Sunday, December 30, 2007
Strengthen the ‘bottom of the pyramid’
by Anand Kumar Jaiswal
19 December 2007
The bottom of the pyramid (BOP) has become one of the dominant ideas of discussion among practising managers, academicians and policymakers. Prof. C. K. Prahalad and other proponents of BOP argue that, instead of disregarding low-income consumers as inaccessible and unprofitable, multinational corporations (MNCs) should view them as an unexploited business opportunity. Moreover, through this, MNCs can help improve the living conditions of the world’s poorest population.
The first question which needs to be answered is whether there really is a ‘fortune’ at the bottom and how big is the BOP market. The oft-discussed BOP success stories are mainly from developing countries with relatively higher economic growth rate and/or high per capita income such as India, Brazil and Mexico.
The concept’s applicability in the poorest nations is questionable. About 2.4 billion people live in low-income countries; among them 751.8 million people live in least developed countries (LDCs).
The World Bank uses $1 and $2 per day as reference poverty lines. In 2001, 1.1 billion people were living on less than $1 a day. If we enlarge the base, 2.7 billion people lived on less than $2 a day. These 2.7-billion people living in acute poverty and struggling to meet even basic needs can by no means be viewed as a profitable market for large corporations.
HUL case study
Proponents of BOP point out Hindustan Unilever Limited’s (HUL’s) success with low-priced candy aimed at the BOP markets. However, in 2005, HUL actually pulled out of the confectionery business as it did not generate satisfactory financial results. Similarly, HUL’s innovation of transporting ice-creams in un-refrigerated vehicles and Annapurna iodised salt were quoted as examples of BOP success.
It is a different matter that, owing to continuous losses in ice-cream business, HUL later decided to focus only on economically better-off customers in select cities (Karnani, 2007). National salt brands, including Annapurna, are out of reach of most poor consumers. In 2002, national brands had a 45 per cent share of the iodised branded salt market while local brands held the remaining 55 per cent share.
Small isn’t beautiful
The proponents suggest several ways to MNCs to tap low-income markets. Use of sachets and low-unit packs is one such However, empirical evidence does not support this contention. An AC Nielsen study has shown that for products such as biscuit, jam, washing powder, sanitary napkin and milk powder, the smallest available packs are not the largest contributor to total volumes of product sold in rural areas (Dobhal and Das Munshi, 2005).
Shampoo is one exception where sachets have the highest share of total volumes sold. Another study by LG Healthcare in India questions the usefulness of sachets for marketers. The result has shown that, although sachets have helped in increased penetration, they have also caused a decrease in overall consumption. Also selling large volume packs enable companies to reduce the processing and transactions costs, not the other way round.
Factors overlooked
BOP work also overlooks the role of several factors, which are often invisible and which facilitate organisations to serve BOP markets on a sustainable and profitable basis. These factors can be in different forms such as support from other organisations, availability of workforce at a lower than market wage rate or availability of low cost or free advertising and communication support (Dixit and Sharan, 2007).
In the case of Aravind Eye Hospital (AEH), local business units, Lions Club, Rotary Club and Vivekananda Kendra organise eye camps and bear the associated costs, which were estimated to be over Rs 200 per patient more than a decade ago. Employees at organisations such as AEH and Amul are dedicated to the cause, hard working, productive and work for a pay which is far lower than that in most private organisations.
The proponents of BOP assert that poverty can be eradicated through BOP initiatives by 2020. Eliminating poverty in just 15 years may be nothing but wishful thinking. It is unclear how selling products such as candies, shampoos, soaps, detergents or refrigerators to the poor will eradicate poverty in just 15 years. The important issue is that BOP consumers cannot really buy more than they currently do because of little disposable income they have.
Raise income levels
To reduce poverty, the income level needs to be raised and for that the poor should be seen as producers and providers. Income of the poor can be increased by providing an efficient system to bring to the market their agriculture produce, handicraft and other products they manufacture. Models such as that of Amul and Shri Mahila Griha Udyog Lijjat Papad, which facilitate decentralised production by thousands of milk farmers and low-income women, contribute immensely to income generation by the poor. We cannot also totally disapprove viewing the poor as consumers as some argue (Karnani, 2007).
Selective consumption by the poor, which entails enabling or restricting the consumption based on the characteristics of goods to be consumed and the net effect on their well-being should be facilitated.
The private sector should avoid undesirable inclusion (marketing products that are not likely to enhance their wellbeing or products that are likely to be abused by them) and exclusion (not offering products that are likely to enhance their wellbeing) of the poor in target market selection decisions. The poor are more vulnerable to undesirable inclusion.
Disparities in income and differences in lifestyle add to a greater perceived relative deprivation. Intensive advertising and promotion of products may result in misplaced priorities in resource allocation.
These consumers may spend or overspend on non-essential goods while cutting down their expenditure on education, nutrition and health.
For instance, under the influence of an attractive advertising campaign, a rural woman may be induced to buy fairness cream or hair colorant. The problem with the consumerist-focused BOP movement is that it does not differentiate between priority and non-priority areas. Contrary to the impression one gets from BOP work, multinationals’ entry in BOP markets may actually create serious problems also. Examples such as Coca-Cola’s alleged involvement in groundwater depletion in Kerala or Nike’s sweatshops in developing countries show that multinationals’ BOP engagement can also be severely problematic.
A rather cautious approach on large corporations’ participation in low-income markets is needed. Managers working in MNCs should carefully formulate their BOP strategies so that they do not add any further woes to the already marginalised and vulnerable population.
From the perspective of policy making, there cannot be BOP miracles without improving the basics. Economic growth and improvement in quality of life are largely driven by investment in education and generation of large-scale employment. Poverty can be alleviated only through enhancing income generation of the poor and there cannot be BOP shortcuts
19 December 2007
The bottom of the pyramid (BOP) has become one of the dominant ideas of discussion among practising managers, academicians and policymakers. Prof. C. K. Prahalad and other proponents of BOP argue that, instead of disregarding low-income consumers as inaccessible and unprofitable, multinational corporations (MNCs) should view them as an unexploited business opportunity. Moreover, through this, MNCs can help improve the living conditions of the world’s poorest population.
The first question which needs to be answered is whether there really is a ‘fortune’ at the bottom and how big is the BOP market. The oft-discussed BOP success stories are mainly from developing countries with relatively higher economic growth rate and/or high per capita income such as India, Brazil and Mexico.
The concept’s applicability in the poorest nations is questionable. About 2.4 billion people live in low-income countries; among them 751.8 million people live in least developed countries (LDCs).
The World Bank uses $1 and $2 per day as reference poverty lines. In 2001, 1.1 billion people were living on less than $1 a day. If we enlarge the base, 2.7 billion people lived on less than $2 a day. These 2.7-billion people living in acute poverty and struggling to meet even basic needs can by no means be viewed as a profitable market for large corporations.
HUL case study
Proponents of BOP point out Hindustan Unilever Limited’s (HUL’s) success with low-priced candy aimed at the BOP markets. However, in 2005, HUL actually pulled out of the confectionery business as it did not generate satisfactory financial results. Similarly, HUL’s innovation of transporting ice-creams in un-refrigerated vehicles and Annapurna iodised salt were quoted as examples of BOP success.
It is a different matter that, owing to continuous losses in ice-cream business, HUL later decided to focus only on economically better-off customers in select cities (Karnani, 2007). National salt brands, including Annapurna, are out of reach of most poor consumers. In 2002, national brands had a 45 per cent share of the iodised branded salt market while local brands held the remaining 55 per cent share.
Small isn’t beautiful
The proponents suggest several ways to MNCs to tap low-income markets. Use of sachets and low-unit packs is one such However, empirical evidence does not support this contention. An AC Nielsen study has shown that for products such as biscuit, jam, washing powder, sanitary napkin and milk powder, the smallest available packs are not the largest contributor to total volumes of product sold in rural areas (Dobhal and Das Munshi, 2005).
Shampoo is one exception where sachets have the highest share of total volumes sold. Another study by LG Healthcare in India questions the usefulness of sachets for marketers. The result has shown that, although sachets have helped in increased penetration, they have also caused a decrease in overall consumption. Also selling large volume packs enable companies to reduce the processing and transactions costs, not the other way round.
Factors overlooked
BOP work also overlooks the role of several factors, which are often invisible and which facilitate organisations to serve BOP markets on a sustainable and profitable basis. These factors can be in different forms such as support from other organisations, availability of workforce at a lower than market wage rate or availability of low cost or free advertising and communication support (Dixit and Sharan, 2007).
In the case of Aravind Eye Hospital (AEH), local business units, Lions Club, Rotary Club and Vivekananda Kendra organise eye camps and bear the associated costs, which were estimated to be over Rs 200 per patient more than a decade ago. Employees at organisations such as AEH and Amul are dedicated to the cause, hard working, productive and work for a pay which is far lower than that in most private organisations.
The proponents of BOP assert that poverty can be eradicated through BOP initiatives by 2020. Eliminating poverty in just 15 years may be nothing but wishful thinking. It is unclear how selling products such as candies, shampoos, soaps, detergents or refrigerators to the poor will eradicate poverty in just 15 years. The important issue is that BOP consumers cannot really buy more than they currently do because of little disposable income they have.
Raise income levels
To reduce poverty, the income level needs to be raised and for that the poor should be seen as producers and providers. Income of the poor can be increased by providing an efficient system to bring to the market their agriculture produce, handicraft and other products they manufacture. Models such as that of Amul and Shri Mahila Griha Udyog Lijjat Papad, which facilitate decentralised production by thousands of milk farmers and low-income women, contribute immensely to income generation by the poor. We cannot also totally disapprove viewing the poor as consumers as some argue (Karnani, 2007).
Selective consumption by the poor, which entails enabling or restricting the consumption based on the characteristics of goods to be consumed and the net effect on their well-being should be facilitated.
The private sector should avoid undesirable inclusion (marketing products that are not likely to enhance their wellbeing or products that are likely to be abused by them) and exclusion (not offering products that are likely to enhance their wellbeing) of the poor in target market selection decisions. The poor are more vulnerable to undesirable inclusion.
Disparities in income and differences in lifestyle add to a greater perceived relative deprivation. Intensive advertising and promotion of products may result in misplaced priorities in resource allocation.
These consumers may spend or overspend on non-essential goods while cutting down their expenditure on education, nutrition and health.
For instance, under the influence of an attractive advertising campaign, a rural woman may be induced to buy fairness cream or hair colorant. The problem with the consumerist-focused BOP movement is that it does not differentiate between priority and non-priority areas. Contrary to the impression one gets from BOP work, multinationals’ entry in BOP markets may actually create serious problems also. Examples such as Coca-Cola’s alleged involvement in groundwater depletion in Kerala or Nike’s sweatshops in developing countries show that multinationals’ BOP engagement can also be severely problematic.
A rather cautious approach on large corporations’ participation in low-income markets is needed. Managers working in MNCs should carefully formulate their BOP strategies so that they do not add any further woes to the already marginalised and vulnerable population.
From the perspective of policy making, there cannot be BOP miracles without improving the basics. Economic growth and improvement in quality of life are largely driven by investment in education and generation of large-scale employment. Poverty can be alleviated only through enhancing income generation of the poor and there cannot be BOP shortcuts
Enterprise 2.0 and Blue Ocean Strategy
In 2004, two professors from INSEAD, W. Chan Kim and Renée Mauborgne published an article in the Harvard Business Review, introducing the concept of “Blue Ocean Strategy”. A number of articles soon followed and a book was published in 2005. This approach has quickly become one of today’s more influential works on business strategy and the book has published over a million copies.
Blue Ocean Strategy is about creating new markets through the introduction of new products. The reference to “Blue Ocean” comes from the authors’ use of a metaphor of markets as oceans. They claim that most organsiations compete in Red Oceans, with essentially the same products against a shared core customer base. In this model, companies focus all their time and energy competing with each another: products become commodities and victories are pyrrhic. With all this fighting, the marketplace is bloody – a Red Ocean.
Blue Oceans are about creating product offerings that are so fundamentally different, they create a new market. The competitor is innovation, not a similar company. As is shown in the book, companies that have created Blue Oceans have been the big winners in the 20th century and the authors believe this trend with continue. Examples include Henry Ford with the automobile and Southwest Airlines with budget travel. Most case studies from the authors are not technology companies or even new companies.
The authors provide plenty of case studies that show that creating a Blue Ocean is not necessarily about technology. That said, I believe it is becoming increasingly difficult for an existing organisation to be innovative without good technology or at least simple technology – especially large companies. This is because their legacy systems are so complex and difficult to manage and their products so tied to this infrastructure that thinking beyond the current-state is extremely difficult.
Implementing systems based on Enterprise 2.0 principles of agility, collaboration and simplicity enables a much better way to innovate. It’s long journey for big company, but worth starting now. And sailing on the Blue Ocean gets a lot easier without a bunch of leaky boats. --(Fastforward)
Blue Ocean Strategy is about creating new markets through the introduction of new products. The reference to “Blue Ocean” comes from the authors’ use of a metaphor of markets as oceans. They claim that most organsiations compete in Red Oceans, with essentially the same products against a shared core customer base. In this model, companies focus all their time and energy competing with each another: products become commodities and victories are pyrrhic. With all this fighting, the marketplace is bloody – a Red Ocean.
Blue Oceans are about creating product offerings that are so fundamentally different, they create a new market. The competitor is innovation, not a similar company. As is shown in the book, companies that have created Blue Oceans have been the big winners in the 20th century and the authors believe this trend with continue. Examples include Henry Ford with the automobile and Southwest Airlines with budget travel. Most case studies from the authors are not technology companies or even new companies.
The authors provide plenty of case studies that show that creating a Blue Ocean is not necessarily about technology. That said, I believe it is becoming increasingly difficult for an existing organisation to be innovative without good technology or at least simple technology – especially large companies. This is because their legacy systems are so complex and difficult to manage and their products so tied to this infrastructure that thinking beyond the current-state is extremely difficult.
