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by Craig Cochran

Working for a small company has many benefits. The environment is usually informal, you can see the results of your work, and co-workers know and care about you. On the other hand, in a small company, everyone must do many different jobs. Time is usually in short supply, too. Often there isn’t enough of a surplus to spend it on establishing consistent procedures and systems. Instead, the whole place runs on “tribal knowledge.” It’s critical that small organizations develop lean and effective systems for managing their business. They need systems more than any other type of organization because they don’t have the luxury of doing things twice. Mistakes can be fatal.

For small businesses, the essentials of a lean management system can mean the difference between success and failure. Fortunately, these are easy to implement once they’re understood. Let’s examine the key elements of a lean management system for a small organization.

Strategic planning

The term “strategic planning” conjures images of grim-faced executives, conference tables cluttered with financial reports and walls filled with scribbled flip-chart pages--in other words, an intimidating and time-consuming process. However, strategic planning is critical to small organizations. It defines their course during an extended time frame, focusing all organizational members on the most critical actions necessary for their growth and survival.

Lean strategic planning can be performed in two to four hours. The underlying concerns are the same as the full-blown version but with less philosophizing. Lean strategic planning provides concrete answers to the following questions:

What are we doing especially well? What must happen to ensure that we continue doing well and even improve?

What are some of our most promising opportunities? Why are they promising? What should we do to pursue them and turn them into things we do especially well?

What are we currently doing poorly? What do our customers tell us we should improve? What do our employees tell us we should improve? Exactly what should we do to improve these aspects of our business?

What competitors are howling at our doors? What makes them a real threat? What should we do to minimize the risks posed by these competitors? What other forces (e.g., social, demographic, political, economic or technological) threaten us? What should we do about these threats?

The answers to these questions form the basis of strategic planning. Having formulated them, a small business must then apply project management to make certain that the actions get done. Specifically, the following must be determined:

Responsibilities. Who is the project manager for each task?

Time frames. When will the action begin? When should it end?

Resources. What resources are available for implementing the actions?

Review. When will key decision makers meet to revisit the progress against the plan?

The results of strategic planning along with project management details must then be documented simply and concisely. The entire document should be no more than a dozen pages long. Copies should be distributed to all personnel who play a role in implementing the strategy. Depending on the plan, this could range from the entire organization to a handful of people. The best way to communicate the strategy to most people is through objectives.


Measurable objectives

Even the best strategic plan can be difficult to understand for those not involved in the planning process. Objectives take the strategy and translate it into language that everyone can understand and implement. They also break the strategy into component pieces that are appropriate for each process.

Let’s say, for example, that the organization must pay off debt in order to stay viable. The best way to do this, it’s decided, is to increase net income. The additional profit will enable the organization to retire the debt and better manage for the future. Most people within the organization will sniff and say, “Well, I don’t have any way to pay off our debt or increase our net income.” Some might not even know what net income is. Let’s translate the organizational strategy into terms that are understandable at each process level:

Organizational strategy: Increase net income to pay off debt.

Sales objective: Increase sales of high-margin products by 20 percent during the next 12 months.

Production objective: Increase production efficiency by 3 percent during the next quarter.

Warehouse objective: Reduce damaged goods to 0.5 percent of total inventory during the next inventory cycle.

Purchasing objective: Initiate long-term contracts with trucking, packaging and raw materials suppliers. Reduce overall purchasing expense by 15 percent during the next six months.

The broad strategy has been transformed into specific, actionable objectives toward which each process can work.

If each process is able to achieve its objective, then the overall strategy of increasing net income to pay off debt will certainly be achieved.

Just like the strategic plan, the objectives for each organizational process must be documented and made very visible. The small organization must be a transparent one. Progress toward objectives must be tracked, posted, analyzed and discussed. There’s no time to get fancy--display the charts and update them regularly. The purpose is to provide a focus to everyone’s work and demonstrate how all activities fit together to achieve the organization’s overall objectives. Once objectives have been established, it’s necessary to develop forums for reviewing progress.

