Time Was

Continuing my discussion of operational excellence we come now to a discussion of Time, capitalized here to indicate the concept. I often capitalize Brand for similar effect.

There are seemingly thousands of metaphorical uses of time in our lexicon. But for our purposes, Time does not ‘heal’ all wounds or ‘stand’ still. It doesn’t ‘march’, nor is it ‘rough’ or ‘smooth’. You can’t ‘spend’ it, ‘save’ it or ‘capture’ it . Yet all of these figurative uses of time do have meaning and are helpful ways to frame how we collectively experience Time.

I am mainly concerned here with time usage so I will first define Time as the measurement we use to experience the earth’s rotation. And in that sense, Time is equal. No person, nation or company has more or less than anyone else.

Humans are extremely good at quantifying Time from a nano-second to a millennium. While Time my have no beginning (the big bang?) or no end (2012?), individually we know that our Time starts and ends with our heartbeats.

In my next post I will discuss  output as a function of Time. And in the following post we will look at the opportunity costs of how we use our time.

To me, the most unusual property of Time is that the more efficient one is the more time they seemingly have. This speaks to the axiom, “If you need something done, ask someone who’s busy.” If that doesn’t immediately ring true to you, wait a few years.

I am also struck by how often younger people use, “I don’t have time for…” when they generally mean, “I do not have the desire to…”. I think the lack of time as an excuse might be what leads people to think they have less time than others. They don’t.

Time is equal.

Rest Up

This is about halfway in my recent jag about operational efficiency (see below). As stated at the outset, these are back office considerations that relate to production and order fulfillment. Much of this discussion does not apply to my readers who own service based businesses that are not challenged by space and/or inventory considerations.

I readily admit that I have defined these terms to help make my case. As theories or concepts they are up for debate which doesn’t really serve my purposes.

That being said, I believe all businesses can be viewed as “a production”. And the more efficiently a business uses its resources the better chance for profitable growth.

The Jakzen is itching to get back to Brand and customer service posts. I had a recent experience with this young company; I also have been stunned by how poorly I have been treated as a customer  shopping online in preparation for a little hop to the Caribbean. And my bank, Wells Fargo, pissed me off so bad this week I want to tell everybody.  The Good, The Bad, the Ugly- A Brand Saga.

But I will soldier on and in my next post to attempt to define the indefinable.

Put It Over There

I concluded my last post with a link to the definition of Just In Time Inventory. But before I continue, here is another definition of opportunity costs from Josh Kaufman’s The Personal MBA.

This is the wiki-link for JIT again. The only real reason I am introducing this process is to familiarize my readers of the concept of the  ’carrying costs’ of inventory. JIT, also known as the Toyota Production System, is at the core of the Kaizen school of constant improvement. And my readers know how I feel about that.

I think of JIT as simply an ideal. But not just for the cost of the square footage the excess inventory consumes but also because of the loss in opportunity.

So here is a dramatic oversimplifcation…

Let’s say Toyota produces 10 million cars a year worldwide. (It sold over 2 million Prius’ alone in 2010). That means they need 10 million front windshields, 10 million rear windshields, and 40 million windows to produce 10 million cars. Where are they going to put all that stuff? And that is just the glass! Using the JIT model they know that they only need about 55,000 front and rear windshields a day and if they can get them delivered each day they don’t need to stock them at all. And if they manufacture the part, the same numbers apply.

My readers that own small businesses are thinking something like, “Well that makes sense for them but it doesn’t relate to me at all.” So let’s look at the similarities for a second. All businesses strive for profitable growth. Most all businesses have challenges with how they use their space. And businesses who use their space more efficiently and profitably see both bottom  and top line growth, by definition.

I just clicked over to this definition of “economies of scale”, which as I understand it, is the opposite of what I just explain. Lo and behold, there is mention of the Toyota Production System and how certain people like me think it’s a bit of a myth.

Go Figure

The Cost Of Being Blind

My approach to operational excellence and efficiency relies heavily on the concept of “opportunity costs”.

Generally speaking, opportunity costs refer to asset allocation and are the measurement of a decision or action not taken. Because of this, not that. This principle is the foundation of many theories in economics and finance. To learn more click here.

For our purposes, and by that I mean production and/or order fulfillment, opportunity costs are those things (time, money, space) foregone  by a decision. These are not so easily seen.

