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The Search for Best
Practices
The Search for Best
Practices
Doing the Right Thing
the Right Way

Rob Reider
The Search for Best Practices: Doing the Right Thing the Right Way
Copyright © Rob Reider, 2015.
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted in any form or by any
means—electronic, mechanical, photocopy, recording, or any other
except for brief quotations, not to exceed 400 words, without the prior
permission of the publisher.

First published in 2015 by


Business Expert Press, LLC
222 East 46th Street, New York, NY 10017
www.businessexpertpress.com

ISBN-13: 978-1-63157-077-3 (paperback)


ISBN-13: 978-1-63157-078-0 (e-book)

Business Expert Press Human Resource Management and Organizational


Behavior Collection

Collection ISSN: 1946-5637 (print)


Collection ISSN: 1946-5645 (electronic)

Cover and interior design by Exeter Premedia Services Private Ltd.,


Chennai, India

First edition: 2015

10 9 8 7 6 5 4 3 2 1

Printed in the United States of America.


Abstract
The book is geared to those interested in doing the right thing the right
way in spite of organizational roadblocks. The book is a “how to” book to
assist management and operations personnel to analyze their operations
in a program of continuous improvements and on-going search for best
practices so that each entity operates most economically, efficiently, and
effectively—tied into why the entity is in existence in the first place. Best
practice techniques assist the company in identifying its critical problem
areas and treating the cause and not the symptom. With sensible business
principles as the hallmark for the company’s quest for best practices, the
company can be clear as to the direction of movement and avoid merely
improving poor practices or matching competitors’ less than desirable
practices—that is, being less inefficient than competitors. Clear business
principles that make sense to all levels of the organization allow the com-
pany to identify and develop the proper best practices. In this manner,
everyone in the organization is moving in the same desired direction—
and singing from the same songbook. The viruses that corrupt a business
organization can be widespread and quite contagious. Nouveau quick
fixes may be okay in the short term, but over the long haul the company
needs to know what they are doing. If the company doesn’t, some other
company will.

Keywords
best practices, communication systems, corporate culture, economies,
efficiencies and effectiveness, management, operating systems, organiza-
tional atmosphere, organization structure, personnel, teamwork
Contents
Preface��������������������������������������������������������������������������������������������������ix

Chapter 1 Overview: Knowing Where You’re Going��������������������������1


Chapter 2 Customer Service������������������������������������������������������������19
Chapter 3 Cash Conversion������������������������������������������������������������41
Chapter 4 Corporate Culture����������������������������������������������������������79
Chapter 5 Organization Structure���������������������������������������������������95
Chapter 6 Organizational Atmosphere������������������������������������������115
Chapter 7 Organizational Communications����������������������������������135
Chapter 8 Management�����������������������������������������������������������������159
Chapter 9 Personnel����������������������������������������������������������������������187
Chapter 10 Operating Systems��������������������������������������������������������217

Appendices�����������������������������������������������������������������������������������������235
About the Author��������������������������������������������������������������������������������247
Other Books by Rob Reider������������������������������������������������������������������249
Index�������������������������������������������������������������������������������������������������251
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Preface
I have a confession to make—I am a management consultant. That’s the
professional who charges you an exorbitant fee to review your operations,
tells you what you’re doing wrong, and then sells your good ideas (best
practices) to their next client. I call this the “honey bee” concept, which is
the sharing of best practices from one client (the honeysuckle) to another
client (the skunk cabbage). In fact, one of the major skills to look for in
hiring a management consultant is the ability to recognize a good system
or best practice that works elsewhere, borrow it, and then make it work
for your company. I call this the consultant’s version of three-card Monte
or steal the old man’s bundle. A consultant (external gun for hire or inter-
nal staff) should be hired for his or her expertise in creative problem solv-
ing by identifying trouble spots and the best practice for remedying the
situation. It doesn’t really matter where the solution comes from or that
it’s not the way the company or the industry has always done things. If it
works, do it. This is called “doing the right thing.” The next step is keep-
ing it that way and continually improving.

DO THE RIGHT THING


AND KEEP IT THAT WAY

I try to look at myself as an organizational problem solver and change


agent—a facilitator or merchant of good ideas that work. In the past, I
tried working with management, and many times, I provided some pretty
good recommendations and best practices—less costly, more efficient,
and producing effective results—for improving their operations. It was
difficult for me to imagine why they would delay one second in imple-
menting these “breathtaking” systems. Eventually, I realized that they
might like things the way they are, the system worked for them, so why
change it.

