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.
Nov 23, 2012 | Customers, Management, Marketing, Operations
Sales forecasting is a common activity, you need to know how much revenue is going to be generated in the coming months. Usually it is done by sales, usually by a straight extrapolation with a few adjustments, and the only thing you know for sure is that it will be wrong.
How cool would it be if your marketing people were able to forecast revenue with some accuracy?
Marketing is an investment in revenue generation, which is an outcome of demand, so it would seem sensible to focus attention on demand in the market, not what sales you did last month. Mindset is important. When you treat something as an expense, it is easy to chop and change based on short term conditions, but when it is an investment, it has longer term implications, and what could be more important than an investment in revenue generation???
To truly be treated as an investment, there must be a reliable ROI calculation that can be made, which means the collection of data, and the agreement on a set of metrics to be applied.
There are lots of tools emerging that claim to automate the marketing process, and generally they do it well, using the traditional sales tunnel metaphor connected to the marketing tools of the net. Whilst it is creating another source of operational complication necessary to get the data, it should be seen as a part of the investment strategy.
However, the mindset change is simple. Recognize that the role of marketing is to create demand, and the cost of using all the tools of branding, innovation, channel selections, and all the rest, are the costs implementing those investment decisions.
Nov 20, 2012 | Lean, Management, Operations
Have you ever calculated yours?
It is a pretty simple performance measure that carries a lot of weight, and contains the seeds of success, and destruction. In addition, if you know your industry well, it is pretty easily calculated for competitors, so acts as a useful competitive benchmark.
Break your P&L up into a few categories:
Ingredients
Direct labour
Administrative Overheads,
Divide the results by sales, and you have the value adding ratio. Just ask your customers what parts of your cost base they are happy to pay for to get the product they buy, unlikely many will answer with a positive to the fancy headquarters building, the boss’s new car, or the off-site strategy meeting at the Casino in Hobart.
To be fair, there are many costs that are necessary, but do not necessarily add the value that consumers are happy to pay for at the supermarket. Things like R&D spending, market research, IT expenditure, freight costs, and many others fall into these categories, but a debate about how they can be reduced, and how the productivity of the expenditure can be increased, is extremely valuable to have.
Pretty basic management stuff, but so easy to ignore. It is also very easy to produce an infographic that everyone can buy into, by simply breaking up a picture of the end product into its percentage categories. This has an enormous visual engagement value for anyone embarking on a Lean initiative.
Nov 12, 2012 | Leadership, Management
Making decisions is like any other process, you gather relevant information, consider options, look for the optimum outcomes, and decide accordingly. Right?
Often wrong.
Decisions are often made based on the HiPPO (Highest Paid Persons Opinion) what was done last time, how it would be viewed by others, what the “rules” say should be done, and a host of other drivers that really add little value to the quality of the decision making.
Decision making is like any process, the better that information, and the more objectively it can be analysed, the better the decision is likely to be. As importantly, the process is optimised by being sufficiently robust such that if the decision were to be made again, with the same information, but a different , but equally capable group of people, the outcome would be the same.
There are a few questions to be asked of any decision making group:
- Where did the data come from?
- What analysis has been done?
- What is the level of confidence in the outcomes?
Pablo Picasso is reported to have said ” computers are useless, they can only give you answers” which goes to the issue at the heart of decision making, the quality of the questions that are asked and the manner in which that are answered.
How disciplined are your decision making processes?
Oct 29, 2012 | Change, Management, Marketing, Social Media
One of the many paradoxes of our on-line social life is that to engage, we give up a part of our personal life, we become available to anyone else who cares to look for us, within the boundaries of increasingly better privacy hurdles in social media tools.
In the past, our personal lives were almost all we had, simply because of the inconvenience, inefficiency, indeed, impossibility, of telling everybody, anything much about ourselves.
The earlier incarnations of social media removed those barriers, and suddenly we realised that we had created a monster, a perfect environment for stalkers. All sorts of unsavory and undesirable people, and those we had no desire to know suddenly had access to our details, and so we started designing out the access, but it is a binary process, a filter is “on”, or it is “off”, no “maybe”.
So, how do we design it out? We design back in some of the elements of the inefficiency we had until a decade ago, put in hurdles that need to be crossed before you get to the personal stuff. Clay Shirky, one of the great minds thinking about this stuff does it again in this Zeitgeist presentation from 2008. I only just found it, but the message is as relevant now as 4 years ago, perhaps more so.
