Sep 29, 2010 | Management, Small business, Strategy
All businesses are conflicted, small ones more obviously than larger ones.
On one hand, the immediate urgency to do whatever necessary to generate the cash to pay the bills, and on the other, the necessity to build capability, relationships, and definitive market position, all critical elements for commercial sustainability, but there is rarely enough time to do both as well as you would like.
There is no easy answer to this dilemma, but in my work with small businesses there are a number of strategies, largely borrowed from large businesses that pay dividends:
- Act like a larger organization internally, by doing things such as having a formal monthly management meeting, regular formal performance reviews, an overt strategy generation process that involves employees, and detailed operational planning.
- Delegate both responsibility and authority clearly. Often those who start businesses do so because they want to feel in control, and delegation does not come easily
- Spend 50% of your time (assuming you are the CEO) outside the businesses with customers, and demand chain partners building relationships.
Small businesses benefit hugely from these disciplines, partly because they are so important for the smooth running of any businesses, and partly because it acts as an “insulation” to the unanticipated. Most in small businesses do not see the need, as they are in daily contact with all in and around the businesses, and therefore, some of these things are seen as unnecessary bureaucracy, when in reality they are more like shock absorbers.
Sep 27, 2010 | Management, OE, Operations
Continuous improvement initiatives I have seen almost always impose a “finishing line”, correctly believing that focusing on an objective is a key to motivate performance.
However, what they often miss in this approach to improvement is the cultural aspect of continuous improvement, the recognition that there is no finishing line, just the next challenge, and the real management challenge is to build a capacity to improve continuously as a foundation of the culture of the business,not just to address the current issue.
Another of the many paradox’s that exist in our world, to motivate, have a goal, but having a goal other than an inbuilt desire to do it better today than you did yesterday, can be counter-productive
Sep 26, 2010 | Demand chains, Management, Operations, Strategy
A while ago I wrote that there seemed to be the beginnings of some thinking amongst the smaller manufacturing operations I interact with about the relative value of manufacturing in high cost Australia, and retaining control of, and having the opportunity to develop, the intellectual capital involved, rather than sending manufacturing offshore in pursuit of lower costs.
I came across this article reflecting the same view, but amongst some of the biggest manufacturers in the US, and it also reflects the beginnings of this trend.
In Australia, we have let our trade skills erode so dramatically over the last 25 years that if we do start to see some sophisticated manufacturing return to our shores, and the obvious contender is photo-voltaic cells, now almost exclusively manufactured in China with Australian technology, we may not have the technical manufacturing skills to deliver.
If this nascent trend does harden, it will usher in a huge gap in our operational skills capability, one that will take a generation or more to fix, and most importantly to any solution, we need a recognition by federal and state politicians that we have a problem bigger than the next election cycle. The long term investment in education and the culture changes necessary will add another big chunk of time to the reaction, possibly a generation.
Sep 23, 2010 | Leadership, Management
Much of the typical managers time is spent ensuring and managing compliance, ensuring the rules are followed, the standards and timetables are met.
This is all fine, and must happen, but where does the balance between compliance and engagement happen?
We are asking stakeholders, particularly employees, to bring their brains to work, but often ensuring they do not use them because there are rules in place that need to be followed.
It is becoming pretty clear that the old carrot and stick management methods do not work in an environment where creativity and the unorthodox is the priority, to be effective, you need engagement, you need the right side of peoples brains to be at work.
Constantly we are being called on to be innovative, creative, to think outside the box, to seek the differentiator, and participate in a “clever country” but our whole system of education from kindergarten to post graduate, our public administration, and our career planning is geared to conformity in order to get ahead.
There is a paradox here that the post industrial age economies need to come to grips with.
Sep 16, 2010 | Alliance management, Collaboration, Communication
Social networks have boomed, tools to enable the networks abound, MySpace, twitter, face book et al being the most well known, but many more fail than succeed, and they do so based on the degree of mutuality that exists.
Bear with me here.
Imagine 2 people who have $10 to distribute between them, one has the power to divide the money any way he likes, the other has just one thing, the right to accept or veto the deal for them both.
Rational economics would suggest that the holder of the veto would accept any deal that has him better off beyond the inconvenience of saying yes or no, say 2 cents, as both parties will be better off with a yes. However, experiments consistently demonstrate that the second person will veto any offer he sees as unfair, resulting in both parties losing, and this “fairness” point kicks in around a 70/30 split.
This implies there is a deep willingness to punish unfairness, even at personal cost, and that there is a strong emotional dimension to decision making, something very hard for economists to take account of in their models.
This emotional dimension underpinning behavior has profound implications for the way we should be thinking about the development of networks, irrespective of weather they are social, commercial or political ones.
Social networking works because there is an unspoken deal in place, which promises mutuality, Wikipedia being a shining example, there appears to be no control and there isn’t, control is exercised by the “wiki community” by virtue of their ability to remove any incorrect, irrelevant, or corruptive content, the access to the edit key which is easier to exercise than the effort required to post something, keeps things on track. Wikipedia in its earliest incarnation was a failure, as it left control with a small group of expert editors and contributors, with nothing left for the community which then failed to show up, as the “mutuality deal” was not in place.
Much of my work is with farmer groups, and the greatest challenge in the formative stages of getting a group “over the line” is the notion of mutuality, and how the group coalesces around a source of that mutuality, then finds ways to self regulate, if it is to be successful.
Sep 14, 2010 | Change, Management, Operations
In any environment, those on the front lines see ways to complete a task easier, faster, cheaper, better, simply because they are doing it all the time, it is just that we usually do not listen enough when the front line employees they try to tell us, and once bitten twice shy.
Labor costs are typically seen as an expense, something to be trimmed and managed, rather than as an investment that can be optimised and leveraged.
All the fancy computer programs, training, and supervision in the world will not even begin to replace the value of an engaged employee who has some control over his environment, and recognition for making it more effective.
What is it like in your factory?
