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How the Lean concept can have the biggest impact on your bottom line

(BUSINESS) Using the Lean business concept and asking the non-sexy question of “What’s dumb around here?” your business will outpace your competitors in no time.

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overtime laws

Entrepreneurs love solving problems. That’s what they’re good at doing. In fact, the more complex, difficult and messy the problem, the more the entrepreneur will enjoy the challenge. Entrepreneurs are especially good at solving problems that nobody knew were there. Think about Steve Jobs: He knew that we needed a pocket MP3 player before we even knew what it was.

While entrepreneurs are coming up with the next “big” thing, we need the non-entrepreneurs in our organizations focused on solving the small problems in our company with the same enthusiasm. Imagine if every one of your team members were consistently looking for opportunities to improve your systems, processes and service delivery. Those subtle changes made in the non-sexy parts of the business usually have the biggest impact on the bottom line.

This is a business concept called Lean, in which a company changes their processes to create the most benefit to the customer using the least amount of resources possible. Lean is commonly used in the manufacturing industry, but its principles can be used in any business to change the way of thinking and doing things.

I recently witnessed a great example of how Lean principles were used to improve one of my clients, LuminUltra – a leading provider of microbiological testing hardware, software and services. The company serves industries that need to know quickly and accurately what’s living in their water. At a recent quarterly planning session at the LuminUltra offices in Fredericton, Canada, COO Charlie Younger shared a powerful story about the company’s manufacturing facility and challenging the status quo.

During the expansion of the company’s manufacturing facility, one of the team members was lamenting to Charlie about how much time it took to complete a lengthy step of the manufacturing process – one specific quality check that was very time-consuming. He remarked that in the history of the company they never had a single machine fail the test. Charlie’s first thought was, do they even need to perform this specific test again?

After more discussion with colleagues, the team realized that the other quality checks performed earlier in the manufacturing process would always identify a defective unit. With this knowledge, the manufacturing team asked for permission to perform minimal testing to still provide assurance with less work. When presented with the information, the company leadership agreed that it was a great idea and would save time and money as well as improve the employee experience. But the bigger question was: Why hadn’t anyone ever questioned this lengthy step of the manufacturing process before?

Charlie, having run Lean programs in the past, has seen this issue before: People continue to do what they’ve always done even if they think there is a better way. He thought this would be a great opportunity to use a fun, simple but elegant technique to capture other status quo breakers – in other words, he decided to use the same principles for changing the company’s production process to make other company decisions.

With that, he posted a whiteboard in the manufacturing room with the title “What’s Dumb Around Here?” and encouraged team members to capture possible “dumb things” to add to it. These topics are discussed and vetted during their Lean process meetings to determine if they can be improved.

When I discussed the new process with Charlie, he noted, “First, you have to create an environment where people are willing to question the status quo. We have always been highly focused on quality and accuracy, so the team thought it was outrageous to openly question a quality check we had been performing for years.”

He continued, “You have to help your management team be open to receiving ideas that might seem crazy and not overreact to the suggestions. Instead, simply ask them to explain their logic. More often than not, the front line knows a better way to do things but does not know how to navigate the change. The beauty of using Lean techniques is that you now have an easy navigation path to discuss, approve and roll out changes. Suddenly, you have an energized front line solving problems with minimal involvement from management – how great is that?”

While LuminUltra continues to grow their product line and expand into new markets, it expects that its implementation of Lean principles will help it make subtle but important modifications to processes that will positively affect its bottom line. The CEO, Pat Whalen, remarked, “If we can produce our products faster and more cost effectively and get them into the hands of our customers faster, we can have an even bigger impact on the water sector with our microbiological monitoring products. I need all of our team members thinking how we can improve every single day. The water sector needs us.”

Every visionary, big-thinking entrepreneur needs a team that challenges the status quo. How are you encouraging your team members to identify, “What’s Dumb Around Here?”

