By Eric Britten
What a preposterous question! Obviously, if your administrative expenses (G&A) were eating your profits, you’d be doing something about it, wouldn’t you? Or would you? Maybe you’ve watched your administrative expenses rise as your sales and revenues have risen and you just figured that was inescapable. Or, worse, maybe you watched your sales and revenues decline during the recent recession while your admin expenses remained relatively level. Or, equally worse, as revenues fell, maybe you just sliced expenses in your administrative areas and watched backlogs and employee frustration build and services levels and customer satisfaction fall.
Administrative expenses as a percentage of revenues seems to be one of those vexing business indicators that owners and managers struggle with. While the concept of scalability makes sense, it’s very common to find businesses that cannot get their arms around sustainable techniques for controlling their administrative costs.
Enter two business tools: process improvement and lean engineering. While lean process improvement may seem cumbersome and complicated at first, practitioners quickly become skilled in using the tools. The outcomes from lean process improvement are numerous. Customer satisfaction increases. Morale quickly improves. With process waste and inefficiencies reduced, capacity increases and cost per transaction decreases. Cash flows are positively impacted. Other costs decrease. Management gains a dashboard that enables them to watch key financial and productivity indicators.
And, finally, lean process improvement is scalable and adaptable. It works for small and large businesses alike. Very small business owners can do the work themselves. And lean process improvement is readily adaptable for non-profits and the public sector.
Read the full article posted in our Article Index here.
How do I create a good team?
This question was recently posted on one of the business networks I subscribe to (http://www.focus.com/). Here's the question in its entirety:
I run a small PR firm where teamwork plays a substantial role. While everyone has their own particular job assignment (Strategist, Media Liaison, etc), we do frequently come together as a team to discuss how to handle particular clients and situations. This is especially true when one of our clients is involved in a major scandal. However, it is during these high stress times when my team simply falls apart. Several of these instances have resulted in employees leaving the company because they "simply can't work with these people", which takes my attention off of whatever issue is at hand to finding a replacement (one position has been occupied by three different people in the past year).
Some of the answers are quite interesting. Here are parts of a few:
1. " ....... it is important to focus time on building trusting relationships. Having people learn about one another's strengths and how they can optimally contribute to the team and developing respect and appreciation for those strengths will help a you retain talent and build a high performing team."
2. "I have had individuals not working together, yet they will band together against another department when it suited! True. I begin the process by having weekly “Team” meetings with all my direct reports (I usually have less than 12). The first thing I do is to set the rules – everyone can and should speak, there are to be NO personal attacks or bullying. Plus people losing control is not an option. We all discuss and if there is dissention then my diplomacy skills are critical, But whatever happens, the final decision is mine."
3. " ..... so why not collect the inputs separately and then make the final decision based on an aggregate of opinion? While it sounds like more work, it's not. Without the fighting, tantrums, drama etc. you can hold a series of very short meetings, aggregate the content and make a decision in a much shorter time frame."
4. "To make your team gel for action when required you just don’t need a “star” hire to replace a team member, you may have to start with the basics. I strongly recommend you first find out how to put in place a coherent team."
5. "One thing that I will suggest is reading the book "Fierce Leadership" by Susan Scott. A major component in there is the "Smart + Heart". I simply adore this ideology. Hopefully you have set a certain culture within your organization, and you and the others within your organization foster, build, and grow it daily."
My response was: "I am a strong proponent of using functional and cross-functional teams in order to develop strong integrated solutions. Often it takes the leader to step up and call the foul when individuals say they just can't work with other individuals. Rarely have I found that to be true. It's determining why one or more team members are saying that and using good team building practices to get the team through the four phases: forming, storming, norming and performing ......... I'd also recommend the well known resource, "The Wisdom of Teams" by Katzenbach and Smith, to you."
I thought it was particularly interesting that one of the posts suggested the the manager meet separately with each of the individuals to get their input. I didn't post my specific sentiment because there already had started to be a bit of discord (parts of responses I didn't post above), but it struck me that question is exactly one reason why it makes sense to meet in teams - to save time.
As a collaborative type, I have rarely found that you can't make a team function. But, often it does take a skilled team leader to get the team formed and through its "storming" phase. One practice that often works well for me is to get the team focused on the problem as quickly as possible. Focusing on the problem leads the team to think about what I call "a common enemy" - something they all agree needs to be fixed - as opposed to thinking about themselves or their individual roles.
Read more interesting and informative business articles in our article library. Click here.
I run a small PR firm where teamwork plays a substantial role. While everyone has their own particular job assignment (Strategist, Media Liaison, etc), we do frequently come together as a team to discuss how to handle particular clients and situations. This is especially true when one of our clients is involved in a major scandal. However, it is during these high stress times when my team simply falls apart. Several of these instances have resulted in employees leaving the company because they "simply can't work with these people", which takes my attention off of whatever issue is at hand to finding a replacement (one position has been occupied by three different people in the past year).
Some of the answers are quite interesting. Here are parts of a few:
1. " ....... it is important to focus time on building trusting relationships. Having people learn about one another's strengths and how they can optimally contribute to the team and developing respect and appreciation for those strengths will help a you retain talent and build a high performing team."
2. "I have had individuals not working together, yet they will band together against another department when it suited! True. I begin the process by having weekly “Team” meetings with all my direct reports (I usually have less than 12). The first thing I do is to set the rules – everyone can and should speak, there are to be NO personal attacks or bullying. Plus people losing control is not an option. We all discuss and if there is dissention then my diplomacy skills are critical, But whatever happens, the final decision is mine."
3. " ..... so why not collect the inputs separately and then make the final decision based on an aggregate of opinion? While it sounds like more work, it's not. Without the fighting, tantrums, drama etc. you can hold a series of very short meetings, aggregate the content and make a decision in a much shorter time frame."
4. "To make your team gel for action when required you just don’t need a “star” hire to replace a team member, you may have to start with the basics. I strongly recommend you first find out how to put in place a coherent team."
5. "One thing that I will suggest is reading the book "Fierce Leadership" by Susan Scott. A major component in there is the "Smart + Heart". I simply adore this ideology. Hopefully you have set a certain culture within your organization, and you and the others within your organization foster, build, and grow it daily."
My response was: "I am a strong proponent of using functional and cross-functional teams in order to develop strong integrated solutions. Often it takes the leader to step up and call the foul when individuals say they just can't work with other individuals. Rarely have I found that to be true. It's determining why one or more team members are saying that and using good team building practices to get the team through the four phases: forming, storming, norming and performing ......... I'd also recommend the well known resource, "The Wisdom of Teams" by Katzenbach and Smith, to you."
I thought it was particularly interesting that one of the posts suggested the the manager meet separately with each of the individuals to get their input. I didn't post my specific sentiment because there already had started to be a bit of discord (parts of responses I didn't post above), but it struck me that question is exactly one reason why it makes sense to meet in teams - to save time.
As a collaborative type, I have rarely found that you can't make a team function. But, often it does take a skilled team leader to get the team formed and through its "storming" phase. One practice that often works well for me is to get the team focused on the problem as quickly as possible. Focusing on the problem leads the team to think about what I call "a common enemy" - something they all agree needs to be fixed - as opposed to thinking about themselves or their individual roles.
Read more interesting and informative business articles in our article library. Click here.
Must Process Improvement Be Tied to Strategy?
Recently, a member of the Lean and Six Sigma Global Network on LinkedIn posted a discussion item about the first of the seven deadly process improvement sins: Sin #1: Process improvement is not tied to the strategic issues the business faces.
Group members from across the continent opined pro and con. It's an excellent ongoing discussion. Here is my post from that discussion: Can we look at it this way? (1) The very fact that process improvement exists within an organization is the result of a strategic decision. (2) Does that, then, mean anything that process improvement is applied to must inherently be strategic? As a body of knowledge, methodology or discipline, I don't think process improvement is a candidate to be labeled strategic. It is simply a tool or process. (3) But, the projects to which the tool, BOK, methodology or discipline are applied very probably should be aligned with the company's strategy. In my experience, I have always worked to tie project selection to organizational strategy. In that sense or context, I then think that Sin #1 would be correct.
