business

2F16 Be a Leader of Leaders

Are you a leader of leaders? Ah leadership. Some might say that a leader needs to be a dictator. Some that a business leader needs to be a bit of a demagogue skilled in the art of politics who plays on people's desires and prejudices.

Truly effective leaders gets the right things done at the right time for the right reasons and take action based on facts or evidence. They know the benefit in creating leaders out of those who follow, which is being a leader of leaders. The point about the right time is particularly important. You cannot be everywhere at once. In business, as in life in general, timing is everything.

When a critical situation arises can it really be right for everything to wait while you get there or information is passed up the traditional chain of command and for a decision to come back down? Remembering what we said about the importance of situational awareness in the last blog, might it be better if people at the scene are empowered to take action?

To be those other leaders, everyone in the business must feel this is our business. That is, in both senses of the word. That is people both feel that they are truly part of the company or other organisation and, when they see a situation develop, that they are responsible for ensuring the necessary action is taken.

In the Flow & Feedback (2F) Diagram, below, the foundation for effective leadership anywhere in the organisation are the aims: the values, purpose and vision. A clear idea of what the organisation stands for, what is does for customers and where it is headed give leaders at any level strong guidance for taking timely, effective action.

 

Next time we will look at the next to last step in closing the feedback loop in the 2F diagram. That is, taking action to improve the situation that we call 'Processes to design and redesign the system'. Does that sound a bit dramatic? Well, you know what they say:

“If you always do what you’ve always done, you always get what you’ve always gotten.”

So see you next time, when once again I will draw on both my book Picture Your Business and on our new ebook Simply Manage. Picture Your Business is available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or emailing me.

A Bridge Supporting Your Value Flow

Crickhowell Bridge, Wales. Photograph Alan Clark 2016

Crickhowell Bridge, Wales. Photograph Alan Clark 2016

Have you thought about the processes and activities that support your value flow as the pillars of a bridge? Your value flow is literally supported by processes and activities such as bookkeeping, payroll, financial audit and accountancy, purchasing, HR, quality audit, communications and IT infrastructure, maintenance, facilities management, catering, cleaning, security, transport (though possibly in the value flow), and many more. Naturally these will vary depending on your individual business or other organisation.

Effective support processes and activities are vital, but not the reason the business exists. These will be added to what we are calling the operational level in the Flow & Feedback (2F) Diagram below. A critical question everyone in support needs to ask is whether they are making a positive contribution to supporting those directly adding what customers see as value that meets their needs.

By showing support processes beneath the value flow, the 2F diagram reminds you of their importance. Thinking of these activities as the pillars of a bridge will hopefully highlight the risk of taking an across-the-board cost-cutting approach by some arbitrary amount or percentage. If the pillars are weakened then your bridge, the value flow, may fail. And if your customers are unhappy they are likely to leave. Do you know and understand the contribution of support activities in your organisation?

In your ongoing drive for competitive advantage, are all your support processes as well as value-adding processes subject to continuous improvement and innovation by the teams themselves? How can they serve their 'customers' in value-adding activities better?

When looking for overall performance improvements think very carefully before outsourcing support processes and activities. An activity might be a core competency. Is it essential?  If this support process should fail or performance should drop off, will this adversely affect value-adding performance in turn impacting the end customer?

Finally there is the people angle of support activities. If you outsource some aspect, will the people from that outside organisation really identify with your business and feel motivated to drive towards your vision?

Security is an interesting example of a support activity that it might be tempting to outsource. Suppose you are a government or military organisation that deals in sensitive information. Are you sure that of the loyalty and confidentiality of outsourced security staff? One could think of situations where outsourced suppliers might be tempted to, say, cut costs in someway that upsets the security staff. Are disgruntled security people able to give of their best?

In conclusion, look at your business or any other type of organisation as a joined-up whole. Whilst it is critical to ensure that value-adding activities operate effectively, the reliability and effectiveness of support activities is equally critical. How effective are the pillars of your support processes bridge?

