In our opinion, one has to focus on what people want to get this engagement. What senior management want from their employees is that they take responsibility for their role in the organization and be accountable for the performance they produce. What employees want from management is confidence that leadership knows what they are doing: leading the organization on the ‘right’ path and maintaining respect and fairness in the organization.

Understanding wants versus expectations is where the rubber hits the road. Many employees expect respect and fairness but they usually want more: more money, more job security, better benefits, and more opportunity to advance. Most customers want the lowest price and the highest quality and the best service. Most seniors want the highest profits, lowest cost, and happy satisfied customers and employees. Creating a system that allows employees to take ‘ownership’ of these inherent conflicts between wants and expectations is a proven roadrubber principle.

So how do you get employees to take ‘ownership’? Studies have shown participation and clarity are the key leverage points. Most people want to be involved in designing how they spend their work life. Participation in planning and creating the performance criteria on how they are ‘judged’ is vital. Control over decision-making within their roles is absolute. Clearly defined roles and behavior standards that are created (designed –innovated) from customer expectations is the place to start. Let the delivery chain process determine structure, performance criteria, and compensation.

As a successful senior manager, you know how vital the service delivery process is to customer satisfaction. Tuning up this process is a perfect project candidate. Having a project provider (independent outsider) help you clarify your customer expectations, and then help you imbed these expectations into your service delivery system, is a formula for success. Helping employees taking ownership of this delivery system eliminates the ‘rental car’ attitude in your culture. Aligning customer expectations with employee behavior is the genesis of performance management. Figuring this all out and having it ‘work’ creates meaning and everyone’s job satisfaction. And as you know, the benefit of you doing the ‘right things’ and having employees doing ‘things right’ is where the rubber hits the road. Enjoy the trip. GMO

What differentiates the planning process in an organization is the individual’s role and the time frame within our responsibility. A worker usually has an annual plan. As a senior manager, your planning horizon is probably out at least 5 years.

Strategic Planning flooded the U.S. business scene in the early 80’s when quality management came back to American from Japan via Demming and Juran. If you recall, the planning debate started when the Japanese admitted to a planning horizon of 25 to 100 years. At the time, every industry and every company of any size was working on some form of a strategic plan, visioning process, mission statements, and how to adopt quality initiatives into the organization. TQM (Total Quality Management) was the ‘silver bullet’.

In my opinion, strategic innovation has replaced the ‘front end’ of the planning process for a couple reasons. One, we all need something new to show we are progressive. Two, the pace of change and globalization has forced all of us to rethink traditional management processes. Launching some form of innovation in an organization also satisfies the creative need within all humans to have something positive to do. If you are reading this piece and do not have some form of embedded innovation process in your area of responsibility now, you are probably thinking about starting one.

As critical as innovation is, it can turn out to be another ‘program’ like TQM became in many large organizations. If this resonates with you, these initiatives can develop into a life of their own. They can gobble human resources time like starving hogs at the trough. If that is not bad enough, this is long-term work and faced with the challenges of the present economic situation, you need results now, not next year.

Cross pollination is a solution to this time crunched need to do something positive now -a hybrid process that takes ‘best practices’ (pollination) in an industry other than your own and finding out how to transfer this ‘technology’ into your yours. Actually, this is often a component of both Strategic planning and Innovation processes. More importunately, it is faster and I have to say, often more effective than a full-blown innovation program. Cross pollination is a proven roadrubber principle. It is also fun way to spend your valuable time. Make a short list of areas you would like to improve. More than likely, someone in your position in another company and another industry has already figured it out. The treasure hunt begins. GMO

]]> http://www.gmoutsource.com/cross-pollination/feed/ 0 http://www.gmoutsource.com/breakeven-thinkin/ http://www.gmoutsource.com/breakeven-thinkin/#comments Wed, 16 Dec 2009 20:44:57 +0000 GMO http://www.gmoutsource.com/?p=185

One of the best things to think about is your breakeven point. You know, the amount of cash required to breakeven, the point where you start making money on a monthly basis. We all have this number blazed into our brains and check it when we review our weekly and monthly financials. How to take this review to the next step is where the exercise becomes fun.

The first step is looking at how you can reduce your breakeven point. What expenses can be eliminated or reduced. You notice the first step is elimination. Use critical analysis to find creative ways to eliminate the root cause of the expense. We often assume everything done in our organizations is necessary, but when you challenge yourself to really look at what tasks create more customers or increasing sales to existing customers, you will find there are many outdated methods and tasks that can go away. The next step is finding out what you could reduce or outsource to a least costly way of providing the service and or products that do produce revenues.