The vision statement of my business states "Everything Begins With A Plan". I don't mean a single plan. I mean a plan, as in a business plan, a strategic plan, an annual operating plan or a marketing plan. Planning is central to a successsful business enterprise. The key is how well developed is the plan. If it's worth the time to develop the plan, then ensuing activities and plans must link to it.
Read more interesting and informative business articles in our article library. Click here.
Group members from across the continent opined pro and con. It's an excellent ongoing discussion. Here is my post from that discussion: Can we look at it this way? (1) The very fact that process improvement exists within an organization is the result of a strategic decision. (2) Does that, then, mean anything that process improvement is applied to must inherently be strategic? As a body of knowledge, methodology or discipline, I don't think process improvement is a candidate to be labeled strategic. It is simply a tool or process. (3) But, the projects to which the tool, BOK, methodology or discipline are applied very probably should be aligned with the company's strategy. In my experience, I have always worked to tie project selection to organizational strategy. In that sense or context, I then think that Sin #1 would be correct.
The vision statement of my business states "Everything Begins With A Plan". I don't mean a single plan. I mean a plan, as in a business plan, a strategic plan, an annual operating plan or a marketing plan. Planning is central to a successsful business enterprise. The key is how well developed is the plan. If it's worth the time to develop the plan, then ensuing activities and plans must link to it.
Read more interesting and informative business articles in our article library. Click here.
WBFP, RBA & AI - Keeping The Tools Sharp
by Eric Britten
Keeping up to date on the various planning tools, methods and techniques seems like a slalom down the alphabet slopes sometimes. But, knowing about the tools, when to use them and how to combine them is critical to delivering what clients need and expect.
WBFP (Working Backwards From Perfect) is one of the tools employed when using the Hoshin (or hoshin kanri) approach to strategic planning. WBFP is a very useful technique in which the ultimate goal or future state (perfect) is visioned; then the gap between current state and future state is closed with as few steps as possible. This is a tool that is used when incremental change just isn't going to deliver the bacon and transformational change is what is needed.
RBA (Results Based Accountability) is a planning technique used often in the public and not-for-profit sectors. This approach focuses on determining what the desired outcomes are for an agency, program or organization and then agreeing on what resources need to be integrated to deliver the improved state. Very often this results in several agencies or groups working together toward improving the outcomes as rarely is there a single cause to a social issue.
A.I. (Appreciative Inquiry) takes a different approach to developing strategy for an organization. Rather than focusing the organization on what is not working, A.I. first looks at what is working. These elements constitute the positive core that give the organization its vitality, success and effectiveness. Focusing on what works builds energy and inspiration for then looking at visioning and planning.
Keeping up to date on the various planning tools, methods and techniques seems like a slalom down the alphabet slopes sometimes. But, knowing about the tools, when to use them and how to combine them is critical to delivering what clients need and expect.
WBFP (Working Backwards From Perfect) is one of the tools employed when using the Hoshin (or hoshin kanri) approach to strategic planning. WBFP is a very useful technique in which the ultimate goal or future state (perfect) is visioned; then the gap between current state and future state is closed with as few steps as possible. This is a tool that is used when incremental change just isn't going to deliver the bacon and transformational change is what is needed.
RBA (Results Based Accountability) is a planning technique used often in the public and not-for-profit sectors. This approach focuses on determining what the desired outcomes are for an agency, program or organization and then agreeing on what resources need to be integrated to deliver the improved state. Very often this results in several agencies or groups working together toward improving the outcomes as rarely is there a single cause to a social issue.
A.I. (Appreciative Inquiry) takes a different approach to developing strategy for an organization. Rather than focusing the organization on what is not working, A.I. first looks at what is working. These elements constitute the positive core that give the organization its vitality, success and effectiveness. Focusing on what works builds energy and inspiration for then looking at visioning and planning.
Your Organization’s Path to Success
By Eric Britten
Four basic elements will help private sector, public sector and non-profit organizations steer toward success.
1. Develop clear goals. Experts have noted that organizational success happens when everyone is focused on the same goals. There are several important elements that must be present to enable this focus. First of all, everyone needs to hear what the organization's mission, vision and goals are...and hear about them repeatedly. The second part includes a plan for everyone in the organization to follow so that they understand how performing their job successfully helps the organization meet its objectives. Everyone from top to bottom should feel like they own a piece of the process. Finally, employees need regular feedback about how the organization is doing and about the contribution of their efforts to organizational success.
2. Create accountability. Linking employees to organizational goals through their job function and providing them with periodic updates on progress toward those goals builds an atmosphere of accountability. Accountability is a critical key to success, not just in the private sector, but in both the public and non-profit sectors as well. Private sector organizations work toward their goals to deliver results to their customers and to the company’s owners. Public sector organizations deliver results to the public, but are also responsible for delivering those services in a cost effective manner consistent with their organization’s mission and goals. Non-profits serve their own constituencies. Like the public sector, they are responsible for delivering those services in a cost effective manner consistent with their organization’s mission and goals.
3. Measure progress. In order to know how a particular organization is progressing toward fulfilling their mission and meeting their goals, clear measures and milestones need to be in place. Creating the right metrics and milestones is more easily said than done. They need to be more qualitative than quantitative. They must pass rigorous tests to ensure they are aligned with desired outcomes. They need to be meaningful, not only to program owners, but to customers as well. They should not consume extensive resources just to generate the results.
4. Make adjustments. If the milestones and metrics indicate that acceptable progress is not being made toward mission and goals, leaders need to search for systemic reasons for this. They should adjust the tactics, activities and processes they are using to achieve their goals and meet their mission. Adjustments should not be made to the metrics or milestones themselves.
Four basic elements will help private sector, public sector and non-profit organizations steer toward success.
1. Develop clear goals. Experts have noted that organizational success happens when everyone is focused on the same goals. There are several important elements that must be present to enable this focus. First of all, everyone needs to hear what the organization's mission, vision and goals are...and hear about them repeatedly. The second part includes a plan for everyone in the organization to follow so that they understand how performing their job successfully helps the organization meet its objectives. Everyone from top to bottom should feel like they own a piece of the process. Finally, employees need regular feedback about how the organization is doing and about the contribution of their efforts to organizational success.
2. Create accountability. Linking employees to organizational goals through their job function and providing them with periodic updates on progress toward those goals builds an atmosphere of accountability. Accountability is a critical key to success, not just in the private sector, but in both the public and non-profit sectors as well. Private sector organizations work toward their goals to deliver results to their customers and to the company’s owners. Public sector organizations deliver results to the public, but are also responsible for delivering those services in a cost effective manner consistent with their organization’s mission and goals. Non-profits serve their own constituencies. Like the public sector, they are responsible for delivering those services in a cost effective manner consistent with their organization’s mission and goals.
3. Measure progress. In order to know how a particular organization is progressing toward fulfilling their mission and meeting their goals, clear measures and milestones need to be in place. Creating the right metrics and milestones is more easily said than done. They need to be more qualitative than quantitative. They must pass rigorous tests to ensure they are aligned with desired outcomes. They need to be meaningful, not only to program owners, but to customers as well. They should not consume extensive resources just to generate the results.
4. Make adjustments. If the milestones and metrics indicate that acceptable progress is not being made toward mission and goals, leaders need to search for systemic reasons for this. They should adjust the tactics, activities and processes they are using to achieve their goals and meet their mission. Adjustments should not be made to the metrics or milestones themselves.
Collaboration By Any Other Name
by Eric Britten
This morning, I read an article that was an early introduction to a local group describing AoH (Art of Hosting) of which World Café is an element. The article was titled “Conversational Leadership: Thinking Together For A Change”, written by Thomas Hurley and Juanita Brown. The article described how a senior manager for H.P. was able to bring about substantial change in one particular area (safety) by visiting plants around the world and sitting down with the workers to discuss the problem and potential solutions. This was as opposed to H.P.’s normal top-down approach.
