Small Business -- Can They Grow and Profit Without Taking on Staggering Debt?

This past June, Manny Skevofilax published a book entitled Ultimate Profit Management: Maximizing Profitability as You Grow Your Business, which details how small businesses can achieve reasonable, prudent growth while avoiding debt. He explains the readily available tools entrepreneurs can use to ensure that their businesses do not turn unprofitable as they grow them. He posits that it makes sense to resist the lure of the high-growth, no-profit strategy and instead embrace the approach of steady growth with profits.

When I spoke with Manny this month, I asked him: "How do you define prudent growth and how can small businesses avoid crushing debt?” Here is his full answer:

In my opinion, “prudent growth” is defined as growth that increases the net income of a business.  “Prudent growth” is usually accomplished slowly, with new revenue acquired at your business’s appropriate margin, in conjunction with the judicious use of debt.  In simpler terms, you do your best to increase the profit of your business without increasing the debt much.  For example, some businesses bring in new revenue (“growth”) that isn’t profitable for one reason or another.  If the business incurred marketing expenses to bring on this unprofitable revenue, how are these marketing expenses going to be paid?  Since there was no profit made from this revenue, there is no money to pay these marketing expenses.  The money needs to come from somewhere and it usually comes from taking on debt.  This scenario describes how a business can grow its revenue and make less profit overall.

If this scenario continues, a business will have poor cash flow and more debt than it can repay.  Sometimes, this scenario causes a business to turn unprofitable which can further aggravate its poor financial situation. Therefore, it is important to make sure that you are growing your business profitably and that you are taking on debt for the right reason.  If you see the need for short-term debt for a sound business reason, then determine what cash flow expectations or enhancements will occur to repay it in the short term. Otherwise, your debt continues accumulating, as do the interest payments, and your flexibility is continually reduced.

To avoid crushing debt, use a portion of the profits that you earn to reinvest in your business for growth. Use a bank line of credit to finance the carry of your accounts receivable and inventory. You grow best when you’re in a strong position, not when you have your hat in your hand in line at the bank. The takeaway here is to use borrowed funds judiciously! 

What are your thoughts regarding Manny Skevofilax's perspective? What are your experiences with growing a small business?

The Mental Well-Being of Colleagues and Continuous Improvement Culture -- Are They Intertwined and Mutually Reinforcing?

At the beginning of June, Chris Butterworth published a new book entitled Why Care? How Thriving Individuals Create Thriving Cultures of Continuous Improvement Within Organizations, which contends that to create a sustainable culture of continuous improvement there must be an organization-wide focus on mental well-being at the individual level. A culture of continuous improvement nurtured in the right way, however, will indeed support mental well-being and help create a thriving organization.

When I recently spoke with Chris about his book, I asked him: "How are mental well-being and a culture of continuous improvement intertwined and mutually reinforcing with an organization?" Here is his complete answer:

Today’s ever-increasing VUCA (Volatile, Uncertain, Complex, and Ambiguous) environment means that organizations must be more adaptable and flexible than ever.  Organizational performance depends on the collective psychological capacity (emotional and cognitive energy) of everyone in the organization.  Without high levels of mental, or psychological, well-being individuals suffer, organizational performance is stifled and continuous improvement (CI) is throttled.

Creating high levels of mental, or psychological, well-being means starting with an inside-out perspective focused on mental well-being at an individual level.  Like the nucleus of an atom, high levels of individual psychological well-being unleash psychological capacity. This precious resource is critical for people to be able to do their work effectively and continuously improve their work. It provides the organization with the energy and agility to prosper. 

However, individual psychological well-being is not enough on its own.  High levels of psychological well-being without a robust CI system limit people’s potential to fully utilize their psychological capacity. Both systems are essential to a thriving organization. Psychological well-being and CI working together create a thriving high-performance environment, where individuals feel they matter, are cared for, and can grow and develop.  Together they create environments where teams can solve problems, innovate, adapt, and grow generating sustainable organizational success. In our book Why Care? we explore how to do this at different levels – individual, team, leader, and organizational and the foundations needed, such as diversity, equality, inclusion, belonging, and an understanding of the brain.

