The term agility makes most people think of gymnasts or mountain goats, leaping and jumping with ease from point to point. Most businesses will never change direction that fast. However, you can go out of business if you stick to your current product line or processes as the landscape changes. On the other hand, you can adapt to changes more quickly and make an adjustment to plans midstream if your business is truly agile. Here are 6 ways to make your business more agile.
Learn Pareto’s Law
Pareto’s Law or the 80/20 rule is a standard rule of human behaviour. Find out what 20 percent of your product delivers 80 percent of your sales and/or profits. This is where your process improvement initiatives should be done since this has the highest return on investment for the company. Also, focus on the 20 percent of root causes that contribute to the most expensive or common failures instead of trying to solve minor problems.
Plan on Incremental Change
Agility shouldn’t be equal to chop and change, suddenly and radically changing direction. This is always risky in business. Instead, look for incremental improvements you can make.
Create a culture of continuous improvement and innovation. Slowly improve your product quality, cycle time and customer satisfaction ratings. These improvements add up over time. Furthermore, you’re giving yourself more leeway if something goes wrong. If it doesn’t work out, it is easier to undo the change and go back to the prior process. That reduces the risk of each incremental change.
A culture of continual, modest improvements makes it easier to implement a major change later on if that is required. However, you’ll want to test out major changes in one facility before you radically change your business processes, if at all possible.
Know Where You Are and Where You’re Going
Process improvement methodologies like Six Sigma and Lean don’t start with major changes to the process; the first step is always to map out and understand the current process. They depend on visual mapping of the current, “as is” process. You propose changes and then draw the “to be” state of operations.
What will the new workflow look like? What will the new assembly or shipping process be? Visual mapping of the new process allows you to plan the transition. Once the new process is in place, continuous process improvement methodologies call on you to analyse the current process.
Ensure that it is working the way you planned before you move on to the next issue, and plan for the unexpected. Have a plan so that the team knows who to call when issues occur, and have slack in the schedule to work out bugs.
Communicate, Communicate, Communicate
Communication is essential to an agile operation. This is often achieved through information dashboards and key process indicators.
What is your current cycle time relative to what it should be? What is your work-in-process backlog? Dashboards and reporting tools will warn you when something is starting to go wrong before there is a critical failure. It forces people to talk about issues when they arise and it reduces the need to constantly check up on people.
However, we manage based on what we measure. Make sure the metrics you collect and manage people by are actually those that matter. And don’t waste time on vanity metrics that look great but don’t represent anything that matters.
Identify a few metrics of the health of your business. Use business analytics tools to collect information and analyse it so that you can make data-driven decisions. If you want to find the best tools for your organisation, you can check out this article from Aston University, where they run down the various business analytic tools and what makes one better than the other. The best business analysis tools should:
- Be easy to use
- Give you visualisation tools
- Help you create key performance indicators
- Allow for ad hoc queries
- Have the ability to be customised for your business needs
You may also want to look for business analytic tools that are plug-and-play with software you’re already using.
Don’t Forget Your People
Don’t forget about the human element when planning your work processes. Have documented processes and ensure that people follow them. Then take time to train people both as they come on board and as the process changes. Don’t rush training, and don’t shame someone who needs to repeat it.
According to management consultant Amanda Setili, “In order to be agile, your employees need to be aligned with your values and vision – and they have to either have or be able to build the capabilities needed to succeed.”
Understand that not everyone is good at communicating complex information or able to articulate their concerns. Help people communicate with leadership and each other. This can include:
- Providing soft skills training
- Holding regular project reviews
- Allowing feedback via anonymous surveys
- Giving people time to ask questions during training
- Having everyone at all levels review and comment on proposed changes
The next step is allowing team members to give suggestions for potential improvements and reporting problems that their managers may not be acting on.
This also means hiring with agility in mind.
Balance can take many forms. Don’t have too much inventory, since that’s a waste of money if the product is no longer of interest to the public. Don’t run things so tight that your assembly line is at a standstill if your delivery of raw materials is late.
Don’t have a production line that barely meets demand, because you’ll lose customers if you keep them waiting too long for your product if there is a surge in demand. Don’t build a production line with so much extra capacity that you’re wasting money on equipment that is underutilised. Try to balance supply with demand, but give yourself some leeway in the form of modest stockpiles and savings.
A rapidly changing world rewards companies that become agile. Fortunately, you can implement a number of cultural and organisational changes to earn this coveted label.