Jun 25, 2012 | Change, Leadership, Operations
Much has been written about the management of change, and it usually focuses on the challenges, acknowledging just how difficult change really is.
When you turn it around, and consider what happens in successful change programs, there is very little management, and a lot of selling.
Leaders lead from the front, demonstrating the behaviors necessary, whilst managers push from behind. Demonstration is the oldest, and still the best form of selling, so when those whose work place, and the processes they operate are subject to being changed seeing those with the decision making power demonstrating the altered behavior makes the change easier.
You do not manage change, you sell it.
You sell it to your employees, shareholders, customers, suppliers, and anyone else who will stand still long enough to listen, and most importantly, believe.
Jun 22, 2012 | Branding, Marketing, Operations, Strategy
Why are we so hung up about ethical sourcing of coffee??
What about the electronics industry, and shoes, rare earth minerals, and many others?
Who bears the responsibility for the conditions of workers in the supply chains of successful businesses.?
Apple is the biggest, most profitable company the planet has seen, but the depredations in the supply chain at Foxxcon are well known.
If the labour cost of an iPad is, as has been calculated, less than $15, adding a few dollars onto the price to lift wages would do little to damp the demand, or indeed, Apple could make a few dollars less, reducing its whopping billions in cash flow by a miniscule amount, but would it be a few dollars less?.
A significant number, albeit a small percentage, of coffee drinkers appear willing to pay a bit extra for the “ethical” badge, surely the same would be the case with an iPad, fancy shoes girls cannot walk in, and many other product categories where differentiation is a key challenge. Benneton does, why not others?.
Jun 15, 2012 | Management, Operations, Small business, Strategy
This is a term coined by Peter Drucker when talking about contract management, particularly in relation to older contractors who bring a wealth of experience and hard won wisdom to the table.
Using contractors, particularly high level ones brings a number of huge benefits:
- Turns a fixed cost of an employee into a variable, project specific cost.
- Easier to impose specific performance measures, as the responsibility of the contractor is to the task, and less to the cultural environment.
- They bring immediate resources to projects otherwise difficult to staff
- Offers the flexibility for enterprises to bring in specific skills from time to time, that they do not need all the time.
- Generalists, and those with a wide experience, are better at seeing how logically unrelated pieces may fit together, they are less concerned with ambiguity, than specialists, and less likely to “anchor” an analysis in their specialty, and narrow perspective.
Our economy is undergoing structural change, management productivity is under scrutiny, so it makes sense for businesses, from start-ups to huge multinationals, to take advantage of the big pool of highly experienced, mobile, and motivated older contractors.
Jun 5, 2012 | Change, Lean, Management, OE, Operations
Robust, repeatable, and easily taught processes are the foundation of good outcomes. It therefore makes sense to consider the factors that separate good processes from poor ones, the effective from the ineffective.
The measure of the process has two parameters:
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- Repeatability. The outcome is repeatable, it has become the way things are done, so has an element of “automatic” about it.
- Agility. In apparent contradiction to the above, effective processes must also be sufficiently agile to accommodate the short term stuff that just happens, and flexible so that they can evolve to continue to deliver optimum results in response to the changes in the environment in which they operate.
Over 35 years of participating, observing and analysing processes, there appears to me to be a small number of enablers that drive effective processes. The weighting of these factors is different from situation to situation, but all are evident to some extent in every successful location.
- Deliberate Design. Successful processes are the outcome of a deliberate design. Sometimes the design comes after a process has evolved, and it is modified and optimised post birth, other times, the design is a deliberate response to a situation that requires a process.
- Infrastructure support. Processes do not survive in a vacuum, so the organisational and operational infrastructure, and the culture of the organisation play a significant role in their success. Without any of these three infrastructure foundations, a process will become sub-optimal.
- There is an “owner”. This is just another way of saying that someone in the organization takes specific responsibility for the effective management and support of the process. The more important the process, the more senior the process owner should be. In almost every situation, a process adds to other broader processes, and each component should have its own owner. Eg. An inventory management process has many sub-processes, from the documentation of deliveries to the appropriate allocation of purchase order numbers and general ledger postings. The “Inventory Management” process may be owned by the CFO, but the supporting components will be owned by others at the more operational levels.
- Process metrics are in place. The old saying, “you get what you measure” is accurate, without performance measurement against current criteria, as well as some that may reflect how the organisation expects the process to evolve, it will solidify at sub optimum performance levels.
- Process improvement. Continuous improvement of processes is a feature of successful businesses, the environment in which businesses operate is subject to ongoing change, and therefore the enabling processes need to evolve to best reflect the environment. In an apparent paradox, improvement is really only possible in a situation of stability. To improve a process you need to be able to identify the impact of a change in the process on the outcome, and you can only do that when the impact of all the existing variables are known.
May 29, 2012 | Lean, Management, Operations
Return on Investment is the basic calculation made to assess any investment, but too often gets complicated by all sorts of assumptions and forecasts.
In these days of rapid prototyping, access to A/B testing tools using the web, and the logic of many small bets in the innovation process rather than a few large ones, the calculation becomes less important if you follow the simple rule:
“Keep the “I’s” small, and nobody will bother you too much about the “R”
May 25, 2012 | Change, Management, Marketing, Operations, Personal Rant
Last week speaking to a gathering, I told the group that Australia was now a net importer of food with a $2.7 billion deficit in 2010-2011, according to the AFGC State of the Nation report . Utter disbelief was the primary reaction, “how could that be” being a typical response.
The Australian food industry is dying at a rapid rate, the pressures on local suppliers are heavy, and increasing all through the supply chain. Retail oligopoly, high $A, regulatory impositions that make no sense, costs of supporting local government social initiatives, and all the rest of the stuff that clogs up the wheels of competitiveness and productivity.
Heinz moved to NZ last year, SP exports, Australia’s largest tomato grower in liquidation, a second major grower hitting the wall in April, and this week, fresh tomatoes hit $10/kg in supermarkets. A sign of things to come in many categories.
We are watching the death by a thousand cuts of an industry, small businesses that garner little exposure are hitting the wall all over the place, Golden Circle gone, Goodman Fielder on the skids, growers are going broke across the board, dairy processing almost all owned overseas, about all that is left is meat, because we are amongst the biggest producers, and horticulture, because most fresh produce does not travel well.
Now, if we continue to go the way it seems we are destined to go, housebrand NPD will eventually overtake proprietary NPD as it has now done in the UK, and you need to ask where that NPD will occur. Certainly not here, because not only have we seen off the manufacturing businesses, we have substantially depreciated the technical capabilities necessary for innovation. Even the CSIRO is a shadow of its former self in the food industry, having removed much of the intellectual infrastructure as its masters re-aligned the priorities to other areas, and progressively trimmed the resources.
The recent drop in the $A will help, just a pity there are few businesses left to take up the slack.