The CI system must be co-designed to leverage the available psychological capacity of everyone in the organization.  In Why Care? we illustrate how the CI system and tools can be reorientated to engender and maximize psychological well-being and how continuously improving work also increases levels of psychological well-being.  Not only are the two intertwined but they are mutually reinforcing.  We believe this is not just a nice thing to do. It is critical to the future of every organization and its people.

Do you agree with Chris' statements? Does your continuous improvement initiative include the psychological capacity of colleagues? 

Toxic Workplace Cultures -- Can Organizations Recover from Them?

Just this past April, Seth Allcorn published a new book entitled Managing Toxic Leaders and Dysfunctional Organizational Dynamics: The Psychosocial Nature of the Workplace, which explores work-life dynamics and the effects toxicities and dysfunctions have on members of organizations.

When I spoke with Seth this past week, I asked him: “How can organizations deal with toxic cultures and recover from them?” Here is his complete response: 

Leaders and organization members can become contributors to creating a toxic workplace that includes a wide range of dysfunctions and oppressive organizational dynamics that limit creativity and productivity. This is regrettably common and limits what the organization can achieve. Healing a toxic organizational culture begins by acknowledging its presence. This opens it up for inspection, “What is it like to work here?” However, like many if not most organizational problems, calling an organizational toxic culture into question can threaten leaders who may be a part of the problem. Organization members may also identify with these leaders and contribute their own harmful behavior. This process of “selecting-in” to these organizational dynamics by organization members creates a like-minded group who defend the toxicity. As a result, when striving to create positive change, a sense of threat may arise for advocating for change. Even so, taking up this challenge is to be applauded. However, the threats associated with creating change may lead to engaging a “disposable” psychosocially informed organizational consultant. 

The consultant should begin by first listening to organization members and then locate a meaningful and as near as possible non-threatening plan for change to avoid resistance to change. If the sense of threat is not too great, a group of motivated organization members may step forward to support the consultant and facilitate the change process. The consultant should also, after listening to a cross-section of organization members, engage the leadership group in a discussion of the findings and facilitate their development of a non-defensive plan to respond to the findings. The plan should be designed to safely engage everyone in a process of no-fault change. The direction of the change process should be toward creating a more open, inclusive, collaborative, trusting, and respectful culture.

What do you think of Seth Allcorn's perspective? Have you worked in organizations in which the culture would be considered toxic? Did the organization take steps to improve it? Was it successful?

Leadership Principles -- How Do They Build Motivation and Commitment?

Back in March, David Sharpley published a new book entitled Leadership Principles and Purpose: Developing Leadership Effectiveness and Future-Focused Capability, which provides a fresh perspective on leadership and the steps required to achieve high performance. It explores how we create purpose by moving from vision and values through principles to action. When I spoke with David this month, I asked him directly: "How do principles shape competencies and build motivation and commitment?" Here is his complete answer: 

We hear executives talk about "vision" and "values," but there’s less mention of the principles that define how activities are completed. These provide points of reference and set boundaries. They also underpin competencies linked to high performance. Higher-order principles influence people’s expectations of what is fair and reasonable. They help clarify how leaders create enabling conditions that enhance motivation, commitment, and shared purpose.  

Self Determination Theory (SDT) offers insight into why principles matter. The SDT Model reveals that everyone has an innate need for positive, trust-based Relationships. We also seek to develop the Competence that fuels meaningful activity and builds motivation. Autonomy adds to self-direction, responsibility, and purpose. Underlying needs are also reflected in people’s desire for social cohesion and stability. Significant principles therefore relate to Justice, Equality, Compassion, and Accountability. Principles are closely aligned with ethical values but expressed in the form of rules, protocols, and norms.  