I realized quickly that I was reading about a process that has been successful in the field of process improvement for some time – empowering the people who actually do the work to identify the process weaknesses and then develop the best solutions for improving the process. This process can certainly be classified as a “conversation” as, in this case, skilled facilitators help the workers hold their conversations so that they remain focused and productive. Whether called conversational leadership or process improvement, the approach is the same; getting those who do the work engaged in developing the solution. Process improvement actually takes the sequence one step farther in that after the workers identify the problem and work together to develop the best solution, they then actually implement that solution. They feel involved, empowered and successful.
While there may be other elements of AoH and process improvement that are not the same, it is interesting to note that the approach is consistent – engage those who are most affected in discussing an issue or problem and then help them evolve and implement best possible solutions.
As all of us in various worlds and disciplines become more focused on evolving solutions by engaging those most conversant with the issues in a dialog about problems and solutions, we should celebrate that we are all recognizing that top-down isn’t working these days in an ever growing list of processes. Business, government, community and social leaders are all recognizing the power of communication, collaboration and group solution generation regardless of what they call it.
This morning, I read an article that was an early introduction to a local group describing AoH (Art of Hosting) of which World Café is an element. The article was titled “Conversational Leadership: Thinking Together For A Change”, written by Thomas Hurley and Juanita Brown. The article described how a senior manager for H.P. was able to bring about substantial change in one particular area (safety) by visiting plants around the world and sitting down with the workers to discuss the problem and potential solutions. This was as opposed to H.P.’s normal top-down approach.
I realized quickly that I was reading about a process that has been successful in the field of process improvement for some time – empowering the people who actually do the work to identify the process weaknesses and then develop the best solutions for improving the process. This process can certainly be classified as a “conversation” as, in this case, skilled facilitators help the workers hold their conversations so that they remain focused and productive. Whether called conversational leadership or process improvement, the approach is the same; getting those who do the work engaged in developing the solution. Process improvement actually takes the sequence one step farther in that after the workers identify the problem and work together to develop the best solution, they then actually implement that solution. They feel involved, empowered and successful.
While there may be other elements of AoH and process improvement that are not the same, it is interesting to note that the approach is consistent – engage those who are most affected in discussing an issue or problem and then help them evolve and implement best possible solutions.
As all of us in various worlds and disciplines become more focused on evolving solutions by engaging those most conversant with the issues in a dialog about problems and solutions, we should celebrate that we are all recognizing that top-down isn’t working these days in an ever growing list of processes. Business, government, community and social leaders are all recognizing the power of communication, collaboration and group solution generation regardless of what they call it.
The Three Core Processes of Execution
By Eric Britten
Being a process person, “Execution: The Discipline of Getting Things Done” (Bossidy and Charan, Crown Business, 2002, 288 pages, ISBN-10: 0609610570) grabbed my attention when the authors outlined what they believe are the three core processes of execution:
1. The people process: Linking strategy and operations
2. The strategy process: Linking people and operations
3. The operations process: Linking strategy and people
“The strategy process defines where a business wants to go and the people process defines who is going to get it there. The operating plan provides the path for those people.”
Execution is at the heart of a successful business. Its implementation is achieved through the effective integration of people processes, strategy processes, and operational/budgeting processes. Leaders have to master each process, understand their synergies and know how to change them. This can only be done by the leader’s day to day immersion in the processes, particularly the people processes.
Any organization can be broken down into core and subordinate processes. Once that’s done, it’s a fairly simple task to determine where the weaknesses are. But, it’s the successful implementation of the change that delivers results. As a boss I once had said, “Execution! Execution! Execution!”
Being a process person, “Execution: The Discipline of Getting Things Done” (Bossidy and Charan, Crown Business, 2002, 288 pages, ISBN-10: 0609610570) grabbed my attention when the authors outlined what they believe are the three core processes of execution:
1. The people process: Linking strategy and operations
2. The strategy process: Linking people and operations
3. The operations process: Linking strategy and people
“The strategy process defines where a business wants to go and the people process defines who is going to get it there. The operating plan provides the path for those people.”
Execution is at the heart of a successful business. Its implementation is achieved through the effective integration of people processes, strategy processes, and operational/budgeting processes. Leaders have to master each process, understand their synergies and know how to change them. This can only be done by the leader’s day to day immersion in the processes, particularly the people processes.
Any organization can be broken down into core and subordinate processes. Once that’s done, it’s a fairly simple task to determine where the weaknesses are. But, it’s the successful implementation of the change that delivers results. As a boss I once had said, “Execution! Execution! Execution!”
What Creates Value For Americans Now?
By Eric Britten
So, how are your company’s sales doing? Still waiting for things to pick up? Well, if you have traditionally dealt in relatively inexpensive lower quality products that can be thrown away and easily replaced, your wait may be a bit longer – like forever. Similarly, if you needed to be able to offer 100% financing, or anything close to it, to move your inventory, that inventory could become a lead weight around your neck.
The economy’s changing a lot more that some folks realize. Many consumers suddenly found themselves upside down in the debt – value equation. That is, they found they owed more than the things they owned were worth. This clearly was the case with many homeowners, even if they thought they had a reasonable amount of equity in their home. It just plain evaporated. The same was the case with other items, like cars, boats, investment property, high end electronics – anything that people could get nearly 100% financing for or just put on a credit card. At the same time, people’s security was threatened. Companies’ sales were dropping, layoffs were rampant, hours were being cut, and jobs became extremely hard to find.
While it sometimes may be difficult to get the public’s attention, the sudden change in people’s financial situations woke them up like a fire bell. Saddled with substantial debt and an unsure future, consumers just plain stopped buying. Credit dried up, so even if people wanted to borrow, they couldn’t. Now Americans are hunkering down for the long haul. They know they have to pay down their debt. So, that’s one place dollars are being directed.
On top of that, people are now focusing on how they spend the disposable dollars they do have. Indications are that consumers are redefining value. They are focusing on how well a product is made; how long it will last. This not only is true for high end items such as cars, appliances, and electronics. It carries through to clothing, household goods and how many loads a box of laundry detergent will wash.
Companies may well follow consumers’ new buying habits as they look for increased longevity, higher quality, and upgradability in the assets they procure.
Companies that sell products and services will need to take note of these new spending habits. Their strategies will need to focus on meeting the demands of the customer, not convincing the customer that they need something they don’t nor convincing them that a cheaper alternative is just as good as a higher priced one. Consumers are going to become more savvy buyers. Retailers and service providers who understand the new definition of value will find life a lot easier than those who do not.
So, how are your company’s sales doing? Still waiting for things to pick up? Well, if you have traditionally dealt in relatively inexpensive lower quality products that can be thrown away and easily replaced, your wait may be a bit longer – like forever. Similarly, if you needed to be able to offer 100% financing, or anything close to it, to move your inventory, that inventory could become a lead weight around your neck.
The economy’s changing a lot more that some folks realize. Many consumers suddenly found themselves upside down in the debt – value equation. That is, they found they owed more than the things they owned were worth. This clearly was the case with many homeowners, even if they thought they had a reasonable amount of equity in their home. It just plain evaporated. The same was the case with other items, like cars, boats, investment property, high end electronics – anything that people could get nearly 100% financing for or just put on a credit card. At the same time, people’s security was threatened. Companies’ sales were dropping, layoffs were rampant, hours were being cut, and jobs became extremely hard to find.
While it sometimes may be difficult to get the public’s attention, the sudden change in people’s financial situations woke them up like a fire bell. Saddled with substantial debt and an unsure future, consumers just plain stopped buying. Credit dried up, so even if people wanted to borrow, they couldn’t. Now Americans are hunkering down for the long haul. They know they have to pay down their debt. So, that’s one place dollars are being directed.
On top of that, people are now focusing on how they spend the disposable dollars they do have. Indications are that consumers are redefining value. They are focusing on how well a product is made; how long it will last. This not only is true for high end items such as cars, appliances, and electronics. It carries through to clothing, household goods and how many loads a box of laundry detergent will wash.
