The E-Myth Mastery Program Systems Innovation The E-Myth Mastery Program Systems Innovation

General Reference General Reference

Business Development Process: GN-0030 Page 3
Business Development Process: GN-0030

Determine the system baseline by looking at its input/out-

Business Systems Innovation Checklist 4 put/cost. Input includes the resources required to operate the
system (staff, facilities, equipment, supplies, and information).
Output is the result produced by the system plus any by-products
The problem with innovation is that there’s no single formula that takes in all your information and waste the system generates. Costs are the costs directly
and returns the one and only right answer. But there are many useful guidelines and principles.
attributable to the system over an accounting period (month) and
These guidelines are compiled for you in the form of the Innovation Checklist, which is presented
the per-unit costs when the system produces units of output.
here. Use it to jump-start your common sense and imagination. With your work flow diagrams
and your input-output-cost information handy, use it to look for opportunities to improve or even Quantify and describe input and output in terms of its key indica-
reinvent your systems by focusing your attention on each of the items on the checklist. tors (quantity, quality, timing, and intangibles). [For more infor-
mation, review Systems Evaluation, GN-0020.] Having gathered
Don’t consider this a complete list. Rely on your experience, your judgment, your imagination.
this information, you now have the baseline against which you
Rely on the people who operate your systems and get the benefit of their experience, judgment,
will measure future performance.
and imagination. Think “outside the box” and don’t be afraid to be unconventional.
Analyze the system’s work flow. Work flow is the progression
When in doubt, experiment. Trial and error can be an effective way to innovate as long as it’s
guided by intelligence and an understanding of what you want to accomplish rather than a ran-
dom series of “try this” and “try that.”
5 of activities, materials, and information into, within, and out of a
system. Work flow has four components – task flow, materiel flow,
information flow, and layout. Task flow consists of the steps you
and quality? showed in your box-and-arrow diagram. Materiel and information
❐ Output: Does the system’s result meet all flows may or may not be significant for any one system, and they
your expectations and requirements? Are ❐ Spin-offs and mergers: Are any of the may or may not coincide with the task flows – it depends on your
the by-products valuable or should they be benchmarks important enough that they specific business. Layout is the physical arrangement of work sta-
minimized or eliminated? Are levels of should be spun off and developed as sys- tions, workspace, and the traffic patterns in the working area.
waste and rework at an absolute minimum? tems themselves rather than merely bench-
Work flow includes connections with other systems in your busi-
❐ Benchmarks: Are the benchmarks – the marks within this system? Are there any
ness and even connections with outsiders like suppliers, regula-
steps that make up this system – the appro- other systems that feed into this system that tors, creditors, and others. The system you’re working on occu-
priate ones? Are any additional bench- should be merged into this system as pies a place in the overall business and is interrelated with other
marks needed? Are there any that should benchmarks? systems. You’ll need to look at those interrelationships to under-
be eliminated? ❐ Consolidation and fragmentation: Can stand their balance and their interdependencies, and the effect the
you combine any of the benchmarks into a system has on the larger scheme of things at your business.
❐ Sequence: Are the benchmarks in the most
effective sequence? Can any steps be oper- single step? Can any of the benchmarks be Later in this booklet you’ll find a list of specific guidlines for
ated “in parallel” (at the same time) rather broken into separate steps? analyzing each of the four work flow components.
than “in series” (sequentially, one after the Apply the Innovation Checklist. Use the Innovation
other) in order to reduce cycle time?
❐ Staff distribution: Can you distribute
your manpower for better effect? Is it bet- 6 Checklist in the Worksheets section at the back of this book-
let to explore opportunities for improvement. The checklist is a
❐ Internal balance: Are the benchmarks ter to have one person perform a chain of
benchmarks or to have several people each series of specific techniques for improving the work flow of any
within the system in balance? Is the output system. Some may be appropriate, some may not. If you’re
from one benchmark what is needed by the performing a single step? For instance, if
you have three people doing assembly inventing a completely new system, the checklist is an excellent
following benchmark and vice versa? way to avoid mistakes in system design.
work, is it better to have each person doing
❐ External balance: Are outputs from other Diagram the innovated system. Decide what improvements
systems received in the right amounts at the
right rate, and are they of the necessary
all three assembly steps, or to have John
doing only front-end assembly, Mary doing
only middle assembly, and Pat doing only
7 to try, or the best configuration for a new system, and dia-
gram it. Again, the box-and-arrow diagramming technique works
quality? Are this system’s outputs to other back-end assembly? well. Take advantage of people who populate the “old” system to
systems produced in the right amount, rate, develop suggestions and give their experienced opinions on vari-
ous ideas for innovating the system.
This document is confidential and proprietary to E-Myth Worldwide and cannot be used,
disclosed or duplicated without the prior written consent of E-Myth Worldwide. This is an unpublished work protected
This document is confidential and proprietary to E-Myth Worldwide and cannot be used, disclosed or duplicated without the prior written consent of E-Myth Worldwide. This is an by federal copyright laws and no unauthorized copying, adaptation, distribution or display
unpublished work protected by federal copyright laws and no unauthorized copying, adaptation, distribution or display is permitted. is permitted.
The E-Myth Mastery Program Systems Innovation The E-Myth Mastery Program Systems Innovation
General Reference General Reference
Business Development Process: GN-0030 Page 2 Business Development Process: GN-0030

