Winners often will bend rules a bit

Whether in business or in sports, the success of a dynasty is the result of vision, talent, aggressiveness and some good fortune. But dynasties also can be ruthless.

A hero is not someone who is 'perfect.' We'd have no heroes if this were our standard. We all make mistakes, but that doesn't invalidate the contributions we make in the course of our lives." -- Anthony Robbins

The New England Patriots were heavily favored to win the Super Bowl on Sunday, although this New York native is celebrating today if the Giants were able to pull off one of the greatest upsets in NFL history.
New England has already won three Super Bowls this decade. They are the first team to win 16 regular-season games. A win Sunday would have made them the equal of any NFL dynasty in history.
Yet an odd scandal marked the beginning of the 2007 season. In September, NFL Commissioner Roger Goodell punished the Patriots after a team employee was caught filming an opposing team's coaches during a game, in an attempt to decipher their signals to players. The Patriots organization was fined $250,000, coach Bill Belichick was personally fined $500,000, and the team will forfeit its 2008 first-round draft pick.
Why would Belichick, already considered an all-time great coach, be driven to take such a petty risk, filming opponents in plain sight? His reputation is already assured. He's proved himself repeatedly as a coach over the past 25 years: first, as the innovative defensive coordinator of the great New York Giant teams of the 1980s, under coach Bill Parcells; then, by winning three Super Bowls in four years with key players injured. He's considered one the greatest game-film analysts and defensive strategists of all time, and created a "value investing" approach to selecting and retaining players, refusing to overpay players in the era of free agency and the salary cap.
Belichick's behavior is not unusual, sadly. Winners, when faced with the prospect of defeat, are often tempted to bend the rules. In sports and in business, dynastic champions eventually run out of steam, when their players or products get older, or when their competitors adjust.
This raises an interesting question: What distinguishes dominating organizations from the merely successful? It is not only ability and opportunity, but a desperate need to prove oneself, regardless of past accomplishments.
The tendency to mythologize winners as heroes runs deep in all cultures. But despite their surface charm, real-life dynasties, in almost any endeavor, are likely to be ruthless and insensitive.
Another example of a long-time winner bending the rules to perpetuate his dynasty was Jack Welch, the retired CEO of General Electric. Welch, named "Manager of the Century" by Fortune magazine in 1999, grew GE's market capitalization in his time as CEO from $15 billion in 1981 to nearly $500 billion in May 2001.
Like Belichick, Welch won through a combination of aggressiveness and innovation, taking an already successful company to new heights. He insisted that all GE divisions excel (No. 1 or No. 2 in their markets) or be sold; that underperforming or unnecessary employees be identified and fired, and he pursued a series of management initiatives in an attempt to grow GE's performance and profitability. Wall Street analysts and investors venerated Welch for his consistent growth of GE's profit, and its stock price rose accordingly.
Welch's successes were substantive and real. But the remarkable consistency of GE's earnings under Welch, quarter after quarter, was a phenomenon unnatural for a large company, and it would be near impossible to achieve today. He accomplished this feat by leveraging two financial tools, which though entirely legal at the time, would be derided as gimmicks today.
First, Welch leveraged GE Capital, the firm's highly profitable financial arm, for "revenue smoothing," to achieve the desired consistency of earning performance. At the time, GE Capital, although GE's single most profitable division, reported earnings as a single unit, a practice changed by current CEO Jeff Immelt in 2002 in response to investor pressure for more transparency. --(StarTribune)

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A disciple of Japanese quality management