Companies may well follow consumers’ new buying habits as they look for increased longevity, higher quality, and upgradability in the assets they procure.
Companies that sell products and services will need to take note of these new spending habits. Their strategies will need to focus on meeting the demands of the customer, not convincing the customer that they need something they don’t nor convincing them that a cheaper alternative is just as good as a higher priced one. Consumers are going to become more savvy buyers. Retailers and service providers who understand the new definition of value will find life a lot easier than those who do not.
The Most Abused And Misunderstood Process
Recently I read a question on one of the online management forums I frequent that made me stop and laugh out loud. It was from a CEO, and it read: "I'm having a hard time with some of my HR staff. They're not executing their jobs effectively and are slacking off. I think they need more effective management in their department. How do I implement better management strategies in a department where the staff is supposed to know everything about that?" It seems the fox is in the henhouse.
Performance management remains one of the most misunderstood and abused processes in business today. And even when all the right elements are in place, its techniques remain elusive. Strategically, performance management is a way to align an organization behind its goals, values and job specific targets. It's a catalyst for cascading long and short term objectives. Bundled into a robust PM system are many tactical targets as well as effective metrics to measure success. Beneath the performance management umbrella falls annual performance planning and that much maligned sub-process, the performance review.
Engineered correctly, a successful performance management system also feeds other closely aligned HR processes such as training, talent management and succession planning. In fact some organizations who have developed their capabilities well split the process. Human Resources manages the process and strategists or corporate performance teams manage much of the content as it moves through the organization.
But organizations without the understanding or capability to put a strong performance management process in place may well find thermselves in the same situation as our hapless CEO who wonders, "How do I implement better management strategies in a department where the staff is supposed to know everything about that?"
There is a good article about part of the PM process in our Article Index (click here) "You're Doing Performance Reviews All Wrong. Check it out.
Performance management remains one of the most misunderstood and abused processes in business today. And even when all the right elements are in place, its techniques remain elusive. Strategically, performance management is a way to align an organization behind its goals, values and job specific targets. It's a catalyst for cascading long and short term objectives. Bundled into a robust PM system are many tactical targets as well as effective metrics to measure success. Beneath the performance management umbrella falls annual performance planning and that much maligned sub-process, the performance review.
Engineered correctly, a successful performance management system also feeds other closely aligned HR processes such as training, talent management and succession planning. In fact some organizations who have developed their capabilities well split the process. Human Resources manages the process and strategists or corporate performance teams manage much of the content as it moves through the organization.
But organizations without the understanding or capability to put a strong performance management process in place may well find thermselves in the same situation as our hapless CEO who wonders, "How do I implement better management strategies in a department where the staff is supposed to know everything about that?"
There is a good article about part of the PM process in our Article Index (click here) "You're Doing Performance Reviews All Wrong. Check it out.
Is Strategic Planning Dead?
by Eric Britten
I came across a post on the Harvard Business Review site that purposed, "Strategy's not dead. It's just adapting." I followed the link to a post by Walter Kiechel III, the former editorial director at HBR titled, "Strategy on the morph". The article's a fun read, so I posted it on our site. (Read "Is Strategic Planning Dead?" from our Article Index here.)
I appreciated Walter's hip rejection of the assertion made by many observers (probably not true practitioners) that strategic planning, "as we know it", is dead. Perhaps my age is showing, but do you remember when televisions were housed in a huge console and had black and white screens that were about a foot square? Well, guess what? Televison, as we knew it then, is dead, too. And thank heavens it is. If television never progressed from being that little screen in a huge box to what it is today, probably nobody would own one now. Similarly, if any of our business processes including strategic planning had not morphed over the years, they'd all be dead, too. But, like television and processes, strategic planning is just adapting and changing with the times. And, just as we still call televisions "televisions" despite the fact that they are unrecognizable from the TV's of yore, so shall we still call strategic planning by the same name even as it changes.
So, let's keep up with the times and embrace the newer, faster, nimbler iterative process that is still strategic planning. If our practitioners are not changing with the times, then they should park themselves in front of those little old boob tubes and be content with watching reruns of the Adams Family.
I came across a post on the Harvard Business Review site that purposed, "Strategy's not dead. It's just adapting." I followed the link to a post by Walter Kiechel III, the former editorial director at HBR titled, "Strategy on the morph". The article's a fun read, so I posted it on our site. (Read "Is Strategic Planning Dead?" from our Article Index here.)
I appreciated Walter's hip rejection of the assertion made by many observers (probably not true practitioners) that strategic planning, "as we know it", is dead. Perhaps my age is showing, but do you remember when televisions were housed in a huge console and had black and white screens that were about a foot square? Well, guess what? Televison, as we knew it then, is dead, too. And thank heavens it is. If television never progressed from being that little screen in a huge box to what it is today, probably nobody would own one now. Similarly, if any of our business processes including strategic planning had not morphed over the years, they'd all be dead, too. But, like television and processes, strategic planning is just adapting and changing with the times. And, just as we still call televisions "televisions" despite the fact that they are unrecognizable from the TV's of yore, so shall we still call strategic planning by the same name even as it changes.
So, let's keep up with the times and embrace the newer, faster, nimbler iterative process that is still strategic planning. If our practitioners are not changing with the times, then they should park themselves in front of those little old boob tubes and be content with watching reruns of the Adams Family.
The Latest From Tom Peters
I spent some time today on Tom Peters' site after catching a Tweet from him. Here are some snippets from his posts:
On Leadership: Hay Group's John Larrere said, "Rapid changes in the world are impacting how organizations do business, and as a result, the old rules of how organizations select, develop and retain good leaders have been turned upside down causing the future of leadership to look very different. ... It's about getting them (people) to be passionate about their work and grooming them to handle the challenges ahead."
On Mentoring: " You can submit a bid for your chance to be mentored by Guy Kawasaki, Caterina Fake (co-founder of Flickr), Aaron Magness (director of Brand Marketing at Zappos), or many others. The winning bidder gets a session with the mentor of their choice; for example, the first winner got a half hour on the phone with Dan Pink. Each week a new mentorship opportunity will be posted, so you might want to bookmark the link....http://www.imno.org/"
On reviewing performance: "..... you should be choosing and assessing your talent like an NFL team or a Symphony Orchestra. Those groups would never use a standardized assessment vehicle, and Tom contends that neither should you."
See his You Tube video about this here: http://www.youtube.com/watch?v=PV6X_LdNVC4. I get the concept, and I think that's his point. Performance plans and assessments do need to be individualized. But, I think that this still can all fit within a fairly common framework.
On Front Line Managers: "The evidence is clear: Employee satisfaction and like variables are significantly, even overwhelmingly, linked to the employee's relationship with her or his first-line manager. While first-line managers are considered to be of great importance, in my experience few companies truly obsess on every aspect of their care and feeding. In fact, my observations suggest that such things as first-line manager training regimes are often of questionable quality. This is a strategic mistake. More important, a lost strategic opportunity."
Read Tom's Blog here: http://www.tompeters.com/. There is always something provocative and interesting posted on it.
On Leadership: Hay Group's John Larrere said, "Rapid changes in the world are impacting how organizations do business, and as a result, the old rules of how organizations select, develop and retain good leaders have been turned upside down causing the future of leadership to look very different. ... It's about getting them (people) to be passionate about their work and grooming them to handle the challenges ahead."
On Mentoring: " You can submit a bid for your chance to be mentored by Guy Kawasaki, Caterina Fake (co-founder of Flickr), Aaron Magness (director of Brand Marketing at Zappos), or many others. The winning bidder gets a session with the mentor of their choice; for example, the first winner got a half hour on the phone with Dan Pink. Each week a new mentorship opportunity will be posted, so you might want to bookmark the link....http://www.imno.org/"
On reviewing performance: "..... you should be choosing and assessing your talent like an NFL team or a Symphony Orchestra. Those groups would never use a standardized assessment vehicle, and Tom contends that neither should you."
See his You Tube video about this here: http://www.youtube.com/watch?v=PV6X_LdNVC4. I get the concept, and I think that's his point. Performance plans and assessments do need to be individualized. But, I think that this still can all fit within a fairly common framework.