The second step is where the fun part begins. Assume for a minute that your monthly revenues will decline. Let’s also assume you are looking into your crystal ball and the disrupting marketplace is catching up to you and you may experience a monthly revenue loss of 50%. What would you cut to balance your breakeven? (We realize this dramatization is drastic, but it will force you to really think hard about the process).

On the flip side of this thought process, what would you do to maintain or increase your revenue stream? We all know you can only cut expenses so far without risking long-term damage to the core business. The value of switching your thought process to revenue generation is the first step in creating a new blueprint for your organization. Start with your customers and work backward into your organization. Put yourself in your customer’s shoes and ask the hard questions to yourself to see if your existing delivery systems are designed to add value throughout the supply chain. Do you really have a quality position and pricing value that you can defend into the future?

Creating scenarios like this is the first step in the innovation process. Everything can be improved. With the rapid change in technology and global delivery systems, our challenge is keeping an open mind about making change. Exploring how you can bring innovation to managing your breakeven is a great start to begin thinking about projects that will create value for you and your customers. Have fun with this roadrubber exercise and enjoy the road. GMO

One of the most effective tools you can use to ‘lay some rubber on the road’ is the use of the Pareto Principle. If you remember the Total Quality training you had years ago, this principle will ring a familiar bell. Most business people know this as the 80/20 rule. 80% of your sales are generated by 20% of your people. 20% of your customers generate 80% of your company revenues. Focusing your energy (time and money) on the top 20% in your organization is the key to ‘doing more with less’.

Sadly, most organizations and managers focus on the opposite end of this equation. They focus on the 80% that are yielding 20%. In fact, most management time in larger organizations is focused on the 5% – terribly disrupting employees, unrealistic customers, meddling competitors, bureaucratic compliance issues, and list goes on.

Every human in an organization is a manager. We all have to plan, organize, implement, and follow up to make sure we are achieving what we are accountable to do in our respective job positions. I have seen many very bright people lose sight of Pareto management as a guiding force, and get way off track by focusing on minor things – making mountains out of molehills. Setting priorities and focusing one’s attention on the critical 20% of all activities, resources, and time will make dramatic changes in organization behavior and how you allocate resources. Performing a Pareto analysis of your business will pay tremendous benefits and it is a lot of fun to boot. What you will discover is there are only a few critical success factors that create the majority of the benefits. This principle applies to your health, your relationships, your investments, your lifestyle, and especially your business. Enjoy the road. GMO

An effective roadrunner principle to achieve this knowledge trio is working our way up the ladder of consciousness (awareness) so we can focus on what is important and making sure the important gets done.

The first rung on the ladder is: unconsciously incompetent – not knowing what you do not know – ignorant bliss. With the rapid change in markets and the constant pressure from economic uncertainty, it is difficult to stay, at the least, on top of the changing dynamics affecting your area of responsibility. Impacts to the bottom line (or the threat impending of the probable threat) will move you to the second rung: consciously incompetent – knowing you do not know.

It is obvious that any one person, regardless of their role in the organization, can stay on top of the rapid changes in the current business climate. Even if one could stay current, understanding how these changes impact your business and how to respond in an efficient way can almost be overwhelming. Separating fact from theory and theory from fantasy is something we all have to learn as critical thinkers. Having the awareness to open yourself to the realization you don’t always have the solution to the myriad of issues at hand can be the driving force to advance to the next rung: consciously competent – taking action to discover the appropriate knowledge of new methods, new markets, and new ways of delivering value added service to your customers before you allocate resources. When you really know that you know, then you can focus the necessary resources on the critical success factors that achieve results.

The last rung on the consciousness ladder is unconscious competence. The best example of being in this awareness state is sometimes defined as ‘going through the motions’. Have you ever got in your car after work and once home realized not remembering the drive. Many senior managers with years of experience are often on ‘auto-pilot’- doing the same things in the same way because this is way we have always done it that way. Of course, this used to work: customers were loyal; competitors were ‘fair’; access to capital was available and affordable; and the pace of change was manageable. Oh, the good old days. By now, you know the ‘rest of the story’, operating as an unconscious competent with antiquated business practices quickly takes a person to the first rung on the ladder – not knowing you don’t know.

The solution to actively staying in a conscious competent state of mind is repetitive attention to learning and then making decisive changes to act on critical business processes that deliver results. Implementing a series of fact-finding projects to explore the best way to proceed will clarify and define the trio of knowledge components to continue your success. Your customers and competitors are responding faster and faster to their business climates. The need to keep pace can be stressful. Getting ahead of the curve and staying ahead is the goal. GM Outsource is dedicated to sharing the ideas and helping hands to achieve this goal. Enjoy the road. GMO