Tag Archives: value-add

Is Your Work Value-Added?

One of Bill Conway’s favorite sayings has always been, “The most important business decision people make every day, is deciding what to work on.”

It’s important for us all to continually self-evaluate in this area. What should we work on? What value will it add for our customers?

Once people know what to work on, they can then determine which tools and methods to use – i.e., How should we go about it? But deciding “what” to work on and “why” must be the first considerations.

Most of us would likely agree that we want our workforce to spend most if not all of their time on “value-added” work, which is often defined as the work our external customer would be willing to pay for, if they knew what we were doing.

Sometimes this is a product, sometimes a service, and sometimes a combination of product and value-adding service. For example, a value-adding distributor delivers the product to a work-site but can also prepare or pre-stage the material, so it is ready to be put into use, saving the construction company time and money. The value goes beyond the product they sell to the service of presenting it in the form that is ready for use.

Common Categories of Work

People are often surprised at the amount of “non-value-added” work that is part of the day-to-day reality in most organizations. Even in the best performing organizations, it is well under 50% of the work being done. In many organizations, over 80% of time and resources are not adding value.

Consider these common examples of non-value-added work:

  • Inspections to find errors
  • Rework to fix errors
  • Errors or defects that are never found and make their way into defective final product
  • Work that sits waiting in front of a bottleneck, or resources that are idled behind a bottleneck
  • Unnecessary work
  • Necessary work such as filling-out expense reports
  • Excess inventory
  • Work product that does not match customer needs or customer needs that go unmet because they have not been surfaced

So, the question is, what can, or should, we do to increase the amount of value-added work within our organization? Our next post will focus on some answers…

4 Ways to Increase Value-Added Work

valueadded22Now that we have established the core value-add of a manager is to study and improve the system of work, and that by eliminating the root causes of the “debris and impediments” leaders can enable the workforce to spend more time creating value and making more money, we can move on to sharing ideas on “how” to do so.

Here are four ideas to increase the portion of resources that are directed at value adding activities:

  1. Work On The Bottlenecks. When we work on many things that have a small effect, we will have a small impact.  The way to increase value most substantially is to work on the bottleneck or constraint. All improvement effort that is off the critical path will have a lower impact on increasing the value add. If the bottleneck can be widened even just a little, it provides a pure increase in value. 
  2.  Increase Understanding of And Alignment With What Customers Truly Value. One of the biggest wastes is when the products or services we offer do not align perfectly with the customers’ needs and values. Errors are possible in two directions.
    • Bundling a feature into the product or service that the customers do not really need or want.
    • Overlooking ways we could leverage our capabilities to solve a problem that the customers may not even have articulated to themselves.
  3. Get At The Root Causes. Replace the constant working on problems and symptoms with lasting solutions by drilling down to root causes.
  4. Eliminate The Non Value Adding Administrative Work. A great deal of time in most organizations is spent on emails, meetings, and reports that do not produce additional value for the customers or the organization.
     
    The amount of non-value-adding administrative work that can be found in most organizations is so varied and so large that we will share several specific ideas for seizing this opportunity for improvement in our next post.

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