Friday, December 30, 2011
The video below is from TED and is titled 'Alberto Cairo: There are no scraps of men'.
Alberto Cairo's clinics in Afghanistan used to close down during active fighting. Now, they stay open. At TEDxRC2 (the RC stands for Red Cross/Red Crescent), Cairo tells the powerful story of why -- and how he found humanity and dignity in the midst of war.
I wish there was a transcript of the talk that I could share as Alberto has some of the most powerful words entwined in his story.
The video is only 20 minutes long, but I think it is an amazing 20 minute experience.
Monday, December 26, 2011
- Unknown Author
So what is your vision for 2012? And I am not talking about world peace etc! What is YOUR personal vision for 2012 and when Dec 2012 rolls around and you reflect on your year, how will you measure your success.
Are you using a Vision Board to visualize your year ahead? Seriously I am not trying to be funny here, the fact is Visualization is a part of all of our lives. Ever heard of a Vision Statement? Almost every company I know has one. A Vision Board simply allows one to use imagery rather than text.
Personally I do not use a Vision Board although I acknowledge the potential merits of using one. Nor do I have a Vision Statement. What I do is simple but it works for me. I divide my year into 2, Family and Work. Then I come up with 5 MAXIMUM measurable objectives for Family and Work.
For example, if one of my Family objectives is "to be a better Father", whilst noble is not really measurable. So instead I could have a think about what being a "better Father" means i.e. reading my son a bedtime story each night. That way at the end of each week I would know if I achieved the objective. Similarly, if my objective "was to become more healthy in 2012" how would I know if I achieved it or not? Hence I would find it of greater benefit to create a measurable objective i.e. "to exercise 4 times a week at my local gym"
- These are my own two categories. You need to decide what works for you.
- My definition of family includes, other personal activities. The reason that I use the term "Family", is because with 2 young sons much of my personal time is centered around my family.
At the end of the day this exercise is a personal choice. Some of you may set New Year's resolutions, some may be very happy with the status quo. Either way, the choice is obviously yours however I leave you with this thought. Why is it we so often plan to the n'th degree various strategies in our work life and yet seldom do we see the same effort applied to our personal lives?
Perhaps the cat was on to something... "One day Alice came to a fork in the road and saw a Cheshire cat in a tree. Which road do I take? she asked. Where do you want to go? was his response. I don't know, Alice answered. Then, said the cat, it doesn't matter." - Alice in Wonderland by Lewis Carroll
Saturday, December 17, 2011
I could have called this article "what small business owners can teach managers in large corporates", but:
a) that is a crap title for an article
b) does not do justice to the importance of understanding how simply looking at profit can be so dangerous.
Take this example. A stand alone business unit of a publicly listed company ran its own Profit and Loss (P&L) that was consolidated up to the parent company. On one particular month the business unit sold (I am going to make the numbers up for purposes of confidentiality) $4mil worth of product to various retailers. The Cost of Goods was around $2mil and the Expenses were around $1.5mil. So if you do the simple maths you can see the EBITDA (operational profit) was $500K or 12.5%. Good business right? Well not quite. You see the same month the business had forecast sales of $6mil, although because of lead times to manufacture the product the forecast was required by the Inventory Manager to purchase the stock 5 months before the stock was shipped to the retailers. Unfortunately the business had actually forecast $6mil for 3 months in a row but about 1 month out of the first of the $6mil months the retail market tanked and whilst the Sales team were trying to come up with initiatives to make up the shortfall, the reality was the retailers were reducing their spend. So the long and short of it was that the business was having to pay for stock that is was not selling. In essence we have here a negetive cash position i.e. more money is going out than is coming in. In fact the reality was that if this business unit had not been part of a much bigger company it would have been in serious financial trouble with an inability to pay creditors.
But wait a minute, the business made an operation profit of 12.5%. So to summarise - a profitable business in serious financial trouble.