On Front Line Managers: "The evidence is clear: Employee satisfaction and like variables are significantly, even overwhelmingly, linked to the employee's relationship with her or his first-line manager. While first-line managers are considered to be of great importance, in my experience few companies truly obsess on every aspect of their care and feeding. In fact, my observations suggest that such things as first-line manager training regimes are often of questionable quality. This is a strategic mistake. More important, a lost strategic opportunity."
Read Tom's Blog here: http://www.tompeters.com/. There is always something provocative and interesting posted on it.
Are You Wasting Time and Money on Change Initiatives?
by Eric Britten
Lately I have been thinking about change initiatives I have been involved in over the past years. They cover a broad spectrum; strategic and tactical planning, process improvement, integrated annual planning cycles, organizational alignment, leadership, communications planning and performance management are just some of them. How many of these types of activities have you or your organization engaged in? If you're doing the same as most businesses, you've engaged in some of these or all of these activities.
How effective have those efforts been? Are the plans and changes put in place still there and working well? Or, like many organizations, do you look back at those hopeful initiatives and wonder why anyone ever thought things would change - because you're right back operating as if those efforts had never taken place?
To those of you who instituted sustainable change and are reaping the benefits from your initiatives, congratulations for a job well done. Keep up the good work. And to those of you who wonder why all the good hard work put into your initiatives yielded little or no sustainable returns, I have two questions.
Question one. Was your change effort visibly, effectively and unequivocably led and supported by senior management throughout the rollout, planning, implementation and followup?
Question two. (This is really the point of this posting.) Is or was the culture of your organization a strategic one that traditionally embraced and rewarded change, innovation, risk taking, collaborative leadership, new ways of doing things and accountability? Or was there a tactical culture in place that pretty much reinforced making "safe" decisions, sticking to tried and true processes, authoratative leadership, relying upon the gut feelings of those who had been around for a while, and often accepting excuses instead of results?
When it comes to instituting sustainable change, organizations with the more progressive and strategic cultures have a huge leg up over those who do not. Culture and behavior have major effects on the ability of an organization to change. This does not mean that only more progressive and strategic companies should attempt change nor that only they can do it. What it does mean is that before attempting any sort of major change within an organization, it is important to assess the capacity and capability for change within that organization. The results of the assessment can then become important factors in determining how change needs to be approached when designing the initiative or project. Skipping that step can jeopardize both success and sustainability.
Lately I have been thinking about change initiatives I have been involved in over the past years. They cover a broad spectrum; strategic and tactical planning, process improvement, integrated annual planning cycles, organizational alignment, leadership, communications planning and performance management are just some of them. How many of these types of activities have you or your organization engaged in? If you're doing the same as most businesses, you've engaged in some of these or all of these activities.
How effective have those efforts been? Are the plans and changes put in place still there and working well? Or, like many organizations, do you look back at those hopeful initiatives and wonder why anyone ever thought things would change - because you're right back operating as if those efforts had never taken place?
To those of you who instituted sustainable change and are reaping the benefits from your initiatives, congratulations for a job well done. Keep up the good work. And to those of you who wonder why all the good hard work put into your initiatives yielded little or no sustainable returns, I have two questions.
Question one. Was your change effort visibly, effectively and unequivocably led and supported by senior management throughout the rollout, planning, implementation and followup?
Question two. (This is really the point of this posting.) Is or was the culture of your organization a strategic one that traditionally embraced and rewarded change, innovation, risk taking, collaborative leadership, new ways of doing things and accountability? Or was there a tactical culture in place that pretty much reinforced making "safe" decisions, sticking to tried and true processes, authoratative leadership, relying upon the gut feelings of those who had been around for a while, and often accepting excuses instead of results?
When it comes to instituting sustainable change, organizations with the more progressive and strategic cultures have a huge leg up over those who do not. Culture and behavior have major effects on the ability of an organization to change. This does not mean that only more progressive and strategic companies should attempt change nor that only they can do it. What it does mean is that before attempting any sort of major change within an organization, it is important to assess the capacity and capability for change within that organization. The results of the assessment can then become important factors in determining how change needs to be approached when designing the initiative or project. Skipping that step can jeopardize both success and sustainability.
How CEOs Can Convert Their Business From an Entrepreneurial Business to a Professionally Managed Business
by Eric Britten
Today, the Value Forward Network held a teleseminar on the title subject. I did not attend, but the title grabbed my attention as it points out a fairly common flaw in business today.
Entrepreneurs and professional business managers are two very different types of businesspeople. Entrepreneurs are skilled at identifying new business opportunities and parlaying them into going enterprises. They create a new enterprise, venture or idea and assume virtually all accountability for the inherent risks and the outcome. The very traits and attributes that make entrepreneurs good at entrepreneuring often doom them as good operating executives.
Good CEOs, COOs and business managers have diferent traits that make them good at managing and growing an established enterprise. Among their strengths are leadership, team building, focusing on performance, balancing risk and reward, financial acumen, credibility, good communications and people skills. The traits that make them good operators often can make them poor candidates for entrepreneuring.
And yet, how often do we see the CEO who founded an organization, navigated it through the rocky waters of start up, took risks on a daily basis to gain a foothold in their market, wrangled with venture capitalists and single-handedly created something from nothing struggling to run the established business? Think of Steve Jobs, who was fired by the very board he established as co-founder of Apple. Today he says it was the best thing that ever happened to him. But, had his board not removed him, what havoc might he have wreaked?
Knowing when to find good competent managing executives to run the enterprise is a struggle for those who start up a business. Often, it is someone else who must point out reality to them as they are still too busy entrepreneuring inside an organization that now needs a different kind of leader.
Today, the Value Forward Network held a teleseminar on the title subject. I did not attend, but the title grabbed my attention as it points out a fairly common flaw in business today.
Entrepreneurs and professional business managers are two very different types of businesspeople. Entrepreneurs are skilled at identifying new business opportunities and parlaying them into going enterprises. They create a new enterprise, venture or idea and assume virtually all accountability for the inherent risks and the outcome. The very traits and attributes that make entrepreneurs good at entrepreneuring often doom them as good operating executives.
Good CEOs, COOs and business managers have diferent traits that make them good at managing and growing an established enterprise. Among their strengths are leadership, team building, focusing on performance, balancing risk and reward, financial acumen, credibility, good communications and people skills. The traits that make them good operators often can make them poor candidates for entrepreneuring.
And yet, how often do we see the CEO who founded an organization, navigated it through the rocky waters of start up, took risks on a daily basis to gain a foothold in their market, wrangled with venture capitalists and single-handedly created something from nothing struggling to run the established business? Think of Steve Jobs, who was fired by the very board he established as co-founder of Apple. Today he says it was the best thing that ever happened to him. But, had his board not removed him, what havoc might he have wreaked?
Knowing when to find good competent managing executives to run the enterprise is a struggle for those who start up a business. Often, it is someone else who must point out reality to them as they are still too busy entrepreneuring inside an organization that now needs a different kind of leader.
Make It Real
John Schaefer, author of the The Vocational Shrink—An Analysis of the Ten Levels of Workplace Disillusionment, discusses five root causes of low employee morale in an article in AMA's Leader's Edge newsletter.
His fifth cause, Make It Real, truly is the root of many morale, trust, relationship and leadership issues in the workplace. He writes:
Suggestion #5—Make It Real
One of the first things to stress with your management team is what's called 'Making It Real.' This means being genuine and believable in interacting with their people. Employees tend to fall into some common negative habit patterns that employees experience when they feel underappreciated. When your managers understand how to be more open and vulnerable with their staff, they work towards trust, respect and improved communication.
'Making It Real' is the answer to the question, 'What is the root cause of low employee morale?' Maybe it's because it's so simple that it is so often missed, but without your people believing you are genuine, honest, and practicing high levels of integrity, any efforts you make to improve morale will be suspect. If you keep this in mind in your dealings with your people, you will be surprised how easy it is to improve morale and you can enjoy the benefits of higher productivity, better retention, lower costs, and an overall happier, more satisfying workplace.
