Jun 17, 2009 | Demand chains, Management, Strategy
Nice thought.
Contracts are the usual form of defining an agreement, they are an enforceable substitute for trust that each party will keep his end of the bargain.
However, the web has made information so freely available, that the potential is for a substitute form to evolve, a form that calls for, and publishes performance data for all to see.
The ambient threat that non performance to an agreement will become public knowledge is going to become as powerful as a contract, as it will inform others that your business is not to be trusted. Similarly, the converse is true.
Will facebook replace a contact, perhaps not, but it may mitigate the current monopoly lawyers and the courts have on the process of agreement enforcement, becoming entirely more democratic and affordable in the process.
Jun 16, 2009 | Demand chains, Management, Marketing, Strategy
There is a theme in the demand chain category of this blog. Wherever I go, I see the power of information transparency to improve performance, not just in commercial situations.
There is an ongoing battle in Australian education for school scorecards, anyone who seriously thinks about performance improvement of Australia’s education system comes to the conclusion that information on current performance is a pre-requisite for improvement, but the bureaucracy, and the teachers union together, but for their own reasons are making it difficult, all in the name of our childrens education.
Bullshit. It is in the name of retaining the very comfortable status quo.
Similarly, a scorecard of hospital performance has been shown in parts of the US to have a dramatic effect on surgical outcomes. Won’t happen here, even with the seeming catalysts for change that are evident in several hospitals, Bundaberg in QLD and Campelltown in NSW amongst others.
In the event we ever get real transparency, where results can be seen, and lessons learnt, the productivity of public dollars spent on health care would improve dramatically.
Businesses and value chains that have used transparency as a management tool routinely see productivity double over time, and there is no reason the results in Healthcare and Education would not repeat that performance.
Jun 12, 2009 | Management
“We do not have time for that long term stuff, we have to …..(fill in your own)… or we will not survive to worry about it”.
This is true, particularly in small business, but if you do not put aside time and energy to consider the origins of the symptoms, and treat them, all you get is steadily worsening symptoms, taking more time and resources to manage, whilst getting sicker.
Identify the problem, treat it, and the symptoms go away, leaving you do something useful with the time freed up.
Jun 11, 2009 | Demand chains, Management, Sales, Strategy
Most supply chains are driven by orders, someone reacts when an order is received.
The niggling question is always about demand, as most recognise it drives orders, inventories, innovation, competitive pressure, and so on, but is rarely measured.
Orders are at the end of the process, they arrive after making allowances for out of stocks, poor display, customers memory, competitive activity, the skill and interest of the sales person, and many other factors.
Demand is created by understanding the customer, and positioning your good or services in their minds as the best value solution available to address their need. This is longer term stuff, harder to measure, easy to ignore, but it is the foundation of commercial sustainability.
How much better would it be to have in place signals that reflect demand, they might give us an opportunity to reduce the incidence of lost opportunities, whilst better managing our investment in inventories, brands, customers, and the short term sales tactics used to stimulate an order.
Jun 10, 2009 | Management, OE, Operations
Most efforts to improve Operational Efficiency (OE) have at their core the elimination of variation in a process. It starts by setting standards, measuring the variations, and then progressively eliminating the causes of the variations, until you have a repeatable process with minimum variation.
Terrific so far.
Change in an organisation, change of any sort, has at its core a dissatisfaction with the status quo, and a determination to change it, not necessarily by the CEO, or anybody with power, but by someone who is dissatisfied with the way things are.
How do these things sit together?
The value of process conformance leading to OE are undoubted, but in gaining the benefits, we eliminate, or at least minimise, the opportunity for change, which flourishes on diversity.
Change, or non conformance, brings risk and growth, high levels of conformance brings a death by boredom, but both are necessary for organisations to flourish.
This is another paradox that challenges the leadership of organisations, one not generally recognised by those who advocate “Lean” thinking, of which I am one, and its cousin “6 Sigma“, but something that leaders perhaps need to consider in the way they go about nurturing the culture of the organisations they run.