In perhaps the earliest endorsement of consultants who possess my powers (see below), here’s the opening salvo of Bastiat’s What Is Seen And Not Seen from 1848. Hit it, Frederico… “In this economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.”

Finally, although a single act may have many perceived costs only a single alternative is “the” cost. For example, if you choose to wear red, it prevents you from wearing any other color. But the “cost” of choosing red is only that you lost the opportunity to wear blue or green or any other single color, not every other color.

I argue, however, that when costs are measured in time, money and space it is likely that a single alternative strategy can produce exponential gains exceeding a single cost. When this happens your operation becomes more efficient. And that’s rockin’ good news!

Next up I will favor you with my limited knowledge of Just In Time inventory. I know, you can’t wait. So here’s a link to hold you over till I return.

I See Dead People

It has been some time since my last post. This has been partially intentional and partially unavoidable. I plan to shift gears away from branding and towards operations, which I feel is an equal part of the Jakzen’s offering. So here goes…

I modestly feel that I have a sixth sense about efficiency. I see waste and redundancy where others see smooth sailing. I have relatively little difficulty in providing alternative strategies that offer cost savings and increased revenues. That’s one of the cool things about efficiency; it can effect both the bottom and top line simultaneously.

The challenge then becomes in framing these fixes in a way that the business owner will feel comfortable with. Change is often a dirty word to a successful entrepreneur. It represents choppy waters to them.

The thing about change is that once endorsed and adopted by the leader, its work is done. It might require a one time administrative tweek or a slight amount of retraining but the cost savings will vastly outweigh the implementation costs.

Constant improvement in this way makes a company more competitive. So for awhile, at least, I will be challenging my readers to take a look at ‘how we have always done it’.

Stay tuned.

WOW, I’m Happy- Conclusion

This post will wrap-up my Delivering Happiness mini-series and will look at Zappos phenomenal customer service. But first a quick look back.

In the first post I discussed Tony’s focus on kaizen, the business principal of constant improvement, from whence my name, Jakzen, is derived. He extends this to personal improvement, which I would guess is much tougher, but still a fantastic goal. In this week’s Fortune Mark Zuckerberg (heard of him?) defines his Hacker’s Way as, “…an approach to building that involves continuous improvement and iteration.” Preach On.

The second post dealt with the famous Zappos’ Culture. Tony and crew have done an unbelievable job at making work fun, meaningful and collaborative for their employees and partners. I think this aspect of the Zappos is the most enviable and probably the hardest for even a small company to replicate. But it is not impossible and I believe when the boss is also the HR department, all it takes is vision and backbone. In short, Leadership.

Which brings us to Tony’s customer service that is WOW worthy.  Hsieh’s version is like ” thrill and delight” on steroids. Overnight shipping, great brand ambassadors in the call center, and a “up to one year’ return policy to name a few. You get the idea…WOW!

Way back in October of 2010 I wrote several posts (four pages below) about such matters. In it I mentioned the trend away from the ‘per transaction’ cost/profit metric and  towards a  ’ lifetime of customer’ approach.  Hsieh has a way of freaking people out by how great Zappos’ customer service is. And they keep coming back, they tell their friends and they shop with him for others.

A very sweet business plan.

A Not So Brief Aside

Before I finish my posts on Tony Hsieh’s Delivering Happiness, which will deal with Zappos’ WOW customer service, a few thoughts.

As I have mentioned, reading this book I was immediately struck by the similarities between his strategies and those I espouse here. And I was reminded of an old ad campaign with the call to, “Read the book!”, “It’s in the book”, “You have to read the book!”.

It took me probably two months before  I remembered the advertiser. Ring any bells? Only those of a certain age will have been exposed to the campaign as I think it ran mostly in the 70′s and early 80′s. My answer is below*. My point is that successful branding efforts remain in long-term memory a very long time. Obviously or they wouldn’t call them “long-term”. Duh.

X   X   X

One thing I would have liked Hsieh to do is provide a timeline. However, had one been provided, it would have disproved one of the Jakzen’s main tenets; that  great companies start brand building from their outset.

Both the focus on brand and culture came after a good deal of success. And all I can say about that, is it’s remarkable that he was able to pull it off. And I suspect without a deep cut due to a layoff which allowed him to remove those employees who didn’t have the necessary “team” gene, it may not have been possible.