Implementing systems based on Enterprise 2.0 principles of agility, collaboration and simplicity enables a much better way to innovate. It’s long journey for big company, but worth starting now. And sailing on the Blue Ocean gets a lot easier without a bunch of leaky boats. --(Fastforward)
Thursday, December 6, 2007
Time management essential
Written plan aids in organizing and prioritizing daily tasks, allowing for better flow in business
One of the major stress factors in owning a small business is that there simply isn't enough time to accomplish all that needs to be done to keep your business running smoothly. As an entrepreneur, you are constantly faced with choices about how to spend your time. It is a valuable commodity and you can only make it go so far. Keep in mind that it is not just how much time you have, but what you do with it that counts. Time management really means managing yourself and your job responsibilities effectively. Small-business owners typically get bogged down for two reasons: poor planning and poor communication. Unless you have a written plan guiding your business, each decision requires too much time and you spend more time fixing past mistakes than planning for the future. Create a business plan to outline the fundamental goals and objectives of your business. With a plan in place, you can concentrate on implementation rather than rethinking each decision. Implementing the business plan also means putting processes in place that allow employees to execute according to plan. ''Process mapping'' will allow common exceptions to be resolved in a consistent and timely manner. This allows you to concentrate on major issues and better manage your time. Regarding communication, maintain an open-door policy for employees. Create an atmosphere that encourages employees to keep you informed about what is going on in your business. Employees are on the front lines and know your business almost as well as you do. They might know your customers better than you do. To make better use of your time, log appointments and major deadlines in a monthly calendar. Write down what must be done and the due dates for projects at key progress intervals. There are many time-management systems available. Everything from pocket calendars to various types of daytimers to electronic schedulers can help you control your time commitments and project obligations. Start each day with a planned schedule. Try to arrive at your office 15 minutes early. You can create an expectation that you have 15 extra minutes daily simply to organize before you begin the business of the day. Make a checklist of priority items and the amount of time you can dedicate to each. Integrate your daily appointments into the checklist. If you find that you are most productive in the morning, perhaps you want to work at your desk until noon and save sales calls for the afternoon. Adjust your calendar to your own personal style for maximum effectiveness. Make it your common practice to establish firm deadlines and meet them. Set deadlines for employees. They will look to you as an example of how things are accomplished within the business. If you routinely meet deadlines, employees will be more likely to meet their deadlines as well. - (Ohio.com)
One of the major stress factors in owning a small business is that there simply isn't enough time to accomplish all that needs to be done to keep your business running smoothly. As an entrepreneur, you are constantly faced with choices about how to spend your time. It is a valuable commodity and you can only make it go so far. Keep in mind that it is not just how much time you have, but what you do with it that counts. Time management really means managing yourself and your job responsibilities effectively. Small-business owners typically get bogged down for two reasons: poor planning and poor communication. Unless you have a written plan guiding your business, each decision requires too much time and you spend more time fixing past mistakes than planning for the future. Create a business plan to outline the fundamental goals and objectives of your business. With a plan in place, you can concentrate on implementation rather than rethinking each decision. Implementing the business plan also means putting processes in place that allow employees to execute according to plan. ''Process mapping'' will allow common exceptions to be resolved in a consistent and timely manner. This allows you to concentrate on major issues and better manage your time. Regarding communication, maintain an open-door policy for employees. Create an atmosphere that encourages employees to keep you informed about what is going on in your business. Employees are on the front lines and know your business almost as well as you do. They might know your customers better than you do. To make better use of your time, log appointments and major deadlines in a monthly calendar. Write down what must be done and the due dates for projects at key progress intervals. There are many time-management systems available. Everything from pocket calendars to various types of daytimers to electronic schedulers can help you control your time commitments and project obligations. Start each day with a planned schedule. Try to arrive at your office 15 minutes early. You can create an expectation that you have 15 extra minutes daily simply to organize before you begin the business of the day. Make a checklist of priority items and the amount of time you can dedicate to each. Integrate your daily appointments into the checklist. If you find that you are most productive in the morning, perhaps you want to work at your desk until noon and save sales calls for the afternoon. Adjust your calendar to your own personal style for maximum effectiveness. Make it your common practice to establish firm deadlines and meet them. Set deadlines for employees. They will look to you as an example of how things are accomplished within the business. If you routinely meet deadlines, employees will be more likely to meet their deadlines as well. - (Ohio.com)
Sunday, November 11, 2007
Quality management: Changing the rules of the game
by Shibu Cheruvatoor
The Economic Times
While elaborating on the concept of Total Quality Management (TQM), the late quality management guru Professor Ishikawa would use an analogy comparing the Shinkansen - the Japanese bullet train to other trains in the west. He would explain that the Shinkansen was then the fastest train in the world because each of the train’s carriages had a motor, unlike others which only had a locomotive in the front. In much the same way, he would conclude total quality management has a similar effect when practiced correctly. Concept of Japanese quality management Put simply, Total Quality Management (TQM) is the process of instilling quality throughout an organisation and its business processes. The Japanese were instrumental in extending Quality Management (QM) to the more broad-based concept of TQM, synonymous with Japanese quality management. Nearer home, Mahindra Institute of Quality (MIQ), a premier management institute located in Nashik, in the western region of the country, imparts residential training programmes in the Japanese way of Quality Management. The training programmes are animated with world-class infrastructure, the Japanese faculty, guest faculty from industry, case-study presentations, experiential learning games, self learning teams, etc. At the end of each course it is mandatory for the participants, facilitated by MIQ, to implement improvement projects in their organization. Scientific management In 1881, F.W. Taylor, published his revolutionary work on scientific management. He propagated the application of scientific methods to each element of work instead of the old rule-of-thumb. He also advocated training of workers, instead of letting them use their own tasks and methods. Alongside he recommended a healthy spirit of co-operation between workers and management to ensure work is done by scientifically devised procedures and appropriate division of work between workers and management. Thermolab, a Maharashtra-based ISO 9001 certified company accredits its Quality Control department as the reason for its ability to provide customers with the best quality equipment. The department is equipped with specialized people to run quality checks at each and every stage of production, keep a track for the incoming material test, check the quality of the equipment during the production stage and finally at the final testing stage. This has resulted in avoiding component and product failure in the field. Customer interests at the centre A company which can understand current and future customer needs, meet their requirements and strive to exceed expectations is more likely to enjoy increased revenues and market shares, which could lead to repeat business. The team at Thermolab proudly state, “Our success is based on actively listening to our customers’ needs and knowing how to convert the customer’s requirements into tangible customer advantage, using a high level of technical expertise. At the same time, we maintain a commitment to introduce the best and latest to the market. This is the key attribute of our focus on customer-driven core values.”
While elaborating on the concept of Total Quality Management (TQM), the late quality management guru Professor Ishikawa would use an analogy comparing the Shinkansen - the Japanese bullet train to other trains in the west. He would explain that the Shinkansen was then the fastest train in the world because each of the train’s carriages had a motor, unlike others which only had a locomotive in the front. In much the same way, he would conclude total quality management has a similar effect when practiced correctly. Concept of Japanese quality management Put simply, Total Quality Management (TQM) is the process of instilling quality throughout an organisation and its business processes. The Japanese were instrumental in extending Quality Management (QM) to the more broad-based concept of TQM, synonymous with Japanese quality management. Nearer home, Mahindra Institute of Quality (MIQ), a premier management institute located in Nashik, in the western region of the country, imparts residential training programmes in the Japanese way of Quality Management. The training programmes are animated with world-class infrastructure, the Japanese faculty, guest faculty from industry, case-study presentations, experiential learning games, self learning teams, etc. At the end of each course it is mandatory for the participants, facilitated by MIQ, to implement improvement projects in their organization. Scientific management In 1881, F.W. Taylor, published his revolutionary work on scientific management. He propagated the application of scientific methods to each element of work instead of the old rule-of-thumb. He also advocated training of workers, instead of letting them use their own tasks and methods. Alongside he recommended a healthy spirit of co-operation between workers and management to ensure work is done by scientifically devised procedures and appropriate division of work between workers and management. Thermolab, a Maharashtra-based ISO 9001 certified company accredits its Quality Control department as the reason for its ability to provide customers with the best quality equipment. The department is equipped with specialized people to run quality checks at each and every stage of production, keep a track for the incoming material test, check the quality of the equipment during the production stage and finally at the final testing stage. This has resulted in avoiding component and product failure in the field. Customer interests at the centre A company which can understand current and future customer needs, meet their requirements and strive to exceed expectations is more likely to enjoy increased revenues and market shares, which could lead to repeat business. The team at Thermolab proudly state, “Our success is based on actively listening to our customers’ needs and knowing how to convert the customer’s requirements into tangible customer advantage, using a high level of technical expertise. At the same time, we maintain a commitment to introduce the best and latest to the market. This is the key attribute of our focus on customer-driven core values.”
Saturday, November 10, 2007
Wisdom from 25 Years in Sales
by Michelle Nichols (BusinessWeek)
BusinessWeek Editor's Note: In her farewell column, longtime contributor Michelle Nichols offers advice you can apply to selling and to life in general.
A few months ago, my gut started screaming at me to stop writing this column. At the time, that seemed as crazy as not breathing. I'd been writing Savvy Selling for six years and I still had plenty of interesting sales topics left to explore. However, I respect my intuition because it represents 40-plus years of life experience. I've learned that whenever I ignore its guidance, I have regrets.
I'm not one to casually walk away from a great relationship. Through my columns, I was able reach more folks around the world in a month than I could speak to in a lifetime. Helping readers sell more and building friendships in the process (I made friends in over 50 countries) have been my favorite parts of the process.
Six years of biweekly columns adds up to around 150 columns. At about 800 to 1,000 words each, that's enough to fill two or three books. Here are some parting insights from my 25 years in the sales business, six of them writing Savvy Selling, which I'd like to share with you.
1. Life is short. Make yours count. Reach for the low-hanging fruit first. Identify those people you can present or complete the sale to, or help today. Call them right away. Then work on your long-term sales prospects.
2. Be real. To start, find out who you are so you can be real to yourself. What are you good at? What do you like? What's important to you? For instance, I found that my favorite part of public speaking was giving workshops and helping individuals, not giving keynotes from the podium, where I was expected to pontificate on three points and worry about my arm gestures.
Next, be real with others and encourage them to be real with you. I've found that by doing so with my customers, they feel safe enough to share who they really are with me. Only then can they tell me what's truly important to them, which allows me to sell them the right solutions in the right way at the right time. As a result, everyone wins and selling is easy.
3. Be bold. Create big doorways of opportunity and then walk through them. BusinessWeek created this column for me after I sent a letter to the site's editor. They asked if they could print it, I said yes, and inquired if they wanted a sales columnist. They said yes—and we struck a deal that day.
A similar process led me to my podcast series. The president of an Internet company mentioned podcasts to me, so I asked BusinessWeek if I could record some for them, even though I had no idea what podcasts were. Four months later when I got the green light, I jumped in and booked Zig Ziglar, the famous master motivator, as my first guest a few weeks before his 80th birthday. Ziglar was a delight and I had a ball interviewing him and the 44 guests that followed.
4. Have fun. The old saying, "If Momma ain't happy, ain't nobody happy," applies to sales, too. If the salesperson isn't having fun, nobody's having fun. Don't be dry; sell in a way that brings a smile to your customers and makes them look forward to seeing you.
My office is filled with funny things to help me lighten up. I have a Rodney Dangerfield doll that says in Rodney's voice, "I don't get no respect," and a sign my kids bought me that reads, "Beware of Attack Salesman." I collect humorous mugs and silly books, too.
5. Balance your family and work. Six years ago, I asked BusinessWeek if I could write a column about the death of my son, Mark, and the lessons I've learned from that terrible experience. That column (BusinessWeek.com, 7/19/02) generated over 100 e-mails from around the world. Every following year in late July, I wrote a column about balancing family, work, and life. Your letters in response have been a great source of healing and encouragement to me. This is an example of the payoff I've received from being real and bold.
6. Love all, always. I know this is a sales column, but it applies to our customers, employees, and families, too. Life really is short; sometimes it ends abruptly. Everyone you meet is fighting a tougher battle than you know, so be gentle. The best we can hope for is to live a full, happy life and leave behind a handful of people who love and respect us.
As the classic breakup line goes, "It's not you, it's me." I am bidding you farewell so I can spend my time boldly tackling whatever it is I'm supposed to do next. Please feel free to keep in touch—and happy selling!
BusinessWeek Editor's Note: In her farewell column, longtime contributor Michelle Nichols offers advice you can apply to selling and to life in general.
A few months ago, my gut started screaming at me to stop writing this column. At the time, that seemed as crazy as not breathing. I'd been writing Savvy Selling for six years and I still had plenty of interesting sales topics left to explore. However, I respect my intuition because it represents 40-plus years of life experience. I've learned that whenever I ignore its guidance, I have regrets.
I'm not one to casually walk away from a great relationship. Through my columns, I was able reach more folks around the world in a month than I could speak to in a lifetime. Helping readers sell more and building friendships in the process (I made friends in over 50 countries) have been my favorite parts of the process.
Six years of biweekly columns adds up to around 150 columns. At about 800 to 1,000 words each, that's enough to fill two or three books. Here are some parting insights from my 25 years in the sales business, six of them writing Savvy Selling, which I'd like to share with you.
1. Life is short. Make yours count. Reach for the low-hanging fruit first. Identify those people you can present or complete the sale to, or help today. Call them right away. Then work on your long-term sales prospects.
2. Be real. To start, find out who you are so you can be real to yourself. What are you good at? What do you like? What's important to you? For instance, I found that my favorite part of public speaking was giving workshops and helping individuals, not giving keynotes from the podium, where I was expected to pontificate on three points and worry about my arm gestures.
Next, be real with others and encourage them to be real with you. I've found that by doing so with my customers, they feel safe enough to share who they really are with me. Only then can they tell me what's truly important to them, which allows me to sell them the right solutions in the right way at the right time. As a result, everyone wins and selling is easy.
3. Be bold. Create big doorways of opportunity and then walk through them. BusinessWeek created this column for me after I sent a letter to the site's editor. They asked if they could print it, I said yes, and inquired if they wanted a sales columnist. They said yes—and we struck a deal that day.
A similar process led me to my podcast series. The president of an Internet company mentioned podcasts to me, so I asked BusinessWeek if I could record some for them, even though I had no idea what podcasts were. Four months later when I got the green light, I jumped in and booked Zig Ziglar, the famous master motivator, as my first guest a few weeks before his 80th birthday. Ziglar was a delight and I had a ball interviewing him and the 44 guests that followed.
4. Have fun. The old saying, "If Momma ain't happy, ain't nobody happy," applies to sales, too. If the salesperson isn't having fun, nobody's having fun. Don't be dry; sell in a way that brings a smile to your customers and makes them look forward to seeing you.
My office is filled with funny things to help me lighten up. I have a Rodney Dangerfield doll that says in Rodney's voice, "I don't get no respect," and a sign my kids bought me that reads, "Beware of Attack Salesman." I collect humorous mugs and silly books, too.
5. Balance your family and work. Six years ago, I asked BusinessWeek if I could write a column about the death of my son, Mark, and the lessons I've learned from that terrible experience. That column (BusinessWeek.com, 7/19/02) generated over 100 e-mails from around the world. Every following year in late July, I wrote a column about balancing family, work, and life. Your letters in response have been a great source of healing and encouragement to me. This is an example of the payoff I've received from being real and bold.
6. Love all, always. I know this is a sales column, but it applies to our customers, employees, and families, too. Life really is short; sometimes it ends abruptly. Everyone you meet is fighting a tougher battle than you know, so be gentle. The best we can hope for is to live a full, happy life and leave behind a handful of people who love and respect us.
As the classic breakup line goes, "It's not you, it's me." I am bidding you farewell so I can spend my time boldly tackling whatever it is I'm supposed to do next. Please feel free to keep in touch—and happy selling!
Quick, look busy! - a look at Stephen Covey's The 7 Habits of Highly Effective People
Oliver Burkeman
Saturday November 10, 2007
The Guardian
I haven't yet felt the need, in this column, to praise Stephen Covey, author of the famous The 7 Habits Of Highly Effective People. It's one of those hopelessly unrealistic books that insists you begin your journey to fulfilment by Discovering Your Values and Finding Your Life Purpose - a process which, it's implied, will take a few days of slogging through several grim chapters of homework-style exercises. But a few days is both too long (who's got a few days to spare?) and too short: surely discovering your "life purpose" takes your whole life. I finally lost respect for Covey when he decided there was an Eighth Habit, requiring a new book. Who's to say there won't be a ninth, 10th, 11th? I'm no maths expert, but I'm guessing the possibilities are, well, infinite.
But Covey's obsession with values leads him to one key insight, and it's all in that word "effective". People sometimes misremember the title as The 7 Habits Of Highly Efficient People, but there's a reason why it's not called that. Covey recognises there's no point being really good at doing stuff - highly efficient, in other words - if it's not the right stuff. Efficiency isn't the same as effectiveness. Work is probably where we misunderstand this the most. A day when lots gets done feels like a day well spent, regardless of what got done, and few companies avoid "presenteeism", where just being at your desk looking busy is rewarded. (Almost every time-management book falls into the trap of assuming that whatever you're doing is worth doing, and just needs doing more efficiently.) But there's "busywork" in our personal lives, too, whenever the volume of activity becomes a stand-in for its value: what else is speed-dating, or pushing your kids into doing 25 extracurricular activities, or a frenetic social life based on keeping in touch with as many people as possible?
The scariest part - for an inveterate list-maker like me - came in Paul Graham's essay, Good And Bad Procrastination (one of a collection, worth browsing, at paulgraham.com). Graham identifies "type-B procrastination": not inactivity, but unimportant busy‑ness. "Any advice about procrastination that concentrates on crossing things off your to-do list is not only incomplete, but positively misleading, if it doesn't consider the possibility that the to-do list is itself a form of type-B procrastination," he writes. It's still procrastination, he points out, to do a lot of pointless tasks just because it feels nice to cross them off the list, while the big, difficult thing - the one that matters - goes undone. I recognised myself, and felt caught red-handed.
Of course, our lives are full of duties we don't find fulfilling but cannot just abandon in favour of more "important" things. One popular piece of advice is to spend even just five minutes each day on one important thing, before the urgent stuff takes over. Increasingly, little tricks like this strike me as far more useful than grand philosophies of happiness. Meanwhile, if you find my life purpose, please get in touch.
Saturday November 10, 2007
The Guardian
I haven't yet felt the need, in this column, to praise Stephen Covey, author of the famous The 7 Habits Of Highly Effective People. It's one of those hopelessly unrealistic books that insists you begin your journey to fulfilment by Discovering Your Values and Finding Your Life Purpose - a process which, it's implied, will take a few days of slogging through several grim chapters of homework-style exercises. But a few days is both too long (who's got a few days to spare?) and too short: surely discovering your "life purpose" takes your whole life. I finally lost respect for Covey when he decided there was an Eighth Habit, requiring a new book. Who's to say there won't be a ninth, 10th, 11th? I'm no maths expert, but I'm guessing the possibilities are, well, infinite.
But Covey's obsession with values leads him to one key insight, and it's all in that word "effective". People sometimes misremember the title as The 7 Habits Of Highly Efficient People, but there's a reason why it's not called that. Covey recognises there's no point being really good at doing stuff - highly efficient, in other words - if it's not the right stuff. Efficiency isn't the same as effectiveness. Work is probably where we misunderstand this the most. A day when lots gets done feels like a day well spent, regardless of what got done, and few companies avoid "presenteeism", where just being at your desk looking busy is rewarded. (Almost every time-management book falls into the trap of assuming that whatever you're doing is worth doing, and just needs doing more efficiently.) But there's "busywork" in our personal lives, too, whenever the volume of activity becomes a stand-in for its value: what else is speed-dating, or pushing your kids into doing 25 extracurricular activities, or a frenetic social life based on keeping in touch with as many people as possible?
