Secret Entrepreneur Success Lesson: Create Perfect Processes for Customers at Less Cost Rather than Remove Defects with Six Sigma from Existing Processes

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Large companies emphasizing Six Sigma are falling behind entrepreneurial start ups who follow a secret entrepreneur success lesson: Create advantages with customers with new business models built from near-perfect processes that deliver offerings less expensively for customers. Large companies are heeding advice about best practices that may cost them their very existence in the long run.

Entrepreneur start ups seeking to create billion dollar businesses should focus on a secret entrepreneurial lesson: Deliver customer benefits with newly invented, less expensive processes that automatically eliminate errors.

It's an old story. When the Hebrews finally got to the Promised Land, their supply of manna ran out. They now had to survive based on what they could produce in the land of milk and honey. But many soon fell into observing the old habits of honoring other gods. God became angry and destroyed their possession of land of plenty due to this shift from what they should have been focusing on, obedience to God's commands. Today's demanding customers provide such a discipline for companies that shift their attention in the wrong direction, especially away from providing better, error-free offerings to customers at less cost.

If you go to the bookstore, Six Sigma is all the rage. If you want to become a billionaire, ignore Six Sigma. Design a customer-focused, low-cost, error-free process instead. Many organizations are wasting time removing errors from existing processes using Six Sigma when they would be better served by designing better processes for customers.

Examples for this study were drawn from studies of the most successful companies in growing their stock prices under one CEO from 1989-2002 as published in Chief Executive Magazine.

These studies were authored by Donald Mitchell, head of The Billionaire Entrepreneurs' Master Mind, http://billiondollarbusiness.blogspot.com/, a global learning organization that helps entrepreneurs create billion dollar businesses from start ups.

Here are some of the former start-up success stories:

Wal-Mart developed new ways to ship and deliver items to its many stores that reduced errors, minimized out-of-stock items, and slashed costs and inventories. For decades, Wal-Mart could hardly build its stores fast enough. The strength of its new processes for serving customers allowed that expansion to go smoothly. Meanwhile Wal-Mart's competitors were struggling to work flaws out of more expensive and less effective delivery processes.

Dell learned to make and ship custom-built computers in a few hours. With this superior process, the company ran rings around competitors who focused on wringing errors out of traditional mass production and distribution methods. Competitors continue to fall behind today.

Paychex mastered a simpler, cheaper way to do payroll for small companies. Clients saved a fortune in overhead and penalties, and competitors were left in the dust with relatively error-less processes that weren't as efficient.

Clear Channel Communications found better ways to assemble low-cost marketing choices for advertisers and rode that process innovation into industry leadership. Competitors, by comparison, struggled with traditional ways of selling air time.

EMC ran circles around industry leaders like IBM in computer storage by pioneering ways to develop and produce faster, more reliable products in less time. Meanwhile the competitors were struggling to improve obsolete processes.

Donald Mitchell noted: "Consultants selling expensive services dominate discussions of best practices. Their books line the best seller lists. Corporate America pays an unexpected price when it relies on others to define what works best. That price is failing to notice what is actually working best. In the race to create better business models through innovating with improved errorless processes, start ups that are developing brand new processes are the clear winner. Start ups spend less than a penny to develop such advantaged processes for every ten dollars that a larger competitor spends to improve an obsolete process with Six Sigma."

The Billionaire Entrepreneurs' Master Mind combines the best thinking of cutting edge entrepreneurs from four continents to uncover and implement the best methods for creating new billion dollar enterprises from start-ups. A limited number of new members will be accepted in February 2006.

Donald Mitchell is co-author of The 2,000 Percent Solution http://www.2000percentsolution.com/, The 2,000 Percent Solution Workbook http://2000percentsolutions.blogspot.com/, The Ultimate Competitive Advantage and The Irresistible Growth Enterprise http://www.irresistibleforces.com/.

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