Order and efficiency are hallmarks of the TVS motorbike factory near Bangalore in southern India. To direct foot traffic, arrows are painted on the shiny shop floor of India's third-largest motorcycle maker.
Large banners with exhortations such as "Let Us Achieve Zero Defects" and "Quality is a Way of Life" hang across the bright facility where nearly 2,000 vehicles are built each day on neat assembly lines. Tea breaks are 9:15 to 9:22 and 14:15 to 14:22, according to a memo on the wall.
Japan's veneration for order has been fully transplanted to this TVS factory in the city of Hosur.
Venu Srinivasan, the mild-mannered 55-year-old managing director and chairman of TVS, has indoctrinated the company with the Japanese management strategy of total quality management. TVS's turnaround has hinged on principles of attention to process, consistency, transparency and employee involvement.
TQM was launched at TVS in 1989 and is credited with reviving the ailing company. Since then, TVS and sister companies in the $2.2bn TVS Group have won the prestigious Japan Quality Medal and the Deming Prize, a quality award from Japan.
TVS rolled out 923,000 motorbikes last fiscal year in India with sales growing 19 per cent to reach about $900m. It recently opened a factory in Indonesia and aims to globalise its business over the next few years.
The scenario before and after TQM reflects how far TVS has come in nearly two decades. Productivity, quality and sales have improved dramatically. Previously, the rate of "re-work" - parts plagued by faults - was 15 per cent. That figure has fallen to 100 parts per million. The factory used to make four deliveries a month to customers compared with two daily now.
It was no easy task to overhaul the family-owned company that was founded in 1911 by Mr Srinivasan's grandfather, TV Sundaram Iyengar. For three decades after 1960, India closed its markets to global competition. Imports were restricted and licences were required to start businesses, creating little incentive to improve or strive for quality.
After earning a degree in engineering from Madras University in today's Chennai, Mr Srinivasan went to the US for graduate studies, like many scions of India's business families. In 1979 he earned a master's in science and management at Purdue University in Indiana - the degree became known as an MBA in 2001 - where he received a "strong dose" of industrial engineering.
He visited factories of US automakers such as General Motors but was unimpressed. "US factories did not have that exactness," he recalls.
A trip to Japan in 1981 and visits to the Suzuki and Honda factories proved pivotal. "Even the bullet train aligned exactly on the platform. People were highly motivated and committed." He was inspired by "a country that could create this kind of excellence" and sought to restore the high quality for which TVS was known in the 1940s when it ran a highly-efficient bus network and General Motors dealership.
Mr Srinivasan began reading books about TQM and "desperately tried to get hold of Japanese professors, but India was not on the radar" in the early 1980s.
The mission to restructure TVS grew more urgent in the 1980s when, profits slipped although sales grew. "That triggered the need for change. I knew that if we continued like that we wouldn't be in business."
Mr Srinivasan introduced TQM to the company in 1989 and implemented and improved it over the next nine years. Experts from Japan still visit the company.
TVS's adaptation of TQM rests on five pillars. They include policy deployment; involving every person at the company; kaizen, or continuous improvement; standardisation of processes; and new product development.
Seated at a long boardroom table at the TVS office, Mr Srinivasan takes a pen and draws a series of boxes to illustrate the "silos" that hobbled the company before. There were six layers of management. With little co-operation or communication between divisions, "most meetings were full of fault-finding and finger pointing".
Under the new regime, silos were broken down. For instance, different teams collaborated on design of new motorcycles so staff from R&D worked jointly with production and assembly.
As a result, innovation has been boosted. TVS rolled out its first 20 models in 21 years but it has produced 10 new products in the past three years alone. This year TVS expects to roll out six new models.
On the factory floor, inefficiencies were identified and weeded out. TVS used to keep 10 weeks of inventory at its factory compared with two weeks now. The assembly line suffered frequent delays. "We couldn't predict what we could supply to customers," says Mr Srinivasan. "It used to be a real mess."
Mr Srinivasan recalls that previously the factory floor was haphazardly organised. "One man operated one machine with another man doing inspections. Relative to today it would be dirty." Today employees are trained to operate different machines, allowing for a leaner workforce.
In traditionally hierarchical India, Mr Srinivasan shocked employees by picking up cigarette butts from the factory floor in keeping with one of the pillars of involving every employee.
He started tracking all the company's statistics and breaking them down, line by line. Figures were conveyed to employees through charts displayed in the factory.
"Everybody could see the actual graph. Before, people would fudge," says Mr Srinivasan. "But every hour productivity is displayed. We created a feedback loop."
Changing an entrenched mindset was a difficult task. "It requires a high degree of understanding between employees and management," says C. Narasimhan, formerly president of Sundaram-Clayton, the auto components firm and sister company of TVS.
But employees were encouraged to offer suggestions for improvement. "Some employees give 200 suggestions a year," says Mr Narasimhan. "Awards are given for the best suggestion."
Roles of each employee are now clarified and targets clearly assigned. Results are displayed for everyone to see in order "to hold the gains". Changing his own role at TVS was also a challenge for Mr Srinivasan, whose position as family trustee shifted as the company's president became more empowered.
"For me to move back and change my role took a lot of change myself," admits Mr Srinivasan. "You've got to look at yourself in the mirror honestly. But you have to make the change to get other people to make the changes you expect of them." --(Rediff)

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Let’s have some wa, hansei and kaizen