The scariest part - for an inveterate list-maker like me - came in Paul Graham's essay, Good And Bad Procrastination (one of a collection, worth browsing, at paulgraham.com). Graham identifies "type-B procrastination": not inactivity, but unimportant busy‑ness. "Any advice about procrastination that concentrates on crossing things off your to-do list is not only incomplete, but positively misleading, if it doesn't consider the possibility that the to-do list is itself a form of type-B procrastination," he writes. It's still procrastination, he points out, to do a lot of pointless tasks just because it feels nice to cross them off the list, while the big, difficult thing - the one that matters - goes undone. I recognised myself, and felt caught red-handed.
Of course, our lives are full of duties we don't find fulfilling but cannot just abandon in favour of more "important" things. One popular piece of advice is to spend even just five minutes each day on one important thing, before the urgent stuff takes over. Increasingly, little tricks like this strike me as far more useful than grand philosophies of happiness. Meanwhile, if you find my life purpose, please get in touch.
10 ways to make meetings more effective
That meeting wasted my time.”How often have you made this statement? Like you, I’ve attended many unproductive meetings, but a recent one topped them all. I had been talking about my consulting and training work with an employee of a company in central New Jersey. Things had gotten to the point that, after receiving information about me, the person suggested that I come to his New Jersey office for a meeting he would set up that would include him and his boss, the director of a training program for new professional hires.
The day of the meeting came, and I made the two-hour drive to the New Jersey office. I met my contact, who brought me to a meeting room with two of his co-workers and his boss. Following our introductions, the boss asked me about the work I do, and I described it. After hearing it, the boss said, “I’m sorry, but that work isn’t in line with what we had in mind.”
What went through my mind at that moment is probably unprintable, but you get the idea. Of course, the trip proved to be a waste of time for me. However, maybe some good did come of it, because ironically, thinking back about it gave me the idea for this article.
The following tips, which apply both to attendees and the chair of the meeting, will help minimize the chances that you’ll be similarly aggravated.
Note: This information is also available as a PDF download.
#1: Determine whether the meeting really is necessary
Does the meeting really need to occur? Do multiple people really need to interact with each other? Reducing the number of attendees saves time for everyone, both those in the meeting (because it probably will end sooner) and for those not attending (because they can do other things).
If the meeting involves a review of documents, status reports, or other material, sending them to attendees prior to the meeting saves time and might even make the meeting unnecessary. Consider my example of the New Jersey meeting: I wonder whether the boss had even reviewed my materials beforehand. Had she done so, or had she spoken to me by telephone, it would have saved time for everyone.
Even if you determine that a meeting is really necessary, does it have to be in person? Consider a telephone or video conference call, which can save time, money, and energy (and which is an option I should have considered for my New Jersey meeting).
#2: Be punctual
Have you ever been on time for a meeting and found that only about three-fourths of the attendees were present? Did the meeting leader say, “Well, let’s wait a few minutes for more people to arrive”? Think about the message that action sends. You, the person who showed up on time, are being penalized for doing so. The people who are late, conversely, are being told that their lateness has no consequences. How likely is it that you will be punctual to the next meeting this leader holds?
I’ve heard of companies that remove all extra chairs from the room once the meeting starts, forcing latecomers to stand. While that technique may be extreme, it does reflect the idea that peoples’ time should be respected.
In the same way, if you’re going to be late, try to let the meeting chair know in advance. Simply showing up late might send a message to the other attendees that to you, the meeting is unimportant.
If you’re the chair, try to end the meeting on time. Attendees have other commitments, and keeping them late is unfair to them and to the others with whom they have commitments. A friend blogged about how she hinted about the late running of a meeting, which was supposed to end at noon: Her stomach growled audibly at 12:05.
#3: Be wary of recapping for latecomers
On a related note, be careful about recapping a meeting for latecomers. By doing so, you are in effect starting the meeting over.
#4: Be prepared
Did you receive background material prior to the meeting? Reviewing it and being prepared with comments saves time for everyone. You might even spot something that could make the meeting unnecessary, as in the case of my New Jersey meeting. If you have questions about the material, consider e-mailing them to the author or to the other attendees in advance, so they have time to think about what you’ve asked.
#5: Have an objective
Author and consultant Stephen Covey counsels readers and clients to “Begin with the end in mind.” When planning a meeting, therefore, ask yourself “What do I want to see as a result of this meeting?” Put another way, ask yourself (as a famous politician and U.S. president did), whether, at the end of the meeting, you and the attendees will be better off than you were at the beginning.
If you have no objective and no purpose, why meet at all?
#6: Publicize the agenda
Having and distributing an agenda prior to a meeting alerts attendees to the nature of that meeting. Attendees who believe a particular item should be added or removed have an opportunity to discuss that issue with the meeting chair.
#7: Be clear about responsibilities
In your agenda and in conversations beforehand, be clear about your expectations for the attendees. Regarding a particular topic, are you looking for a short update, a discussion, or a formal presentation? Being clear about expectations leads to efficiency and avoids embarrassment.
#8: Address important things first
Dr. Covey uses a demonstration involving sand and a collection of medium-size and large rocks. He challenges audience members to place all of them into a pail, so that there’s no overflowing of sand and the rocks all stay below the top of the pail. After many people fail, Dr. Covey shows them how to do it: He puts in the large rocks, then the smaller rocks, then pours in the sand. Those who fail do so because they reverse this sequence.
In your meetings, as in other aspects of your life and work, try to address the most important issues first. Get them out of the way, so that if you do run out of time, all you have left are the less important things.
#9: Avoid being distracted by side issues
It’s easy, during a meeting, to be distracted by side issues. If that happens, you risk losing control of your agenda and the meeting itself. Is the issue one that really needs to be addressed right now? Does it need to be resolved to continue the meeting? If not, consider “parking” it. Section off part of a flipchart page or whiteboard, write the issue inside, then continue the meeting. Afterward, document the issue, as well as any others that have similarly been parked.
If the issue really does need to be addressed immediately, you have a difficult decision to make. Among your current attendees, do you have the necessary people — and only those people needed to resolve the issue? If so, and this issue is important, you may have to take time to address it with the other attendees. If you lack the necessary people, you might have to defer the issue. In that case, try to proceed with other agenda items you can resolve.
#10: Document your meeting
Within a day or two after the meeting, distribute minutes so people have a record of it. Make sure that the minutes list the specific people assigned to specific tasks. Without minutes of a meeting, questions will arise as to who said what and who committed to what. Follow-up actions from the meeting might happen more slowly, if they happen at all.
The day of the meeting came, and I made the two-hour drive to the New Jersey office. I met my contact, who brought me to a meeting room with two of his co-workers and his boss. Following our introductions, the boss asked me about the work I do, and I described it. After hearing it, the boss said, “I’m sorry, but that work isn’t in line with what we had in mind.”
What went through my mind at that moment is probably unprintable, but you get the idea. Of course, the trip proved to be a waste of time for me. However, maybe some good did come of it, because ironically, thinking back about it gave me the idea for this article.
The following tips, which apply both to attendees and the chair of the meeting, will help minimize the chances that you’ll be similarly aggravated.
Note: This information is also available as a PDF download.
#1: Determine whether the meeting really is necessary
Does the meeting really need to occur? Do multiple people really need to interact with each other? Reducing the number of attendees saves time for everyone, both those in the meeting (because it probably will end sooner) and for those not attending (because they can do other things).
If the meeting involves a review of documents, status reports, or other material, sending them to attendees prior to the meeting saves time and might even make the meeting unnecessary. Consider my example of the New Jersey meeting: I wonder whether the boss had even reviewed my materials beforehand. Had she done so, or had she spoken to me by telephone, it would have saved time for everyone.
Even if you determine that a meeting is really necessary, does it have to be in person? Consider a telephone or video conference call, which can save time, money, and energy (and which is an option I should have considered for my New Jersey meeting).
#2: Be punctual
Have you ever been on time for a meeting and found that only about three-fourths of the attendees were present? Did the meeting leader say, “Well, let’s wait a few minutes for more people to arrive”? Think about the message that action sends. You, the person who showed up on time, are being penalized for doing so. The people who are late, conversely, are being told that their lateness has no consequences. How likely is it that you will be punctual to the next meeting this leader holds?
I’ve heard of companies that remove all extra chairs from the room once the meeting starts, forcing latecomers to stand. While that technique may be extreme, it does reflect the idea that peoples’ time should be respected.
In the same way, if you’re going to be late, try to let the meeting chair know in advance. Simply showing up late might send a message to the other attendees that to you, the meeting is unimportant.
If you’re the chair, try to end the meeting on time. Attendees have other commitments, and keeping them late is unfair to them and to the others with whom they have commitments. A friend blogged about how she hinted about the late running of a meeting, which was supposed to end at noon: Her stomach growled audibly at 12:05.
#3: Be wary of recapping for latecomers
On a related note, be careful about recapping a meeting for latecomers. By doing so, you are in effect starting the meeting over.
#4: Be prepared
Did you receive background material prior to the meeting? Reviewing it and being prepared with comments saves time for everyone. You might even spot something that could make the meeting unnecessary, as in the case of my New Jersey meeting. If you have questions about the material, consider e-mailing them to the author or to the other attendees in advance, so they have time to think about what you’ve asked.
#5: Have an objective
Author and consultant Stephen Covey counsels readers and clients to “Begin with the end in mind.” When planning a meeting, therefore, ask yourself “What do I want to see as a result of this meeting?” Put another way, ask yourself (as a famous politician and U.S. president did), whether, at the end of the meeting, you and the attendees will be better off than you were at the beginning.
If you have no objective and no purpose, why meet at all?
#6: Publicize the agenda
Having and distributing an agenda prior to a meeting alerts attendees to the nature of that meeting. Attendees who believe a particular item should be added or removed have an opportunity to discuss that issue with the meeting chair.
#7: Be clear about responsibilities
In your agenda and in conversations beforehand, be clear about your expectations for the attendees. Regarding a particular topic, are you looking for a short update, a discussion, or a formal presentation? Being clear about expectations leads to efficiency and avoids embarrassment.
#8: Address important things first
Dr. Covey uses a demonstration involving sand and a collection of medium-size and large rocks. He challenges audience members to place all of them into a pail, so that there’s no overflowing of sand and the rocks all stay below the top of the pail. After many people fail, Dr. Covey shows them how to do it: He puts in the large rocks, then the smaller rocks, then pours in the sand. Those who fail do so because they reverse this sequence.
In your meetings, as in other aspects of your life and work, try to address the most important issues first. Get them out of the way, so that if you do run out of time, all you have left are the less important things.
#9: Avoid being distracted by side issues
It’s easy, during a meeting, to be distracted by side issues. If that happens, you risk losing control of your agenda and the meeting itself. Is the issue one that really needs to be addressed right now? Does it need to be resolved to continue the meeting? If not, consider “parking” it. Section off part of a flipchart page or whiteboard, write the issue inside, then continue the meeting. Afterward, document the issue, as well as any others that have similarly been parked.
If the issue really does need to be addressed immediately, you have a difficult decision to make. Among your current attendees, do you have the necessary people — and only those people needed to resolve the issue? If so, and this issue is important, you may have to take time to address it with the other attendees. If you lack the necessary people, you might have to defer the issue. In that case, try to proceed with other agenda items you can resolve.
#10: Document your meeting
Within a day or two after the meeting, distribute minutes so people have a record of it. Make sure that the minutes list the specific people assigned to specific tasks. Without minutes of a meeting, questions will arise as to who said what and who committed to what. Follow-up actions from the meeting might happen more slowly, if they happen at all.
- (by Calvin Sun, TR, 6 Nov 2007)
Wednesday, November 7, 2007
The power of reliability excellence
By R. Keith Mobley, CMRP, MBB
In striving to achieve improvements, many organizations turn to lean manufacturing, six sigma and total productive maintenance (TPM). They’re valid initiatives and proper implementation depends on having stable, repeatable operations. Realize that such operational stability is delivered through a combination of organizational and equipment reliability.
Sustainable business improvements come through organizational ownership of standardized work processes coupled with the discipline to execute them. In striving to achieve improvements, many organizations turn to lean manufacturing, six sigma and total productive maintenance (TPM). They’re valid initiatives and proper implementation depends on having stable, repeatable operations. Realize that such operational stability is delivered through a combination of organizational and equipment reliability.
Core methods: Address each facet of reliability excellence to achieve reliability, low cost and profitability. If one element is sub-par, it jeopardizes the stability of anything that follows. Reliability requires systematic identification and elimination of waste from processes while increasing responsiveness to change. The 10 interrelated, perhaps concurrent, core methods that an organization can use to implement a lean production system are, in sequential order:
Six sigma
Hoshin kanri
Kaizen
Five S (5-S)
Cellular manufacturing
Just-in-time (JIT) production
Kanban
Seven wastes (7-W)
Single minute exchange of dies (SMED)
Total productive maintenance (TPM)
The differences: The primary difference between reliability excellence, lean, six sigma, TPM and other improvement processes is the implementation logic and methods. Most applications of these processes are limited to a narrow focus on horizontal, tactical silos intended to address a single limiting factor within the plant or corporation. As a result, applying these processes might generate improvements in the focus area, but because it isn’t applied widely enough, it too often increases cost of goods sold and reduces product throughput.
Six sigma is almost exclusively implemented as a quality assurance tool or to gain ISO certification. In neither case do the implementations consider organizational change management, or the effect this type of implementation will have on other critical issues, such as cost of goods sold, life-cycle cost, asset reliability and even environmental, health and safety.
Few, if any, companies fully implement the entire lean manufacturing process. Instead, selected components, such as five-S or seven wastes, are implemented as quick-fix tools in one or more areas of production. While these are good and needed methodologies, they won’t provide the benefit that most plants need for survival.
Again, the critical limitations of a narrow-focus application of select parts of the lean manufacturing process are change management and universal application of lean as a cohesive process.
Integrate processes such as lean, six sigma, and total productive maintenance into a single holistic process implemented vertically and horizontally throughout the plant or plants. For example, 5-S and 7-W lean methodologies are applied in each functional area of the plant, not just the production function. The foundation of change must be a thorough understanding of the limiting factors that restrict performance. Reliability excellence includes an assessment process that accurately identifies, quantifies and prioritizes the factors that must be corrected to achieve and sustain desired performance levels.
Organizational change management (hoshin kanri) is the primary driver of the process.
Without changing the work culture and the way that each employee performs duties and makes business decisions, the tools provided by these processes will have little, if any, sustainable benefit. Management commitment and effective leadership are nurtured and developed through the business reengineering training and development process that starts at the beginning of the transformation and continues throughout implementation.
Total employee involvement is encouraged throughout transformation. Evaluation of existing work processes, development of new, more effective processes and the training for and implementation of these processes is done through cross-functional focus teams comprised of stakeholders within the organization. The entire reliability excellence transformation is by the workforce, for the workforce.
While the objectives and methods of lean are valid and desirable, the methods employed don’t address two critical success factors. First, the sole focus is on the production organization and excludes that asset reliability, as well as an effective maintenance function, are critical to lean. Second, lean assumes that the processes used in day-to-day business (planning, management, operations, procurement and maintenance) are reliable. Reliability excellence draws heavily on lean and six sigma methodologies, but also includes the missing pieces needed to achieve a sustainable level of improvement and build the foundation for continuous improvement that solidifies the company’s chance for long-term survival. - (PS, Nov 07)
In striving to achieve improvements, many organizations turn to lean manufacturing, six sigma and total productive maintenance (TPM). They’re valid initiatives and proper implementation depends on having stable, repeatable operations. Realize that such operational stability is delivered through a combination of organizational and equipment reliability.
Sustainable business improvements come through organizational ownership of standardized work processes coupled with the discipline to execute them. In striving to achieve improvements, many organizations turn to lean manufacturing, six sigma and total productive maintenance (TPM). They’re valid initiatives and proper implementation depends on having stable, repeatable operations. Realize that such operational stability is delivered through a combination of organizational and equipment reliability.
Core methods: Address each facet of reliability excellence to achieve reliability, low cost and profitability. If one element is sub-par, it jeopardizes the stability of anything that follows. Reliability requires systematic identification and elimination of waste from processes while increasing responsiveness to change. The 10 interrelated, perhaps concurrent, core methods that an organization can use to implement a lean production system are, in sequential order:
Six sigma
Hoshin kanri
Kaizen
Five S (5-S)
Cellular manufacturing
Just-in-time (JIT) production
Kanban
Seven wastes (7-W)
Single minute exchange of dies (SMED)
Total productive maintenance (TPM)
The differences: The primary difference between reliability excellence, lean, six sigma, TPM and other improvement processes is the implementation logic and methods. Most applications of these processes are limited to a narrow focus on horizontal, tactical silos intended to address a single limiting factor within the plant or corporation. As a result, applying these processes might generate improvements in the focus area, but because it isn’t applied widely enough, it too often increases cost of goods sold and reduces product throughput.
