Monthly Archives: May 2007

Normalized Deviation

One of the most destructful forces for any business is also one of the hardest to guard against. I call it normalized deviation, some call it standardized deviation but it means the same thing. The issue comes up when varying from your normal standards or procedures becomes the norm.

The most commonly used example of this is the burned out light bulb. Imagine you are walking down the hall to your office one day and notice a burned out bulb. Your first thought is probably that you need to get that bulb changed. The next morning you notice the same bulb and think “man, I forgot to get that bulb dealt with”. By the fourth or fifth day if it hasn’t been changed you fail to even notice the burned out bulb when you pass it. The burned out bulb has become “normal”!

Now carry this example to issues that are much more critical to your business. Your month end reports slip by a day or two or a particular staff member comes in late a couple Monday mornings. There are a thousand details in every business that once they start to slip from the standards that have been set, they are on a slippery slope. The first challenge here is of course to set the standards or procedures in the first place. But once you decide on a standard you must maintain it at all times. Things deviating just a little seem innocent enough but that is what makes normalized deviation so hard to guard against. You must be diligent because what seems innocent enough when it starts can be the beginning of a dangerous precedent. The biggest danger is when varying from standards itself becomes the norm.

So make sure you are dealing with all the “light bulbs” in your business the first time you see them. Make dealing with any deviation as soon as it comes up a standard in your business.

Check for snakes

One of my favorite business stories came from Ross Perot. Most of you will recall Ross from his colorful run in the 1992 American Presidential campaign.

During that campaign Ross told the story of his time with General Motors. At one time he held a majority share position with GM. The story is not about how he acquired that position but rather why he sold his shares and severed his ties with the company. At a board meeting of GM, Mr. Perot stood to address the board and told this story. He said: In my company we compared problems to snakes. Around here when ever anyone spots a snake, the first thing you do is strike a committee to determine if it is actually a snake. Then you form another committee to determine what kind of snake it might be followed by a committee to recommend what actions might be taken with this particular type of snake. While all this is going on do you know what the snake is doing? He is crawling up your pant leg and biting you in the ass! In my company when someone sees a snake do you know what we do? We kill it!!

Mr. Perot then immediately sold his shares in General Motors.

Are there any snakes crawling around your company being studied or worse yet ignored? Does your team know they have the power, ability and responsibility to kill snakes immediately?

How’s your company’s Heart?

Businesses do have hearts and they are being watched by everyone they interact with at all times. It may be easier to see the heart of a business than that of an individual. That is because pretty much everything a business does is out there to be seen by the world.

How you treat your customers is the first sign but not by any means the only one. What about how you treat your staff. How they are treated will be far more important to them than the rate on their pay check. They will reflect how they are treated in every action they take. That’s what makes it so transparent. You can’t hide happy people. Their enthusiasm shines through in every interaction and is therefore passed on to each customer, supplier and co-worker they touch. The same is true of your company’s supplier and customer relations. When people are treated fairly and with integrity, they tend to respond in a like manner.

Another obvious sign of the condition of a company’s heart is their community involvement. Do they give back to the community? Being actively involved in charity work is a necessary function of any good corporate citizen.

So, give your company a heart check-up. Take a good look around. Is the staff happy at work? Are they smiling and having fun? How are your suppliers being treated? Is your business one they look forward to visiting? And what about your customers, do they enjoy doing business with you? What is your image in the community? Is your company one that is recognized for the charitable things it does as well as the business it does? Get back to me and let me know, how’s your heart?

The fear of business planning

One of my favorite presentations is the one I do called “Taking The Fear Out Of Business Planning”. Why would I even think there is a fear of business planning? Well, I often ask people if they think a business should have a business plan and they almost always say yes. So then why is it that so few businesses have a plan? I believe it is because people are afraid of the process of creating the plan in the first place.

There has been so much said and written about business planning that it has become this big, important, mystical thing. There in lies the problem. You see, I believe that a business plan doesn’t have to be a big, fancy, complicated document. What it does need to be is a simple plan that describes in detail how you plan to accomplish your strategic objectives. A simple step by step outline of what you actually plan to do in your business during the period covered by the plan. When you have a plan you can refer back to it regularly to confirm that you are indeed doing the things you set out to do and that these activities are achieving the results you expected.

I will discuss the details of planning and the differences between a strategic plan and a business plan in future discussions. Actually, as these are some of my favorite subjects, we will probably discuss them often. For now, just remember this; if you don’t have a business plan, it would be very beneficial for you and your business if you develop one and if you have one that isn’t referred to regularly then you need a new one. And the most important point……This doesn’t need to be a scary process!

Remember your dreams

I was reminded today of the indivisible link between a business plan and the dreams of the business owner. Too often as days turn into weeks and then months and then years, we lose sight of this.

We all have dreams. Those things we would like to accomplish in life. Some of these are directly associated with our business and some are not. They are dreams related to our life outside the walls of our office. But these dreams too must be in sync with our business plans. If we lose this connection, our lives no longer have balance. This can lead to a breakdown either in our lives or our business.

So, when considering your business plans, don’t forget to make sure these plans coincide with your dreams.

Thanks Ben

I am really looking forward to reaching out to my friends and business associates through this blog. I really have to thank Ben for getting it started for me. He is also doing amzing work on my web site.

Stay tuned for daily business thoughts and discussions.

R