Clearly stated principles ensure consistency of approach, support cascaded leadership, and define the work culture. Effective leaders build on principles that will develop capability and create shared purpose. They appreciate that discretionary effort is influenced by a range of factors, which include opportunities for self-directed, meaningful activity. Significant, Superordinate Principles strengthen trust-based relationships and motivation. They help build commitment, which is the emotional connection and identification people feel towards the organization. It is enhanced when people feel valued and there are opportunities for personal development (e.g. "my manager supports my development"). Commitment helps maintain motivation when we are faced with the inevitable setbacks that undermine progress.  

Over time, authentic leaders internalize important principles, including an emphasis on transparency, equality, and accountability. Clear principles increase personal conviction, but also our willingness to develop capability in others. Acting on the basis of higher-order principles conveys integrity and establishes a clear rationale for effective action, which adds to the leader's credibility. Principles have a significant role in building and maintaining people's motivation and commitment. They help leaders create shared purpose, develop effective systems, and achieve more meaningful connections with others.

What do you think of David's perspective? What is the state of leadership in your organization? Do the principles stated and practiced build motivation and commitment?

Virtual Reality and Artificial Intelligence -- What is Their Role in Coaching and Training?

In February, Matteo Zaralli published a new book -- entitled Virtual Reality and Artificial Intelligence: Risks and Opportunities for Your Business -- which focuses on how virtual reality (VR) and artificial intelligence (AI) are reshaping the way we learn and coach. 

When I spoke with Matteo this past week, I asked him: “What are some of the ways virtual reality and artficial intelligence are being incorporated into coaching and training?” Here is his complete answer:

Virtual Reality (VR) and Artificial Intelligence (AI) are revolutionary technologies with the potential to radically transform the landscape of learning and coaching, significantly accelerating, enriching, and enhancing the process.

Exploring the domain of artificial intelligence, we see how the accessibility to information and the speed of its acquisition highlight the transformative power of AI. However, its application extends far beyond this. Recently, Open AI introduced a groundbreaking development with the launch of a vocal feature for ChatGPT, offering users the opportunity to interact with an advanced virtual assistant, further expanding the horizons of digital learning.

In parallel, virtual reality is opening new frontiers in education and coaching, thanks to the introduction of cutting-edge devices from Oculus and Apple. Studies conducted on these platforms demonstrate that learning can be up to four times faster, with improved performance and optimal concentration, thanks to an immersive environment that minimizes distractions.

By combining the strengths of VR and AI, we can envision innovative scenarios such as public speaking, healthcare procedures (such as surgical room preparation and intricate surgeries), work safety certifications alongside standards compliance, construction projects, engineering challenges, and energy and plant maintenance represent areas where advanced tools significantly enhance learning and execution of specialized skills; where users can practice in a safe, interactive, and emotionally engaging context. This environment is enriched by the presence of a virtual assistant, with whom users can discuss specific topics, offering an unprecedented learning experience. For coaches and instructors, often constrained by limited time, this synergy provides a valuable simulation tool, allowing them to efficiently support every individual and ensure a high level of continuous learning.

The benefit of having a tool to train and exercise our skills is needed today more than ever. Technology runs, companies run, and more and more skills and abilities developed quickly are demanded at work, but like everyone, the day consists of 24 hours. So it required a tool that allows us to learn faster, with an impact on our recollection and memory, and above all that untied from space and time.

What do you think of Matteo's perspective? Has VR and AI been incorporated into your organization's learning and coaching processes? Have the results been successful? 

The Future of Manufacturing -- What are the New Core Technologies?

This month, Philip J. Gisi published his third book with Productivity Press entitled The Dark Factory and the Future of Manufacturing: A Guide to Operational Efficiency and Competitiveness. His new book provides a view into the future and direction on how to navigate the journey to a more automated, smarter, and continuously learning factory. This book consolidates the major elements of the fourth industrial revolution and describes them in clear terms within the context of integrated manufacturing. It creates awareness and a fundamental understanding of the advanced technologies that are coming together to facilitate highly automated, smarter, agile, and sustainable operations.