Six sigma is almost exclusively implemented as a quality assurance tool or to gain ISO certification. In neither case do the implementations consider organizational change management, or the effect this type of implementation will have on other critical issues, such as cost of goods sold, life-cycle cost, asset reliability and even environmental, health and safety.
Few, if any, companies fully implement the entire lean manufacturing process. Instead, selected components, such as five-S or seven wastes, are implemented as quick-fix tools in one or more areas of production. While these are good and needed methodologies, they won’t provide the benefit that most plants need for survival.
Again, the critical limitations of a narrow-focus application of select parts of the lean manufacturing process are change management and universal application of lean as a cohesive process.
Integrate processes such as lean, six sigma, and total productive maintenance into a single holistic process implemented vertically and horizontally throughout the plant or plants. For example, 5-S and 7-W lean methodologies are applied in each functional area of the plant, not just the production function. The foundation of change must be a thorough understanding of the limiting factors that restrict performance. Reliability excellence includes an assessment process that accurately identifies, quantifies and prioritizes the factors that must be corrected to achieve and sustain desired performance levels.
Organizational change management (hoshin kanri) is the primary driver of the process.
Without changing the work culture and the way that each employee performs duties and makes business decisions, the tools provided by these processes will have little, if any, sustainable benefit. Management commitment and effective leadership are nurtured and developed through the business reengineering training and development process that starts at the beginning of the transformation and continues throughout implementation.
Total employee involvement is encouraged throughout transformation. Evaluation of existing work processes, development of new, more effective processes and the training for and implementation of these processes is done through cross-functional focus teams comprised of stakeholders within the organization. The entire reliability excellence transformation is by the workforce, for the workforce.
While the objectives and methods of lean are valid and desirable, the methods employed don’t address two critical success factors. First, the sole focus is on the production organization and excludes that asset reliability, as well as an effective maintenance function, are critical to lean. Second, lean assumes that the processes used in day-to-day business (planning, management, operations, procurement and maintenance) are reliable. Reliability excellence draws heavily on lean and six sigma methodologies, but also includes the missing pieces needed to achieve a sustainable level of improvement and build the foundation for continuous improvement that solidifies the company’s chance for long-term survival. - (PS, Nov 07)
Simple performance management
by John Ha
When you look at the overall talent management process, performance management is often an elusive target. While leaders conceptually agree that it is a good thing, it is generally viewed by most managers and employees as another worthless human resources process that wastes time and paper. Still, most leaders who "get it" understand that they must have some form of performance management system to continually advance their organization. Once we start down this road with a client, they all ask us for the same two things: They want a performance management process that is simple and doesn't require so much time that their managers won't do it.
Performance management doesn't have to be that hard. In fact, I think it's overdone at most companies. It can be very manageable as long as you think through the process and implement a system that makes sense with your organization's needs. This article summarizes the three major components of a performance management system. It's really a cycle that continues to build on itself. Just remember that when it comes to performance management, less can be more. You don't always need a 10- to 15-page form to document performance.
1) Employee goals and development: This is the first step and focuses on setting goals for both performance and individual improvement. Goals should be for both professional and personal purposes with specific timelines. The manager should commit to providing the necessary resources and support to achieve these goals. An example might be to obtain the Certified Maintenance and Reliability Professional (CMRP) designation within six months, with the manager making a commitment that the employee can attend at least one industry workshop or seminar during the course of the year.
2) Self-appraisal document: The second step should be a self-appraisal. This should be a simple form that allows each employee an opportunity to self-evaluate and "brag" about their past accomplishments. Unfortunately, managers and their employees aren't always on the same page when it comes to identifying successes and failures. A word of caution here: Some employees may not receive this step favorably. They may question why they should be the ones to document all of their great achievements. After all, wouldn't a good manager know about all of their employees' accomplishments? Depending on your culture, a self-appraisal may be an optional step.
3) Performance feedback document: This is the most difficult step because most people as managers do not enjoy giving negative feedback to their employees. That is why it is so common to have a staff that is pretty much average. Only the superstars and the worst performers are recognized. It's also the most time-consuming step, as managers should meet with their employees individually to discuss their performance. If you don't have managers who are willing to give honest feedback to their employees on their performance (whether or not they successfully met their goals and objectives) and devote the necessary time, the entire system will fail.
How often you go through this process really depends on the circumstances and is a judgment call. A good guideline is an annual review process with a mid-year check-up to see how an employee is progressing on their goals. It wouldn't be uncommon for those goals to be adjusted at mid-year based on shifting priorities.
The application is numerous. You should be able to use the performance management system to determine merit increases, bonuses, promotions, transfers, training plans and even terminations.
If you still don't buy into performance management, think about it as a form of predictive and preventive maintenance for your people. It's really nothing more than a tool to ensure your people are operating at their peak performance without unexpected failures. Sound familiar? While comparing people to machines is like comparing apples and oranges, there are some great lessons that can be applied to both. For example, when a machine fails, is it generally the machine's fault or is it because it wasn't operated or maintained properly? Now, apply that question to the failure of an employee to perform their job.
As I've said before, professionals in the field of reliability and maintenance should be the first to understand the importance of performance management because it's already in their school of thought. - (RP, Nov 07)
When you look at the overall talent management process, performance management is often an elusive target. While leaders conceptually agree that it is a good thing, it is generally viewed by most managers and employees as another worthless human resources process that wastes time and paper. Still, most leaders who "get it" understand that they must have some form of performance management system to continually advance their organization. Once we start down this road with a client, they all ask us for the same two things: They want a performance management process that is simple and doesn't require so much time that their managers won't do it.
Performance management doesn't have to be that hard. In fact, I think it's overdone at most companies. It can be very manageable as long as you think through the process and implement a system that makes sense with your organization's needs. This article summarizes the three major components of a performance management system. It's really a cycle that continues to build on itself. Just remember that when it comes to performance management, less can be more. You don't always need a 10- to 15-page form to document performance.
1) Employee goals and development: This is the first step and focuses on setting goals for both performance and individual improvement. Goals should be for both professional and personal purposes with specific timelines. The manager should commit to providing the necessary resources and support to achieve these goals. An example might be to obtain the Certified Maintenance and Reliability Professional (CMRP) designation within six months, with the manager making a commitment that the employee can attend at least one industry workshop or seminar during the course of the year.
2) Self-appraisal document: The second step should be a self-appraisal. This should be a simple form that allows each employee an opportunity to self-evaluate and "brag" about their past accomplishments. Unfortunately, managers and their employees aren't always on the same page when it comes to identifying successes and failures. A word of caution here: Some employees may not receive this step favorably. They may question why they should be the ones to document all of their great achievements. After all, wouldn't a good manager know about all of their employees' accomplishments? Depending on your culture, a self-appraisal may be an optional step.
3) Performance feedback document: This is the most difficult step because most people as managers do not enjoy giving negative feedback to their employees. That is why it is so common to have a staff that is pretty much average. Only the superstars and the worst performers are recognized. It's also the most time-consuming step, as managers should meet with their employees individually to discuss their performance. If you don't have managers who are willing to give honest feedback to their employees on their performance (whether or not they successfully met their goals and objectives) and devote the necessary time, the entire system will fail.
How often you go through this process really depends on the circumstances and is a judgment call. A good guideline is an annual review process with a mid-year check-up to see how an employee is progressing on their goals. It wouldn't be uncommon for those goals to be adjusted at mid-year based on shifting priorities.
The application is numerous. You should be able to use the performance management system to determine merit increases, bonuses, promotions, transfers, training plans and even terminations.
If you still don't buy into performance management, think about it as a form of predictive and preventive maintenance for your people. It's really nothing more than a tool to ensure your people are operating at their peak performance without unexpected failures. Sound familiar? While comparing people to machines is like comparing apples and oranges, there are some great lessons that can be applied to both. For example, when a machine fails, is it generally the machine's fault or is it because it wasn't operated or maintained properly? Now, apply that question to the failure of an employee to perform their job.
As I've said before, professionals in the field of reliability and maintenance should be the first to understand the importance of performance management because it's already in their school of thought. - (RP, Nov 07)
Saturday, November 3, 2007
Time Is A Dimension So Do You Seriously Think You Can Contain It?
by Robin O'Brien
October 31, 2007
People are often described as being two-dimensional. It implies that there is a lack of depth to their character; a three-dimensional person is supposed to be the complete picture. But many forget that there is a forth dimension: Time. Is it sheer folly to try and control a dimension?
Without Time life would cease to exist. Consciousness only exists because we all have an innate sense of the passing of time. We know we're happy or sad because we have a fixed time reference; we know that our psyche, indeed everything in life, is constantly changing. We're happy, because we know that sometime in the past we were not. Without Time we would not be able to say if we were happy or not.
Time is a universal law and yet we hear experts telling us we should manage it. Time management is now big business. But time management implies total control, that we can somehow change it. We pay these people huge amounts of money each year so that we too can learn the trick of managing, taming and controlling time. We take these gurus seriously; they are rather like the fabled alchemists who could change lead into gold.
But what if they preached about width management, height management and depth management and how we need to control them to live a more fulfilled life. We would think them ludicrous. And yet, when they talk about time management - the forth dimension - we nod respectfully and beseech them to take our money.
Perhaps I'm being a little facetious but I think there is a serious point to be made. When we spend too much effort in sectioning off our time from one activity to the next, we may think we are more fulfilled, but I suspect, something dies within us.
Are we seriously supposed to draw up time charts for work, family, hobbies and 'quality time'. Surely, our family is a constant part of us; is it possible to shut them out altogether when they are not scheduled in. The term 'quality time' implies an allotted time for us to explore our emotions; a time to be happy, to reflect, to build relationships, to be sad even. But how can we 'switch on' these things; we're human beings, not machines. Our emotions and thoughts creep up on us; they bare scant regard to time, whether it's been allotted to them or not.
When we try to live a regimented life we loose that certain something that makes us human.
Of course, the business of getting through the day does require a degree of organization but spontaneity, creativity and true fulfillment is only possible when time is given a long leash.
I often think that when Time Management gurus tell us that we can reach a better, happier place from the rigorous management of our allotted time on this planet, they are, at best misguided. What is more likely to happen is that we turn off our humanity; we become machine-like. A machine doesn't have any self doubts or bad times, but neither does it have our genius for thought, creation and spontaneity.
A machine is the perfect example of time management. A human being is the perfect example of something that is not governed by, or tries to manage time, but is aware of the possibilities that time gives each and everyone one of us.
visit sponsor
October 31, 2007
People are often described as being two-dimensional. It implies that there is a lack of depth to their character; a three-dimensional person is supposed to be the complete picture. But many forget that there is a forth dimension: Time. Is it sheer folly to try and control a dimension?
Without Time life would cease to exist. Consciousness only exists because we all have an innate sense of the passing of time. We know we're happy or sad because we have a fixed time reference; we know that our psyche, indeed everything in life, is constantly changing. We're happy, because we know that sometime in the past we were not. Without Time we would not be able to say if we were happy or not.
Time is a universal law and yet we hear experts telling us we should manage it. Time management is now big business. But time management implies total control, that we can somehow change it. We pay these people huge amounts of money each year so that we too can learn the trick of managing, taming and controlling time. We take these gurus seriously; they are rather like the fabled alchemists who could change lead into gold.
But what if they preached about width management, height management and depth management and how we need to control them to live a more fulfilled life. We would think them ludicrous. And yet, when they talk about time management - the forth dimension - we nod respectfully and beseech them to take our money.
Perhaps I'm being a little facetious but I think there is a serious point to be made. When we spend too much effort in sectioning off our time from one activity to the next, we may think we are more fulfilled, but I suspect, something dies within us.
Are we seriously supposed to draw up time charts for work, family, hobbies and 'quality time'. Surely, our family is a constant part of us; is it possible to shut them out altogether when they are not scheduled in. The term 'quality time' implies an allotted time for us to explore our emotions; a time to be happy, to reflect, to build relationships, to be sad even. But how can we 'switch on' these things; we're human beings, not machines. Our emotions and thoughts creep up on us; they bare scant regard to time, whether it's been allotted to them or not.
When we try to live a regimented life we loose that certain something that makes us human.
Of course, the business of getting through the day does require a degree of organization but spontaneity, creativity and true fulfillment is only possible when time is given a long leash.
I often think that when Time Management gurus tell us that we can reach a better, happier place from the rigorous management of our allotted time on this planet, they are, at best misguided. What is more likely to happen is that we turn off our humanity; we become machine-like. A machine doesn't have any self doubts or bad times, but neither does it have our genius for thought, creation and spontaneity.
A machine is the perfect example of time management. A human being is the perfect example of something that is not governed by, or tries to manage time, but is aware of the possibilities that time gives each and everyone one of us.
visit sponsor
Aiming for excellence
10/29/2007 Daily Journal
When Tom Peters wrote "In Search of Excellence" with Robert Waterman 25 years ago, "excellence" became a mantra in much of the business world.The book's litany of characteristics of successful companies - close to the customer, a bias for action, autonomy and entrepreneurship, to name a few - were repeated, studied and emulated in companies large, small and in between and became a part of the common business lexicon.National Public Radio named "In Search of Excellence" one of the three most influential business books of the 20th century, and it opened the market to a whole new business literature that took the focus off strategy, budgets and numbers and put it on people -employees and customers. It really was a harbinger of a shift in American business.Peters, who has spent the quarter century since its publication writing and consulting, was in Tupelo last week, still preaching his message that successful businesses are essentially about one thing: Releasing the creative talents and energy of people in the service of others.He appeared at the kickoff of the corporate fundraising campaign for HealthWorks!, a children's interactive health education center under development at the old Kroger building in Gloster Creek Village. The center, scheduled to open in fall 2008, is patterned after the original in South Bend, Ind., which was featured for its highly creative and innovative approach in a 2004 television production by Peters.Long-term plansPeters urged the Tupelo audience not to settle for making incremental progress in childhood obesity, which he described as the most serious problem facing the country. Why not think big - make this a model for the country by turning around not just Northeast Mississippi's obesity problem, but the entire state's.Don't settle for small progress or comparing yourself only to the rest of the state, he said. Aim higher. Tupelo's past achievements suggest it should be thinking in those terms, he said.It was more than inspirational rhetoric. Peters has a point - not just for HealthWorks!, but for any community or regional undertaking.Whether in health care, public education, economic development, neighborhood revitalization, downtown rejuvenation or any of a myriad of other common undertakings, Tupelo and Northeast Mississippi shouldn't settle for good enough, or even better than most in the state. World-class is the vision that will produce results that will be remembered.This community and region have been best when they aimed highest - the Wellspring site, for example. Peters points out that risk-taking and big thinking brings the criticism and debunking of the naysayers, as that project surely did. Yet had the region's leaders not thought big and taken risks, there would have been no Toyota.Communities, like businesses, need to be constantly reinventing themselves. And, like businesses, the best communities are those that unleash their people to stretch the limits of their imaginations.Pie in the sky? Only to those who haven't seen it work because they've never tried it.
When Tom Peters wrote "In Search of Excellence" with Robert Waterman 25 years ago, "excellence" became a mantra in much of the business world.The book's litany of characteristics of successful companies - close to the customer, a bias for action, autonomy and entrepreneurship, to name a few - were repeated, studied and emulated in companies large, small and in between and became a part of the common business lexicon.National Public Radio named "In Search of Excellence" one of the three most influential business books of the 20th century, and it opened the market to a whole new business literature that took the focus off strategy, budgets and numbers and put it on people -employees and customers. It really was a harbinger of a shift in American business.Peters, who has spent the quarter century since its publication writing and consulting, was in Tupelo last week, still preaching his message that successful businesses are essentially about one thing: Releasing the creative talents and energy of people in the service of others.He appeared at the kickoff of the corporate fundraising campaign for HealthWorks!, a children's interactive health education center under development at the old Kroger building in Gloster Creek Village. The center, scheduled to open in fall 2008, is patterned after the original in South Bend, Ind., which was featured for its highly creative and innovative approach in a 2004 television production by Peters.Long-term plansPeters urged the Tupelo audience not to settle for making incremental progress in childhood obesity, which he described as the most serious problem facing the country. Why not think big - make this a model for the country by turning around not just Northeast Mississippi's obesity problem, but the entire state's.Don't settle for small progress or comparing yourself only to the rest of the state, he said. Aim higher. Tupelo's past achievements suggest it should be thinking in those terms, he said.It was more than inspirational rhetoric. Peters has a point - not just for HealthWorks!, but for any community or regional undertaking.Whether in health care, public education, economic development, neighborhood revitalization, downtown rejuvenation or any of a myriad of other common undertakings, Tupelo and Northeast Mississippi shouldn't settle for good enough, or even better than most in the state. World-class is the vision that will produce results that will be remembered.This community and region have been best when they aimed highest - the Wellspring site, for example. Peters points out that risk-taking and big thinking brings the criticism and debunking of the naysayers, as that project surely did. Yet had the region's leaders not thought big and taken risks, there would have been no Toyota.Communities, like businesses, need to be constantly reinventing themselves. And, like businesses, the best communities are those that unleash their people to stretch the limits of their imaginations.Pie in the sky? Only to those who haven't seen it work because they've never tried it.