Putting the market challenges aside one of the key contributors to such a problem is the lack of all round financial skills that managers learn in large corporations.
Whilst larger companies can teach some great business skills they often don't teach great all round financial skills. Small business owners come to know the saying "Cash is King" very early on. However in large companies Cash Management can be part of Accounts Receivable, Treasury and often the domain of the Chief Financial Officer. Hence many employees, even General Managers with P&L responsibility, don't learn great financial skills as Managing Cash flow may be outside their remit. What they learn is primarly centered around the Profit and Loss.
So the next time you see a profit number, ask the question, "How does the cash position relate to the profit number?". If you do, and are in a large corporate, you are already ahead of many of your peers (and in many cases those above you). If you are in a small business and have not asked the question, God help you because your Bank Manager won't.
I appreciate there may be readers who are questioning the forecasting, inventory management, supply chain, sourcing process etc that should assist in helping to manage the stock risk. The purpose of this article is not to overlook the various stock control mechanisms but to illustrate the problem with only focusing on profit.
Friday, December 9, 2011
My youngest son is 7 weeks old. I was thinking the other day about how different my upbringing was compared to the world he has entered. Feeling a little nostalgic I thought I would put pen to blog.
|Then (I was born early 70’s)||Now|
|School Assignments |
|If we had a school assignment the school would call the local library to ensure that the assignment books could only be loaned for 3 days max. That way everyone had a chance of reading the books.||Google it.|
|School Assignments |
|As above, but we used to have to use tracing paper to outline and colour in the pictures we were going to use.||Google Images.|
|Phone||Big phone with a round plastic dialling button. Lots of Zero’s sucked as it hurt your finger when you went around the whole way and hit the metal piece. For the kids it looked like this : link||I’m skyping from my tablet.|
|Tablet||Was the dosage pharmaceutical companies used for how humans took a drug.||It’s not a computer but it is. It is also “magical”.|
|Flying on an aeroplane||This was a BIG DEAL back then. My parents actually bought me a suit for the first time I went on a plane.||Its a flying bus with seatbelts.|
|Computer Games||We had a ZX Spectrum in the early 80’s. You had to load a tape that took 15min+ to load the game.||Play in real time with someone else on the other side of the world.|
|Portable Computer||The first first portable computer I ever used was an Olivetti M21. It weighed about 15KGs. It had a 8MHz CPU and 640Kb of memory||My Samsung Galaxy II weighs 116g has a Dual-core 1.2 GHz and up to 32gb internal memory. Specs.|
|Music Player||Something that played a vinyl record or a tape.||My phone.|
|Music Shop||A shop that sold vinyl records, tapes and later cd’s. You used to browse the collections by flicking through the collections with your fingers.||The internet.|
|Cars||My fathers car had 4 wheels, an engine, a steering wheel and he would fix it by opening the hood and doing things :)||My car has wheels, an engine, a steering wheel and when it needs fixing a mechanic opens the hood and then I am required to pay a fee that helps to pay off the debt of a small 3rd world nation.|
I appreciate this post is atypical of my normal Execution & Strategy type posts but there is nothing like a little reflection to bring about a smile. I am sure many of you have thought similar things about your past vs present. Feel free to share your thoughts in the comments section.
Sunday, November 27, 2011
This article pertains to project execution however there may some readers who see relevance in their day to day business environment.
Management guru Peter Drucker said, "What's measured improves". Whilst I agree with the sentiment, my view is that creating metrics (measurements) is a futile exercise if there are no consequences, should the metrics be continually missed or ignored, or alternatively should they be exceeded with little to no recognition.