To read his entire article, The Root Causes of Low Employee Morale, click here.
His fifth cause, Make It Real, truly is the root of many morale, trust, relationship and leadership issues in the workplace. He writes:
Suggestion #5—Make It Real
One of the first things to stress with your management team is what's called 'Making It Real.' This means being genuine and believable in interacting with their people. Employees tend to fall into some common negative habit patterns that employees experience when they feel underappreciated. When your managers understand how to be more open and vulnerable with their staff, they work towards trust, respect and improved communication.
'Making It Real' is the answer to the question, 'What is the root cause of low employee morale?' Maybe it's because it's so simple that it is so often missed, but without your people believing you are genuine, honest, and practicing high levels of integrity, any efforts you make to improve morale will be suspect. If you keep this in mind in your dealings with your people, you will be surprised how easy it is to improve morale and you can enjoy the benefits of higher productivity, better retention, lower costs, and an overall happier, more satisfying workplace.
To read his entire article, The Root Causes of Low Employee Morale, click here.
Foul up. Fess up. Fast. Fastidiously.
dispatches from Tom Peters' the new world of work
Foul up. Fess up. Fast. Fastidiously.
SHIT HAPPENS.
SHIT HAPPENS TO YOU AND ME BECAUSE WE SOMETIMES DO STUPID SHIT.
WE RARELY GET IN TROUBLE FOR THE SHIT THAT HAPPENS AS A RESULT OF THE STUPID SHIT WE DO.
WE OFTEN GET IN TROUBLE FOR THE STUPID SHIT WE DO TO AVOID TELLING ABOUT THE SHIT THAT HAPPENED BECAUSE OF THE STUPID SHIT WE DID.
MESSAGE.
FOUL UP.
FESS UP.
FAST.
FASTIDIOUSLY. (Tell the Whole Truth.)
TO ANYONE YOU CAN FIND TO FESS UP TO.
BOSSES.
SUBORDINATES.
THE GUY AT THE BAR.
OR IN THE WEIGHT ROOM.
THEN GET ON WITH LIFE.
I am not a moralist.
I am not arguing that "telling the truth is a ... GOOD THING. (Though I generally think it is.)
I am arguing that telling the truth ASAP is a ... USEFUL-PRAGMATIC-CAREER ENHANCING THING TO DO ... BECAUSE THE BOOGEYMAN IS GOING TO GET YOU IF YOU DON'T. (I.e. bloggers cornering Dan Rather. Rather has a habit of being chased by weird people, come to think of it.)
And, actually, people think it's "cool" when you/me tell the truth—foul up, fess up, fast, fastidiously. (Soooo Cool, that maybe you should fess up to things you haven't done?) (Just a thought.)
Seriously: PEOPLE HAVE VAST RESERVOIRS OF FORGIVENESS FOR SINS INCLUDING STUPID SINS ... AND ARE THIN-SKINNED AS ALL GET OUT ABOUT EVASIVENESS AND CONVOLUTED EXPLANATIONS.
("It depends on what the meaning of 'is' is.")
"I screwed up with the customer" beats (by a country mile): "We lost the customer because the customer's people tripped all over themselves and couldn't come to a decision ... blah blah blah."
Or: "THE LIGHTS IN THE ROOM WERE TOO LOW BY WHICH TO SEE MURDEROUS DICTATORS." (Hey, even, "I like the old brute, used to go water skiing with him ..." would have been better. Right?)
FOUL UP.
FESS UP.
FAST.
FASTIDIOUSLY.
Visit Tom Peters' blog: http://www.tompeters.com/
Foul up. Fess up. Fast. Fastidiously.
SHIT HAPPENS.
SHIT HAPPENS TO YOU AND ME BECAUSE WE SOMETIMES DO STUPID SHIT.
WE RARELY GET IN TROUBLE FOR THE SHIT THAT HAPPENS AS A RESULT OF THE STUPID SHIT WE DO.
WE OFTEN GET IN TROUBLE FOR THE STUPID SHIT WE DO TO AVOID TELLING ABOUT THE SHIT THAT HAPPENED BECAUSE OF THE STUPID SHIT WE DID.
MESSAGE.
FOUL UP.
FESS UP.
FAST.
FASTIDIOUSLY. (Tell the Whole Truth.)
TO ANYONE YOU CAN FIND TO FESS UP TO.
BOSSES.
SUBORDINATES.
THE GUY AT THE BAR.
OR IN THE WEIGHT ROOM.
THEN GET ON WITH LIFE.
I am not a moralist.
I am not arguing that "telling the truth is a ... GOOD THING. (Though I generally think it is.)
I am arguing that telling the truth ASAP is a ... USEFUL-PRAGMATIC-CAREER ENHANCING THING TO DO ... BECAUSE THE BOOGEYMAN IS GOING TO GET YOU IF YOU DON'T. (I.e. bloggers cornering Dan Rather. Rather has a habit of being chased by weird people, come to think of it.)
And, actually, people think it's "cool" when you/me tell the truth—foul up, fess up, fast, fastidiously. (Soooo Cool, that maybe you should fess up to things you haven't done?) (Just a thought.)
Seriously: PEOPLE HAVE VAST RESERVOIRS OF FORGIVENESS FOR SINS INCLUDING STUPID SINS ... AND ARE THIN-SKINNED AS ALL GET OUT ABOUT EVASIVENESS AND CONVOLUTED EXPLANATIONS.
("It depends on what the meaning of 'is' is.")
"I screwed up with the customer" beats (by a country mile): "We lost the customer because the customer's people tripped all over themselves and couldn't come to a decision ... blah blah blah."
Or: "THE LIGHTS IN THE ROOM WERE TOO LOW BY WHICH TO SEE MURDEROUS DICTATORS." (Hey, even, "I like the old brute, used to go water skiing with him ..." would have been better. Right?)
FOUL UP.
FESS UP.
FAST.
FASTIDIOUSLY.
Visit Tom Peters' blog: http://www.tompeters.com/
Fire Your Relatives. Scare Your Employees. And Stop Whining.
By KERMIT PATTISON in The New York Times February 11, 2010
IT’S not the economy, stupid, it’s you. So says George Cloutier, author of “Profits Aren’t Everything, They’re the Only Thing” (HarperBusiness, 2009). Mr. Cloutier, the 63-year-old founder and chief executive of American Management Services, specializes in advising small and midsize businesses and turning troubled companies around.
His advice is to put profits above all. Always pay yourself first. Shock your laggard employees. Don’t accept excuses. His ax falls on trade shows (“they’re just a flimsy excuse for a paid vacation”), sweat equity (“I call it working for nothing and being a fool”) and teamwork (“vastly overrated”). And if you ever apply for a job at American Management Services, don’t mention that you like to play golf. A condensed version of a conversation with Mr. Cloutier follows.
Q. Lots of people blame the recession for putting them out of business. You don’t buy it?
A. I’m a little bit of a hawk on that one. The recession has been an excuse for poor performance. Why does your work dry up? Normally because you haven’t built a strong enough sales organization.
Q. What do most troubled companies have in common?
A. They have not implemented strong financial reporting. Small businesses fail to focus on the basics — doing your P.& L.’s [profit and loss statements] and paying attention to cash flow.
Q. What are you trying to drive into people’s heads when you say, “It’s not the economy, stupid, it’s you.”
A. Look, what happened yesterday is now done. Tomorrow is a new day. I have to cut my costs viciously. I have to spend a great deal more time on my sales and marketing, and I have to stop whining and get to work.
To read the entire article [Fire Your Relatives. Scare Your Employees. And Stop Whining.], click here.
IT’S not the economy, stupid, it’s you. So says George Cloutier, author of “Profits Aren’t Everything, They’re the Only Thing” (HarperBusiness, 2009). Mr. Cloutier, the 63-year-old founder and chief executive of American Management Services, specializes in advising small and midsize businesses and turning troubled companies around.