Friday, November 2, 2007
Professor provides road map to management 2.0
A road map to management 2.0
By Stefan Stern, Financial Times October 28, 2007
Peter Drucker, the 20th century's preeminent management writer, famously said, "Most of what we call management consists of making it difficult for people to get their work done." The ambitious challenge Gary Hamel has set himself -- and largely met -- is to provide a new road map for 21st century managers. How can organizations be more adaptable, innovative and resilient, and what do managers need to do, or stop doing, to help promote these qualities?Although Hamel is full of admiration for the great names of management theory from the past -- Frederick Taylor, Max Weber, W. Edwards Deming and Drucker himself -- his point is that it is time to move on.Some of these greats, still hugely influential today, belong to "a small coterie of long-departed theorists and practitioners who invented the rules and conventions of 'modern' management back in the early years of the 20th century."Just as we are now living through the "Web 2.0" era, Hamel contends that we need "management 2.0" to deal with our new surroundings. This is a neat idea, and a fitting one, because in a sense the "The Future of Management" by Hamel with Bill Breen offers us a vision of Hamel 2.0. The London Business School professor was as energized by the "new" economy as anyone and, with almost evangelical fervor, wrote "Leading the Revolution" in 2000. Although it might have gotten much of its analysis right, it is also remembered for its euphoric praise for Enron Corp. A bit older, and much wiser, Hamel offers an intriguing account of what managing in the future is going to look like. It is time for some innovation in the way we organize our work, he writes. Where should we look to see the future in action -- as Drucker always urged us to do? Hamel focuses on three examples: Whole Foods Market Inc., W.L. Gore & Associates and, predictably enough, Google Inc.Whole Foods, the organic food retailer, has annual sales of $6 billion and more than 30,000 employees. It is an open, relatively nonhierarchical organization. The pay of every employee is known, and even senior executives receive no more than 19 times the average wage. Recruits are voted in through a process of peer appraisal after a four-week probationary period.W.L. Gore has annual sales of $2 billion and employs 7,500 people producing high-quality specialized clothing and fabrics. It has no management layers and no organizational chart. "We vote with our feet," one employee tells Hamel. "If you call a meeting and people show up, you're a leader."Google has more than $10 billion in annual revenue and 10,000 employees. It is a company, Hamel says, "that is capable of evolving as fast as the Web itself."Here too hierarchy and position count for little. "Command and control isn't an option when your 'employees' are some of the smartest people on the planet," Hamel writes. After flirting with a conventional corporate hierarchy, Google's middle management is now kept to a minimum because "an excess of oversight was putting a damper on innovation."It is pretty clear what Hamel thinks the future of management needs to look like. It should be far more democratic and less hidebound. Genuine empowerment and decentralization are required. Organizations will become more human, because to adapt and survive they will need a creative contribution from everybody.Consider the traditional management cry: "How do we get more out of our people?" It is "loaded with industrial-age thinking," Hamel says. It "virtually guarantees that a company will never get the best out of its people. . . . Vassals and conscripts may work hard, but they don't work willingly. . . . An enthusiastic workforce will consistently outperform one that is merely industrious."Ambitious and imaginative managers have little to fear from the brave new world that Hamel describes so well in this book. Bureaucrats, careerists and control freaks, on the other hand, should be worried. And Drucker? He would, I think, have loved it.
By Stefan Stern, Financial Times October 28, 2007
Peter Drucker, the 20th century's preeminent management writer, famously said, "Most of what we call management consists of making it difficult for people to get their work done." The ambitious challenge Gary Hamel has set himself -- and largely met -- is to provide a new road map for 21st century managers. How can organizations be more adaptable, innovative and resilient, and what do managers need to do, or stop doing, to help promote these qualities?Although Hamel is full of admiration for the great names of management theory from the past -- Frederick Taylor, Max Weber, W. Edwards Deming and Drucker himself -- his point is that it is time to move on.Some of these greats, still hugely influential today, belong to "a small coterie of long-departed theorists and practitioners who invented the rules and conventions of 'modern' management back in the early years of the 20th century."Just as we are now living through the "Web 2.0" era, Hamel contends that we need "management 2.0" to deal with our new surroundings. This is a neat idea, and a fitting one, because in a sense the "The Future of Management" by Hamel with Bill Breen offers us a vision of Hamel 2.0. The London Business School professor was as energized by the "new" economy as anyone and, with almost evangelical fervor, wrote "Leading the Revolution" in 2000. Although it might have gotten much of its analysis right, it is also remembered for its euphoric praise for Enron Corp. A bit older, and much wiser, Hamel offers an intriguing account of what managing in the future is going to look like. It is time for some innovation in the way we organize our work, he writes. Where should we look to see the future in action -- as Drucker always urged us to do? Hamel focuses on three examples: Whole Foods Market Inc., W.L. Gore & Associates and, predictably enough, Google Inc.Whole Foods, the organic food retailer, has annual sales of $6 billion and more than 30,000 employees. It is an open, relatively nonhierarchical organization. The pay of every employee is known, and even senior executives receive no more than 19 times the average wage. Recruits are voted in through a process of peer appraisal after a four-week probationary period.W.L. Gore has annual sales of $2 billion and employs 7,500 people producing high-quality specialized clothing and fabrics. It has no management layers and no organizational chart. "We vote with our feet," one employee tells Hamel. "If you call a meeting and people show up, you're a leader."Google has more than $10 billion in annual revenue and 10,000 employees. It is a company, Hamel says, "that is capable of evolving as fast as the Web itself."Here too hierarchy and position count for little. "Command and control isn't an option when your 'employees' are some of the smartest people on the planet," Hamel writes. After flirting with a conventional corporate hierarchy, Google's middle management is now kept to a minimum because "an excess of oversight was putting a damper on innovation."It is pretty clear what Hamel thinks the future of management needs to look like. It should be far more democratic and less hidebound. Genuine empowerment and decentralization are required. Organizations will become more human, because to adapt and survive they will need a creative contribution from everybody.Consider the traditional management cry: "How do we get more out of our people?" It is "loaded with industrial-age thinking," Hamel says. It "virtually guarantees that a company will never get the best out of its people. . . . Vassals and conscripts may work hard, but they don't work willingly. . . . An enthusiastic workforce will consistently outperform one that is merely industrious."Ambitious and imaginative managers have little to fear from the brave new world that Hamel describes so well in this book. Bureaucrats, careerists and control freaks, on the other hand, should be worried. And Drucker? He would, I think, have loved it.
Thinkers Call For Creative Learning at the Festival of Thinkers
Dr Edward de Bono
University leaders suggested at a Dubai conference yesterday that conventional teaching methods may block one’s creative instincts to continue life-long learning and solve personal and professional crises. Educators now advocate "creative learning" as critical to a student reaching his/her full potential.
In an approach long advocated by Malta psychologist and physician Edward de Bono, educators said students of tomorrow must see life as a series of creative opportunities rather than challenges.
De Bono joined 20 Nobel Laureate speakers and educators at the three-day Festival of Thinkers which wrapped up at Dubai Men’s College yesterday.
Author of 75 books, De Bono’s pioneering work on lateral thinking was a central theme of the conference which included a panel of educators who asked how they can prepare "creative and responsible citizens".
Dr Kerry Romesburg, President of Jacksonville University, said: "We need a broader range of understanding. We actually train creativity of our students… The biggest challenge is keeping that creativity alive."
Richard Stephens, a member of the American Education Commission and a senior vice-president of Boeing Company, said universities need to transfer knowledge to students but they also must teach students how to define and solve problems "to put that knowledge to use".
Dr Monte Cassim, President of Ritsumeikan Asia Pacific University in Japan, said university is "a place to shape one’s destiny. Marriage of arts and science is absolutely critical, we have to go beyond disciplines".
Instilling creativity in students, he said, is "not just a matter of the head but a matter of the heart."
Dr Thomas Rocco, Provost of the three-year-old Greece-based Hellenic American University, said the school is "focusing on a culture of competence. We emphasise outcomes and frequent assessment of those outcomes". He said that students must evolve beyond their individual learning capacity.
New York Institute of Technology President Dr Edward Guiliano said he believes there will be a new 21st century teaching model for universities that will morph alongside a changing culture that demands higher degrees of creativity. - (xress, 25 Oct 07)
Editor: I attended a talk on creative thinking delivered by Dr Edward de Bono in Kuala Lumpur in September 2007. He mentioned that ISLAM is the religion that encourage THINKING the most compared to other religions. He quoted several verses from the Holy Quran and Hadith (traditions of Prophet Muhammad) to support his claim to the amazement of the audience.
In an approach long advocated by Malta psychologist and physician Edward de Bono, educators said students of tomorrow must see life as a series of creative opportunities rather than challenges.
De Bono joined 20 Nobel Laureate speakers and educators at the three-day Festival of Thinkers which wrapped up at Dubai Men’s College yesterday.
Author of 75 books, De Bono’s pioneering work on lateral thinking was a central theme of the conference which included a panel of educators who asked how they can prepare "creative and responsible citizens".
Dr Kerry Romesburg, President of Jacksonville University, said: "We need a broader range of understanding. We actually train creativity of our students… The biggest challenge is keeping that creativity alive."
Richard Stephens, a member of the American Education Commission and a senior vice-president of Boeing Company, said universities need to transfer knowledge to students but they also must teach students how to define and solve problems "to put that knowledge to use".
Dr Monte Cassim, President of Ritsumeikan Asia Pacific University in Japan, said university is "a place to shape one’s destiny. Marriage of arts and science is absolutely critical, we have to go beyond disciplines".
Instilling creativity in students, he said, is "not just a matter of the head but a matter of the heart."
Dr Thomas Rocco, Provost of the three-year-old Greece-based Hellenic American University, said the school is "focusing on a culture of competence. We emphasise outcomes and frequent assessment of those outcomes". He said that students must evolve beyond their individual learning capacity.
New York Institute of Technology President Dr Edward Guiliano said he believes there will be a new 21st century teaching model for universities that will morph alongside a changing culture that demands higher degrees of creativity. - (xress, 25 Oct 07)
Editor: I attended a talk on creative thinking delivered by Dr Edward de Bono in Kuala Lumpur in September 2007. He mentioned that ISLAM is the religion that encourage THINKING the most compared to other religions. He quoted several verses from the Holy Quran and Hadith (traditions of Prophet Muhammad) to support his claim to the amazement of the audience.
Breaktrough management - 'manufacturers must think global'
MUMBAI: Even as the debate on core competency and diversification continues to dog Indian companies, a well known Japanese management expert was in the country recently to try and make Indian manufacturing companies look beyond mere production and to include aspects like research and logistics, to increase their share of the global pie. Professor Shoji Shiba, a former professor at the Massachusetts Institute of Technology, and author of the celebrated ‘breakthrough management’ concept, was in Mumbai, to make middle and senior executives unlearn the “need to produce and produce more.” Core competency for corporations has been a key part of management restructuring in most companies ever since gurus CK Prahlad and Gary Hamel published their celebrated theory in the Harvard Business Review in the nineties. But then there has also been too much of a focus on production, fears the professor. “For years Indian manufacturing companies have been laying too much emphasis on production. It’s time they made that leap to the big mindset,” he said. “You need to include R&D (research and development), product design, supply chain, if you want to go global,” he said. The Japanese professor who is also one of the world’s leading experts in Total Quality Management, recently spent two weeks at the Godrej’s Center for Excellence in Mumbai, in a joint effort with the Confederation of Indian Industry. “If Indian manufacturing companies don’t get their act together and work toward a global presence, they could be wiped out,” he said. Indian manufacturing is already reeling under the impact of old labour laws and a weak infrastructure, he added. Outlining his views through a presentation titled ‘Small m vs Big M’, with the ‘m’ representing mindset, Prof Shiba said R&D based on customer feedback is vital before focusing on production. The feedback and research would feed product design which could then be used in producing custom-made goods, he said. Putting the supply chain - including logistics for raw materials and finished goods - was equally important and so were developing after-sales-service and warranty to spur global growth, he added. Industry insiders, including those who have attended Prof Shiba’s previous sessions say that the re-orientation from production-only to a global mindset, shows how dynamic his concepts could be. In fact the former MIT professor wasn’t slow to attack TQM and Total Productivity Maintenance (TPM). “All that was okay till three years back...now it isn’t enough. The Big M is essential to survive under global competition,” he added. Rightfully, his new concept now includes manufacturing, societal and environmental changes as well. “You also need to develop manufacturing and create role models,” he said while talking about the erosion of the sector’s share of the Indian economy. Manufacturing currently accounts for 27% of the GDP, way behind the 55% contributed by the service sector. But that could be changing, say latest reports. Manufacturing firms reported healthy expansion of output in September, with the rate of growth the fastest since November 2006 and led by higher volumes of new orders and increased marketing. The ABN AMRO India Purchasing Managers’ Index (PMI) rose from 57.9 in August to 59.1 in September. The index is an indicator of the economic health of the manufacturing sector and is based on factors like new orders, inventory levels, production, supplier deliveries and employment. A index reading of more than 50 means that the sector has expanded. Apart from a more-than-necessary focus on production, weak R&D is another inhibiting factor, said Prof Shiba. “Research in India is mostly product design...that needs to be ramped up so that Indian centres create a series of innovations,” he added.
The correct approach to implementing lean
by Carl Wright
Oct 2007
Lean manufacturing is one of the most widely utilized business improvement methodologies. There are hundreds of consultants and schools teaching lean manufacturing principles.
The problem with many courses teaching lean manufacturing is the lack of real-world experience of the instructor. Many have limited experience applying the principles, nor the interpersonal skills to influence change.
Lean manufacturing is not nearly as structured as Six Sigma or other continuous improvement initiatives. There is no standard approach to implementation or third-party certifying body such as ISO.
Lean manufacturing consists of many different “tools”. The best courses teach the lean manufacturing principles as well as how and when to use the tools.
Some companies have heard that lean manufacturing implementation will reduce their waste and costs, and decide to just start implementing. They often start using one tool at a time until the boss declares it’s done.
Worse yet, some companies find a consultant that knows 5-S and little else. When the consultant leaves, the clean and organized business eventually realizes they are clean, organized and still full of waste.
The correct approach to implementing lean manufacturing begins with an analysis of the businesses needs, opportunities and challenges. Once these opportunities are identified, the tools are used which will solve the issues. These tools might be lean manufacturing or Six Sigma tools. It simply wouldn’t be prudent to limit the success of a lean initiative to exclude any tool if it was known to solve the problem at hand.
In other words, the problems identify the tools rather than the tools being forced into the organization.
Some of the lean manufacturing tools are 5-S (sort, set in order, shine, standardize and sustain), value stream mapping, kanban, takt time, continuous flow, cellular manufacturing, TPM (Total Productive Maintenance), SMED (single-minute exchange of die), OEE (overall equipment effectiveness), line balancing, standardized operations, seven wastes (muda), error-proofing, kaizen and root cause problem-solving.
There are a few tools that can and should be used with any lean manufacturing initiative. The 5-S tool is a powerful workplace organization tool. This tool makes sense in any business. It would be hard to find an organization where order and organization didn’t make sense.
Root cause problem-solving tools should be used in every lean manufacturing implementation. These tools vary based on the problem. Some of the more common are cause and effects analysis, five-why analysis, 8D method, CT trees, process mapping and affinity diagrams.
Value stream mapping is another useful tool to determine where value is added and identify where no value is added (muda). The value stream map depicts the flow of product and information on paper. Information such as inventory, distance and bottlenecks are highlighted. Once the value stream map is completed, opportunities for improvement become obvious.
Tools such as line balancing, SMED, takt time and OEE should be used to solve specific business opportunities. For example, SMED (single-minute exchange of die) is a tool that is used to reduce machinery or process setup times. This tool is a lot more useful in businesses that run smaller order quantities and changeover often. OEE is an excellent tool to determine why a machine or process is not producing at world-class levels. Once the reasons (opportunities) are known, they can be improved.
Kaizen (a Japanese word meaning continuous improvement) is a very powerful improvement tool. It is basically a rapid (three to five days) improvement method utilizing a cross-functional team to solve a business problem. A kaizen event team will use many other lean tools to help solve the problem.
Utilize lean manufacturing principles to identify and solve business issues and the financial impact will justify their use. If the tools are made to “fit” the organization, the result will be chaos, disruption, low morale and financial loss.
attend Six Sigma & Lean Six Sigma Seminar in Kuala Lumpur -Dec 2007
Oct 2007
Lean manufacturing is one of the most widely utilized business improvement methodologies. There are hundreds of consultants and schools teaching lean manufacturing principles.