Future blogs will continue to expand on the 2F diagram, drawing from my book Picture Your Business, which is still available from me priced £12.00+P&P. The latest version of the companion 2F Worksheet is now available free in MS Word or PDF on request from me either via a Linkedin message or by emailing alanclark@keybiz.com.

Mouth-Watering Marketing

Ever wondered what it is that makes a highly successful business? Some experts would have you believe you have really got to push your product or service. What if your product or service pulled customers to you?

If your product or service is a mouth-watering proposition, one that give customers the WOW! factor that could pull customers in. Just like the slice of Black Forest gateaux above that keeps pulling me back to a certain hotel when I’m in their vicinity.

But first, a tale of three retailers that starts with the sad events surrounding British Home Stores (BHS) who are no longer on UK high streets. In some way they were not giving customers what they wanted and certainly no WOW! factor. Next consider the Co-op who have recently rebranded. By going back to their previous logo it is possibly going back to giving customers more of what they were known for instead trying to be the same as all the other retailers in their sector. Finally, there is Tiger, a new entrant to the UK retail sector who is giving customers a unique take on retail with their products, namely fun!

At this point we’ll introduce the diagram below that might give you a way to position these three retailers and challenge you to think about your products or services in a new way. It’s called the Kano model.

BHS is an example of going out of business. It shows what can happen if you don’t meet customers expected needs, which they don’t tell you about. They assume you will deliver it, like working brakes on a car. Going out of business can also happen if you don’t deliver enough what customers say they want, like a Bluetooth® connection for hands-free use of your mobile phone in your car. There is an element in this more is better about keeping up with the competitors in the marketplace.

By going back to their previous logo, perhaps the Co-op is signalling a return their roots as a community-focused business with high ethical standards. One assumes that this is what customers have told them that they value them for and want more of. It is a spoken need.

Finally, it would be surprising if customers told Tiger that they wanted their retail experience to be fun. However, Tiger chose to difference themselves by introducing the fun element into their offering. In the same way Sony chose to product the original personal cassette player and the various smartphones were not asked for by customers, but introduced to give a competitive edge, a Wow! factor even. The fact that Apple, Inc. are turning in astonishing financial success should tell you all you need to know about being different.

The Kano diagram also illustrates the point that no business can stand still. There is a life cycle for products and services driven by familiarity and the take up by competitors that inexorably drives from exciting through more is better to must be. It should be a stark warning that complacency could be fatal for your business. Three questions to ask yourself about your business however large or small.

1.    What’s my must-be quality? (It’ll be unspoken)

2.    How am I on bells and whistles? (They’ll tell you about these)

3.    What’s my Wow! factor? (They’ll know it when they see it!)

Leading from the biggest picture?

Ever wondered what it is that highly effective leaders do to improve performance, even in the most difficult situations? Too many leadership and motivational gurus would have you believe all people need is to be given stretch targets. There is no one such silver bullet. As we saw in my last blog we all have our own reasons for doing something. We further saw the factors that were revealed by Frederick Herzberg's research that increased people's satisfaction at work. It further helps if work and the direction a company is heading is worthwhile and believable. In particular it can help to work towards an inspiring compelling vision of a ever-better total customer experience.

As a leader of an organisation, you are responsible for taking action that moves your organisation in that better direction. This needs a sound foundation, a critical part of which is an understanding of the whole situation or biggest picture. The word biggest is used here to encourage you to really push to discover as much as you can.

Back in the twentieth century, Royal Dutch Shell called this the helicopter view, which is a helpful metaphor. It serves to remind you need to both 'gain altitude' to obtain your biggest picture and 'dive down' into the detail to apply that knowledge of the context in your actions and decision making.

The three c's of customers, your company and competition, guide your scanning of the whole landscape. Remember also to look at the whole environment as well. Look at these factors over time. Where has the present biggest picture come from historically, are there new insights available now, and where are things heading over the next five to ten years?