His advice is to put profits above all. Always pay yourself first. Shock your laggard employees. Don’t accept excuses. His ax falls on trade shows (“they’re just a flimsy excuse for a paid vacation”), sweat equity (“I call it working for nothing and being a fool”) and teamwork (“vastly overrated”). And if you ever apply for a job at American Management Services, don’t mention that you like to play golf. A condensed version of a conversation with Mr. Cloutier follows.
Q. Lots of people blame the recession for putting them out of business. You don’t buy it?
A. I’m a little bit of a hawk on that one. The recession has been an excuse for poor performance. Why does your work dry up? Normally because you haven’t built a strong enough sales organization.
Q. What do most troubled companies have in common?
A. They have not implemented strong financial reporting. Small businesses fail to focus on the basics — doing your P.& L.’s [profit and loss statements] and paying attention to cash flow.
Q. What are you trying to drive into people’s heads when you say, “It’s not the economy, stupid, it’s you.”
A. Look, what happened yesterday is now done. Tomorrow is a new day. I have to cut my costs viciously. I have to spend a great deal more time on my sales and marketing, and I have to stop whining and get to work.
To read the entire article [Fire Your Relatives. Scare Your Employees. And Stop Whining.], click here.
Brands on the Brink: Marketing in a Down Economy
What does a down economy do to consumer behavior? Most obviously, it makes people less eager to open up their wallets. According to Janelle James, vice president for global marketing at advertising agency Leo Burnett Worldwide, recent research shows that 80% to 90% of people are willing to trade off or trade down when it comes to shopping. Moreover, said Chris Kuenne, CEO of the marketing strategy firm Rosetta, many of those customers might not bounce back with the economy. He likened the effect to "a one-way membrane--it's not like everyone's going to go back to work [when the recession ends] and become much less value-sensitive."
Read the article published in Knowledge@Wharton here.
Read the article published in Knowledge@Wharton here.
A Framework for Change Management
This perspective come from Alsbridge
Change management is a critical part of any project that leads, manages and enables people to accept new processes, technologies, systems, structures and values. It is the set of activities that helps people transition from their present way of working to the desired way of working. The focus of change management is to address the people and organizational factors that will both drive and obstruct change throughout the organization. The ultimate goal of any change initiative is to ensure everyone in the organization is ready, willing and able to appropriately perform their role in the new environment.
Challenges for Change Management
The nature of the change gives rise to a range of change management challenges, including:
- Lack of visible sponsorship: The change is not perceived to be important or even happening.
- Unclear, ineffective decision-making process: Reduced pace of implementation; additional cost: time + rework; lack of vision, direction and focus. Lack of buy-in; other priorities will be made.
- The right people are not involved: Delayed decision making; no sense of urgency; rework required by additional resources.
- Failure to remove organizational barriers: Project delays and could ultimately fail.
- Not anticipating and pro-actively managing people issues: Increased resistance; attrition; employee relations issues.
- Skills for new/changed jobs or roles are assumed and not tested/assessed: Training effort insufficient – additional effort required/reduced service level; unmanaged staff expectations.
- Planned organizational rationalization is not achieved: Staff are retained without a real need.
- Finance/HR resistant to "letting go" of certain current responsibilities which may in future be no longer theirs.
- Reluctance to change behavior: "Temporary" double effort; benefits are not reached (as quickly). Underestimating the time and effort required to "make the change stick."
- Lack of baseline/metrics/system to measure progress (how far have we got, how far do we still need to go?): No clear sense of how much has been achieved; lack of momentum; project fatigue.
Don’t Lose Your Customers
This perspective comes from Pivot Point Solutions:
You can’t lose what isn’t yours. And if you recognize that your relationship with “your” customers is tenuous at best, you have a good chance of creating lasting bonds and keeping customers. Customers are transient. They are supposed to be transient in a free-market economy. In our Darwinian economy, only the strong should survive. In our economy we should want consumers to make the best purchases for them. I used to feel bad when I didn’t “buy American” until I realized that American’s don’t buy American, they buy smart. Now I only feel bad when companies think of their customers as entitlements. Here are some surefire ways to lose customers:
Hammer them Like a Nail – If your answer to dissatisfied customers is to run a public relations campaign trumpeting how much you’ve improved, you are on the wrong track and wasting money. Customer satisfaction can be addressed only by improving customer service. In the world of social media and connected buyers/consumers, the good news about service will spread. Without tangible customer benefits your PR campaign will seem like you view service as a marketing problem, rather than a service problem.
Treat Customers as an Inconvenience – We focus a lot of time, energy, attention, study, research, and ultimately money on acquiring customers. Who can argue with an approach that lends itself to growing and building the business? Yet we invest very little on retaining those customers we worked so hard to acquire. If our acquisition message of “you are important” is to resonate and remain meaningful, we must back it up with actions and deeds that shout “we still value you!”
Create Processes that Benefit You or Your Company (but not the customer) – I had a surreal experience recently when trying to pay off the balance on a loan with Chase Bank. It took only a few minutes to get the loan. But paying it back required two (2) hours and the involvement of at least four (4) different departments (I stopped counting). Amazingly, Chase Bank had to verify that it was authorized to accept payment. I don’t know about you, but when someone offers to pay me back, I don’t ask where the money came from… I’m just happy to see it again. Now I’m beginning to understand why people think the banking system is broken. First it lent money to people who shouldn’t have gotten any in the first place, and now it won’t take the money back? Quite simply, if your processes aren’t benefiting customers, they are losing customers.
The Pivot Point is that “your” customers have choices. And so do you. If you choose to ignore customers or erect barriers to their success they will take their business elsewhere. After all, customers are yours only as long as you provide a benefit.
You can’t lose what isn’t yours. And if you recognize that your relationship with “your” customers is tenuous at best, you have a good chance of creating lasting bonds and keeping customers. Customers are transient. They are supposed to be transient in a free-market economy. In our Darwinian economy, only the strong should survive. In our economy we should want consumers to make the best purchases for them. I used to feel bad when I didn’t “buy American” until I realized that American’s don’t buy American, they buy smart. Now I only feel bad when companies think of their customers as entitlements. Here are some surefire ways to lose customers:
Hammer them Like a Nail – If your answer to dissatisfied customers is to run a public relations campaign trumpeting how much you’ve improved, you are on the wrong track and wasting money. Customer satisfaction can be addressed only by improving customer service. In the world of social media and connected buyers/consumers, the good news about service will spread. Without tangible customer benefits your PR campaign will seem like you view service as a marketing problem, rather than a service problem.
Treat Customers as an Inconvenience – We focus a lot of time, energy, attention, study, research, and ultimately money on acquiring customers. Who can argue with an approach that lends itself to growing and building the business? Yet we invest very little on retaining those customers we worked so hard to acquire. If our acquisition message of “you are important” is to resonate and remain meaningful, we must back it up with actions and deeds that shout “we still value you!”
Create Processes that Benefit You or Your Company (but not the customer) – I had a surreal experience recently when trying to pay off the balance on a loan with Chase Bank. It took only a few minutes to get the loan. But paying it back required two (2) hours and the involvement of at least four (4) different departments (I stopped counting). Amazingly, Chase Bank had to verify that it was authorized to accept payment. I don’t know about you, but when someone offers to pay me back, I don’t ask where the money came from… I’m just happy to see it again. Now I’m beginning to understand why people think the banking system is broken. First it lent money to people who shouldn’t have gotten any in the first place, and now it won’t take the money back? Quite simply, if your processes aren’t benefiting customers, they are losing customers.
The Pivot Point is that “your” customers have choices. And so do you. If you choose to ignore customers or erect barriers to their success they will take their business elsewhere. After all, customers are yours only as long as you provide a benefit.
How U.S. Consumer Spending Is Changing
McKinsey and Company reports that US consumers have responded to the global economic crisis by curtailing their expenditures, paying down debt, and saving more—all logical responses to a recession. Yet most consumers have acted by choice, not necessity. Spending, saving, and debt averages are not at abnormal levels today but rather returning to long-term trends. It was the behavior of US consumers during the past two decades, our research shows, that was the aberration. The return to traditional spending patterns will cause companies to adjust to a fundamentally altered playing field.