The problem with many courses teaching lean manufacturing is the lack of real-world experience of the instructor. Many have limited experience applying the principles, nor the interpersonal skills to influence change.
Lean manufacturing is not nearly as structured as Six Sigma or other continuous improvement initiatives. There is no standard approach to implementation or third-party certifying body such as ISO.
Lean manufacturing consists of many different “tools”. The best courses teach the lean manufacturing principles as well as how and when to use the tools.
Some companies have heard that lean manufacturing implementation will reduce their waste and costs, and decide to just start implementing. They often start using one tool at a time until the boss declares it’s done.
Worse yet, some companies find a consultant that knows 5-S and little else. When the consultant leaves, the clean and organized business eventually realizes they are clean, organized and still full of waste.
The correct approach to implementing lean manufacturing begins with an analysis of the businesses needs, opportunities and challenges. Once these opportunities are identified, the tools are used which will solve the issues. These tools might be lean manufacturing or Six Sigma tools. It simply wouldn’t be prudent to limit the success of a lean initiative to exclude any tool if it was known to solve the problem at hand.
In other words, the problems identify the tools rather than the tools being forced into the organization.
Some of the lean manufacturing tools are 5-S (sort, set in order, shine, standardize and sustain), value stream mapping, kanban, takt time, continuous flow, cellular manufacturing, TPM (Total Productive Maintenance), SMED (single-minute exchange of die), OEE (overall equipment effectiveness), line balancing, standardized operations, seven wastes (muda), error-proofing, kaizen and root cause problem-solving.
There are a few tools that can and should be used with any lean manufacturing initiative. The 5-S tool is a powerful workplace organization tool. This tool makes sense in any business. It would be hard to find an organization where order and organization didn’t make sense.
Root cause problem-solving tools should be used in every lean manufacturing implementation. These tools vary based on the problem. Some of the more common are cause and effects analysis, five-why analysis, 8D method, CT trees, process mapping and affinity diagrams.
Value stream mapping is another useful tool to determine where value is added and identify where no value is added (muda). The value stream map depicts the flow of product and information on paper. Information such as inventory, distance and bottlenecks are highlighted. Once the value stream map is completed, opportunities for improvement become obvious.
Tools such as line balancing, SMED, takt time and OEE should be used to solve specific business opportunities. For example, SMED (single-minute exchange of die) is a tool that is used to reduce machinery or process setup times. This tool is a lot more useful in businesses that run smaller order quantities and changeover often. OEE is an excellent tool to determine why a machine or process is not producing at world-class levels. Once the reasons (opportunities) are known, they can be improved.
Kaizen (a Japanese word meaning continuous improvement) is a very powerful improvement tool. It is basically a rapid (three to five days) improvement method utilizing a cross-functional team to solve a business problem. A kaizen event team will use many other lean tools to help solve the problem.
Utilize lean manufacturing principles to identify and solve business issues and the financial impact will justify their use. If the tools are made to “fit” the organization, the result will be chaos, disruption, low morale and financial loss.
attend Six Sigma & Lean Six Sigma Seminar in Kuala Lumpur -Dec 2007
Lack of management skills main reason for workplace bullying
New research released by the Ban Bullying At Work campaign reveals that two thirds of managers believe that lack of management skills is the major factor contributing to bullying.
Unrealistic targets (27%), authoritarian management styles (56%), personality (57%) and failure to address incidents (37%) are also cited as contributory factors.
Lyn Witheridge, CEO of the Ban Bullying At Work campaign, said: “It is clear that managers now acknowledge that bullying behaviour in the workplace takes many forms and creates deep repercussions.
“In fact bullying costs UK businesses £18 billion per year and one in four people has experienced bullying in the workplace. We are challenging businesses to speak out against bullying to create workplaces where employees can see clearly that bullying behaviours will not be tolerated. We want to inspire managers to speak out and instill a culture where business is not frightened to stand-up to the bullies.” - (CD, 2 Nov 07)
Unrealistic targets (27%), authoritarian management styles (56%), personality (57%) and failure to address incidents (37%) are also cited as contributory factors.
Lyn Witheridge, CEO of the Ban Bullying At Work campaign, said: “It is clear that managers now acknowledge that bullying behaviour in the workplace takes many forms and creates deep repercussions.
“In fact bullying costs UK businesses £18 billion per year and one in four people has experienced bullying in the workplace. We are challenging businesses to speak out against bullying to create workplaces where employees can see clearly that bullying behaviours will not be tolerated. We want to inspire managers to speak out and instill a culture where business is not frightened to stand-up to the bullies.” - (CD, 2 Nov 07)
Friday, October 26, 2007
Keeping a balanced score
How do you measure if your business is travelling successfully?
For most, the answer would be the bottom line. For others it may be customer satisfaction levels.
But Professor David Gadenne, head of the school of commerce and the school of management at the University of the Sunshine Coast, told a business audience at Marcoola on Friday that far too many companies were focussed on narrow aspects of the business.
Instead, he said, owners and managers should be looking at wealth creation for all stakeholders, including customers, shareholders, the community and most importantly, employees.
“Some businesses are blind to the fact they need to look at all areas simultaneously to be successful ... they need to design and implement what’s called a balanced scorecard,” he said.
“And that scorecard should have an underlying premise of increasing value for shareholders.
"That means looking at processes from a customer perspective, from a financial perspective, from an internal perspective and from an innovation, learning and growth perspective.”
Mr Gadenne said human capital was without doubt the number one resource for businesses, adding successfully addressing issues surrounding that would improve results in other areas such as profits and customer satisfaction.
“Customers do not simply buy on price, so it’s very important to attract and retain the right people ... absolutely critical,” he said.
“How do you know you’re selecting the right people? Core competencies are important, things like education, knowledge, computer skills, training and experience, but more important are their people skills ... things like empathy and understanding, communication skills and a sense of humour. You don’t want people who will create conflict.
“Other characteristics like their values and commitment in areas like dedication, drive and persistence, as well as their imagination, are also important.
"If you employ people without imagination your business won’t do as well.”
Mr Gadenne pointed to successful entrepreneurs such as Richard Branson, and companies including Toyota, The Body Shop and Healthy Choice as examples of enterprises that valued human capital and innovation.
“Richard Branson encourages all his employees to talk to him about ideas they have about improving the various Virgin businesses, and even starting other ones,” Mr Gadenne said.
“Creating an innovative climate in business will lead to success.
“You should listen to new voices, have an open market for new ideas, incentives for innovators ... even a sense of higher purpose within the company.
“Businesses need to understand the competitive landscape is constantly changing. Employees must be encouraged to continually learn, innovate and improve.”
For most, the answer would be the bottom line. For others it may be customer satisfaction levels.
But Professor David Gadenne, head of the school of commerce and the school of management at the University of the Sunshine Coast, told a business audience at Marcoola on Friday that far too many companies were focussed on narrow aspects of the business.
Instead, he said, owners and managers should be looking at wealth creation for all stakeholders, including customers, shareholders, the community and most importantly, employees.
“Some businesses are blind to the fact they need to look at all areas simultaneously to be successful ... they need to design and implement what’s called a balanced scorecard,” he said.
“And that scorecard should have an underlying premise of increasing value for shareholders.
"That means looking at processes from a customer perspective, from a financial perspective, from an internal perspective and from an innovation, learning and growth perspective.”
Mr Gadenne said human capital was without doubt the number one resource for businesses, adding successfully addressing issues surrounding that would improve results in other areas such as profits and customer satisfaction.
“Customers do not simply buy on price, so it’s very important to attract and retain the right people ... absolutely critical,” he said.
“How do you know you’re selecting the right people? Core competencies are important, things like education, knowledge, computer skills, training and experience, but more important are their people skills ... things like empathy and understanding, communication skills and a sense of humour. You don’t want people who will create conflict.
“Other characteristics like their values and commitment in areas like dedication, drive and persistence, as well as their imagination, are also important.
"If you employ people without imagination your business won’t do as well.”
Mr Gadenne pointed to successful entrepreneurs such as Richard Branson, and companies including Toyota, The Body Shop and Healthy Choice as examples of enterprises that valued human capital and innovation.
“Richard Branson encourages all his employees to talk to him about ideas they have about improving the various Virgin businesses, and even starting other ones,” Mr Gadenne said.
“Creating an innovative climate in business will lead to success.
“You should listen to new voices, have an open market for new ideas, incentives for innovators ... even a sense of higher purpose within the company.
“Businesses need to understand the competitive landscape is constantly changing. Employees must be encouraged to continually learn, innovate and improve.”
(TD, 17 Oct 07)
Tuesday, October 23, 2007
Doing the right things right
Recently I came across the wonderful story of Charles Schwab, the former President of U. S. Steel and the founder of Bethlehem Steel. The first time I heard this story was nearly 40 years ago, but I was reminded how simply elegant is its principle.Here is the gist of the story. About 80 years ago, Schwab (no relation to the brokerage guru Charles Schwab) came into contact with Ivy Lee. Lee was a noted consultant who would later co-found one of the country's first public relations firms.Schwab was looking for a way to become more efficient, and Lee had just the thing.Lee supposedly told Schwab about his idea and then ask Schwab to follow it religiously for 30 days. Lee was so confident that his idea would be invaluable that Schwab should withhold payment until after the 30 days; Schwab could then pay him whatever he thought the idea was worth.
Schwab was a diligent man and an overachiever and he followed the idea every day for 30 days. Schwab was more than amazed by his results. So pleased was he, that he handed Lee a check for $25,000. This was a huge payment in those days.What was this big idea?"Every evening before you leave work, write down the six most important activities you have to accomplish the next day in order of their priority and leave the list on your desk. Begin, the next day working on item #1 and work your way sequentially through the list, making sure you do not move on to the next item until the current item is completed"That's it? That's it. This is a deceptively simple concept and yet it's extremely difficult to do. Why?First, at the end of nearly every day we start our frenzied "after work" schedule of home related tasks. Dinner, the kids, errands, traffic etc., all take their toll. Sound familiar?Second, most of us arrive at our workplace and we dig in to tackle the most obvious task only to be interrupted by a crisis. Our phone rings with an important call requiring an immediate response. Then someone drops by to chat and brainstorm their problem and so it goes. The day is done and only part of the work gets done.One expert says that some interesting happens when you use the "six most important things" list. By spending a few minutes each day before you leave the office, your subconscious mind will absorb the list overnight, and you'll start the next day focused and ready the dig into the day's activities. Never underestimate the power of the subconscious.One of my early mentors used to tell me that one hour of careful planning is worth eight hours of work. I know it is true.Prioritizing tasks has been around for decades. That's not the secret to success. Knowing it is one thing, but doing it is the key. Consider "the six most important things" concept for increasing your personal effectiveness.The challenge we all face is developing the habits that are repeated on a daily basis that separate the average from the exceptional. It is not a matter of doing the things right. To quote Peter Drucker, "It is doing the right things right."Notable Quote: "It is those who make the worst use of their time who most complain of its shortness." -- Jean De La Bruyere
Schwab was a diligent man and an overachiever and he followed the idea every day for 30 days. Schwab was more than amazed by his results. So pleased was he, that he handed Lee a check for $25,000. This was a huge payment in those days.What was this big idea?"Every evening before you leave work, write down the six most important activities you have to accomplish the next day in order of their priority and leave the list on your desk. Begin, the next day working on item #1 and work your way sequentially through the list, making sure you do not move on to the next item until the current item is completed"That's it? That's it. This is a deceptively simple concept and yet it's extremely difficult to do. Why?First, at the end of nearly every day we start our frenzied "after work" schedule of home related tasks. Dinner, the kids, errands, traffic etc., all take their toll. Sound familiar?Second, most of us arrive at our workplace and we dig in to tackle the most obvious task only to be interrupted by a crisis. Our phone rings with an important call requiring an immediate response. Then someone drops by to chat and brainstorm their problem and so it goes. The day is done and only part of the work gets done.One expert says that some interesting happens when you use the "six most important things" list. By spending a few minutes each day before you leave the office, your subconscious mind will absorb the list overnight, and you'll start the next day focused and ready the dig into the day's activities. Never underestimate the power of the subconscious.One of my early mentors used to tell me that one hour of careful planning is worth eight hours of work. I know it is true.Prioritizing tasks has been around for decades. That's not the secret to success. Knowing it is one thing, but doing it is the key. Consider "the six most important things" concept for increasing your personal effectiveness.The challenge we all face is developing the habits that are repeated on a daily basis that separate the average from the exceptional. It is not a matter of doing the things right. To quote Peter Drucker, "It is doing the right things right."Notable Quote: "It is those who make the worst use of their time who most complain of its shortness." -- Jean De La Bruyere
Talent management in the marketplace
A recent study from Deloitte has revealed that 60 per cent of new jobs in the 21st century require skills that are only possessed by 20 per cent of the current workforce.
The UK labour market is undergoing a reduction in workforce-aged residents; there are currently 17 million people in the UK aged 20-40, and 14 million between the ages of 45 and 65. By 2020, the projections are that the younger group will decrease to 16 million, while the older group will increase to 17 million (CIPD: Talent Management: understanding the dimensions, May 2006). The problem is faced not only by the UK labour market, but by others, including the US. Dwindling populations mean competition for labour is becoming increasingly intense.
At a time of such change and falling populations, the link between succession planning and talent management is irrefutable. Both areas need to be aligned with HR management in every business, and a successful talent management programme can act as a pipeline for a fruitful succession planning model.
In addition to the decrease in the number of people of working age, those that are coming into the workforce are doing so without the requisite skills to fill the jobs available.
To overcome the increasing competition to recruit the best staff, the business world is realising the importance of managing and nurturing their existing talent. Businesses need to look at holistic solutions to this increasingly important issue, by implementing strategic learning programmes to address their goals and talent needs.
Whilst historically companies would look at staff management and recruitment as a solution to resolving skills gaps, the changing marketplace has meant that employees have to manage their workforce as a single entity. By managing them as a whole at any time they can know where their key employees are, what skills are being developed and where skills gaps need plugging.
Succession management is necessary to ensure that key employees are identified and developed to successfully fill key roles within organisations of all sizes. A programme which enables businesses to identify employees that demonstrate key skills and prepares them for advancement or promotion will reduce the risks when key employees leave a company. In smaller companies, the difficulty in replacing key individuals is multiplied by their importance in an environment of fewer people.
Effective succession management leads to higher employee satisfaction and thus productivity. Individuals who feel that their future career is being considered by the company, especially those who have been selected as a succession or talent pool candidate are further motivated and committed to their employer.
Succession planning becomes increasingly complex in the UK market because of the potential lack of senior staff mobility and lack of transferable skills. A CIPD survey in 2005 revealed that one in five UK businesses had no succession planning activity in place. Being able to secure candidates from an internal pool can considerably reduce the costs and time required to recruit a replacement.
The businesses which are going to succeed in this period of increasingly competitive recruitment are those which demonstrate they are developing individuals’ capabilities to achieve personal goals. A business which builds its talent internally will, in-turn, recruit the best talent when it first enters the workforce.
The UK labour market is undergoing a reduction in workforce-aged residents; there are currently 17 million people in the UK aged 20-40, and 14 million between the ages of 45 and 65. By 2020, the projections are that the younger group will decrease to 16 million, while the older group will increase to 17 million (CIPD: Talent Management: understanding the dimensions, May 2006). The problem is faced not only by the UK labour market, but by others, including the US. Dwindling populations mean competition for labour is becoming increasingly intense.
At a time of such change and falling populations, the link between succession planning and talent management is irrefutable. Both areas need to be aligned with HR management in every business, and a successful talent management programme can act as a pipeline for a fruitful succession planning model.
In addition to the decrease in the number of people of working age, those that are coming into the workforce are doing so without the requisite skills to fill the jobs available.
To overcome the increasing competition to recruit the best staff, the business world is realising the importance of managing and nurturing their existing talent. Businesses need to look at holistic solutions to this increasingly important issue, by implementing strategic learning programmes to address their goals and talent needs.
Whilst historically companies would look at staff management and recruitment as a solution to resolving skills gaps, the changing marketplace has meant that employees have to manage their workforce as a single entity. By managing them as a whole at any time they can know where their key employees are, what skills are being developed and where skills gaps need plugging.
Succession management is necessary to ensure that key employees are identified and developed to successfully fill key roles within organisations of all sizes. A programme which enables businesses to identify employees that demonstrate key skills and prepares them for advancement or promotion will reduce the risks when key employees leave a company. In smaller companies, the difficulty in replacing key individuals is multiplied by their importance in an environment of fewer people.
Effective succession management leads to higher employee satisfaction and thus productivity. Individuals who feel that their future career is being considered by the company, especially those who have been selected as a succession or talent pool candidate are further motivated and committed to their employer.
Succession planning becomes increasingly complex in the UK market because of the potential lack of senior staff mobility and lack of transferable skills. A CIPD survey in 2005 revealed that one in five UK businesses had no succession planning activity in place. Being able to secure candidates from an internal pool can considerably reduce the costs and time required to recruit a replacement.