We all live with metrics everyday, outside of business, and miraculously seem to (in the main) be able to meet the objectives. For example, traffic speed limits. Typical traffic roads rules include set speeds for various roads. Government authorities impose speed limits, for various reasons, that road users are required to obey. Should anyone break the speed limit, and are measured doing so, the repercussion may be a fine or loss of driving points (if relevant to the given country) etc. Should one choose to continually break the speed limit, and get caught, the severity of the action taken by the authorities may be increased i.e. increased monetary fines, potential loss of licence etc. In summary should a driver choose to ignore the set metric, there are consequences. In part (I appreciate not all) this helps ensure the majority of road users keep within the set parameters thereby helping to ensure an orderly road system.
Yet in the everyday business world there is often a chasm between the set metric and the outcome.
I have seen a numerous projects and "transformation programs" where a key platform of the recommendations is the introduction of new metrics aligned to the deliverables (prize). I have seen these same companies set up fantastic spreadsheets tracking the progress in line with the new metrics. However time and time again the prize emblazoned on the PowerPoint presentation does not materialize. Please do not get me wrong, there are multiple reasons why a project / program does not achieve its objectives (including setting the wrong objectives and metrics to start with) however in my opinion the lack of consequences for not adhering to the new measurements is often a considerable reason for a project's performance.
I am not suggesting firing anyone and everyone for missing a number or objective however I am suggesting that if a metric is in place and it is ignored or missed by a mile then there should be an action plan to get things back on track, including resetting the metric or objective if appropriate. Likewise, it is equally important to recognize those who do meet and / or exceed the set requirement. Again, I have seen many employees work ridiculous hours to achieve a specific objective only to end up incredibly demotivated because their effort in achieving the metric was overlooked.
Part of the action plan may be the need to review the metrics or objectives themselves. How many times have you looked at a Balanced Scorecard and scratched your head wondering who is really responsible for achieving what? (As an aside here is a great article on this particular issue - link).
My suggestion to anyone reading this is that the next time you are assigning metrics ask yourself, "If this objective / measurement is or is not met, then what?" If the answer is "absolutely nothing"...don't bother.
Sunday, November 13, 2011
Time for a little quiet reflection.
Sunday, November 6, 2011
Recently I purchased two products from two separate online retailers. The first item was a TV and the second item was a Smart Phone.
Both online retailers touted their ability to deliver significant savings to the customer (i.e. me) due to their low cost business models. And to be fair, the prices on both products were far lower that I had seen in traditional retail outlets. Additionally both online retailers provided free delivery. So in summary, the proposition to me was brilliant. I was purchasing well known products, through reputable online retailers at below market prices and I did not need to leave the comfort of my lounge chair. How could I go wrong????
Retailer 1: The TV
The website gave the option to choose the delivery date. I purchased on a Monday and chose to receive the product 2 days later on the Wednesday. At 10am Wednesday morning I received a call from the delivery driver saying he will be at my house at approximately 12 to 12:30pm. At 12:30pm my new TV was delivered.
Experience Rating - Excellent
Probability of repeat purchase - High
Retailer 2: The Smart Phone
After I purchased the item, I received a confirmation email that included the line "Products listed as "In Stock" are usually dispatched within 3 business days." 3 Days came and went very quickly. In fact 7 days came and went very quickly. I called the order inquiry line.... and was asked to leave a message. Then I sent an email, to which I received a response saying "There have been slight delivery delays on some Samsung phones in the last week. We pride ourselves on the speed of our service and delivery and almost always our Canon, Apple, Nikon and Samsung products are dispatched within 48 hours. There have been some airline issues for International flights ...." yada yada yada. Long story short, my phone will be delivered next week - 15 days post the purchase date.
Experience Rating - Crap
Probability of repeat purchase - Low
Now lets break this down into a very simple value chain analysis. (Note: Please do not email me saying this is not a proper Value Chain. I understand this. This is merely for illustrative purposes).
|Retailer B: Smart Phone|
|2||Price product and highly competitive rates||Achieved||Achieved|
|3||Provide comprehensive and easily to navigate on line retail environment||Achieved||Achieved|
|4||Accept payment for product (nice way of saying take upfront payment)||Achieved||Achieved|
|5||Provide delivery window||Achieved||Achieved|
|6||Deliver product within specified time frame||Achieved||FAIL|
This is an excellent example of how failing in execution can minimize one's competitive advantage. Here we have two like businesses with similar business models. And yet one has an significantly increased probability to generate further income from its customer (me).