X   X   X

Finally, I felt a real kinship with the Zappos’ story because it began at the same time (1999) as my first ecommerce endeavor. This is chronicled in my post last year titled, Success Is As Success Does. (see below)

What really blows me away is that while I barely made it past launch, Zappos’ sales in year three were $36 million. And for most of that year, the company was within 60 days of folding. In other words, it was somehow the case, that it was costing Zappos more than $36 mil to gross $36 mil. I’m stumped by how that is possible. But it lends a certain suspense to the tale. Once sufficient funding became available and a focus on Brand and Culture were in put in place,  they never had to worry about paying their bills again.

X   X   X

*Time Life Books

Culture Club – 2 of ?

Continuing with our discussion of Hsieh’s, Delivering Happiness, we will look at how the Zappos brand has been built on the culture they have created.

I have not dedicated that much space in the past to internal branding. And even though Tony doesn’t call it that, Zappos has done a masterful job of creating a culture that is so strong that he believes “the culture is the brand”. I do not agree with this strictly on semantics, but as he is a kazillionaire, I won’t protest too much.

Think about the culture of your workplace. Do you love your job and your coworkers? How easy or difficult are the company’s internal communications? Is there a clear set of guidelines for behavior? Is it abundantly clear how you should act in every situation? Is your future track similarly clear?

In Tony’s chapter, Platform For Growth, he describes how he and his coworkers were able to, in effect, create an Asshole-free Workplace™. And the rock on which it is founded are 10 Core Values . These core values are different than the ones I often write about that relate to brand identity. These core values are directed not at the consumer but at the employees.

Very important to all of this is his contention that these core values remain front of mind and not be buried in an employee handbook. Even more important, that the commitment to these beliefs must rise to the level that they be used as a basis for hiring and firing. And when they reach this level the culture has a way of self-replicating itself (ok, I just made that up…).

Is it that simple? Can your company rid itself of assholes? A good place to start is to stop hiring them; and firing the grandfathered in ones. So, yes it is that simple.

Wow

Ah, Happiness- 1 of ?

My business book of the year for 2011 (published in 2010) was Tony Hsieh’s Delivering Happiness. Hsieh’s book is partly a memoir of his entrepreneurial experiences as a young man which reminded me of Rich Dad Poor Dad. Then he talks of his first start-up which he sold to Microsoft and the lessons he learned there. The book also has many excerpts from his colleagues at Zappos, which he funded initially as a VC with his firm Venture Frogs. The rest is history.

As I said in my review (see below) this book seemingly shared The Jakzen’s Group’s DNA. Hsieh (pronounced Shay) uses different terms in places but he puts the emphasis exactly where I do. In this sense, this book was personal to me yet approachable to everybody, especially those who have web based retail business experience.

My company’s name, Jakzen, was formed by my first name and the term “kaizen” which means constant improvement. Tony talks about “constant change” which mirrors exactly what I preach, although he very wisely adds that these changes should be from the bottom up. My focus is more on the ‘top’ being open to change regardless of where it derives, often looking to others (best practice) for ways to improve.

One of the excerpts, an actual  company blog post, was written by Zappos’ CFO, Alfred L., which I found very enlightening. He asks, what if you could improve your offering or process by 1% a day? Does that mean at the end of the year your company would be 3.65 times better (365%)? No. It means that at the end of the year your company would be 37 times better (his math).

He doesn’t stop there. He asks his employees to consider improving themselves 1% a day. Preach it Al, “Wake up everyday and ask yourself not only what is the 1% improvement I can change to make Zappos better, but also what is the 1% improvement I can change to make myself better personally and professionally. In the end we, as Zappos, can’t grow unless we, as individuals, grow too.”

Wow.

Three Links/ No Waiting

In my last post I mentioned a company challenged by their own web content. One of my first posts The Write Thing (way below) talked of this all to often phenomenon. Within an hour of me pointing this out, I received Seth’s daily post. I am happy to report that the specific mistake I pointed out has been corrected. You A Flake?

This next link is from a weekly blog by Nigel Hollis who is with the advertising powerhouse, Millward Brown (see The Branded Mind -below). I was surprised that this post had no comments. Because I started this year with a very basic look at brands, I took this opportunity to write a somewhat scholarly reply. By scholarly I mean I made up some stuff. Impressions

The final link is a Ted video from Derek Sivers, who is well known to my readers. It is fun and I was reminded of it at recent G-Love concert. It’s A Movement!

Stay tuned for ‘Happiness.