Restructuring a Business
Robert Fritz, in his compelling book The Path of Least Resistance, claims that “structure determines behavior.” This statement explains at a glance why desired changes often elude us. If you have two entrances to your shop, one in front and one on the side, but you have difficulty getting customers to enter at the side entrance, you need to make a structural change. If the front entrance is “the path of least resistance,” customers will choose that entrance every time. To make it easier for them to enter at the side, you need to make physical changes that will direct customers where you want them to go.
This may sound like a simplistic example. “Of course,” you say, “any fool knows that.” But many other important changes you desire for the shop may not be getting done because the existing structure is the path of least resistance—the easier way to go.
So now here we are, trying to introduce new efficiencies in our businesses by implementing lean processes. But from my observations and many of the articles I have read, this is no easy task. Old habits are hard to break. The old ways are the most comfortable and familiar, and so they keep coming back. The restructuring model suggests we have to treat our business like a restoration job: We have to tear down the old before we reconstruct the new.
When we’re tearing down a classic car in order to restore it, we know exactly what to do. The tools and procedures are familiar and we’re well experienced in the process. But what are the components involved in restructuring an entire business?
Space. Workflow space is arranged to encourage a particular type of behavior. Rearranging working areas is no easy task. It might require moving a frame machine or even a spray booth to get an optimum workflow. It’s probably better to begin arranging the reconstruction around the least flexible structure like the spray booth. It may also be easier to restore a vehicle without replacing the frame but you know that might also not be possible. You may have to bite the bullet and reconstruct the most difficult aspect to get the job done.
Time. Time is not an easy change to get people to go along with. You may want to open an hour earlier, or close an hour later, or stay open longer on Saturday, but you could meet with some resistance from employees. The path of least resistance is to acquiesce and keep the same hours, so you have to create a new “path of least resistance.” Since compensation is definitely a “structure that determines behavior,” some change in compensation may get the job done.
Product. Another structural element that determines the behavior of a business is the product and how you arrive at that product. For example, some shops now paint individual panels in the spray booth rather than the entire vehicle. Other changes may be working with new carbon fiber materials, new alloys, aluminum and plastics. Restructuring around products may be easier because the products dictate procedures.
Tools. I happened to hear an estimator’s complaints at a shop that was trying to implement more efficient, lean procedures to reduce costs. He noted that the owner tried to save money by buying reconditioned cameras and cheap computer printers. Only the cheap printers kept breaking down, doubling the amount of time needed to write an estimate when it was necessary to go to another part of the shop to print the estimate. And the reconditioned cameras wouldn’t hold a charge, so after a couple of photos he would have to stop to recharge the camera before continuing to take photos. The owner’s old pattern of buying cheap tools was costing far more in lost time. I would bet if we went through the shop, we would find more examples of inefficient, faulty tools and equipment. In this case, a restructuring of the owner’s buying habits would be needed to arrive at the desired more efficient changes.
Other structural components of businesses include personnel, training, furniture, overall appearance and more.
It can be worthwhile to do a complete structural analysis of the shop, much as you would a restoration job on a vehicle. Just keep in mind that if you design a change that has people walking into walls, they’re not likely to go in that direction. Instead, try to make the new procedure the new “path of least resistance.” Then you won’t have any difficulty getting people to travel in that direction.
Tom Franklin, author of Strategies for Greater Body Shop Growth, has been a sales and marketing consultant for more than 40 years.