Thinking is very difficult work. Especially when it comes to developing and applying strategy to move forward. It helps you, as a leader, therefore to have knowledge and understanding of the whole situation or biggest picture as a starting point. Have a great flight!

Next time we will begin to look some more at the Flow & Feedback Diagram as a way of making visible your company in the context of your customers and your external environment.

Incentives work, right?

Have you ever noticed that when performance issues arise a common first resort seems to be, 'How can we incentivise them?' This is even though little thought appears to be given as to whether incentives are appropriate let alone whether they actually work as intended. The prevailing management myth says people need incentivising otherwise you will never get people to give of their best. In reality the opposite is true. According to Frederick Herzberg what actually releases people's motivation is quite different, to which we shall return.

So incentives must work? Mustn't they? It of course depends what you mean by work and actually who is getting the pay off? Are incentives just providing the manager with comfort that they are 'doing something'? Releasing the motivation, the 'want-to-do' that exists within everyone, might mean giving the situation further thought and taking different action, which may require more effort.

But first, why the pigeon? Well. It is a passing reference to the work of B.F. Skinner. Skinner did experiments studying the effects of conditioning behaviour on rodents, pigeons and primates. Some people have used this work to justify the use of financial incentives to increase human performance. There has been much debate on the validity of making this connection. Not sure I'm convinced.

Perhaps more directly relevant was the work of F.W. Taylor that he reported in his 1911 book The Principles of Scientific Management, allegedly based on his famous pig iron loading experiments. Essentially Taylor suggested that workers are primarily motivated by pay and probably only pay. Perhaps giving rise to many people's idea that they should use incentives like performance-related pay, which seems to have become the prevailing management 'wisdom'.

The slight problem with the case Taylor made is that research, reported in a paper by Charles D. Wrege of Rutgers University and Amedeo G. Perroni of University of Alberta, revealed that Taylor had been "economical with the actualité ". They were more direct, 'An investigation of that story reveals it to be more fiction than fact'. Work study experiments on loading of pig iron were carried out, though not by Taylor himself. According to the research, over time Taylor embellished the results, of others at Bethlehem Steel, and the story itself apparently to support his case that pay for performance worked. Oops.

So if Taylorism and Skinner's pigeons might be suspect where can you turn for something more reliable and, more to the point, effective? For that we need to go back to 1959 and The Motivation to Work by Frederick Herzberg, et al, which is still well worth a read today. Basically Herzberg proposed that in human motivation at work there are hygiene factors (the dissatisfiers) and motivational factors (the satisfiers). I have summarised these in the diagram below: 

Motivation is widely misunderstood and done badly. I suggest that motivation means want to do something. And we are all born with it!

It is necessary to understand that you, me and everyone else do things for their own reasons not for the reasons of leaders or managers. It is possible coerce or incentivise people to take certain action. However, in those circumstances the reason they take that action is because they are avoiding pain or going for a reward. They are not interested in the work itself or, worse, the customers.
Using coercion or reward usually has unintended consequences. Take for example financial incentives for bankers to increase the number of mortgages they provide. They take ever greater risks and you might end up with a global recession. Sound familiar?

Herzberg's work showed that with these environmental or hygiene factors no amount of additional salary, for instance, will increase motivation beyond a certain level. However, a low salary compared to the market place will demotivate. Motivation on the other hand was found due to factors such as achievement, recognition, the work itself, responsibility and advancement and personal development.

If, as a manager, you are looking for higher performance from your team there are human factors that are critical. It might mean that you have to think afresh about what it means to release the motivation in the team. You might also have a look at the way the work is done and your policies, but these two are topics for another day.

Culture Change Programmes?

'These people (indicates an external team standing alongside) are going to be running our culture change programme. And I'm telling you. You lot (indicates audience of employees and their managers) need this!' And, having said this, the CEO, director, executive or senior manager sweeps out slamming the door. A hush settles over the assembled audience. Follow that!

Hmm... So where do you think that an organisation's culture comes from?

Might the culture of any organisation be an outcome of the whole situation or as some call it, the system? Suppose it is the many, many relationships and interactions between all the elements at play within an organisation and with the whole external environment in which it operates that determine the culture.