It comes down to the question of need – your customers’ needs get the work done? Could it be done better
and the needs of your business. with different equipment? Could the working
❐ Movement of supplies and materials: Are conditions be better for the people operating
You know about your customers’ needs. That was the idea the supplies and materials needed at each
behind the psychographic profile you created in Module 2: E- the system if they had different equipment?
benchmark available when they are needed,
Myth Marketing Fundamentals. It’s also the idea behind the in the necessary quantities, in the form need- ❐ Centralized vs. decentralized: Are there
product strategy and design work of Module 5: Foundations of ed, and are they conveniently accessible? benchmarks in this system in common with
E-Myth Client Fulfillment. The products you produce, your other systems, and can those steps be central-
delivery process, your customer services, your sales processes, ❐ Information: When information (such as ized? For instance, in many businesses, word
and your advertising, all have to serve your customers’ needs. operating instructions, product specifications, processing or data entry are benchmarks for a
But your systems also have to serve your business. And that customization instructions, standards, etc.) is number of systems. By creating a centralized
comes down to economics and quality of life for you and your a necessary part of a benchmark, is it readily data entry or word processing capability,
people. The economics require minimizing costs, maximizing available in easy-to-use, easy-to-understand many systems benefit and overall costs are
profits, and ultimately increasing the value of your business. form? reduced. On the other hand, it may be better
Quality of life issues revolve around creating business systems to decentralize some centralized operations
❐ System layout: Does the physical layout –
that are productive and satisfying for your people. for better quality control or responsiveness to
the floor plan, the plant layout, the configura-
tion of the repair truck, the office traffic pat- the customer.
The Systems Innovation Process
tern, the physical movement of materials and
❐ Management decision points: Does man-
The Systems Here’s an overview of the process (some of the steps are dis- tools, the placement of work stations (“adja- agement or some other decision maker have
Innovation Process cussed in more detail following the outline): cency”) – enhance or detract from work flow? to review and approve any part of the sys-
Are work stations configured not only for
Select a system for innovation. Which system? The next tem’s operation? For example, does an
Select a System
for Innovation 1 one on your Business Systems Development Plan (from your
work in Module 4, MG-0010). Or a system brought to your
efficiency, but also for human factors (like
safety, comfort, convenience, or appearance)?
assembly system stop until a manager
approves the assembled item, or does a draft
Observe the attention through the Key Frustrations Process (Module 1, LD- ❐ Inspection and quality control points: Are report have to be approved by someone
System On-Site 0060). Or a system your intuition tells you needs attention. Or before it can more forward, or does the
there a sufficient number of quality control
one you’ve identified through the systems evaluation process points in the system? Too many? Do they reorder of parts or materials have to wait
Diagram the
System
(using GN-0020). The process works for any system. interfere with the operation of the system? until someone approves it? Do such deci-
Actually, the real answer to the question “Which system should Can they be made to happen without interfer- sions interrupt or in any way interfere with
Determine System you innovate?” is every system. You’ll take the most important ing with or interrupting the system or any of the system? Can decision points be eliminat-
Baseline ed? Are more needed?
systems and those that need attention most urgently first, but its steps?
eventually, every system in your business should be put through
Analyze Work
❐ Idle points and transitions: As work flows ❐ Gathering management information:
Flow the systems innovation process.
through the system, are there points within Rather than creating new, potentially intru-
Observe the system on-site. See it. Watch it in action.
Apply the
Innovation Checklist 2 Talk to the people who operate it. Get their experience, their
“feel” for the system. Read the system documentation. Get to
the benchmarks during which work stops or
slows? Can they be eliminated? Are there
sive information-gathering steps, can infor-
mation gathering be “piggy backed” onto
existing document flows? Can production
points in the transition of work from one
Diagram the know the system. information be gathered from inventory tags
Innovated System benchmark to the next that the product rests
Diagram the system. Use the box-and-arrow format to make rather than creating a new form? Can a copy
Estimate
Performance &
3 a simple diagram of the benchmarks of the system. Give each
benchmark a brief name and number them in sequence. Make
(is not being worked on)? Can such idle
points be eliminated? of an inspection tally sheet be used instead of
creating a separate quality tracking form? Is
Compare with
your diagram spacious, not cramped. You’re going to use it for a ❐ Equipment: How could technology help? it possible to make use of existing informa-
Baseline
number of purposes and you’ll need the space. Does each workstation have what it needs to tion flows?
Install & Test the
Innovated System

This document is confidential and proprietary to E-Myth Worldwide and cannot be used,
disclosed or duplicated without the prior written consent of E-Myth Worldwide. This is an unpublished work protected
by federal copyright laws and no unauthorized copying, adaptation, distribution or display This document is confidential and proprietary to E-Myth Worldwide and cannot be used, disclosed or duplicated without the prior written consent of E-Myth Worldwide. This is an
is permitted. unpublished work protected by federal copyright laws and no unauthorized copying, adaptation, distribution or display is permitted.