IF THE SYSTEM WORKS FOR YOU,


WHY CHANGE IT?
x Preface

Many times my “out of this world” best practice recommendations


gathered dust in some manager’s “to do” or “do–do” pile. As I get my pro-
fessional stroking from affecting positive change, this was extremely frus-
trating. Many of my clients were confused as to why I got so angry when
they didn’t follow through on my recommended best practices. I realized
that I had to work with the entire organization not just management to
ensure acceptance and implementation of my best practice recommenda-
tions. Immediately, I began to see improvements in best practice imple-
mentations. Operations personnel would help to identify trouble spots as
well as work toward positive system changes.

BEST PRACTICES ARE BEST


IMPLEMENTED BY THOSE INVOLVED

I was sitting at a bar in a fancy new airport hotel, one of those all glass
with an atrium and bar in the center, offering elaborate happy hours,
focused on keeping you and 4,000 downsized corporate employees fed
and mellow for the next month. I had just finished conducting a profes-
sional seminar for managers and executives on how to operate their busi-
nesses more economically (at the least possible cost), efficiently (using the
best available systems), and effectively (achieving maximum results). The
theme of the seminar was how to work less and achieve more through the
use of best practices.

WORK LESS, ACHIEVE MORE,


USING BEST PRACTICES

During the course of the seminar, I had shared numerous anecdotes


on some of the good, the bad, and the ugly experiences working with
clients relative to implementing best practices. Many of the seminar par-
ticipants identified with these organizational horror stories, some even
had more horrible stories. Amazingly, very few related to the best practice
successes I shared, questioning me as to whether such organizations that
had learned to “do the right thing” actually existed.

ORGANIZATIONS THAT DO THE RIGHT THING—-


AN OXYMORON?
Preface xi

I sat alone at the bar munching on the executive health snack, peanuts
and pretzels, when the bartender came over. I asked her where the crowd
was. She responded that it was like this most weeknights. I asked her why
they continued to put out such an elaborate spread of food with so little
traffic. She shrugged her shoulders and said “don’t ask me, I only work
here, for less than minimum wage, go ask the so-called manager, if you can
find him.” I shook my head, always the consultant trying to solve every-
one’s problems. As this was my attitude adjustment time after dealing with
kvetchy business managers all day, I let it drop but stored what the bigger
picture was in my mind—that is, incompetent management and under-
employed personnel. I was sensing a national trend of corporate decay in
my travels. The country’s corporate organizations were in need of an atti-
tude adjustment. I ordered them a consultant’s dinner—a double martini.

INCOMPETENT MANAGEMENT AND


UNDEREMPLOYED PERSONNEL—
A PERFECT MATCH

I noticed three of my seminar participants wandering around. I


turned away but to no avail; they found me anyway. I couldn’t ignore the
smack on my back by the largest of the three (Hulk Hogan in a three-
piece suit with purple suspenders) and an invitation to buy me a drink.
As a management consultant, I had learned to never refuse a free drink,
particularly from a potential client, and the best practice of “what you
don’t spend remains in your pocket.” My let’s get away from it all reverie
had become let’s pick the consultant’s brain or maximizing the seminar
fee. My goal was to not give away potential consulting fees for the price
of a happy hour well drink.
Of the three seminar participants, one was a vice president of manu-
facturing (an American endangered species) for a small electronics busi-
ness, one was a “chief falsifying officer” (CFO) of a medium-sized publicly
held conglomerate producing snack items and roofing shingles, and the
other was the director of personnel (do personnel really need directing?)
for a large multinational company that had downsized more employees
than the other two companies employed. Each of them, in their own way,
asked me what was happening in their companies. What used to be the
xii Preface

standard operating procedure (SOP) was now the cause for dismissal, and
garden paths were replacing career paths.

CAREER PATHS ARE


NOW GARDEN PATHS

They were all fearful of losing their jobs, although each one expressed
that he or she was doing a good job. They wanted to know why they felt so
desolate in their situations. I told them that I couldn’t provide specifics with-
out analyzing their individual situations, a typical consultant’s response, but
if their companies would implement the best practice techniques discussed
in my seminar, their situations would improve. The CFO said that would
be wonderful, but it would never happen at her company. Her boss really
should have been at the seminar, but he was too busy attending meetings
to discuss a new office layout to reduce cubicle space allowing for more
workers per square inch without reducing a manager’s private office space.