Why is this? In a previous article (Under promise and over deliver) I quoted Tom Peters, "Formula for success: under promise and over deliver". In the case of Retailer B, simply delivering would be a win (sorry I could not resist).
The reason the the final outcome, that is repeat purchasing, is so different is the ability to execute the total Sales process.
Sales is not simply getting extracting money from a buyer. It is understanding the total value chain that is required to generate repeat purchasing. The inability to execute against any step along the Sales value chain reduces a company's competitive advantage. In the case of Retailer B, as a consumer would you care about the problems with the international flights or the outsourced freight supplier i.e. the retailers logistics. No, as a customer you would care about making sure the product you have paid for arrives on time. Quite simply the customer expectation is "deliver what is promised"!
It does not take a genius to develop a strategy of selling high volume product at competitive pricing. However it does take great execution to deliver a competitive advantage.
Wednesday, October 26, 2011
- It takes 12 positive experiences to make up for one unresolved negative experience – “Understanding Customers” by Ruby Newell-Legner
- A 5% reduction in the customer defection rate can increase profits by 25 – 95% – Bain & Company
- A customer is 4 times more likely to defect to a competitor if the problem is service related than price or product related – Bain & Company
- 68% of customers leave because they were upset with the treatment they received whilst speaking to customer services – US Chamber of Commerce
- 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back – 1st Financial Training services
- A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people – White House Office of Consumer Affairs
- Companies that make customer service a high priority see twelve times the return on sales than those companies with a low emphasis on service -
- International Customer Service Association
Back to the hospital! This particular hospital has four values, three of which are, Compassion, Respect and Excellence. Clearly the hospital's strategy and ability to execute were not aligned for the mid-wife in question. Like all organisations, this hospital could have a 95% (1 in 20 as stated above) success rate in employees adopting the values element of the corporate strategy however the impact of that one person literally wiped out the entire 95% achievement for us as customers.
As a side note the forth of the core values at the hospital was Accountability. We were very impressed by the Customer Service Manager who did an exit interview with us re my wife's stay. As returning to the hospital is not in our near term plans it would be very interesting to see how the feedback we provided is used to minimize the potential negative impact of the one bad apple by living the core value of Accountability.
Sunday, October 16, 2011
As many of you may have experienced, it is common practice for companies and/or their specific business units to undertake Benchmarking exercises, often by paying exhorbent fees to Professional Services companies to provide the required facts.
I recently came across an old video of Tom Peters discussing Benchmarking in a presentation (note: the video is at bottom of this post). Tom states, "... I hate Benchmarking! Benchmarking is Stupid! Why is it stupid? Because we pick the current industry leader and then we launch a five year program, the goal of which is to be as good as whoever was best five years ago, five years from now."
Tom has a point. And it is a good one. This is the "Ugly" in Benchmarking. There is no use setting your objective based on trying to achieve a specific measure if the reality is the best-in-class company is going to continually move the goal posts forward. This is why innovation is so important. If you only chase the leading benchmark you will always be a follower. To quote Steve Jobs, "Innovation distinguishes between a leader and a follower." Or as Seth Godin wrote, "The reason it is so hard to follow the leader is this: The leader is the leader precisely because he did something remarkable. And that remarkable thing is now taken - so it's no longer remarkable when you decide to do it."
However I do not totally agree with Tom. As the first part of the definition states, Benchmarking is the process of comparing one's business processes and performance metrics... In my view is this is critical. Obvious, but critical. I liken it to going on a journey. It is impossible to get to point B or C if you do not know where your starting point i.e. point A, is. Hence, in my view, this is the "Good" in Benchmarking as having a solid factbase about your own business (and not necessarily everybody else's) is an essential starting point of executing any strategy.