by Sudheendra Kulkarni

Indian businessmen doing business with Japan are of two types — one, for whom the relationship is short-term and frustrating, and the other for whom it becomes durable and highly fulfilling, not only financially but also in other intangible ways. The first type will complain: “It’s difficult to understand the Japanese. They take so long to take decisions, rarely come straight to the point and conclude the deal. Who has got that much time in today’s world of multiple opportunities?”
Those in the second category will tell you: “For the Japanese, business partnerships are not only about making money. They are about seeking, preserving and promoting wa or harmony, a quintessentially Japanese principle, which they practice within their own companies, in product design, art and society in general. They have an elaborate and often time-consuming way of ascertaining whether a particular decision harmonises with their culture of doing business. But once they know that you are trustworthy and the right partner, decisions are taken very fast, often without the formality of legal documents. You then begin to realise how scrupulously they keep their word, care for your feelings, respect your ideas and suggestions, and make the relationship an opportunity for mutual growth.”
I have mentioned this because in my last week’s column (‘The Toyo-Tata Way to Nation-Building’) I had reflected upon how Toyota’s unique manufacturing principles had not only enabled it to become the world’s leading car company, but also offered important lessons for all types of organisation-building. My reflections were triggered, first, by Jeffrey K. Liker’s internationally acclaimed book The Toyota Way and, later, by a visit to Toyota’s main plant in Nagoya in Japan. Can manufacturing have a moral message? Can it have a cultural and philosophical basis? These questions may sound strange, but the answer, provided by Toyota and many Japanese companies, is yes.
In Toyota’s superior business paradigm, its long-term vision of value-creation supersedes pursuit of short-term money-making. Every employee is made to feel important, honoured, empowered and responsible to achieve the company’s objectives of zero-defect, zero-waste and complete customer satisfaction. This is what helped Toyota beat American auto giants Ford and General Motors in most markets globally. Liker’s book presents amazing case-studies of how Toyota doubled or tripled the speed of every business process, reduced production cost through constant innovation, and made quality control a company-wide obsession.
But The Toyota Way’s principal lessons are not for car-making alone. For example, as a political activist, I believe that all those political parties that are concerned about problems within and genuinely desire long-term growth would profit by paying heed to the following principles.
• “Don’t hide problems within the organisation, but bring them to the surface.”
• “Continuously solving root problems improves organisational learning. Even high-level managers should go and see things for themselves, so that they will have more than a superficial understanding of the situation.”
• “Develop such leaders in your organisation who thoroughly understand the work, live the philosophy, and teach it to others.”
• “Develop exceptional people and teams who follow your company’s philosophy. Make an ongoing effort to teach individuals to work together as teams toward common goals.”
• “Become a learning organisation through relentless reflection (hansei) and continuous improvement (kaizen). Protect the organisation’s knowledge and cultural base by developing stable personnel, careful promotion, and well thought-out succession systems.”
Similarly, Toyota’s constant effort to achieve “zero waste of human, material, energy and time resources” is something that ought to become the guiding principle of a national mission in India. Take energy conservation, for example. When the Japanese government issued a directive to its citizens three years ago to use less energy for air-conditioning in summer, Toyota, Hitachi, Sony and other big and small companies asked everyone, from chairmen down to receptionists, not to wear their ties and jackets in office. When the government set strict new energy-saving targets for consumer and office electronics products, saying they must be redesigned to use 63 per cent less power by 2008, every company got down to the task. It is through such national campaigns that Japan has managed to achieve the impossible: It now imports 16 per cent less oil than it did in 1973, although its GDP has more than doubled. How does India fare in this regard? Five years ago, former prime minister Atal Bihari Vajpayee announced an energy-saving campaign in government offices, in which the PMO and Rashtrapati Bhavan were required to cut their power consumption by 10 per cent. Nobody knows about the fate of that campaign.
The trouble with Indians, especially with those in government and politics, is that we talk more and do less. Though our businesses are now transforming themselves, most of the work processes in government and political parties are extremely slow and deeply flawed. There is poor adherence to any long-term vision and specific goals, and scant accountability to reach them. And little is done to enthuse, empower, involve and reward the ‘small’ man in the achievement of big organisational or national objectives. If we want to build a New India in the 21st century, isn’t it high time we enshrined the Indian equivalents of wa, hansei and kaizen in a nationwide drive for a New Work Culture in governance, politics, business and other spheres of public life? --(IndiaExpress)

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Great time for greatness

By ROSS FREAKE

Let's dare to be great this year.
It is a choice, an intention. We can continue as we always have or we can take a transformative leap to be the best we can be.
We know we create our reality, so let's accept that responsibility and do something different before we take that long walk into forever.
We can live in such a way that when we do go, we will go laughing, and not with regret about the things we didn't do.
It's time to stake a claim, to lift our noses off the grindstone and our shoulder from the wheel. There is more to life than paying off the mortgage, the car and the plasma TV.