The businesses which are going to succeed in this period of increasingly competitive recruitment are those which demonstrate they are developing individuals’ capabilities to achieve personal goals. A business which builds its talent internally will, in-turn, recruit the best talent when it first enters the workforce.
by Alun Cope-Morgan, CRN 23 Oct 2007
Why you should start thinking 'lean'
Here’s a concept that may have great benefit to you and your organization. In its various forms it’s known as “lean”, Six Sigma and The Toyota Way. There are other names as well. No, they’re not all identical. Each has its own unique variations and its own distinctive vocabulary. But at the heart of each is an identical concept — the development and implementation of processes to drive out waste. Wasted time. Wasted effort. Wasted product. These are the most obvious wastes.
You don’t have waste? Well, let me ask this in another way. Do you have enough manpower and material to do the job you're required to do? Do you have to work within a budget?
Do you ever get frustrated because a particular task you’ve assigned didn’t get done in time? Or it didn’t get done correctly? Do you have a tough time keeping your crew focused and on job? Do you often have trouble finding parts or tools? Or keeping your equipment repaired or maintained?
If you took a look at your processes — a hard, critical look — my guess is you’ll see a lot of waste in your operation, regardless of its size.
Taking the more positive approach: Are you committed to improving yourself, your employees and your department or operation?
Yes, I know what you’re thinking. Systems such as The Toyota Way (“lean”) and Six Sigma might work well in manufacturing, but they have no application in, say, a parks & recreation department or university grounds department.
My guess is that you would be wrong on that. Dead wrong.
I’ve been following the progress of dozens of landscape companies that have embarked on the “lean” journey thanks to the support of outdoor power equipment manufacturer Ariens Company, Brillion, WI, and a year-long program guided by consultant Jim Paluch of JP Horizons. That program is about half way done, and the participating landscape folks that I talk to say that their ongoing “lean” training is paying huge dividends in making their operations more efficient. They’re proving that implementing processes to reduce waste and encourage continuous improvement work equally well for contracting companies.
More recently, I saw Six Sigma in action at the Jacobsen Parts Distribution facility in Charlotte, NC. The place was spotless, and the manufacturer of mowers and other wheeled outdoor power equipment was the model of efficiency. Obviously, the employees there were keen on fulfilling one of the tenents of Six Sigma, the "5 S's" — Sort, Straighten, Shine, Standardize, Sustain.
I’m convinced that“lean” (to one degree or another) can work in any situation that involves and requires a cooperative effort among a group of people — whether it’s a large group or a small group. Or whether it’s manufacturing, retail, service or a single department within a larger entity, say a city parks and rec department, or a university grounds department.
But, it’s not an easy undertaking. In fact, it’s very difficult; not to start, which many organizations do, but to sustain. In almost all cases (let’s make that “all” cases) it requires the drive of a knowledgeable and dedicated person to get the program up and running. And, more importantly, to sustain it. Remember, this is an ongoing program to improve and drive waste from your operation or department.
I have yet to meet anybody in the parks and rec or athletic field maintenance world that has attempted to implement “lean” processes into his or her operation, but I hope to. And I hope they’re willing to share their experiences with the rest of us.
If you’re curious about Six Sigma or The Toyota Way or “lean”, there is a huge amount of information on the Internet. Google it and give it a look to see what you think.
(By:Ron Hall, Athletic Turf News)
Business Process Improvemet Using Six Sigma & Lean Six Sigma: Kuala Lumpur - 11-12 Dec 07
You don’t have waste? Well, let me ask this in another way. Do you have enough manpower and material to do the job you're required to do? Do you have to work within a budget?
Do you ever get frustrated because a particular task you’ve assigned didn’t get done in time? Or it didn’t get done correctly? Do you have a tough time keeping your crew focused and on job? Do you often have trouble finding parts or tools? Or keeping your equipment repaired or maintained?
If you took a look at your processes — a hard, critical look — my guess is you’ll see a lot of waste in your operation, regardless of its size.
Taking the more positive approach: Are you committed to improving yourself, your employees and your department or operation?
Yes, I know what you’re thinking. Systems such as The Toyota Way (“lean”) and Six Sigma might work well in manufacturing, but they have no application in, say, a parks & recreation department or university grounds department.
My guess is that you would be wrong on that. Dead wrong.
I’ve been following the progress of dozens of landscape companies that have embarked on the “lean” journey thanks to the support of outdoor power equipment manufacturer Ariens Company, Brillion, WI, and a year-long program guided by consultant Jim Paluch of JP Horizons. That program is about half way done, and the participating landscape folks that I talk to say that their ongoing “lean” training is paying huge dividends in making their operations more efficient. They’re proving that implementing processes to reduce waste and encourage continuous improvement work equally well for contracting companies.
More recently, I saw Six Sigma in action at the Jacobsen Parts Distribution facility in Charlotte, NC. The place was spotless, and the manufacturer of mowers and other wheeled outdoor power equipment was the model of efficiency. Obviously, the employees there were keen on fulfilling one of the tenents of Six Sigma, the "5 S's" — Sort, Straighten, Shine, Standardize, Sustain.
I’m convinced that“lean” (to one degree or another) can work in any situation that involves and requires a cooperative effort among a group of people — whether it’s a large group or a small group. Or whether it’s manufacturing, retail, service or a single department within a larger entity, say a city parks and rec department, or a university grounds department.
But, it’s not an easy undertaking. In fact, it’s very difficult; not to start, which many organizations do, but to sustain. In almost all cases (let’s make that “all” cases) it requires the drive of a knowledgeable and dedicated person to get the program up and running. And, more importantly, to sustain it. Remember, this is an ongoing program to improve and drive waste from your operation or department.
I have yet to meet anybody in the parks and rec or athletic field maintenance world that has attempted to implement “lean” processes into his or her operation, but I hope to. And I hope they’re willing to share their experiences with the rest of us.
If you’re curious about Six Sigma or The Toyota Way or “lean”, there is a huge amount of information on the Internet. Google it and give it a look to see what you think.
(By:Ron Hall, Athletic Turf News)
Business Process Improvemet Using Six Sigma & Lean Six Sigma: Kuala Lumpur - 11-12 Dec 07
Sunday, October 21, 2007
Practical tips on time management
Most of us have to work, and the more you can do in the least amount of time, the better. Time management frees you up to not just work better, but ensure balance in your life. Lorraine Pirihi offers some practical tips.
Basic Time Management
A simple time management tip is to use a daily ‘to do’ list. You have a couple of choices: write your list in the morning, as the first task at the commencement of your working day; or take the time to do it before you finish up the night before, as your final flourish for the day, freeing your mind so you don’t take your work home with you.
Creating a List
Forget trying to create your ‘to do’ list in your head. It must be written down, then left somewhere highly visible, such as your desktop. I suggest writing it in your diary, so you can juggle it with your other commitments.
An effective list will almost always be updated during the day. It is not a static document. As your priorities alter with each crisis, your list will be a work in progress. And don’t be unrealistic. Steel yourself to list only the achievable projects and activities. If you are unable to complete a task on the designated day, simply transfer it to the next day or another suitable time in your diary. Look at the daily ‘to do’ list as the map that keeps you on track.
When you have written your list in the diary, go back and number each item in order of importance. Start with number one and work your way through.
Recording Information
In today’s busy work environments, we are bombarded with so many different distractions it’s sometimes difficult to keep track of everything that’s going on, particularly if you work in a distracting open-plan office.
Instead of recording on scraps of paper or sticky notes all the zillion thoughts that pass through your mind during these stressful periods, use an inexpensive spiral notebook. Anything you write down can then be found again at a later date. Use it with your diary and as a great memory jogger and it will help you focus your thoughts, remind yourself of past conversations and save time from searching for all those ‘back of envelope’ notations.
Telephone Messages
Murphy’s Law of telephones and deadlines means when you are really pressed trying to complete a project on time, the telephone will take off, with a mind of its own.
Try recording a message letting your callers know you are currently unavailable, asking why they are calling, and let them know you will return their call. Or have someone working with you who can screen your calls (lucky you) to give off a similar message. Asking what the call is about will help you assemble any relevant information before you call back, enabling you to better plan your day and return all calls sooner and more effectively.
Time and Stress Management
Effective time management will directly affect your stress management. Using these simple, commonsense time management tips will greatly reduce your stress levels. Keep your systems simple because the simpler they are the more likely you will use them. By implementing these tips and continually sticking with them you will also avoid procrastination, working smarter, not harder.
(Dynamic Business)
Basic Time Management
A simple time management tip is to use a daily ‘to do’ list. You have a couple of choices: write your list in the morning, as the first task at the commencement of your working day; or take the time to do it before you finish up the night before, as your final flourish for the day, freeing your mind so you don’t take your work home with you.
Creating a List
Forget trying to create your ‘to do’ list in your head. It must be written down, then left somewhere highly visible, such as your desktop. I suggest writing it in your diary, so you can juggle it with your other commitments.
An effective list will almost always be updated during the day. It is not a static document. As your priorities alter with each crisis, your list will be a work in progress. And don’t be unrealistic. Steel yourself to list only the achievable projects and activities. If you are unable to complete a task on the designated day, simply transfer it to the next day or another suitable time in your diary. Look at the daily ‘to do’ list as the map that keeps you on track.
When you have written your list in the diary, go back and number each item in order of importance. Start with number one and work your way through.
Recording Information
In today’s busy work environments, we are bombarded with so many different distractions it’s sometimes difficult to keep track of everything that’s going on, particularly if you work in a distracting open-plan office.
Instead of recording on scraps of paper or sticky notes all the zillion thoughts that pass through your mind during these stressful periods, use an inexpensive spiral notebook. Anything you write down can then be found again at a later date. Use it with your diary and as a great memory jogger and it will help you focus your thoughts, remind yourself of past conversations and save time from searching for all those ‘back of envelope’ notations.
Telephone Messages
Murphy’s Law of telephones and deadlines means when you are really pressed trying to complete a project on time, the telephone will take off, with a mind of its own.
Try recording a message letting your callers know you are currently unavailable, asking why they are calling, and let them know you will return their call. Or have someone working with you who can screen your calls (lucky you) to give off a similar message. Asking what the call is about will help you assemble any relevant information before you call back, enabling you to better plan your day and return all calls sooner and more effectively.
Time and Stress Management
Effective time management will directly affect your stress management. Using these simple, commonsense time management tips will greatly reduce your stress levels. Keep your systems simple because the simpler they are the more likely you will use them. By implementing these tips and continually sticking with them you will also avoid procrastination, working smarter, not harder.
(Dynamic Business)
Wednesday, October 17, 2007
Redefining the MBA - Facing criticism, business schools bring in new leaders to review mission, find relevance
By Robert Weisman October 14, 2007 (Boston)
Autumn in the Boston area means leaves turning, students returning and, this year, the leaders at business schools churning. A new crop of educators, including a high-profile power broker and pair of Bay State natives coming home from Philadelphia and Silicon Valley, are working to re-brand their schools and reshape business education in an increasingly competitive market.
While demand for master's degrees in business administration has picked up among corporate recruiters after a lull following the Internet boom, business schools have been scrambling to rethink their missions and recast their images in response to critics questioning their ivory-tower aloofness and single-minded focus on maximizing shareholder value.
Their approaches vary, from bringing students into the workplace to customizing MBA programs to training global teams in corporate responsibility, but all struggle to remain relevant at a time of rapid economic change. "Schools are trying to redefine what business leaders need to know," said Rakesh Khurana, associate professor in organizational behavior at Harvard Business School.
Gloria C. Larson, who held top administrative jobs in the state and federal governments, has sounded at times like a candidate wooing voters with pledges of a "real world partnership" in her first weeks as president of Bentley College, a one-time accounting school that now boasts MBA and PhD degrees in its business portfolio.
"Bentley's six high-tech learning labs let you 'test drive' the concepts you learn in your classroom," Larson told 1,000 visiting high school seniors at the school's Waltham campus last month.
At the Massachusetts Institute of Technology in Cambridge, David C. Schmittlein officially moves into the dean's office at the Sloan School of Management tomorrow. But in meetings with students, faculty, administrators, and alumni, Schmittlein, a Northampton native who was deputy dean at the elite Wharton School of the University of Pennsylvania, has been stressing the need to boost "experiential learning" with businesses. "Sloan is going to be at the leading edge of a more honest approach to management education," he promised.
And newly installed dean Bruce R. Magid at Brandeis University's International Business School is championing "cross-cultural fluency" as his goal at the Waltham school, where two thirds of students come from abroad. Magid, raised in Sharon, is a former overseas Bank of America executive who founded the graduate business school at San Jose State University. He insisted he's not fazed by taking his place alongside heavyweights like Sloan and Harvard Business School in one of the nation's most crowded markets for management education.
"Having worked in global financial services, I'm used to competition," he said. "We're fortunate to be in the Boston area, but we want to be one of the world's top global-focused business schools."
Ethics also figures prominently in the plans, and the talking points, of the three business educators. Noting that its Center for Business Ethics marked its 30th anniversary this year, Larson said Bentley is moving toward a "holistic" approach to preparing its students for the business world. "You have to be thinking smarter, moving faster, and also being the best global citizen you can be," she said. The arrival of Larson, Schmittlein, and Magid hastens a leadership turnover at Greater Boston business schools after a long period of stability. Jay O. Light took the reins at Harvard Business School last year. Andrew Boynton became dean of Boston College's Carroll School of Management in 2005, and Thomas Moore dean of Northeastern University's College of Business Administration in 2004.
Autumn in the Boston area means leaves turning, students returning and, this year, the leaders at business schools churning. A new crop of educators, including a high-profile power broker and pair of Bay State natives coming home from Philadelphia and Silicon Valley, are working to re-brand their schools and reshape business education in an increasingly competitive market.
While demand for master's degrees in business administration has picked up among corporate recruiters after a lull following the Internet boom, business schools have been scrambling to rethink their missions and recast their images in response to critics questioning their ivory-tower aloofness and single-minded focus on maximizing shareholder value.
Their approaches vary, from bringing students into the workplace to customizing MBA programs to training global teams in corporate responsibility, but all struggle to remain relevant at a time of rapid economic change. "Schools are trying to redefine what business leaders need to know," said Rakesh Khurana, associate professor in organizational behavior at Harvard Business School.
Gloria C. Larson, who held top administrative jobs in the state and federal governments, has sounded at times like a candidate wooing voters with pledges of a "real world partnership" in her first weeks as president of Bentley College, a one-time accounting school that now boasts MBA and PhD degrees in its business portfolio.
"Bentley's six high-tech learning labs let you 'test drive' the concepts you learn in your classroom," Larson told 1,000 visiting high school seniors at the school's Waltham campus last month.
At the Massachusetts Institute of Technology in Cambridge, David C. Schmittlein officially moves into the dean's office at the Sloan School of Management tomorrow. But in meetings with students, faculty, administrators, and alumni, Schmittlein, a Northampton native who was deputy dean at the elite Wharton School of the University of Pennsylvania, has been stressing the need to boost "experiential learning" with businesses. "Sloan is going to be at the leading edge of a more honest approach to management education," he promised.
And newly installed dean Bruce R. Magid at Brandeis University's International Business School is championing "cross-cultural fluency" as his goal at the Waltham school, where two thirds of students come from abroad. Magid, raised in Sharon, is a former overseas Bank of America executive who founded the graduate business school at San Jose State University. He insisted he's not fazed by taking his place alongside heavyweights like Sloan and Harvard Business School in one of the nation's most crowded markets for management education.
"Having worked in global financial services, I'm used to competition," he said. "We're fortunate to be in the Boston area, but we want to be one of the world's top global-focused business schools."
Ethics also figures prominently in the plans, and the talking points, of the three business educators. Noting that its Center for Business Ethics marked its 30th anniversary this year, Larson said Bentley is moving toward a "holistic" approach to preparing its students for the business world. "You have to be thinking smarter, moving faster, and also being the best global citizen you can be," she said. The arrival of Larson, Schmittlein, and Magid hastens a leadership turnover at Greater Boston business schools after a long period of stability. Jay O. Light took the reins at Harvard Business School last year. Andrew Boynton became dean of Boston College's Carroll School of Management in 2005, and Thomas Moore dean of Northeastern University's College of Business Administration in 2004.
Business-oriented Babson College in Wellesley, which emphasizes entrepreneurship, is expected to name a new president some time next year. Bentley, meanwhile, is interviewing candidates to be the new dean of business under Larson.
The changes at the top have been accompanied by a reassessment and, in some cases, a tweaking of what marketers call the business schools' "brands" at a time when all are vying for students, faculty members, recruiters, and relevancy. Northeastern, for example, has sought to differentiate itself with an emphasis on practical studies like supply chain management. BC has been building its business program around ethical values, while Harvard has been pushing to extend its leadership brand into emerging fields like healthcare.