The 2 minute video below, includes the Tom Peters quote above:
BTW. There is no "Bad". It just made for a good blog title :)
Wednesday, October 12, 2011
However what surprises me is that I have come across very little in the way of comparisons to one of the greatest business people and marketer's of the 20th Century, Henry Ford. The reason that I am surprised is that I find considerable similarities between Apple and Ford (with particular reference to the Model T Ford).
1) Existing Concepts:
|Ford||Automobiles||The concept of the first automobile dates to 1672.|
|Apple||Mouse||See Xerox Parc re concept.|
|Apple||Apple Mac||See: History of Personal Computers|
|Apple||iPod||Apple acknowledges the concept dates to 1979|
|Apple||iPhone||See: History of Smartphones|
|Apple||iTunes||Apple purchased the rights to SoundJam MP.|
|Apple||iPad||See: How The Tablet Computers Have Evolved|
To summarise the table above, neither Ford nor Apple invented the concept related to the product for which they are famous.
2) Lack of Product Customisation:
Both Ford and Jobs are famous for not creating multiple customisations of their products in response to consumer requests.
In Henry Ford´s 1923 autobiography ‘Henry Ford - My life and work’ he quotes himself as saying, “Any customer can have a car painted any colour he wants so long as it is black”.
Likewise Steve Jobs and Apple haVE been criticized countless times for their strict control over their closed business model (ecosystem).
3) Mass Market Focus
"I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in God's great open spaces."Steve Jobs:
Steve Jobs and Bill Gates were interviewed at 'D5: All Things Digital' conference in Carlsbad, California, in 2007. When asked what each has contributed to the computer and technology industry Bill Gates said of Steve Jobs: “What Steve’s done is quite phenomenal, and if you look back to 1977, that Apple II computer, the idea that it would be a mass-market machine, you know, the bet that was made there by Apple uniquely—there were other people with products, but the idea that this could be an incredible empowering phenomenon, Apple pursued that dream. Then one of the most fun things we did was the Macintosh and that was so risky. People may not remember that Apple really bet the company. Lisa hadn't done that well, and some people were saying that general approach wasn’t good, but the team that Steve built even within the company to pursue that, even some days it felt a little ahead of its time—I don’t know if you remember that Twiggy disk drive and…"4) Visionaries:
Both Henry Ford and Steve Jobs were incredible visionaries. Whether it was the Henry Fords’ foresight to create a process and production line that allowed for an affordable car or Steve Jobs remarkable ability to see the mass potential of an existing product through great design (Steve Jobs: Design is not just what it looks like and feels like. Design is how it works.) both men were visionary in their thinking and execution.
Leonardo da Vinci was an astonishing inventor and whilst neither Henry Ford or Steve Jobs invented the concepts of their most famous products, they (and their businesses) shared a number of characteristics, not the least being their ability to execute their vision.
Wednesday, October 5, 2011
The speech by Steve Jobs below is one of my all time favorite speeches. Steve Jobs RIP.
“Don’t be sad because it’s over. Smile because it happened. — Dr. Seuss"
Wednesday, September 28, 2011
Monday, September 26, 2011
People listen..."Just because you send it from a blackberry (or other device - even your pc) a one word email is not acceptable!".
So what can we do to improve this blight on society. Simple:
- companies could create email etiquette policies that ban one word emails
- mobile device makers and the email software providers could make sending one word emails impossible
- anyone typing an email could use common sense (and heaven forbid, some manners)!!!
Friday, September 16, 2011
Saturday, September 10, 2011
From a timing perspective, "stopping the bleeding", needs to be undertaken as quickly as possible where a company is in financial distress. In part, the benefit of stabilizing the cash flow situation is to allow the organisation breathing space to develop a growth strategy. This is particularly relevant where companies are in a critical and often sudden state of financial distress.