"Treat a man as he is and he will remain as he is. Treat a man as he can and should be and he will become as he can and should be," said the German philosopher Goethe.
So let us create the expectations and the life we have always imagined.
"One of the most profound learnings in my life is this," Stephen Covey wrote in The 7 Habits of Highly Effective People. "If you want to achieve your highest aspirations and overcome your greatest challenges, identify and apply the principle or natural law that governs the results of what you seek."
How we see the world shapes who we become; we attract what we think about; what is constantly on our mind takes shape in our life.
It's hard to live a peaceful, serene life when we seethe with resentment and anger at how we think we have been treated, at our family, friends, co-workers and the person at the coffee shop.
The first step of the longest journey, the only important journey, of achieving those aspirations is to figure out what they are and then find the principle to turn them into reality.
Sometimes, the questions are as important as the answers. We need to ask ourselves what we believe, whether we're happy with where and who we are and if not, why we don't change.
We didn't suddenly become who we are; we spent a lifetime getting here. We're the way we are because of the choices we made yesterday, and the day before. But at any time, we can change those choices.
If knowledge is power, the converse must also be true - lack of knowledge is lack of power. We must find those old beliefs that cling to our subconscious like barnacles on an old ocean schooner, challenge our assumptions, let go of our perceived deficiencies, and our excuses for why we aren't what we secretly think we should be.
Intention is as important as what we want because without it, our dreams remain electrical blips in our brains. Then, we focus on our goals, not letting circumstance or comfort seduce us from the path. So write it down, make it real. This is what we want; this we will achieve; this is who we will become. See it. Believe it. Taste it. Live it.
Last words to Leonard Cohen, singer, poet, Zen man and wise man: "The years are flying past and we all waste so much time wondering if we dare to do this or that. The thing is to leap, to try, to take a chance."

Think Before You Act - Teaching Thinking Skills In Schools Could Improve Behaviour In the Classroom

The question so often asked by teachers of schoolchildren caught misbehaving - "what were you thinking?" - could become a thing of the past if thinking skills were more widely taught in schools. Psychologists who have studied Edward De Bono's thinking programmes for schools believe they may hold the key to improving behaviour in the classroom in 9 - 16 year olds.Dr Michael Hymans, an Educational Psychologist with the London Borough of Brent presented his research into Edward De Bono's (1986) CoRT Thinking materials and how they can be used to encourage children to think before they act on Thursday 10 January 2008, at the British Psychological Society's Division of Child and Educational Psychology Annual Conference in Bournemouth.CoRT stands for the Cognitive Research Trust, and the programme developed by the famous thinker Edward DeBono, is now widely in use throughout the world. It encourages children to think for themselves by providing a series of exercises which give them freedom to use their creative and lateral thinking, however its application in the context of improving behaviour is less well explored. The research suggests that the high premium placed on children's own ideas helps children to enlarge their view of situations and enables teachers to gain a better understanding of the range and development of creative and lateral thinking within their classes. As children begin to value each other's ideas they gain confidence and are more willing participate.Previous work by Dr Hymans suggests these thinking skills can significantly reduce attention-seeking behaviour amongst children in primary mainstream and special schools. Dr Hymans said; " Helping children to learn how to think and to think before they act promotes a positive pattern of motivation in that there is belief amongst children and young people that effort leads to success and, that they gain satisfaction from personal success at difficult tasks as well as from their own ability to improve and learn."

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What leadership means

THE PRACTICE OF MANAGEMENT by Peter Drucker, renowned management expert, states that "leadership cannot be created or promoted. It cannot be taught or learned. Leadership is not magnetic personality – that can just as well be demagoguery. It is not making friends and influencing people – that is salesmanship."
"Leadership is the lifting of a man's vision to higher sights, the raising of a man's performance to a higher standard, the building of a man's personality beyond its normal limitations. Leadership requires aptitude and basic attitudes. And nothing is as difficult to define, nothing as difficult to change as basic attitudes. Practices, though humdrum, can always be practised whatever a man's aptitudes, personality or attitudes. They require no genius – only application."
The above is more than a mouthful and should cause us to contemplate the correctness or otherwise of assertions which, in recent times, have permeated our airspace. Tomorrow's senior positions will be filled by men who today occupy junior positions. Drucker argues: "I have yet to see any method that can predict a man's development more than a short time ahead."
Our nation has been blessed with leaders of immense talent. Needless to say, a critical review could easily disclose that some were more gifted than others but that each started from a position of minimal known expertise in the task of leading the country. Some achieved more than others. It could be argued that some achieved little.
Yet, our country has advanced and remains an object of admiration certainly for the wider Caribbean and for some countries by no means our neighbours. What factors contributed to these gains? Have we realised our full potential? The answer is a definite 'no'.
Our major contributors to success have been our educational facilities, respect for law and order, and our religious fervour. No wonder we have been able to change our leaders without unusual fanfare and by peaceful transfer of power. We have respected the notion that each man brings different qualities and that a man can learn only so much so fast.
The hallmark of management today is its success in facing adaptive challenges. Changes in societies, markets, customers, competition and technology are forcing leaders to clarify their values, develop new strategies and impose new operational techniques.
The Harvard Business Review of January 1997 quotes chief executive officer of Scandinavian Airlines, Jan Carlzonas, saying: "One of the most interesting missions of leadership is getting people on the executive team to listen to and learn from one another. Held in debate, people can learn their way to collective solutions when they understand one another's assumptions. The work of the leader is to get conflict out into the open and use it as a source of creativity."
Globalisation, whatever it means, requires leaders, accustomed as they are to solving problems themselves, to adopt new methods. Drucker argues: "Leaders do not need to know all the answers. They need to ask the right questions. --(Nation News)

Listen to Your Customers to Find the Blue Oceans

By Louis Columbus

CRM Buyer 01/18/08

As W. Chan Kim and Renee Mauborgne, the authors of the book Blue Ocean Strategy: How to Create Uncontested Market Space and make Competition Irrelevant, show in their research, the ability of manufacturers to reassess the unmet needs of their customers and create entirely new products and solutions that match customers' changing preferences is critical.