Business review

Small organizations don’t have time for long, formal meetings. When people are in meetings, production grinds to a halt. That’s why business reviews must be performed in a brief, concentrated manner. They might not even be meetings; the review might take place over the telephone, via e-mail, through a folder of information passed from person to person or by logging onto a Web site. The trick is to review progress and make decisions quickly and frequently because small organizations exist in dynamic worlds that change rapidly.

A business review agenda for a small organization can include a wide range of topics, but the most typical are:

Special or unusual orders and/or projects

General communication between functions about current work

Progress toward objectives

Problems that have arisen since the last review

Improvement opportunities

Generating action items to address problems or opportunities

Status of pending action items

Additional agenda items can be added as needed, but keep in mind that reaction time slows with each additional topic. Many organizations have found that their business reviews are most effective when they comprise several different reviews, each addressing a different set of concerns. This “mixed” review enables flexibility, timeliness and fast response.

An example of a mixed review format--composed of a daily, monthly and quarterly review--follows:

Daily review

Requires no more than 30 minutes

Tactical in nature

Addresses the most pressing issues (e.g., urgent orders, necessary resources and customer complaints)

Conducted at the beginning or end of the day

Includes the status of pending actions

Can be conducted in person or remotely


Monthly review

Requires one to 1.5 hours

Tactical and/or strategic in nature

Reviews progress toward objectives

Reviews financial results (excerpted)

Addresses the status of pending actions

Includes broader trends (e.g.,corrective and preventive actions, customer feedback, and audit results)

Can be conducted in person or remotely

Quarterly review

Requires one to three hours

Strategic in nature

Reviews progress toward objectives and strategic plan

Proposes necessary changes to strategy

Analyzes financial results over broader time frame

Addresses the status of pending actions

Includes aggregated trends and their implications

Can be conducted in person or remotely

There are many different ways to slice and dice business reviews so that they accommodate a small organization’s unique requirements. The only imperative is that they take place. Small organizations must keep a finger on the pulse of their performance at all times. That doesn’t mean micromanagement; it just means that everyone knows the direction in which the organization is moving and what changes must be made. When these are known, personnel are able to contribute effectively.



Documentation refers to the information used by the organization to run its business and satisfy its customers. The documentation’s nature and scope will vary widely from organization to organization, but here are a few of the most typical examples:

Product specification

Service standards

Process setups


Job instructions


Engineering drawings

Strategic plans


Documentation should be concise and presented in the most practical format possible. More is not better when it comes to documentation; it should get directly to the point and avoid peripheral information that’s not really needed.

Practical formatting means that the documentation might not resemble a traditional procedure. Small organizations must get creative when developing documentation. Managers should ask themselves, “What format will deliver the information in the clearest and easiest way possible?” The answer might point to text, drawings, photos, cartoons, flow diagrams, physical samples, audio/video media or nearly anything else you can imagine. In general, people digest graphic information more quickly than text, so including images is almost always a good idea.

Whatever formats are chosen, the organization should try to steer clear of the following documentation paradigms that plague so many larger companies:

All documents must look exactly alike. Why does this matter? Each document should look like whatever it needs to in order to best convey its information. Consistency is only important if it adds to the documentation’s usability and effectiveness.

Documents should always include certain sections. The sections that organizations require within their documents run the gamut of possible topics. These include cover page, table of contents, introduction, purpose, scope, definitions, responsibilities and reference documents. Although some of these sections might sometimes be relevant, others simply take up space and make the document longer and more confusing than it needs to be.

Small organizations can’t afford to make their documentation long and confusing.

Documents must be reviewed and approved by every manager. With good intentions, some organizations stipulate that all key managers must review and approve all documents. This only slows down the documentation system and adds useless bureaucracy.

Documents must include every single detail about a process. The thinking is: If we’re going to bother with documents, they’re going to include every detail anyone could possibly ever need. This makes the documents large and unwieldy and discourages people from actually using them. Include the essential information, but strive to keep documents as lean as possible.