We have seen at the beginning of this article how there may be clues to malign influences within an organisation. Suppose the organisation works within some totalitarian state where it can literally be fatal to express a dissenting opinion? There have been countless throughout history. What sort of culture and behaviours might that environment be liable to evoke within the organisation and with its customers or service users?

There are always exceptions and I believe that largely there is good within human beings. So in terrible situations there will be a few outstanding acts of kindness, bravery and creativity. Sadly, conversely even in the most moral societies there can be random acts of evil. Critically, of all the elements at play within an organisation, it is the values in action than exert one of the most powerful influences.

Individual, organisational and societal values are the key to an organisation's culture. Perhaps no one has greater influence on and responsibility for the values in action than the leaders. If leaders demonstrate in their policies, actions and what they say, for example, that customers are the primary focus, surely this must yield increased engagement and commitment that would be important in the release of creativity and innovation to serve those customers? How else will a business attain and maintain competitive advantage? Surely change is inevitable and should be ongoing. Isn't guiding and encouraging change the key work of management and especially providing leadership? This includes the way they relate and behave with everyone. Surely this cannot be delegated?

Note To any CEO, director, executive or senior manager and, where appropriate, their boss(es) contemplating 'changing the culture' in their organisation. Are you prepared to behave differently? Just a thought.

Innovation is flash, bang, wallop isn't it?

Even if you are successful now, how will you sustain that success? Some innovation perhaps?

You get the impression that for some people innovation is a flash of inspiration, which you bang into production or service delivery, and wallop all the cash flows into your bank account. Do you think?

I was reading an interview Apple's Tim Cook in Fast Company magazine about that company playing the long game. It is clear that Edison's quote that genius, and by implication innovation, is 1% inspiration and 99% perspiration is true for Apple. Apple have persisted with, for example, their Maps app, the launch of which was greeted with derision and now is more used than Google Maps on iOS. It seems from the article that working away at innovation, especially to get a great customer experience, has been the Apple way for a long time.

Innovation is about persistence as the article shows. I seem to recall in the dim and distant past that Microsoft had to persist with and really work at Windows in the '80s and '90s. The question is, are you as a business owner or manager prepared to take a long-term view about innovation? All too often it seems that the default position is short-term profits and a lack of a commitment to the future. Is it wise to leave the future to chance?

How far into the future is your business prepared to look and commit? What can you do to begin to take a longer term view?

Data? Wiggly Lines? Improve for Free? Nah!

Let's go on making it up as we go along. Business as usual. Change? "I didn't get where I am today by changing!" Oooo, I'm not sure about changing... It's expensive isn't it? That depends on how you do it.

First the opportunity. Research by Cardiff University in the early 00's showed that across a wide range of industry sectors approximately half of all activity is pure waste. In that the customer would not pay for it nor is it stuff you've got to do (at the moment).

What's more you can get at the 50% without spending any money or very, very little, if you do business process improvement properly using the Process Behaviour Chart; the wiggly line above.

To paraphrase Dirty Harry:

Uh uh. I know what you're thinking. "Did he say half of activity is waste?" But being this is a Process Behaviour Chart, the most powerful management tool in the world and would blow your performance clean into the stratosphere, you gotta ask your one question: "Am I seriously interested in profit?" Well, are ya, punk?

According to world-renowned statistician and performance improvement expert Dr Donald J. Wheeler, too many organisations and improvement specialists are missing a trick. The perceived wisdom seems to be that to improve performance you need to spend money (and time) changing processes and probably equipment.

"Wrong!", says Doc Wheeler.

One of the biggest causes in most businesses and organisations in general is that people just do not operate their current process to its full potential. Largely this is due to not operating the process consistently and predictably. He recommends the Process Behaviour Chart as a way to understand and improve your business processes so that they perform consistently and predictably.