Competing for customers has never been more challenging, intensely focused, or costly for manufacturers globally. Instead of relying on plunging prices or continually adding in product line extensions to marginally increase a given product's market size and potential sales, manufacturers must get back to what made many of them successful to begin with, and that is concentrating on knowing the unmet needs of customers and responding to them with innovative products and solutions better than any competitor globally.
Aggressively getting Voice of the Customer (VoC) initiatives and programs off the ground quickly to drive both ongoing quality programs and getting their product development cycles fine-tuned to customers' unmet needs delivers long term competitive advantages. Any lasting competitive strength needs to be built on processes that deliver exceptional value to customers with products that meet their unmet needs and exceed their expectations.

Searching for Blue Oceans and Global Customers: Let the Race Begin
While the catalysts that launched many manufacturers were innovative products and services that in many cases created entire markets, the predominant mindset today seems to be following cost reduction as a strategy to the exclusion of creating new markets. As W. Chan Kim and Renee Mauborgne, the authors of the book Blue Ocean Strategy: How to Create Uncontested Market Space and make Competition Irrelevant, show in their research, the ability of manufacturers to reassess the unmet needs of their customers and create entirely new products and solutions that match customers' changing preferences is critical.
When companies follow this approach to redefining markets for their products and services, they create entirely new market segments, which the authors have called "blue oceans." A market that is considered a blue ocean is one where demand is created, not fought over, and illustrates opportunity for growth and profitability versus margin- and price-cutting to gain market share. Conversely, red oceans are those markets marked by high levels of price-cutting and margin-taking in the hopes of driving demand up quickly to compensate for declining sales. Price isn't the problem in red oceans; relevance is. Finding blue oceans starts, however, with an aggressive VoC plan and continues with a shift in the culture of manufacturers to act on the customer intelligence gained.
There are excellent lessons learned from Blue Ocean Strategy that apply to manufacturers. Here are several of them:
Incumbent manufacturers most often create blue oceans from their core businesses. Chrysler's redefining the family vehicle market with the development of the minivan, IBM's (NYSE: IBM) humble beginnings as the company CTR for tabulation machines, IBM's creation of the server market with the launch of the System/360, Compaq's defining the blue ocean of low-end, fully configured servers with the launch of its ProSignia line, Proctor & Gamble's redefining of floor cleaning products with the Swiffer are all examples of how blue oceans have been defined by incumbent manufacturers.
In entertainment, AMC's definition of the blue ocean strategies of first the cinema multiplex and later, the megaplex, in addition to the redefining of circus entertainment by Cirque du Soleil, which is thoroughly discussed in the book and article by Kim and Mauborgne, also illustrate how manufacturers can create blue oceans for themselves based on their core strengths.
Blue oceans can't be bought purely through technology innovation. Consider the fact that the majority of blue oceans that manufacturers are benefiting from today are based on existing technology, and it's clear that just spending heavily on R&D to create entirely new markets doesn't work. Instead, there needs to be deliberate customer listening strategies including aggressive VoC programs to fully understand the needs of customers and re-align existing product and process strengths to meet them.
The technology behind the Apple (Nasdaq: AAPL) iPod series of personal MP3 players was well known; it was the development of the iTunes store as well as strong demand for personal music that could be quickly saved to a personal MP3 player and used anytime, anywhere that revolutionized this specific market. For manufacturers the message is clear; the blue oceans are out there and it takes a concentrated effort to find them through VoC programs and staying close to how customers want to solve their unmet needs.
Defining blue oceans as traditional industries and markets don't work; yet capturing and acting strategically on customers' changing unmet needs do. Kim and Mauborgne contend that blue oceans defy existing approaches to defining them and as a result require entirely new product strategies, marketing messages, and approaches to meeting unmet customers' needs. Manufacturers who strip away the traditional approaches to business development and new venture creation have a better chance of uncovering the higher growth and uncontested blue oceans that may exist in their customer bases. Customers' approaches to buying, using, and recommending your products change dramatically over time; finding out about how these changes occur is critical to finding blue ocean markets.
Blue ocean strategies transform value/cost trade-offs and force manufacturers to align activities in the pursuit of differentiation and low cost at the same time. For incumbent manufacturers, this is the aspect of cost reduction that makes the greatest potential impact on competing in new markets. The ability to trim cost isn't then used, turning a red ocean even more red with losses. It's about creating such a high level of differentiation in products and delivering such high value that low cost becomes one more competitive differentiator. It isn't the single greatest differentiator, yet a contributing factor in underscoring exceptional value to customers in the fulfillment of their unmet needs.
For manufacturers, the implications of pursuing blue oceans are clear. First, the world is now the playing field -- not any state, province or region they are located in. Globalization has leveled the playing field and is bringing competitors to manufacturers' doorsteps, yet also providing opportunities to capture customers globally with greater efficiency than ever before as well.
Fuel for Global Growth: Capturing Voice of Customer Insights
