Dec 6, 2012 | Lean
There are three types of activity in any business, from the small one man service operators to BHP.
- Doing all the things that generate revenue, today, tomorrow, and into the future,
- Doing the necessary things that support the generation of revenue,
- All the other crap that takes time, costs money, and does not add any value to anyone, just costs.
Every person in business should be maximising 1, ensuring that the time and resources spend on 2 are as productive as possible, and eliminating 3.
I had a carpenter at my home a while ago, building a deck. Watching him prepare a joist, I noticed the rule of three operating.
- Cutting the joist was adding value, and ultimately what I was paying him for
- Setting up his drop saw, organising to feed in the timber to be cut, measuring the wood for the cut point, and a few other things were necessary in order to cut the timber accurately.
- The walking back and forward to his van to bring in things he had forgotten, looking for his pencil, then leaving it in an inappropriate spot, and a whole lot of other stuff, was waste.
- It took 10 seconds to cut the wood, probably 3 minutes to do all the necessary stuff, and another 15 minutes to do all the unnecessary stuffing around. For a 10 second cut, I paid for just over 18 minutes, of which 15 minutes was waste.
The rule of three at work.
Dec 4, 2012 | Leadership, Management, Strategy
Listening this morning to a discussion about the value of a review of the GST sharing regime currently in place, a small part of the GST regime, I was reminded of the geometric nature of the complications that arise from complexity of a system.
The greater the amount of data, the greater the opportunity for analysis, apparently. However, the greater the amount of data, it usually follows that the level of complexity also increases, and as complexity increases so does the number of interactions, and cause and effect relationships that need to be anticipated and interpreted.
Unanticipated relationships that have an impact on the performance of the system, but have not been “risk-assessed” can create a huge risk to systems, simply because they are not in the rule-book. The system is supposed to be “fail-safe” so the response to an unanticipated situation is not enabled. Remember Lehmann Brothers, a massive institution that on paper was AAA, but in reality was so complex that risk was not easily assessable except with hindsight.
Finding the needle gets harder as the pile of hay gets higher, and the complexity of hay-stack increases.
How complex is your business model?
Dec 3, 2012 | Management, Uncategorized
A really good explanation of the Kickstarter process.
Crowdfunding is not the new panacea for new ventures to raise money, you still need a robust business plan, the right people, and a value proposition that really works, but it is an option not available just 2 years ago.
Astonishing evolution of a funding option.
Dec 3, 2012 | Leadership, Management, Marketing
Can’t see the forest for the trees!.
This is a pretty common expression, almost a cliché observing that the pressure of the detail overcomes the view of the whole.
However, a tree is a part of the foundation of the forest, in the same way a single challenge or task is a part of a whole project, and it plays a role in the “fabric” of the whole.
The challenge is to see both the forest and the tree, the forest offering the context, the tree offering the vital details and relationships between the details, at the same time.
Failure to see both, and manage ambidextrously, will compromise both.
Nov 29, 2012 | Leadership, Management, Strategy
We measure return on the capital investments we make, there is an extensive, well understood, widely used set of tools that offer a framework for the calculations, most of us would be lost without them.
However, whilst we all know in our guts that there is a set of practices that together we would call great management, and the businesses they run are better than those run by “ordinary” management, there are few tools available. Trouble is, articulating what make great management has been a qualitative process, significantly informed by hindsight.
So what are the characteristics of superior management?
Seems to me there are three characteristics, that are all the result of extensive sets of individual and group behaviour:
- A well executed strategy that differentiates in a manner customers value
- The management team is a cohesive, but questioning bunch of trained, intelligent people who have a strong sense of team competitiveness. This characteristic is reflected in the groups that exist at all levels of the organisation.
- There are appropriate measures that drive continuous improvement throughout the organisation
For comparative purposes, the Worldmanagementsurvey.org site carries an extensive database with the results of a multiyear, multinational academic survey that offers an opportunity to benchmark management performance. It offers an opportunity to start the process of identifying the behaviours that lead to superior performance by management.
