optimization

The Downside of Easy (or, the Upside of a Good Challenge)

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As a young boy, I was “that kid” who would take everything apart, often leaving a formerly functional alarm clock in a hundred pieces in a shoe box. I loved figuring out how things worked, and how components worked together as a system. When I was 10 I spent one Picture of a Suzuki motorcyclewinter completely disassembling and reassembling my Suzuki TM75 motorcycle in my bedroom (my parents must have had so much more patience and understanding than I do as a parent). It was rebuilt by spring and ran like a champ.

By then I was hooked – I enjoyed working with my hands and fixing things. That was a great skill to have while growing up as it provided income and led to the first company I started at age 18. There was always a fair degree of trial and error involved with learning, but experience and experimentation led to simplification and standardization. That became the hallmark to the programs I wrote and later the application systems that I designed and developed. It is a trait that has served me well over the years.

Today I still enjoy doing many things myself, especially if I can spend a little bit of time and save hundreds of dollars (which I usually invest in more tools). Finding examples and tutorials on YouTube is usually pretty easy, and after watching a few videos for reference the task is generally easy. There is also a sense of satisfaction to a job well done. And most of all, it is a great distraction to everything else going on that keeps your mind racing at 100 mph.

My wife’s 2011 Nissan Maxima needed a Cabin Air Filter, and instead of paying $80 again to have this done I decided to do it myself. I purchased the filter for $15 and was ready to go. This shouldn’t take more than 5 or 10 minutes. I went to YouTube to find a video but no luck. Then, I started searching various forums for guidance. There were a lot of posts complaining about the cost of replacement, but not much about how to do the work. I finally found a post that showed where the filter door was. I could already feel that sense of accomplishment that I was expecting to have in the next few minutes.

But fate, and apparently a few sadistic Nissan Engineers had other ideas. First, you needed to be a contortionist in order to reach the filter once the door was removed. Then, the old filter was nearly impossible to remove. And then once the old filter was removed I realized that the length of the filter entry slot was approximately 50% of the length of the filter. Man, what a horrible design! A few fruitless Google searches later I wasPicture of a folded cabin air filter for a Nissan Maxima more intent than ever on making this work. I tried several things and ultimately found a way to fold the filter where it was small enough to get through the door and would fully open once released. A few minutes later I was finally savoring my victory over that hellish filter.

This experience made me recall “the old days.” Back in 1989 I was working for a marketing company as a Systems Analyst and was given the project to create the “Mitsubishi Bucks” salesperson incentive program. People would earn points for sales, and could later redeem those points on Mitsubishi electronics products. It was a very popular and successful incentive program.

Creating the forms and reports was straight forward enough, but tracking the points presented a problem. I finally thought about how a banking system would work (remember, no Internet and few books on the topic, so this was reinventing the wheel) and designed my own. It was very exciting and rock solid. Statements could be reproduced at any point in time, and there was an audit trail for all activity.

Next, I needed to create a fraud detection system for incoming data. That was rock solid as well, but instead of being a good thing it turned out to be a real headache and cause of frustration. Salespeople would not always provide complete information, might have sloppy penmanship, or would do other things that were odd but legitimate. So, I was instructed to turn the dial way back. I let everyone know that while this would minimize rejections it would also increase the potential for fraud, and created a few reports to identify potentially fraudulent activity. It was amazing how creative people could be when trying to cheat the system. By the third month the system was trouble free. It was a great learning experience. Best of all, it ran for several years once I left – something I know because every month I was still receiving the sample mailing with the new sales promotions and “Spiffs” (sales incentives).

This reflection made me wonder how many things are not being created or improved today because it is too easy to follow an existing template. We used to align fields and columns in byte order to minimize record size, overload operators, etc. in order to maximize space utilization and performance. Code was optimized for maximum efficiency because memory was scarce and processors slow. Profiling and benchmarking programs brought you to the next level of performance. In a nutshell, you were forced to really understand and become proficient with technology out of necessity. Today those concepts have become somewhat of a lost art.

There are many upsides to easy. My team sells more and closes deals faster because we make it easy for our customers to buy, implement, and start receiving value on the software we sell. Hobbyists like myself are able to accomplish many tasks after watching a short video or two. But, there may also be downsides relative to innovation and continual improvement simply because easy is often good enough.

What will the impact be to human behavior once Artificial Intelligence (AI) becomes a reality and is in everyday use? It would be great to look ahead 50 to 100 years and see the full impact, but my guess is that I will see some of the effects in my lifetime.

 

 

Profitability through Operational Efficiency

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In my last post I discussed the importance of proper pricing for profitability and success. As most people know, you increase profitability by increasing revenue and/or decreasing costs. But, cost reduction doesn’t have to mean slashing headcount, wages, benefits, or other factors that could negatively affect morale and ultimately quality and customer satisfaction. There is often a better way.

The best businesses generally focus on repeatability, realizing that the more that you do something – anything, the better you should get at doing it. You develop a compelling selling story based on past successes, develop a solid reference base, and have identified the sweet spot from a pricing perspective. People keep buying what you are selling, and if your pricing is right there is money available at the end of the month to fund organic growth and operational efficiency efforts.

Finding ways to increase operational efficiency is the ideal way to reduce costs, but it does take time and effort to accomplish. Sometimes this is realized through increases in experience and skill. But, often optimization occurs through standardization and automation. Developing a system that works well, consistently applying it, measuring and analyzing the results, and then making changes to improve the process. An added benefit is that this approach increases quality as well, making your offering even more attractive.

Metrics should be collected at a “work package” level or lower (e.g., task level), which means they are related tasks at the lowest level that produce a discrete deliverable. This is a project management concept, and it works whether you are manufacturing something, building something, or creating something. This allows you to accurately create and validate cost and time estimates. And, when you are analyzing work at this level of detail it becomes easier to identify ways to simplify or automate the process.

When I had my company we leveraged this approach to win more business with competitive fixed price project bids that provided healthy profit margins for us while minimizing risk for our clients. Larger profit margins allowed us to fund ongoing employee training and education, fund innovation efforts, fund international expansion, and experiment with new things (products, technology, methodology, etc.) that were fun and often taught us something valuable. It was only possible because of our focus on doing everything as efficiently and effectively as possible, learning from everything we did– good and bad, and having a tangible way to measure and prove that we were constantly improving.

Think like a CEO, act like a COO, and measure like a CFO. Do this and make a real difference in your own business!