THERE’S ALWAYS TIME TO DO THE WRONG THING AND


DO IT OVER AGAIN,
BUT NEVER ENOUGH TIME TO DO THE RIGHT THING TO
BEGIN WITH

I told them the best they could probably do in their circumstances was
to get enough people in their organization that felt as they did and then
“screw them from the inside.” To emphasize the point of the dangers that
can befall when you assume your company is trying to do the right thing,
I shared the story of one of my close professional friends, Jack Ratter. Jack
was the executive vice president of operations for a large industrial pack-
aging manufacturer. Jack’s company, like many in the present economy,
was looking for ways to do things better—that is, revenue enhancement
and cost reduction. I was working with Jack’s group to identify those
product lines of highest profitability together with earmarking those cus-
tomers with the greatest potential for ordering these items.

IF YOU KNOW THEY’RE WRONG AND CAN’T CHANGE


THEM,
SCREW THEM FROM THE INSIDE
Preface xiii

Immediately following the identification of high profitable product


lines and high potential customers, the sales team was assigned to those
product lines and given the task of negotiating with identified customers.
Lo and behold, the company landed four major orders for these products
surpassing previous year’s total sales. At the same time, I was helping iden-
tify opportunities for effective cost reductions.
Jack was ecstatic, he wanted to kiss me, but we settled for a subtle
wink. A blank check would have been better, but there’s always a next
time. Jack went immediately to the chief executive officer (CEO); I actu-
ally saw him skipping, with the production plans and staffing patterns
developed to meet customer delivery schedules. But, in less than 10 min-
utes, Jack returned, running down the halls screaming “doesn’t anyone
know what they’re doing?” Jack was hysterical, Mr. Three Piece Suit gone
awry, ranting about the inmates in charge of the asylum.

DOESN’T ANYONE KNOW


WHAT THEY’RE DOING?

While we were working on plans for how to do the right thing, the
CEO and top management were developing cost-cutting plans to make
next quarter’s numbers look good to the stockholders. Their plans were
so counter to ours that Jack couldn’t hire additional personnel to meet
customer commitments, but had to cut 20 percent of present production
personnel to meet the CEO’s cost-cutting targets.

DO THE RIGHT THING—


DAMN THE POLICIES AND PROCEDURES

My seminar participants thought that this story was very funny and
close to home. They all agreed that change would also never work in
their situation unless they could change the thinking of their bosses, their
bosses’ bosses, and so on. I asked them how they thought this could be
done, as their bosses wouldn’t listen to them. They all said loudly and
in unison “why don’t you write a book, we think they can read.” So,
here goes. This is for all you decision makers who don’t have the time to
learn how to make the right decisions, in the hope that there are really
xiv Preface

i­ndividuals out there who do know what they are doing. Please, be there
for Jack’s sake.

IF ONLY I COULD CHANGE THEIR THINKING


TO MY WAY—THE RIGHT WAY

I never did get my “free” martini. I wonder if anyone was charged for it.
This book is intended for the big bosses who make the ultimate deci-
sions and get the golden parachutes, as well as the little bosses, and blind
followers who provide the basis for making these decisions and ultimately
get the golden screw. Those of you, who are interested in doing the right
thing in spite of the counter pressure within your organization, may also
gain some insights into the inner workings of organizational crazy making
and how to live with it or change it.

DO YOUR OWN THING,


BUT MAKE SURE IT IS THE RIGHT THING

Each section of the book discusses some of the right ways to deal with
things and shares some anecdotes on my experiences. Each anecdote is a
filmic moment of insight into some of the basic truths of organizational
existence and the search for best practices. If you recognize yourself or
your organization in any of these anecdotes, it may not be just coinciden-
tal. The viruses that are corrupting our organizations are widespread and
quite contagious. The nouveau quick fixes may be okay in the short term,
but over the long haul, the company better know what it is doing and
recognize the best practice and the right thing. If the company doesn’t,
some other company will.

