The Six Disciplines: Building Excellence in Small Businesses

"Unfortunately, many of us are caught trying harder and harder to "whistle a symphony" when we should really be building an orchestra."

According to Gary Harpst, author of "The Six Disciplines", even though small businesses collectively generate $5 trillion in sales in the U.S., the biggest challenge of an individual business is 'survival'. 80% of all new business start-ups are out of business within five years. And 80% of the 20% that survived do not survive another five years! That means that, on average, only 4% of small businesses starting this year will be around in 10 years.
What makes it so hard?

In his book "Six Disciplines for Excellence", Gary Harpst details a roadmap for small businesses to learn, lead and last. This book is based on over 30 years of experience and research into more than 300 small businesses - each with 10 to 100 employees. The result is a book which is lays out a systematic approach for building and sustaining a successful business - driven by excellence. This systematic approach is what Harpst has termed The Six Disciplines:
  1. Decide what's important. Based on your mission, values, strategic position and vision, what are your vital few objectives? What are you doing that you should stop doing?
  2. Set Goals that Lead. What are your business measures, targets and initiatives? And how do you engage your team?
  3. Align Systems. What in your business is not aligned with your strategy? How do you align your processes, policies, measures, technologies and people?
  4. Work the Plan. How and when do you define, review, rate and prioritize Individual Plans to ensure that your business goals are being worked at?
  5. Innovate Purposefully. How do you tap into the creativity of your team to create new and innovative ideas to solve problems and drive excellence in your business? As business owner, how do you recognize individual contribution?
  6. Step Back. How and when do you review the internal and external factors impacting your business? How do you review performance of people?
Gary Harpst and his team have put a tremendous amount of work into detailing the steps within each of these disciplines so that this book can really be used as a small business owner's manual. They have succeeded in developing a practical methodology for those of us who spend too much time "working in the business, instead of on the business". These disciplines define solid well structured approach that supports the small business from strategic and tactical planning to the execution of tasks to meet the business' goals every day.

This approach is not for large businesses - it is targeted at small businesses that employ between 10 and 100 people. It is also not for those who are looking for a 'quick fix'. Success in using The Six Disciplines takes ... well, discipline. You would not expect to see results of this approach within 6 months.

I like the approach and would recommend the book, as it is uniquely tailored for small businesses; it is well written with a lot of substance; and gives business owners a practical tool that they can use to implement business improvement for sustainability, growth and excellence.

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The Top 3 Myths about Business Intelligence

Myth 1. BI is a technology solution.
Myth 2. BI is all about data warehousing.
Myth 3. The IT function can take care of BI.


The July edition of the PMI Network magazine carries an article entitled Get Smart. In the article, Malcolm Wheatley outlines some good case studies that dispel the above myths around Business Intelligence.

The example that caught my eye (mainly because it is close to my heart) is that of Coca-Cola Amatil in Australia, and what they have done with BI to drive improvement. By using good business intelligence, they were able to avoid investing in additional production capacity by improving their existing line capacities. I'll let you read the details of this case, but the basic steps of BI were followed:

  • Collect data. At Amatil, they collected highly granular, second-by-second data off their line PLC's.
  • Store it. Warehouse your data.
  • Carry out that Analysis. Look and data trends and patterns over time or compare what is happening in one location over another. Those of you who have read some of my Six Sigma posts will see the relevance on BI in analysing processes to get to the root cause of problems.

Dispelling those Myths:

  1. BI is a technology solution. No, it is not. BI is a management initiative powered by data.
  2. BI is all about data warehousing. No, it is not. The analytics and reporting are at least as important. (Good to know when you are chosing a BI solution or vendor).
  3. The IT function can take care of BI. Yes, BUT - if you want measures that are 100% focused on the objectives of the business, the business better have total ownership of the BI solution. IT should certainly take care of the data warehousing.

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SMALL BUSINESS VIEW

What information do you need to run your business?
Understand what data your business processes generate. Capture and store it.
Make the time to analyze this data. Look for trends over time; for patterns that point to problems in your business.
Improve your business!

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