover and replacements.
• Focus is critical—since there are never enough resources—people, time or money.
• The two highest value (lowest cost) forms of compensation are praise—promptly and specifically given and "thanks," honestly and sincerely said.
• There’s no "I" in "team." If you think you are indispensable, stick your finger in a glass of water and see how big a hole it leaves when you take it out.
Hopefully there is something for everyone in this list. I hope some of them will make your New Year a little happier, easier and more profitable.
Best, John.
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