I WOULD RATHER SIT ON A DRILL PRESS AND HAVE IT


ALL TO MYSELF,
THAN BE CROWDED ON A VELVET PANACEA
CHAPTER 1

Overview: Knowing Where


You’re Going
Organizations have been in existence for thousands of years, some suc-
cessful and long lasting, others short lived. Through the years there has
been no clear-cut criterion or formula for success. Many business organi-
zations have been successful through such intangible attributes as dumb
luck, falling into a niche marketplace, being the first, consumer accept-
ance, and so on. Other companies using the best available business acu-
men and methods have failed miserably. Identifying, implementing, and
maintaining the secrets of success are an elusive target. Banking on what
has worked in the past and your own internal ouija board is an ineffective
substitute for objective internal appraisal and external comparison and
analysis in the search for best practices. The quest for best practices main-
tains the organization’s program of continuous improvement and helps to
gain competitive advantage.
The search for best practices begins with an analysis of existing opera-
tions and activities, identi­fies areas for improvement, and then establishes
performance standards on which the best practice can be measured. The
goal is to improve each identified activity so that it can be the best pos-
sible, and stay that way. The best practice is not always measured in terms
of least costs, but may be more in terms of what stakeholders value and
their expected levels of performance.

THE BEST SYSTEM IS THE SIMPLE SYSTEM—


AND THE ONE THAT WORKS

Before one even thinks about what best practices might be relevant for
the organization, it is necessary to determine why the organization is in
existence. When I ask my clients this question, invariably the answer is to
2 THE SEARCH FOR BEST PRACTICES

make money. Although this is partly true, there are really only two reasons
for an organizational entity to exist:

1. The customer service business: To provide goods and services to satisfy


desired customers so that they will continue to use the organiza-
tion’s goods and services and refer it to others. An organizational
philosophy that correlates with this goal that has been found to be
successful is “to provide the highest quality products and service at
the least possible cost.”

LET THE CUSTOMER BE YOUR GUIDE,


DON’T SELL THEM WHAT YOU WANT,
LET THEM PURCHASE WHAT THEY NEED

2. The cash conversion business: To create desired goods and services


so that the investment in the organization is as quickly converted
to cash, as possible, with the resultant cash-in exceeding the cash-
out (net profits or positive return on investment). The correlating
philosophy of this goal can be stated as follows “to achieve desired
organizational results using the most efficient methods so that the
organization can optimize the use of limited resources.”

GET THE CASH FIRST OR BEFORE YOU DELIVER


THE PRODUCT OR SERVICE—
LEVERAGE THE USE OF OPM (OTHER PEOPLE’S MONEY)

This means that we stay in business for the long term to serve our cus-
tomers and to grow and prosper. A starting point for establishing desired
best practices is to know which business the organization is really in (such
as the previous two) so that operational efficiencies and effectiveness can
be compared.

IT IS NOT THE SOURCE OF THE BEST PRACTICE


THAT IS IMPORTANT,
BUT WHETHER IT WORKS IN YOUR SITUATION
Overview: Knowing Where You’re Going 3

Once short-term thinking is eliminated, managers realize that they


are not in the following businesses and best practice decision making
becomes simpler:

• Sales business: Making sales that cannot be collected profitably


(sales are not profits until the cash is received and all the costs
of the sale are less than the amount collected) creates only
numerical growth.

It’s not booking sales, it’s collecting the cash

• Customer order backlog business: Logging customer orders is a


paperwork process to impress internal management and out-
side shareholders. Unless this backlog can be converted into
a timely sale and collection, there is only a future promise,
which may never materialize.

Backlog is an indication of inefficient


customer order scheduling

• Accounts receivable business: Get the cash as quickly as possi-


ble, not the promise to pay. But remember, customers are the
company’s business; keeping them in business is keeping the
company in business. And, normally, the company has already
put out its cash to vendors and into inventories.

Collect the cash, not the promise to pay

• Inventory business: Inventory doesn’t equal sales. Keep inven-


tories to a minimum—zero if possible. Procure raw materials
from your vendors only as needed, produce for real customer
orders based on agreed-upon delivery dates, maximize work-
in-process throughput, and ship directly from production
when the customer needs the product. To accomplish these
inventory goals, it is necessary to develop an effective orga-
nizational life stream that includes the company’s vendors,
employees, and customers.

The greater the inventory, the greater the inefficiencies


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