Manufacturers must find the intersection of their core strengths through the use of aggressive VoC programs find the blue oceans their organizations can compete strongly in. There are a series of qualitative approaches manufacturers rely on to gain insights from their customers, and while these are all valuable as part of a broader VoC program, the culture of any manufacturer must also change to capitalize on the lessons learned.
No one can afford the luxury of being arrogant and ethnocentric in such a rapidly and highly competitive, changing world; if anything, VoC programs must force manufacturers out of their comfort zones before market forces do and force change that is planned versus by accident. Here are the key approaches manufacturers are taking to gain qualitative feedback in their VoC programs:
Advisory councils: One of the most effective approaches to gaining insights from customers, there has been wide variation in results achieved using councils to gain insights into new markets and unmet needs of customers. The cardinal sin so many manufacturers commit here, however, is either thinking they already know what their customers' future plans are, or worse, viewing this as a negative experience just because customers will complain about problems they may have had for years. There is no room for such arrogance in such a rapidly changing global economy. Fail to listen to your customers' complaints and someone else will; and will gain their business in the process.
If there was ever a time to throw off the "we know already" mentality that tends to pervade old-school manufacturers, this is the time because it is time to fight for your customers like never before. Besides that, they have insights into where entirely new blue ocean markets are.
The best-run advisory councils first recruit from the standpoint of exclusivity and the need to gain insights into the direction customers are going. They are hardly sales events; they are more often events where C-level executives gather to share peer-level insights into what is working and what isn't when it comes to solving major strategic challenges. Symantec's (Nasdaq: SYMC) use of advisory councils at the CEO level with its customers has netted remarkably strong results as its customers have shared their long-term security strategies and plans, challenges, and sought advice from the senior security experts at the software company. The result: over two years, the platform product strategy direction of Symantec was perfectly aligned with their customers' needs.
Blogs: If there is one lesson taken away from this article, get out to Google (Nasdaq: GOOG) , get an RSS reader set up and start tracking bloggers who are in your industry. There is an exponential growth of content being generated by bloggers and many of them are hinting at the next blue oceans in key markets. In addition many manufacturers have set up blogs and even defined blogging policies for their employees. Using blogs as a means of connecting with customers needs to be down with transparency, honesty and directness. No sugar-coating problems, not dodging customer complaints, but ownership and sincerity are critical in the blogosphere. Start tracking what bloggers are saying about your company, the industry, and what is going on in related areas as well, as this is a great way to stay on the pulse of what one form of exponentially growing voices of customers is saying.
Focus groups: This is a commonly used qualitative strategy for completing research, yet it can also be used as a VoC program as well; and needs to be considered as part of any new product development effort. The use of focus groups has been criticized, yet it is one more avenue by which manufacturers are attempting to find the blue oceans accessible to them.
Mining unstructured content from sales and post-sales feedback including customer complaints: Well-intentioned at the time they are nearly always ignored when the results come back from customers, sales feedback forms and post-sale customer satisfaction bounce-back cards often up in stack after stack of moving boxes in the marketing director's closet. Because the data is unstructured and difficult to interpret, it gets ignored for years. There is good news for manufacturing company's marketing directors feeling too guilty to throw these boxes out yet seeing a Herculean task of coding them. Companies including Attensity, Cymfony, Island Data and others have software that can interpret unstructured data and create linguistic models based on the results. This is incredibly powerful for finding blue oceans. Consider getting to know how these tools work to gain greater insight into how to find blue oceans globally.
Win/loss analysis needs to grow up: The days of simply relying on sound bites of why business was won or lost have got to end for any manufacturer who wants to compete more effectively on a global basis. If you're a manufacturer and you're not doing a thorough analysis of why you didn't win the major deals, then it's time now to start paying more attention to this area of a VoC program. Kill sound bites and don't allow them to be part of how sales efforts get evaluated; finding out the specific reasons why a given deal was lost is critical if a manufacturer is going to compete globally with greater strength.
Too many companies get lulled to sleep with sound bites while their competitors have found entirely new markets -- their blue oceans have arrived -- and sound bites hide that from a competing manufacturer. Don't be asleep on this area of where weaknesses are slowly eroding competitive strength. Likewise, finding out why a customer chose your products and solutions nearly always points to greater clarification of the unique value proposition manufacturers rely on for positioning and identity.
Listen to Your Customers
Finding blue oceans is the path to profitability and growth for manufacturers, regardless where they are located. For American manufacturers, their core strengths began by uniquely attacking customers' unmet needs and aligning their product strategies accordingly. It's time for this nation's manufacturer to wake up and realize that it doesn't need to just be about cost reductions and product line extensions -- in the vernacular of Kim and Mauborgne -- red ocean strategies.
Instead, embracing the challenge of finding blue oceans through concerted VoC programs needs to be a strategic priority -- and further than that -- a passion to change and become a stronger global competitor in the process.