Remember at the end of the day it is called a Turnaround and not a Standstill. At the forefront of any Turnaround professionals' mind must be a focus on reducing costs and setting the business on a path for growth. Simply cutting costs does not grow the business.
Sunday, September 4, 2011
A quick check at Harvard Business Review shows that searching using the word "Leadership" generates 7404 results, including:
HBR's 10 Must Reads on Leadership
Social Intelligence and the Biology of Leadership
Leadership That Gets Results
and so on and so on and so on.....
However what fascinates me is that the majority of the materials written all suggest ways and means for one to become a great leader. However very little appears to be dedicated to the opposite i.e. Bad Leadership.
Of the very little that has been written on this subject Barbara Kellerman's book Bad Leadership: What It Is, How It Happens, Why It Matters is a standout (for me anyway). Kellerman outlines seven types of Bad Leadership:
- Incompetent: lacks the will or skill (or both) to sustain effective action with regard to at least one important leadership challenge
- Rigid: stiff and unyielding; unable or unwilling to adapt to new ideas, new information, or a changing of the landscape
- Intemperate: lacks self-control
- Callous: uncaring or unkind; ignores or disregards the needs, wants, and wishes of others, especially subordinates
- Corrupt: lies, cheats, or steals; puts self above any other interest
- Insular: minimizes or disregards the health and welfare of anyone outside the group or organization for which they are directly responsible
- Evil: outright disregard for even the human worth of others; egregious inhumanity.
I have a big problem with the lack of focus on Bad Leadership and the continual focus on 'how to become a great leader'. I liken it to going to the doctor. Imagine telling the doctor you want to get better but you don't want to know what is wrong. By ignoring the traits of Bad Leadership we ignore what needs to improve. By focusing only on the notion of improving our leadership abilities we do not focus on negative areas that may need addressing.
So now for a little soul searching. Are you a Bad Leader?
Sunday, August 28, 2011
- Work out why you are selling and let that drive the structure. People often sell businesses with a focus only on the money and then later look back with regret after six months playing golf. It may be that a partial exit is better for you than a sale would be.
- Hire advisers who buy and sell businesses for a living. Yes, they'll charge a lot more than Fred who does your tax return, or the neighbourhood lawyer who sold your house, but it will be money well spent.
- Dividend out all excess cash well before the sale process begins. Smart buyers will always go after the cash sitting in your business.
- Try to resolve outstanding or pending litigation. It may even be worth taking a financial hit to remove litigation which could scare off potential buyers or result in a tough warranty/indemnity/escrow regime.
- Address leadership succession issues well before the sale process begins. No smart investor wants to buy a business from a retiring founder. (See my previous post on this topic).
- If your inventory controls are loose, complete a professionally supervised stock take. Your goal is to build buyer confidence, and that means avoiding surprises.
- Make an effort to collect overdue debtors. It's unlikely that the buyer will pay for accounts receivable which are dated (depending on your industry, this typically means 90+ days).
- Sell obsolete or slow moving inventory, as well as any surplus assets. Again, the buyer probably won't give you value for these, so try and monetise them before you start marketing your business.
- Remove those embarrassing “personal" assets from the balance sheet. Come on, you know what I'm talking about. Your daughter's computer, the boat you never used for customer sales events, the car you ex-wife drives . . . time to clean it all up.
- Ensure that property leases are arms-length. Buying a company where the seller is also the landlord is an uncomfortable, but common, situation. If your company's buildings are sitting in the family trust, at least put in place a proper lease on typical market terms.
- Run a competitive sale process. Getting an offer from several buyers will not only almost always drive up the sale price, but it may also give you a range of different transaction structures to consider.
- Get your books in order. Ideally you should have three years of audited accounts ready to show the buyers.