But business schools are under scrutiny as never before, and some of their toughest critiques are coming from within. In a new book, "From Higher Aims to Hired Hands: The Social Transformation of American Business Education," Harvard's Khurana argues the schools have failed to define leadership in the context of the public good and enshrined maximizing shareholder value as their highest ideal.
Other critics, like Warren Bennis and James O'Toole at the University of Southern California, have warned that business schools have grown overly academic and theoretical, far removed from the actual day-to-day operations of business and management.
Such critiques have clearly struck a chord. Schmittlein, who has been involved in the debate over the mission of business schools for nearly three decades, believes schools should move away from a cookie-cutter approach. He envisions Sloan developing a broader portfolio of programs tailored toward students on different paths, from going into investment management to joining family businesses.
"Why haven't MBA programs been more honest about where students are and where they want to go?" Schmittlein asked rhetorically. "What would be really radical would be organizing MBA programs around activities that students want to pursue."
Larson, who had extensive dealings with movers and shakers in her most recent job at the Boston law firm Foley Hoag, plans to form a "kitchen cabinet" of business leaders to advise her on Bentley's curricula. "It's a crowded marketplace," she said. "There's a spotlight on this next generation. The marketplace is demanding a very different skill set than it needed even 10 years ago. They're demanding high levels of foreign language literacy, cultural literacy, and economic literacy."
And at Brandeis, educators will be focusing on a new "seamless bottom line," in Magid's words. "You want people to come out of here who are excellent managers, are engaged in their communities, and are taking a long-term perspective about our planet," he said.
The changes at the top have been accompanied by a reassessment and, in some cases, a tweaking of what marketers call the business schools' "brands" at a time when all are vying for students, faculty members, recruiters, and relevancy. Northeastern, for example, has sought to differentiate itself with an emphasis on practical studies like supply chain management. BC has been building its business program around ethical values, while Harvard has been pushing to extend its leadership brand into emerging fields like healthcare.
But business schools are under scrutiny as never before, and some of their toughest critiques are coming from within. In a new book, "From Higher Aims to Hired Hands: The Social Transformation of American Business Education," Harvard's Khurana argues the schools have failed to define leadership in the context of the public good and enshrined maximizing shareholder value as their highest ideal.
Other critics, like Warren Bennis and James O'Toole at the University of Southern California, have warned that business schools have grown overly academic and theoretical, far removed from the actual day-to-day operations of business and management.
Such critiques have clearly struck a chord. Schmittlein, who has been involved in the debate over the mission of business schools for nearly three decades, believes schools should move away from a cookie-cutter approach. He envisions Sloan developing a broader portfolio of programs tailored toward students on different paths, from going into investment management to joining family businesses.
"Why haven't MBA programs been more honest about where students are and where they want to go?" Schmittlein asked rhetorically. "What would be really radical would be organizing MBA programs around activities that students want to pursue."
Larson, who had extensive dealings with movers and shakers in her most recent job at the Boston law firm Foley Hoag, plans to form a "kitchen cabinet" of business leaders to advise her on Bentley's curricula. "It's a crowded marketplace," she said. "There's a spotlight on this next generation. The marketplace is demanding a very different skill set than it needed even 10 years ago. They're demanding high levels of foreign language literacy, cultural literacy, and economic literacy."
And at Brandeis, educators will be focusing on a new "seamless bottom line," in Magid's words. "You want people to come out of here who are excellent managers, are engaged in their communities, and are taking a long-term perspective about our planet," he said.
Tuesday, October 16, 2007
Who is Peter F. Drucker? Why Should You Care?
by George W. Mantor (Realty Times)
Peter Drucker passed away in 2005 at the age of 97. If that means nothing to you, it is important that you continue reading. You are in business. And Peter F. Drucker was to business what Billy Graham is to religion, what Mozart was to music, what DiMaggio was to baseball, a legend for the ages in his field of endeavor.
The "Druckster" was the mac-daddy of the business world and when he spoke, king-makers listened. And speak he did. For over 60 years he influenced generations of business people as a teacher, writer, and business leader.
He is widely regarded as the father of modern day management philosophy.
And his basic premise is more relevant to our business today than fifty years ago, when Drucker wrote, The Practice of Management, in which he raises the question of the very purpose of a business.
I often raise this question in my workshops and overwhelmingly people agree that the purpose of a business is to make a profit.
Drucker says they are wrong.
And this is the important lesson for us Drucker says, "There is only one valid definition of business purpose: to create a customer."
He notes that profit is the by-product of doing that well.
If you are waiting for customers to create themselves, fuhgeddaboudit. They don't know how.
Drucker stresses this point. "Markets are not created by God, nature or economic forces but by businessmen. The want they satisfy may have been felt by the customer before he was offered a means of satisfying it. There may have been no want at all until business action created it."
His core principal, if fully understood and implemented, is the perfect response to current market conditions that, in many places, have changed. Buyers are apprehensive. You can tell them that this is a great time to buy, but many still believe that values are going to decline dramatically.
On the supply side, there is a lot of dormant equity that is generating zero return or less for the property owner.
Despite our immersion in all things real estate, non-practitioners are frequently absorbed in other things. There are many customers waiting to be created in this group. How? Ask, what would Drucker do?
Analyze the situation.
During the last few years, many new licensees have entered the real estate business. At the same time, a hyper-robust economy, historically low interest rates and a growing population combined to create record numbers of transactions.
Now in most communities, the pent up demand has been temporarily satisfied and monthly closings have receded back to their baseline level.
There are now far fewer closings than the surplus number of licensees and that signals attrition within the industry. If you've been living off the frenzy, you had better get a new plan.
Define the customer you intend to create.
No matter how lofty it talks, the real estate industry cannot wean itself of the concept of "prospecting" and "lead" generation.
Everyday a dozen different companies email me about their great leads. Frankly, I cannot understand how, if all of these "leads" are so good, they could possibly trickle all the way down to me. Then I watch my DVD of David Mamet's "Glengarry Glen Ross" and Drucker's words come back to me.
The interesting thing to keep in mind is that customers have habits and patterns and these have been studied at length by the industry. And the industry doesn't like what it sees. In short, there is a problem. The customers timing is out of synch with the realities of the industry.
Buyers and sellers of real estate tend to take, on average, anywhere from five months to five years to "collect experiences" before acting. That exceeds the career life span of most new licensees and demonstrates the inefficiency of trying to time the beginning of the relationship at the exact moment when the customer is ready to act.
Real estate needs are driven by routine life events not because of real estate marketing.
Leads are perceived as having an immediate need. Once you have a lead all that is left to do is close them. Leads are for closers. But how do you close someone who is still in the experience-collecting phase? You can't.
But you can be their indispensable guide along the experience-collecting pathway.
Only you have the power to create great customers for you.
Make a simple plan.
For all of its hi-tech, gee-whiz gadgetry, earning a good living in real estate comes down to a few simple realities. Most new licensees will fail because there is not nearly enough business to support them all. Period!
Building a portfolio of marketable listings is the only way to attain security.
By focusing on sellers, the best buyers will come your way.
Set simple objectives as a way to avoid distractions. This will keep you on course doing the right things throughout the course of your business.
Present one CMA (Competitive Market Analysis) every day.
If you are working today, you are presenting a CMA. If not, it's a day off. You'll be tempted to do something else frequently, like show property. Do not be drawn away from your simple, daily objective. Before you do anything else you must set appointments, do the work, present your findings, and begin helping the client formulate a plan. Everything else is extra.
Have you ever thought about the connection between a CMA and a listing? In virtually every case, the listing was preceded by a CMA. Conclusion, more CMA's equal more listings as well as purchases and lending opportunities.
Rather than "trying to get a listing" use the CMA to create a customer for when they are ready to move forward with the next logical step in the plan that you are helping them develop.
Presenting a CMA is a great opportunity to create a customer. People are interested in the value of their homes so it is a very easy appointment to get. Your purpose is to explain the factors underlying their home's value.
Once the value and equity have been determined it is time to move the discussion to issues of asset protection. How do they hold title? Are they aware of the benefits of a living trust? Do they have adequate insurance on their real estate? Rapid appreciation has left many property owners short of insurance without them realizing it. Do they need a personal liability umbrella policy?
Explore how their real estate can be an important part of their overall life plan, college payment plan, retirement plan, business plan or other goal.
For example, real estate around colleges continues to appreciate. Parents are buying condos as a future residence for a college-bound child. Appreciation could offset the tuition and housing costs.
Your immediate objective is to do a CMA for everyone you know who owns real estate. You aren't selling anything; you are performing a valuable service. You must present it in person and you must explain exactly what data you analyzed, why, and how you arrived at your conclusion.
Marshall Your Resources.
What do you need to implement the plan? Two things: knowledge in the areas I am about to define and relationships.
Learn the fundamental tax laws regarding real estate. Many agents eschew any questions about taxes, but favorable tax laws are one of the great customer creators, because they are extraordinarily jaw-dropping generous and not well understood.
You should be very conversant with the tax payer relief act of 1997 and the details of the law prior to the enactment of Section 121. You should also be able to articulate the benefits of Section 1031 and how benefits can be combined, under certain circumstances, with Section 121.
And, a recent change regarding Private Annuity Trusts might suggest a need for a change in strategy for those planning to use this vehicle to defer capital gains taxes.
Learn financing. Repositioning dormant equity and creating exit strategies are the appropriate response to flattening appreciation.
Money ought to be working, but if there is no appreciation, property owners' money power is eroding. If they have the income potential and understand the tax implications, they might very well see the wisdom in repositioning some of their equity, refinancing, moving up, buying a second home or a rental, or creating a plan to do these things in the future.
Learn alternative real estate vehicles.
Longtime landlords might want to liquidate during an extended period of flat appreciation. The problems and responsibilities of owning and managing residential properties can be eliminated by exchanging into an alternative real estate investment such as a Tenant-In-Common (TIC) vehicle.
Beyond selling and lead generating is an entire market of customers who are waiting for you to create them. Planned real estate ownership is part of a long-term life plan. But real estate's value as an investment vehicle is often obscured by the fact that the industry is primarily focused on selling houses rather than creating customers with a lifetime of multiple needs to fill.
If you want to create more customers for your business, do what Drucker would do…offer something people would want if only they knew about it, and then go show them what is possible.
Peter Drucker passed away in 2005 at the age of 97. If that means nothing to you, it is important that you continue reading. You are in business. And Peter F. Drucker was to business what Billy Graham is to religion, what Mozart was to music, what DiMaggio was to baseball, a legend for the ages in his field of endeavor.
The "Druckster" was the mac-daddy of the business world and when he spoke, king-makers listened. And speak he did. For over 60 years he influenced generations of business people as a teacher, writer, and business leader.
He is widely regarded as the father of modern day management philosophy.
And his basic premise is more relevant to our business today than fifty years ago, when Drucker wrote, The Practice of Management, in which he raises the question of the very purpose of a business.
I often raise this question in my workshops and overwhelmingly people agree that the purpose of a business is to make a profit.
Drucker says they are wrong.
And this is the important lesson for us Drucker says, "There is only one valid definition of business purpose: to create a customer."
He notes that profit is the by-product of doing that well.
If you are waiting for customers to create themselves, fuhgeddaboudit. They don't know how.
Drucker stresses this point. "Markets are not created by God, nature or economic forces but by businessmen. The want they satisfy may have been felt by the customer before he was offered a means of satisfying it. There may have been no want at all until business action created it."
His core principal, if fully understood and implemented, is the perfect response to current market conditions that, in many places, have changed. Buyers are apprehensive. You can tell them that this is a great time to buy, but many still believe that values are going to decline dramatically.
On the supply side, there is a lot of dormant equity that is generating zero return or less for the property owner.
Despite our immersion in all things real estate, non-practitioners are frequently absorbed in other things. There are many customers waiting to be created in this group. How? Ask, what would Drucker do?
Analyze the situation.
During the last few years, many new licensees have entered the real estate business. At the same time, a hyper-robust economy, historically low interest rates and a growing population combined to create record numbers of transactions.
Now in most communities, the pent up demand has been temporarily satisfied and monthly closings have receded back to their baseline level.
There are now far fewer closings than the surplus number of licensees and that signals attrition within the industry. If you've been living off the frenzy, you had better get a new plan.
Define the customer you intend to create.
No matter how lofty it talks, the real estate industry cannot wean itself of the concept of "prospecting" and "lead" generation.
Everyday a dozen different companies email me about their great leads. Frankly, I cannot understand how, if all of these "leads" are so good, they could possibly trickle all the way down to me. Then I watch my DVD of David Mamet's "Glengarry Glen Ross" and Drucker's words come back to me.
The interesting thing to keep in mind is that customers have habits and patterns and these have been studied at length by the industry. And the industry doesn't like what it sees. In short, there is a problem. The customers timing is out of synch with the realities of the industry.
Buyers and sellers of real estate tend to take, on average, anywhere from five months to five years to "collect experiences" before acting. That exceeds the career life span of most new licensees and demonstrates the inefficiency of trying to time the beginning of the relationship at the exact moment when the customer is ready to act.
Real estate needs are driven by routine life events not because of real estate marketing.
Leads are perceived as having an immediate need. Once you have a lead all that is left to do is close them. Leads are for closers. But how do you close someone who is still in the experience-collecting phase? You can't.
But you can be their indispensable guide along the experience-collecting pathway.
Only you have the power to create great customers for you.
Make a simple plan.
For all of its hi-tech, gee-whiz gadgetry, earning a good living in real estate comes down to a few simple realities. Most new licensees will fail because there is not nearly enough business to support them all. Period!
Building a portfolio of marketable listings is the only way to attain security.
By focusing on sellers, the best buyers will come your way.
Set simple objectives as a way to avoid distractions. This will keep you on course doing the right things throughout the course of your business.
Present one CMA (Competitive Market Analysis) every day.
If you are working today, you are presenting a CMA. If not, it's a day off. You'll be tempted to do something else frequently, like show property. Do not be drawn away from your simple, daily objective. Before you do anything else you must set appointments, do the work, present your findings, and begin helping the client formulate a plan. Everything else is extra.
Have you ever thought about the connection between a CMA and a listing? In virtually every case, the listing was preceded by a CMA. Conclusion, more CMA's equal more listings as well as purchases and lending opportunities.
Rather than "trying to get a listing" use the CMA to create a customer for when they are ready to move forward with the next logical step in the plan that you are helping them develop.
Presenting a CMA is a great opportunity to create a customer. People are interested in the value of their homes so it is a very easy appointment to get. Your purpose is to explain the factors underlying their home's value.
Once the value and equity have been determined it is time to move the discussion to issues of asset protection. How do they hold title? Are they aware of the benefits of a living trust? Do they have adequate insurance on their real estate? Rapid appreciation has left many property owners short of insurance without them realizing it. Do they need a personal liability umbrella policy?
Explore how their real estate can be an important part of their overall life plan, college payment plan, retirement plan, business plan or other goal.
For example, real estate around colleges continues to appreciate. Parents are buying condos as a future residence for a college-bound child. Appreciation could offset the tuition and housing costs.
Your immediate objective is to do a CMA for everyone you know who owns real estate. You aren't selling anything; you are performing a valuable service. You must present it in person and you must explain exactly what data you analyzed, why, and how you arrived at your conclusion.
Marshall Your Resources.
What do you need to implement the plan? Two things: knowledge in the areas I am about to define and relationships.
Learn the fundamental tax laws regarding real estate. Many agents eschew any questions about taxes, but favorable tax laws are one of the great customer creators, because they are extraordinarily jaw-dropping generous and not well understood.
You should be very conversant with the tax payer relief act of 1997 and the details of the law prior to the enactment of Section 121. You should also be able to articulate the benefits of Section 1031 and how benefits can be combined, under certain circumstances, with Section 121.
And, a recent change regarding Private Annuity Trusts might suggest a need for a change in strategy for those planning to use this vehicle to defer capital gains taxes.
Learn financing. Repositioning dormant equity and creating exit strategies are the appropriate response to flattening appreciation.
Money ought to be working, but if there is no appreciation, property owners' money power is eroding. If they have the income potential and understand the tax implications, they might very well see the wisdom in repositioning some of their equity, refinancing, moving up, buying a second home or a rental, or creating a plan to do these things in the future.
Learn alternative real estate vehicles.
Longtime landlords might want to liquidate during an extended period of flat appreciation. The problems and responsibilities of owning and managing residential properties can be eliminated by exchanging into an alternative real estate investment such as a Tenant-In-Common (TIC) vehicle.
Beyond selling and lead generating is an entire market of customers who are waiting for you to create them. Planned real estate ownership is part of a long-term life plan. But real estate's value as an investment vehicle is often obscured by the fact that the industry is primarily focused on selling houses rather than creating customers with a lifetime of multiple needs to fill.
If you want to create more customers for your business, do what Drucker would do…offer something people would want if only they knew about it, and then go show them what is possible.
Subscribe to:
Posts (Atom)