Certified Petra Coach Rob Simons draws upon his 25 years of experience as an entrepreneur, brand expert and business coach. Rob founded PixelWorks Corporation in 1993 to serve the interactive advertising industry and in 1996 he founded Toolbox Studios, Inc., one of the most respected branded content marketing firms in Texas. Rob sold Toolbox Studios in 2015 to focus exclusively on business coaching, which includes certification as a Gazelles International Four Decisions™ coach. An active member of the Entrepreneurs’ Organization (EO), Rob is currently a “Master” EO Strategy Summit Facilitator and an EO Accelerator Instructor. In 2007, the San Antonio Business Journal named him one of San Antonio’s “40 Under 40.”

Business News

Coca Cola drops 200 brands, most you’ve never heard of

(BUSINESS NEWS) Coca Cola hopes to revitalize their drink arsenal by rolling back some “underperforming” brands (that you might not have known they were still making.)

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Woman drinking Coca Cola against plain wall

2020 has forced a lot of businesses to return to their proverbial drawing boards, and the Coca Cola Company is no exception. Last week, Coca Cola announced in a corporate blog post that they are halting the production of 200 of their beverage brands.

In the words of Cath Coetzer, the head of global marketing for Coca Cola, the restructuring will “accelerate [Coke’s] transformation into a total beverage company”.

“We’re prioritizing bets that have scale potential across beverage categories, consumer need states and drinking occasions,” Coetzer added. “Because scale is the algorithm that truly drives growth.”

That’s… a surprising amount of technical beverage jargon, Cath.

Coca Cola is already the leading manufacturer of non-alcoholic drinks on the planet. It’s hard to imagine their scope becoming any more “total.” But this strategy shift comes as the consumer thirst for soda is drying up.

Soda consumption has steadily fallen over the last ten consecutive years, thanks to a swath of modern studies that link excess sugar intake with negative health outcomes like obesity, diabetes, and heart disease.

In light of this research, regional sales taxes on drinks with added sugar have been debated across the country, despite aggressive corporate lobbying against it. All this has meant that beverage companies have had no choice but to pivot hard.

Take Odwalla, a Coca Cola brand that touted its vitamin content and servings of produce, which was discontinued earlier this year. Despite being marketed as a health brand, Odwalla flavors contained whopping amounts of added sugar: Their popular “superfood” flavor quietly boasted 47 grams per bottle.

The brands affected by Coke’s recent soda cull also include TAB diet soda, ZICO coconut water, and Coca Cola Life, plus internationally marketed drink brands like Vegibeta of Japan and Kuat of Brazil.

Condensing their portfolio allows Coca Cola to prioritize their most profitable products and invest in more new beverage trendsetters that better fit the times, like sparkling water, coffee, or even cannabis-infused products.

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Business News

Uber and Lyft face the music as employee ruling is upheld

(BUSINESS NEWS) The battle for Uber and Lyft drivers’ status continues, and despite company protests, the official ruling has been upheld.

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Interior of Uber and Lyft rideshare looking out on palm trees

A gig economy has its pros and cons. For anyone who has ever been an independent contractor, done freelance work, or worked for companies like Uber, Lyft, and DoorDash, the pros are clear – you get to work when you want, where you want and how much you want. Flexibility and gigs go hand in hand.

And the cons? Well, those are a little more complex. Without a W2 linking you directly to the company, you as an independent contractor don’t receive the same rights and perks that your 9-5 employee friends might. For example, your employer is not required to provide a healthcare option for you. You are also not entitled to earned time off or minimum wage.

So which is better?

The gig economy conundrum has made its way all the way to an appellate court in California last week. The ruling was that Uber and Lyft must classify their drivers as employees.

Back in May, Attorney General Xavier Becerra and city attorneys from L.A., San Diego and San Francisco brought forth a lawsuit that argues Uber and Lyft gain an unfair, unlawful competitive advantage by not classifying their workers as W2s.

Uber and Lyft responded to the suit, stating that if they were to reclassify their drivers as employees, their companies would be irreparably harmed – though the judge in last week’s ruling negated that claim, stating that neither company would suffer any “grave or irreparable harm by being prohibited from violating the law” and also that the financial burden of converting workers to employees “do[es] not rise to the level of irreparable harm.” Essentially, the judge called their BS.