When I spoke with Phil this past week, I asked him: "What are some of the newer core technologies in manufacturing and how are they being used?” Here is his complete answer:

Manufacturing is undergoing a significant transformation with the adoption of several newer core technologies such as the Industrial Internet of Things (IIoT), Artificial Intelligence (AI), Augmented Reality (AR) / Virtual Reality (VR), and Digital Twins. IIoT involves connecting machinery, sensors, and other devices to collect and exchange data. This data can be used for real-time monitoring, predictive maintenance, and improving overall efficiency.  AI is being used in manufacturing for process optimization, quality control, predictive maintenance, and even autonomous decision-making. Machine learning algorithms can analyze vast amounts of data to identify patterns and make predictions to avoid unplanned equipment downtime.  

AR and VR technologies are being used in manufacturing for training, design visualization, and maintenance. These technologies can help improve efficiency, reduce errors, and enhance collaboration while the application of a digital twin, serving as a virtual model of a physical manufacturing asset, process, or system, can enable real-time monitoring, simulation, and optimization, leading to improved performance and reduced downtime. As I stated in my latest book, “Manufacturers must be aware of, understand, and embrace these changes to stay competitive and meet the evolving demands of customers in the modern era. This book enhances the awareness and understanding of these core technologies by explaining what they are and how they are being used in manufacturing."  Clearly, these technologies are reshaping the future of manufacturing and will continue to do so as they evolve within the scope of the Fourth Industrial Revolution or Industry 4.0 for short.

What do you think of Philip's perspective? Are these core technologies now part of your business? If so, have they delivered the expected results?

Lean Six Sigma -- Its Evolving Best Practices and Issues

This past December, Terra Vanzant Stern published the third edition of Lean Six Sigma: International Standards and Global Guidelines. Lean Six Sigma (LSS) is designed to accommodate global challenges and constraints by capitalizing on Six Sigma and Lean Thinking, and her book assumes that the overall goal of operational excellence is to ensure that organizational tasks and activities are being performed to the best of their process capabilities. It defines continuous improvement as activities that support and empower environments to make flexible decisions that lead to ongoing improvement and effectiveness. It covers new global LSS standards, international implementation of process improvement programs,  new international LSS applications, and international LSS areas of competency.

When I spoke with Terra this month, I asked her: "What important updates are covered in this third edition of your book?” Here is her complete answer:

The updates included in this edition are crucial because I have taken Lean Six Sigma to new heights, incorporating cutting-edge updates and advancements that will leave you captivated. With a focus on enhancing change management and data governance programs, this edition is a game-changer for organizations seeking to optimize their processes and drive sustainable growth.

What sets this edition apart is its ability to seamlessly integrate process improvement methodologies with change management and data governance. We understand that these three pillars are essential for organizations to thrive in the current dynamic business landscape. By leveraging Lean Six Sigma principles, you can streamline your processes, drive efficiency, and achieve remarkable results.

Imagine a world where every process is optimized, every change is seamlessly implemented, and every data point is governed with precision. This vision becomes a reality with the help of the latest edition of this book. I have meticulously crafted a framework that empowers organizations to achieve operational excellence while ensuring compliance and data integrity.

But what truly makes this edition intriguing is the transformative power it holds. By embracing Lean Six Sigma, organizations can unlock their full potential and drive a culture of continuous improvement. From reducing waste and defects to enhancing customer satisfaction, the possibilities are endless.

With this third edition of the book, you surely discover how Lean Six Sigma can revolutionize your organization's process improvement, change management, and data governance programs. Embrace the power of Lean Six Sigma and unlock a world of endless possibilities.

The new edition of this book assists you as you embark on a journey toward operational excellence, enhanced change management, and impeccable data governance. It's time to revolutionize the way you do business.

What are your experiences with Lean Six Sigma initiatives? What issues and aspects do you feel should be incorporated as organizations change and evolve?