In a McKinsey survey conducted in March 2009, 90 percent of the US respondents said that their households had reduced spending as a result of the recession—33 percent of them “significantly” so. The survey, which included 600 households in three consumer segments comprising around 40 percent of all US homes, found that 45 percent of those who reduced spending did so by necessity, 55 percent by choice.
To read more, click here.
In a McKinsey survey conducted in March 2009, 90 percent of the US respondents said that their households had reduced spending as a result of the recession—33 percent of them “significantly” so. The survey, which included 600 households in three consumer segments comprising around 40 percent of all US homes, found that 45 percent of those who reduced spending did so by necessity, 55 percent by choice.
To read more, click here.
Six Mistakes Companies Are Making Today And How You Can Avoid Them
SAP has developed an interesting white paper focusing on six mistakes they believe many companies are making today.
The introduction reads: "When the economy slows, many businesses react by retrenching and cutting costs in order to weather the downturn. While such cost reduction is important, companies often overlook equally critical strategic decisions – opportunities to use valuable business information to strengthen product and service offerings and emerge ahead of the competition."
The paper suggests the six mistakes are:
1: Taking Existing Customers for Granted
2: Failing to Capitalize on Market Opportunities
3: Allowing Operational Inefficiencies to Persist
4: Letting Problems Go Undiagnosed and Uncorrected
5: Driving the Wrong Behavior in the Organization
6: Failing to Offer Transparency for Stakeholders
It's a thought-provoking article and a good read. At the end of the paper is a business intelligence self assessment that's quite worthwhile to take. It's short but revealing. You can download the white paper here.
The introduction reads: "When the economy slows, many businesses react by retrenching and cutting costs in order to weather the downturn. While such cost reduction is important, companies often overlook equally critical strategic decisions – opportunities to use valuable business information to strengthen product and service offerings and emerge ahead of the competition."
The paper suggests the six mistakes are:
1: Taking Existing Customers for Granted
2: Failing to Capitalize on Market Opportunities
3: Allowing Operational Inefficiencies to Persist
4: Letting Problems Go Undiagnosed and Uncorrected
5: Driving the Wrong Behavior in the Organization
6: Failing to Offer Transparency for Stakeholders
It's a thought-provoking article and a good read. At the end of the paper is a business intelligence self assessment that's quite worthwhile to take. It's short but revealing. You can download the white paper here.
Why across-the-board cuts make no sense
Why don’t back-office efficiency drives stick?
A granular look at back-office operations shows why across-the-board cuts make no sense.
The McKinsey Quarterly - January 2010 • Marco Ferber, Jürgen Geiger, and Klaus Kunkel - Source: Operations Practice
Difficult economic times are spurring many CEOs to demand cuts in corporate back offices. And no wonder: finance, HR, IT operations, and other support functions can represent 15 to 20 percent of a global company’s personnel expenses and are thus prime targets for retrenchment. Yet the savings are often fleeting—we find that barely four in ten companies meet their targets one year into a cost-cutting program, and by year four fully 90 percent of back-office costs are right back where they started.
To read the rest of this article, click here.
A granular look at back-office operations shows why across-the-board cuts make no sense.
The McKinsey Quarterly - January 2010 • Marco Ferber, Jürgen Geiger, and Klaus Kunkel - Source: Operations Practice
Difficult economic times are spurring many CEOs to demand cuts in corporate back offices. And no wonder: finance, HR, IT operations, and other support functions can represent 15 to 20 percent of a global company’s personnel expenses and are thus prime targets for retrenchment. Yet the savings are often fleeting—we find that barely four in ten companies meet their targets one year into a cost-cutting program, and by year four fully 90 percent of back-office costs are right back where they started.
To read the rest of this article, click here.
The key components of a successful business strategy
What are the key components of a successful business strategy? Harvard Business School Professor Michael Porter says strategy is all about escaping that model of “perfect competition,” and instead creating a strong position for your product or service that allows it to garner outsized profits.
He cites five key competitive “forces” that will determine the ability of your product or service to achieve a strong strategic position:
1. Entry. How easy is it for others to enter your market? Do newcomers face significant barriers, or do they expect sharp retaliation from existing competitors? Barriers to entry can include economies of scale, a highly differentiated product, large capital requirements for new entrants, large costs for customers to switch, limited access for newcomers to distribution channels, and government regulations or subsidies.
2. Threat of substitution. Are there other products and services that can easily be substituted for yours? Consider, for instance, what the rise of corn syrup did to the sugar industry, or what the iPod did to the CD business.
3. Bargaining power of buyers. Are a small number of buyers responsible for a large portion of your sales? Do their purchases from you represent a large portion of their costs? Can they easily switch suppliers, or go into your business themselves? Is your product relatively unimportant to the quality of their product or service? If the answer to these questions is “yes,” the buyer has significant leverage over you and your pricing.
4. Bargaining power of suppliers. Do you have multiple suppliers? Are there substitutes you can use? Is it easy to switch suppliers? Are you a relatively important customer? Is their product a relatively unimportant input for you? In this case, a “yes” answer means you have significant bargaining power over them.
5. Rivalry among current competitors. How intense is the rivalry among the firms you compete with? This will also affect your ability to sustain profits.
In coping with these five forces, Mr. Porter argues there are three generic strategies a firm can take to create superior profits:
– Overall cost leadership. If you keep your costs lower than anyone else’s, you can sustain profits. This was the strategy of computer maker Dell Inc., for instance, or of Wal-Mart Stores Inc.
– Differentiation. If you can create something that is valued as unique – think Mercedes automobiles, or Apple computers – you can succeed in making more money than others in the industry.
– Focus. By focusing on the unique needs of a particular group of buyers, a particular geographic region, or a particular segment of the product line, you may be able to earn above-average returns.
Porter argues that it is critical that companies make clear strategic choices about their approach. The worst position, he argues, is to be “stuck in the middle,” without either clear price leadership, a clearly differentiated product, or a distinct focus.
He cites five key competitive “forces” that will determine the ability of your product or service to achieve a strong strategic position:
1. Entry. How easy is it for others to enter your market? Do newcomers face significant barriers, or do they expect sharp retaliation from existing competitors? Barriers to entry can include economies of scale, a highly differentiated product, large capital requirements for new entrants, large costs for customers to switch, limited access for newcomers to distribution channels, and government regulations or subsidies.
2. Threat of substitution. Are there other products and services that can easily be substituted for yours? Consider, for instance, what the rise of corn syrup did to the sugar industry, or what the iPod did to the CD business.
3. Bargaining power of buyers. Are a small number of buyers responsible for a large portion of your sales? Do their purchases from you represent a large portion of their costs? Can they easily switch suppliers, or go into your business themselves? Is your product relatively unimportant to the quality of their product or service? If the answer to these questions is “yes,” the buyer has significant leverage over you and your pricing.
4. Bargaining power of suppliers. Do you have multiple suppliers? Are there substitutes you can use? Is it easy to switch suppliers? Are you a relatively important customer? Is their product a relatively unimportant input for you? In this case, a “yes” answer means you have significant bargaining power over them.
5. Rivalry among current competitors. How intense is the rivalry among the firms you compete with? This will also affect your ability to sustain profits.
In coping with these five forces, Mr. Porter argues there are three generic strategies a firm can take to create superior profits:
– Overall cost leadership. If you keep your costs lower than anyone else’s, you can sustain profits. This was the strategy of computer maker Dell Inc., for instance, or of Wal-Mart Stores Inc.
– Differentiation. If you can create something that is valued as unique – think Mercedes automobiles, or Apple computers – you can succeed in making more money than others in the industry.
– Focus. By focusing on the unique needs of a particular group of buyers, a particular geographic region, or a particular segment of the product line, you may be able to earn above-average returns.
Porter argues that it is critical that companies make clear strategic choices about their approach. The worst position, he argues, is to be “stuck in the middle,” without either clear price leadership, a clearly differentiated product, or a distinct focus.
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