Additionally, according to the judge, there is nothing that would prevent Uber and Lyft from offering flexibility and independence to their drivers – and they have had plenty of time to transition their drivers from independent contractors to employees (the gig worker bill that spurred this lawsuit was decided in 2018). Seems fair to me!

However, there is an oppositional proposition on the ballot that muddies the waters. Proposition 22, if passed, is a measure that would keep rideshare drivers and delivery workers classified as independent contractors, meaning that those workers from Uber and Lyft would be exempt from the new state law that classifies them as W-2 employees. And you might be surprised to know how many of the app-based rideshare workers are in favor of Prop 22!

In a class-action lawsuit, Uber has been accused of encouraging drivers and delivery workers to support Prop 22 via the company’s driver-scheduling app. It appears, unfortunately, that Uber is manipulating its workforce by wrongly hanging their jobs over their heads.

On this matter, Gig Workers Rising stated: “If Uber and Lyft are successful in passing Prop. 22 and undo the will of the people, they will inspire countless other corporations to adapt their business models and misclassify workers in order to further enrich the wealthy few at the expense of their workforce.”

Ultimately, the fate of California Uber and Lyft driver’s in still in question. It’s unclear if the question we should be asking is, will Lyft drivers have proper healthcare through their jobs or will they have jobs at all. All of this is occurring at a time where millions are jobless and 158,000 individuals sought unemployment support this week due to COVID-19 layoffs.

Personally, I have little sympathy for tech-giants that rake in billions off the backs of the exploited working-class. If the CEO of Uber is an ostentatious billionaire, then his employees should have health insurance. Clear and simple.

The scariest part of the gig economy is that workers have become increasingly happy to work for a company that gives them little to no benefits. More companies are dissolving or combining positions so that they can further bypass their responsibilities to their employees. Let us not be fooled: The dispute over whether or not to make Uber and Lyft workers W2 employees does not affect the health of the companies themselves. What it will affect is how fat the bonuses will be the big guys at the top, and that’s exactly why the companies are so adverse to the ruling. They’d rather their workers suffer than lose a single dime.

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Business News

Bay Area co-living startup strands hundreds of renters at dire time

(BUSINESS NEWS) They’re blaming COVID for failing as a co-living space, but it looks like trouble was well established even before now.

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Person packed a bag and walking away from co-living space.

Over the last few years, “co-living” startups have become increasingly common in tech-rich cities like San Francisco. These companies lease large houses, then rent individual bedrooms for as much as $2,000 per month in hopes of attracting the young professionals who make up the tech industry. Many offer food, cleaning services, group activities, and hotel-quality accommodations to do so.

But the true value in co-living companies lies in their role as a third party: Smoothing over relations, providing hassle free income to homeowners and improved accountability to tenants… in theory, anyway. The reality has proved the opposite can just as easily be true.

In a September company email, Bay Area co-living startup HubHaus released a statement that claimed they were “unable to pay October rent” on their leased properties. Hubhaus also claimed to have “no funds available to pay any amounts that may be owed landlords, tenants, trade creditors, or contractors.”

This left hundreds of SF Bay Area renters scrambling to arrange shelter with little notice, with the start of a second major COVID-19 outbreak on the horizon.

HubHaus exhibited plenty of red flags leading up to this revelation. Employees complained of insufficient or late payment. The company stopped paying utilities during the spring, and they quietly discontinued cleaning services while tenants continued to pay for them.

Businesses like HubHaus charge prices that could rent a private home in most of the rest of the country, in exchange for a room in a house of 10 or more people. PodShare is a similar example: Another Bay Area-based co-living startup, whose offerings include “$1,200 bunk beds” in a shared, hostel-like environment.

As a former Bay Area resident, it’s hard not to be angry about these stories. But they have been the unfortunate reality since long before the pandemic. Many urbanites across the country cannot afford to opt out of a shared living situation, and these business models only exacerbate the race to the bottom of city living standards.

HubHaus capitalized on this situation and took advantage of their tenants, who were simply looking for an affordable place to live in a market where that’s increasingly hard to find.

They’ve tried to place the blame for their failure on COVID-19 — but all signs seem to indicate that they had it coming.

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