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It's not easy to sustain those kaizen results

How do you sustain kaizen results? This is a common question that I get asked and an issue that we all deal with on our lean journey. We work hard at identifying opportunities and finding ways to reduce waste in our processes only to see many of our gains erode over time. How do we sustain our kaizen results?There are most certainly several factors that could affect our kaizen sustainability, however I would like to focus on just one. In my experience, the quality of our kaizen follow-up activities greatly impacts sustaining our kaizen results. In the case of kaizen events, it seems we do a pretty good job of working through all the issues, despite struggling during the week, and end up getting good results which, in some cases, can be amazing. In our team report out, we show the before kaizen condition and after kaizen results that were accomplished in the event followed by a typical 30-day homework list, maybe some lessons learned and a listing of future kaizen opportunities. We congratulate the team on a job well done and celebrate our success.At this point, the erosion process begins. Many times, we believe that job is done with our report out and celebration, moving on to new opportunities. We have lots of waste to eliminate, right?But just ask the associates in the recent event area that endured the kaizen storm for the week if the job is done. Almost 100 percent of the time, you would get a big “Hell, no!” Some would say details, details, details, but that is the point. If we don’t follow up well and get these details worked out, erosion takes hold and results are lost.Our follow-up efforts must be just as diligent as our activities during the kaizen event. That requires providing resources on a daily basis to resolve all the open issues from the kaizen activity. Be prepared that we may find that this takes more effort than the kaizen event itself.Don’t fall into the trap of waiting until the last week before the 30-day follow-up meeting to crash through the list in a frantic attempt to get it all done in one day. This crash-course approach almost always creates poor workmanship and weakened results.If we think about it, this type of effort is more strenuous on our team than if we spread the follow-up activity out daily for the 30 days. Not only is the workload spread out (less burden), the quality goes up.Here are a few helpful hints that may improve our kaizen follow-up:1) Have a kaizen follow-up process: It sounds silly, but some companies don’t have a follow-up process at all. Create a process that works for your company and use it.
2) Establish a formal 30-day follow-up meeting: Try setting this meeting date at the time of the kaizen report out for approximately 30 days out, and stick to that date. This meeting should have a formal agenda.3) Add a 30-day results column to the Kaizen Results Achieved sheet: Typical Kaizen Results Achieved sheets have columns for improvement measurement (i.e. productivity, WIP inventory, floor space, etc.), before kaizen, kaizen goal, actual achievement and percent improved. Just add a column for 30-day follow-up to record what the improvement results were at 30 days.4) Put one person in charge of the entire kaizen follow-up: This could be the kaizen team leader, sub-leader or the process owner. Don’t just rely on departments or individual assigned to tasks to finish the job. One key leader should be assigned and responsible for the complete follow-up process.5) Buy-in is still important: We may have done a good job getting buy-in for the process changes by the people in the process during the event, but as things go south the next week, it is easy for people to give up. Work to remove their frustration and keep their buy-in.6) Keep our presence in gemba: Kaizen events are fast-paced and exciting. One of the most notable features is constant presence in gemba by the team during the week. But what happens the following week? From an associate point of view, it may feel like everybody forgot about you and you are abandoned, left on your own to make it work. Let our associates know that we are still there to support them after kaizen by staying in gemba.7) Extend follow-up past 30 days: Sometimes our follow-up activities do not result in a stable enough process after just 30 days. Don’t be afraid to add a 60-day or even a 90-day follow-up for activities and meetings.8) Kaizen our kaizen: Reflect on each stage and element in our kaizen process. What improvements can we implement to improve our kaizen process? Include ideas from team members and associates in the kaizen areas.With focus on our kaizen follow-up process, we have a better chance of sustaining our results. It just may take us a little more work after the kaizen. --(Reliable Plant)