- Get your premises in order. Sounds very obvious, but do not want to give a terrible firm impression due to dirty workshops, offices with 20 year old lighting and carpets, no signage on buildings, etc. As part of this, consider whether your OH&S practices would stand up to outside scrutiny.
- Assume that potential buyers will want to read your board minutes from the past 12 months . . . write them accordingly.
- Make sure that employment contracts are in place for all important members of the management team.
- Ensure that the accounts are in order - both statutory and management accounts. It is worth making an investment in a decent accounting firm to ensure that the accounts are in as good condition as they can be before buyers pitch up. If can be very embarrassing for a seller to find that their earnings are much lower than they had thought because there is a stock write-off, an uncollectable debt, or whatever hiding in the books.
Wednesday, August 24, 2011
Saturday, August 20, 2011
The video below is from TED June 2007. There is also a book titled The Boy Who Harnessed the Wind that is a highly recommended read.
If you want further information see:
a) William's website - http://williamkamkwamba.typepad.com/
b) Wikipedia article - http://en.wikipedia.org/wiki/William_Kamkwamba
c) TED page - http://www.ted.com/speakers/william_kamkwamba.html
Enjoy the video.
Monday, August 15, 2011
- I have absolutely no interest in taking a political stance. I am merely putting a business lens on the situation.
- I am obviously simplifying the scenario and solution, considerably, for the purposes of the article.
Tuesday, August 2, 2011
Monday, July 25, 2011
Typically a successful argument, suggestion etc requires persuading the audience that "perceiving is believing". However this is clearly not the same as "seeing is believing", which I find to be far more successful when trying to get various parties on side.
Tuesday, July 19, 2011
- Most people go to work and want to do a good job
- Most people enjoy being recognised for doing their job
- There are superstars out there in particular fields and by the nature of their job they are easy to identify i.e. Programmers, Surgeons, Athletes
- The majority of people in “general management” type roles i.e. Marketing, Sales, Operations, HR have similar ability (however unpalatable that may sound).
- There is a big difference between working hard and being a "superstar". NOTE: This is a big distinction for me. There are people whose hard work and determination are what makes them rise above the rest. However this is a considerable difference to natural ability.
Perhaps the 30th President of the USA, (John) Calvin Coolidge was on to something when he said, "
Saturday, July 16, 2011
Tuesday, July 12, 2011
Friday, July 1, 2011
I have seen many organisations often bundle together high level generic organisation Accountabilities with individual Accountabilities into generic KPI’s that are then imposed on almost all employees. This methodology fails to hold individuals accountable for their role.
A simplistic example:
Hypothetically imagine you or I were to go to have a surgical procedure. From the moment we entered the hospital it is the “hospital” and all staff involved responsibility to ensure my health is looked after. HOWEVER we do not hold the person at the administration desk accountable for my surgery. Likewise we do not hold the Theatre Nurse accountable for the actual procedure. We hold the Theatre Nurse accountable for ensuring the Doctor has all appropriate surgical instruments etc. Likewise we do not hold the Surgeon accountable for changing my bed pan.
Now imagine if everyone’s KPI at the hospital was the same e.g. “Ensure the health of all our patients.” How would you know who is doing a good job or a great job? How do you know when something goes wrong where the accountabilities lie?
This example can be applied across organisations today. How many of you have a Sales, Margin or Profit number next to your name but your accountabilities are not directly related to impacting the financials? Of course everyone plays a role in the organisations ability to meet its financial objectives however if the metrics are not aligned with Accountabilities then there will forever be lack of role clarity, poor communication and finger pointing i.e. it was someone else’s “responsibility”!
Sunday, June 19, 2011
Perhaps if Groupon was around in John's era he may have had a little more insight. Before I go on I need to stress I am in no way advocating the use of Groupon as a sales tool. However, I always advocate measuring how a business spends its money....in any department.
I recently came across this article on Techcrunch which I think is fantastic. Have a read - http://techcrunch.com/2011/06/18/ribman-groupon-bashing/
So, why did I love the article? Simple. Look at the level of analysis that Carey Friedman, the restaurant owner of Grandpa Eddies BBQ, goes to in understanding the success of the campaign.