Avoid tasks that unnecessarily slow down the delivery of information or complicate its understanding. Get creative, and don’t be afraid to try something a little unusual. Some of the most unusual documentation styles are often the best for small organizations. Here are a few user-friendly documentation formats I’ve seen applied effectively:

Flowchart and/or troubleshooting guide combination. This is a single-page document printed on both sides, posted directly at the workstation. It’s often laminated or otherwise protected. One side of the document shows a flowchart of the process, describing the basic steps required to carry out the activities and make correct decisions. The opposite side describes various troubleshooting situations that might arise and what should be done about them. The troubleshooting situations reflect the collective knowledge and experience of everyone familiar with the process. In effect, they’re one-page encyclopedias of the process and its pitfalls. The document’s content is limited by the fact it’s delivered on a single page, ensuring that only the most important details are included. The brevity also ensures that users are not intimidated.

One-minute reminder. This is a single-page document, posted directly at the workstation. It features a photograph of a particular aspect of the process, followed by a short description of what should be done. The text is often presented as a bulleted list. The intent is that the entire document can be digested in a matter of seconds; hence, its name. One-minute reminders are developed during any stage of the process that’s particularly error-prone. Because errors usually are made at only a few critical steps during any process, this means that the documentation will only be applied where it’s most needed.

Hyperlinked process diagram. This is an electronic document available on a shared drive or network. The document depicts a high-level view of the entire process, showing the major steps. Each step includes a hyperlink that drills down to a lower-level activity in the process. In effect, document users can continue drilling down as low as they need to: process overview, activity-specific view or task-specific view. The document’s content is completely dynamic, driven by the users’ needs. Specifications for goods and services can also be hyperlinked from the main process diagram. This type of document is incredibly versatile but is only appropriate for organizations that have the computer infrastructure and technical competency to support it.

Document control

Documentation is worthless if it isn’t controlled. Thankfully, the necessary controls are very basic. The fundamentals of document control include:

Approving documentation before it’s made available

Making the documentation available where it’s needed

Keeping the documentation up to date

Approving documents is a simple process. It’s nothing more than ensuring the information is accurate and appropriate for distribution, then making it clear that the document has been approved. The act of approving a document can be done by a single person, and the approver doesn’t even have to be a manager. There are no rules about who can approve documents, except for any rules the organization itself stipulates. Small organizations should keep document approval as timely and streamlined as possible. There’s rarely a need for a herd of managers to review and approve a document before it’s put into use. I don’t know how many times I’ve heard people within larger organizations say: “I’m not sure what happened to that document. I guess it’s making the approval rounds.” In the meantime, everyone is working with outdated information. Don’t fall into that trap.

Making the documentation available where it’s needed means exactly that: Get the information in front of everyone. If the information users have computers, then electronic documents are often the best way to make documents available. If the users have workbenches, then hard-copy documents posted directly at the workbench are probably more appropriate. Use good sense. Practices that don’t make sense include:

Enormous binders. They’re intimidating and confusing. Provide only the information that’s needed.

Procedures stored in supervisors’ offices, training rooms or other remote locations. When documents aren’t available at arm’s length, they have little value. Put the information where it’s needed.

Procedures provided electronically but without directions on how to access them. I’ve seen this more times than I can count: impressive documentation systems that employees can’t get to. Ensure everyone knows how to use the new technology.

Documentation is subject to change, of course. Small, dynamic organizations must provide especially seamless methods for revising documentation because the need for timely information is great. One out-of-date specification can make the difference between a good month and a disastrous one.

A decentralized document control system, with multiple employees who are in charge of their own documents, provides the most efficient process for revising them. When a document must be revised, whoever recognizes the need simply approaches the document control person in their process and initiates the change. The less bureaucracy, the better. Simply make the change, get it approved and make it available. This is where electronic documentation really shines, by the way. Revising and approving an electronic document can be performed in a snap. Once the document has been approved, distribution is accomplished instantaneously by uploading the document to the server or Web site. Everyone simultaneously has the most current version.

We’ve examined some of the components for a lean management system within a small organization. In coming months, I’ll provide additional lean systems so that you can build an overall system for success.

About the author

Craig Cochran is a project manager with the Center for International Standards & Quality, part of Georgia Tech’s Economic Development Institute. Contact CISQ at (800) 859-0968 or on the Web at www.cisq.gatech.edu. Letters to the editor regarding this article can be sent to letters@qualitydigest.com.