ANALYSIS BY: Eric Britten, President, Britten & Associates, LLC, Anchorage, AK.
PUBLISHED: Jun 02 2010 .
AUDIENCE: Operations professionals, ERP professionals, Six Sigma professionals, Enterprise decision makers .
Introduction
It's difficult to have an objective discussion about about something unless we can definitively state what that "something" is. So, let's understand what Six Sigma is.
Motorola, the company who pioneered Six Sigma in 1981, says that Six Sigma is three things: a metric, a methodology and a management system. At different times in varying contexts, Six Sigma is all three. As a metric, Six Sigma is a measure of defects per million opportunities, a statistical measure that focuses on nearly error-free results. As a business improvement methodology, Motorola says it focuses an organization on understanding and managing customer requirements, aligning key business processes to meet those requirements, using hard data to analyze and minimize errors in those processes, and driving rapid and sustainable improvement to those processes. Finally, as a management system, Motorola says it is a high performance system for executing business strategy that enables organizations to align their strategy, mobilize to attack high impact projects, accelerate improved results and sustain those improvements.
With this three-in-one concept in mind, let’s now take a look at the pros and cons of Six Sigma.
Analysis
Pros
Research shows that firms who successfully implement Six Sigma typically deliver better return on investment, return on sales, employment growth, stock growth and value growth. General Electric executives report that their company realized approximately $8 billion in savings through its Six Sigma program from 1999 to 2002. I participated in a series of linked Six Sigma projects in 2007-2008 that netted $15 million in savings over 18 months.
Thomas Pyzdek, Author of The Six Sigma Handbook, says, “Estimated savings per project varies from organization to organization. Reported results average about US$150,000 to US$243,000. My experience is that the average Six Sigma Black Belt project will produce a net benefit of around $200,000 in mature programs, but I have seen a single project in a new Six Sigma program net as much as $2.5 million.”
Michael Marx, research manager for iSixSigma, tells us "About 53 percent of Fortune 500 companies are currently using Six Sigma, which has resulted in an estimated $427 billion of savings over the past 20 years. Utilization rises to 82 percent when you look at just the Fortune 100."
In addition to the financial benefits, Six Sigma implementation can also improve an organization’s ability to deliver value to their customers, create competitive advantage, improve job satisfaction, increase teamwork and communications, improve strategic alignment, improve systems performance and simplify process and workflow.
If implementing a Six Sigma environment in an organization can deliver so many benefits, why then isn’t every company doing it?
Cons
The reasons why every company doesn’t implement a Six Sigma program are varied. Yet, when we think about it, all the reasons can be reduced to three primary factors. First, Six Sigma implementation requires many organizations to completely change the way the company does business, and, in the judgment of leadership, that may just not always be in the best interests of the company or their customers. Second, it’s just plain hard work. Even if a company does decide to embark upon the Six Sigma path, it’s not an easy process, and some companies may only achieve limited or unsustainable gains. I’ll point out the third factor shortly.
Dr. Jiju Antony of Glasgow Caledonian University writes, “When Six Sigma was introduced to many organisations , the initial reactions varied from a lot of enthusiasm to an absolute skepticism. The latter mood reflected incomments such as:
•It is another quality improvement initiative or flavour of the month
•There is nothing really new in Six Sigma compared to other quality initiatives such as TQM we have witnessed in the past.
•This too shall pass like others
•This won’t work in our business
•It is nothing more than a hype
•It is not for us as Six Sigma requires complicated statistical methods”
Those types of opinions and perceptions usually are self-fulfilling prophesies. If a Six Sigma implementation is going to be successful, it has to be embraced by everyone at all levels of the organization. And it is within this context that the primary difficulties of implementation lie.
Forrest W. Breyfogle III, American Society for Quality Crosby Medal 2004 recipient, and David Silverstein, managing partner at Breakthrough Management Group, list what they see as the primary Six Sigma pitfalls:
•Not building an effective Six Sigma implementation strategy
•Trying to implement a one-size-fits all metric within Six Sigma (Organizations should choose the best metric for each project situation.)
•Trying to "go it alone," using their own training material when implementing Six Sigma
•Having weak, uncommitted leadership
•Failing to recognize the need for a supporting infrastructure
•Not committing Black Belts 100 percent of the time
•Pursuing poorly defined projects that are too broad in scope
I mentioned earlier that there was one more reason that an organization might not decide to embark on a Six Sigma implementation. Frequently, when thinking about Six Sigma, organizations either know or quickly realize that they already have many Six Sigma programs, practices and systems already in place. Their company has adopted these various elements as parts of their company management and operating system over time and they simply don’t call them Six Sigma.
Conclusion
If an organization is considering a Six Sigma implementation, their time will be well spent learning about the discipline, analyzing the expected benefits versus the costs, and thinking long and hard about how well the system will fit within their organization.
Read more interesting and helpful business articles in our article library. Click here.
Are Your Administrative Costs Slicing Into Your Profits?
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.
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.
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