Marketing managers are forever chastised for wasting money:
and if you are keen for a little academic reading:
If you read the Techcrunch article comments you will see a number of posters are critical about the ROI of the campaign. That may be fair enough, but how many small business owners spend money on advertising (I am using the term advertising loosely here) and have no idea of the cost, outcome (at the detailed level) and hence ROI.
It is not only small businesses that waste marketing money. Anyone remember the $500mil impact the Microsoft Vista campaign. Here are many many more examples of poor marketing spend execution - http://tinyurl.com/3uyoasu
I tip my hat to Carey Friedman. If more small business owners were as fastidious about their marketing spend, as Carey Friedman, then there would be far fewer business owners wondering which half of their advertising was wasted.
Friday, June 17, 2011
Thursday, June 2, 2011
A recent HBR blog post by Tony Schwartz titled "The Only Thing That Really Matters" is well worth the read.
I appreciate there are many out there who do not, for what ever reason, subscribe to the emotional side of people management however the example given in the article of Doug Conant, the outgoing CEO of Campbell Soup is a fantastic case study for demonstrating how managing people is more than KPIs and bottom line results. To quote the article, "Doug Conant .... is a rare example of a CEO who truly appreciates the relationship between personal value and the bottom line."
Many organisations and consultancies are fantastic at developing strategy. But when people are so often treated merely as an expense on the P&L, is it little wonder that that the execution does not deliver the famed "size of the prize"? Perhaps if more managers followed the examples laid out by Tony Schwartz the outcome of many strategies may be materially improved.
Wednesday, May 25, 2011
Q:How many HR officers does it take to change a light bulb?
A: Four. One to assess the risk of the light bulb changing process, another to consult the light bulb and its stakeholders, yet another to ensure that the health and safety procedures are being adhered to while the bulb is being changed, and a fourth to actually change it.
I need to start with a caveat. My beautiful wife is a HR Manager and is exceptional at her job. This article refers to all other HR folks out there :)
I recently advised a client on a new start-up business. I was talking about the org structure and told him that at the start-up stage not to worry about bringing in any HR personnel as they are a cost center and there would be little to no value add. On reflection I wondered if others agreed with my point of view not only about a start-up environment but also an established corporate environment.
and the grand daddy of them all (note: this article is 6 years old and has been constantly referred to in numerous articles and blogs)
There is even a PHD paper based on the above article:
Teaching Guide for “Why We Hate HR”
Finally an article about HR getting a "seat at the table" the readers comments do not hold anything back.
I am sure if I did a search on other professions / roles I would find similar articles, however I was surprised at the venom in some of the comments.
My own personal belief is that there are two sides to this story but that ultimately the execution of a solid HR strategy does not rest with the HR managers but with the CEO's who employ the function and weak managers who palm off responsibility. As blogger Suzanne Lucas at Evil HR Lady says "Why am I evil? Well, I'm not, but that's the perception of all of us in HR. Need to fire someone? Come to HR. Need to explain to someone why, even after working their rear end off all year, that their annual increase is 2.7%? Come to HR. Need to come up with new mountains of paperwork? Come to HR. So, come join me on the Evil Side."
Don't get me wrong. I have worked with a number of HR managers who could not run a bath let alone a business but to lump the whole profession in the "crap basket" is unfair. Owners, CEO etc have to take responsibility for the implementation of their corporate strategy and if part of that strategy is centered around people (i.e. the whole thing) then I suggest they shine the torch on their own inactions in the HR department. Allowing any department to become a haven for bureaucratic policing is a failure in executing the right strategy. As Einstein said, “Bureaucracy is the death of all sound work."
As for the start-up. I stand by my advice. Sorry HR but in a start-up environment I believe it is a cost the business cannot afford.