Look at the chart at the head of this article. It shows a process that is predictable and consistent, though within very, very wide limits. From the worst to the best performance was getting on for almost double! Great scope for improvement once you understand why the line is wiggling so much. Are your processes being operated consistently at their best? Do you even know how they are performing?

You know that we all don't necessarily operate properly and predictably to the process in everyday life. Drive or walk down any street. Just watch how many people don't use their direction indicators well before making a turn, if at all. I saw a driver yesterday make a turn towards a parking place on the other side of the street. They drove at 45 degrees across the road and at the very last moment put on their indicators just before finally completing the turn into the space. Although it was a quite street, it was curved and there were three junctions within 50 metres so there was quite a high risk.

People not working consistently and predictably applies to any process whether it be in everyday life, administration, government(!!!), food preparation, fulfilling orders in a warehouse, manufacturing and even in I.T. and the Internet. The list goes on. Without some objective means of understanding how well they are working to the process. So try using a Process Behaviour Chart. Ah! Go on!

Use Less Energy; Less Climate Change?

With the great and the good in Paris thrashing out a deal to prevent climate change, is it perhaps time to think about using less energy? I understand that an authority in the field suggests that many of the proposed solutions to climate change like alternative and renewable energy sources might not be as green as we think. The trouble is that the production of wind turbines and solar panels all generate CO2. Indeed it is suggested that making them contributes more to CO2 emissions than they save during their operational lives. If this is true... Oops!

All of which brings me to using less energy. Surely the starting point, even in developing countries, should be how to use the very minimum of energy rather than to repeat the bad habits of the developed world? One only has to look at any modern city at night to see how much energy is wasted lighting skyscraper office blocks with no one in them. Satellite images show just how much energy is being used to light urban areas at night. Is that really necessary?

Lean thinking has long provided a method for reducing waste in manufacturing, services and the public sector. The 2002 report Lean Profit Potential from the Lean Enterprise Research Centre at Cardiff University yielded some staggering information. Whether in manufacturing or what the report called information industries, approximately half of all activity was found to be waste. Yes, you read that correctly, HALF!

So on the face of it by working leaner enables huge energy savings to be a significant benefit from the world working leaner. That doesn't take into account what could be further achieved by applying lean thinking to both energy production and the efficiency with which it is consumed. Surely a low energy revolution technical wave as great as we are seeing with internet must be possible. Indeed the internet of things is already here to help.

So tell me about why developing countries like China, for example, (sorry guys) want to increase coal-based electricity generation by 25%? Why not be innovators at the forefront of low-energy technology?

And we can start tomorrow! Just by turning off those office lights, perhaps?

Community and Cooperation

Funny old world. As I do 'organisation-watching' on the latest episodes in the UK Labour Party leadership election I am struck by how dysfunctional not only they are but how all the UK political parties are. There seems to be no shared sense of community and collaboration even within each party.

This thought was triggered by a clearly partisan piece by Polly Toynbee in The Guardian. Toynbee has every right to support whoever she wants. The thought struck me that the piece was more a rail against (Jeremy Corbyn) than a piece in support of her favoured candidate. It didn't sound like the aim was to contribute to bringing the Labour community closer together or to foster collaboration. It's as if it's OK to criticise but not to say that there is good and bad in everything and how can we build on collective strengths.

Oops! I've used a word collective that could provoke a 'He's of the far left' jibe - which I am not! Yet ultimately having a sense of community and cooperation is vital for our complex society work to be able to together for the benefit of all. As I say, this applies to the whole of society and it also applies to the individual organisations within society.

Over twenty years ago the late W Edwards Deming said,

"Everyone must understand the danger and loss to the whole organisation from a team that seeks to become a selfish, independent, profit centre.”

This idea applies to all organisations whether they are businesses, not-for-profits, political parties or the national government. The question for all organisations and especially political parties, in what I regard as a highly dysfunctional political system, is "What is it you are doing to promote a spirit of community and cooperation in the UK?" Selfishness seems to be the rule and encouraged. So how about it? Are you promoting and contributing to a spirit of community and cooperation in your organisation?