Management: Leaders and responsibility

By Stefan Stern
January 23 2008

Harvard Business School celebrates its centenary this year. We can look forward to a series of grand events, much back-slapping and frequent blowing of its own trumpet. But how energetically will the great school salute the achievements of perhaps its most famous alumnus of all, George W. Bush (class of ’75)? It seems unlikely that the outgoing US president will be claimed as a poster boy for the Master of Business Administration (MBA) qualification any time soon.
Maybe this Bush administration merely represents an embarrassing hiccup in the otherwise increasingly deep and intimate relationship between commerce and elected leaders. The worlds of politics and business inevitably overlap, and collide. What President Dwight D. Eisenhower once labelled the “military-industrial complex”, we might rebrand as “politico-commercial”.
Even in this era of (more or less) free markets, trade takes place within the constraints of man-made regulation. Some politicians may remain uninterested in the business of wealth creation, and some business people may be left cold by the idiosyncrasies of democratic politics – but each side has to deal with the other.
The smartest actively seek cross-fertilisation. When JP Morgan, the US investment bank, snapped up the newly available former British prime minister Tony Blair earlier this month – to serve as an adviser for an estimated $5m a year – some of the sceptical noises that greeted the news were inspired by simple professional jealousy. Mr Blair had already turned down several offers from commercial organisations, his friends maintained. But he does plan to accept a few more. The ex-prime minister’s access to key figures and his understanding of how geo-political trends are likely to develop make him a highly valuable commodity.
Indeed, Mr Blair had long been attracted by the qualities, as he saw them, of successful business leaders. When he wanted to convince the sceptical British electorate in 1996 that his Labour party could be trusted to form a competent government, he turned to his growing body of friends in the business community for inspiration. Encouraged in particular by his contacts with BP, the oil company – a relationship that grew increasingly important as his time in office went on – Mr Blair conceived a series of “performance commitments” that he made to the British people. These commitments, five of them, were printed on a credit-card sized “pledge card”, and carried by Labour party candidates.
This was state-of-the-art performance management introduced to the scruffy world of party politics. The message was: do not bother reading our unwieldy, old-fashioned manifesto. Focus on these modest, practical and business-like proposals instead. Vote Labour – or your money back. And in the course of his 10 years in office, Mr Blair continued to seek the insights and experience of business leaders to lead enquiries, policy groups and task forces.
George Bush too, when he entered the White House in 2001, appeared determined to make the most of business expertise. His administration has been packed with former corporate executives. His vice-president, Dick Cheney, had been chief executive at Halliburton, the engineering and services company. His first treasury secretary, Paul O’Neill, had been CEO of Alcoa, the aluminium company, while Mr O’Neill’s successor, John Snow, had been CEO of CSX, a transport business. Mr Snow’s successor, Hank Paulson, was CEO of Goldman Sachs, the investment bank. President Bush’s first defence secretary, Donald Rumsfeld, had been CEO of the pharmaceutical company GD Searle between 1977 and 1985 – before it was bought by Monsanto. Not for nothing was this known as “the CEO administration”.
Karl Rove, President Bush’s key adviser, spoke with admiration of his boss’s business-like administrative skills. Gone was the chaos and aimless late-night chat of the Bill Clinton administration. In the Bush era, meetings would start and end on time. Ties would be worn. President Bush is said to be a great believer in Peter Drucker’s now rather dated idea of “management by objectives”, or MBO. “I had read Peter Drucker, but I’d never seen Drucker until I saw Bush in action,” Mr Rove once said in an interview with Atlantic Monthly, the political magazine. President Bush has also revealed how business school influenced his approach to the job. “Harvard gave me the tools and the vocabulary of the business world,” he wrote in his 1999 book A Charge to Keep: My Journey to the White House.
In October 2002, before his early departure from the administration, Mr O’Neill visited Harvard Business School. He told the assembled students that much was expected of them. “The world is desperate for the application of what you’re learning here,” he said. “Not only do you have the talent and the tools – you have the obligation.”
Today, the worlds of business and politics look towards each other with greater intensity than ever. The theme for this year’s meeting at Davos is “The Power of Collaborative Innovation”. Business and political leaders will look to learn from each other. One session at Davos exemplifies this. It is called: “Rebuilding Brand America: Five Suggestions for the Future President.”
And yet both parties to this collaborative conversation should take care. Critics – perhaps we should properly say cynics – will be closely watching what they do. As Professor Henry Mintzberg (no friend of MBA orthodoxy) of Montreal’s McGill Univeristy has said: “Davos: where the people who spend 51 weeks a year creating all our problems take another week to see if they can fix them.”
If that sounds harsh, remember these words from President Eisenhower when he gave his farewell address on January 17, 1961: “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought ... The potential for the disastrous rise of misplaced power exists and will persist.”

Stefan Stern is the FT’s Management columnist

Perspectives on performance management

By Maya Baltazar herrera

The observable performance of an organization—its productivity, the quality of its products, its economic performance—is only the top layer of a complex system. Observable behavior is the offshoot of deeper layers.

Perhaps the easiest way to understand this is by way of analogy versus the observable layer of individual performance—behavior. Many organizations attempt to manage individual performance almost in a classical conditioning manner, invoking carrots and sticks with little or no consideration of either the internal psyche of the individual nor his general environment or circumstances.

A more enlightened approach to individual performance takes into account the realities of the performance situation. Such things as the availability of resources, the level of ability of the individual vis-à-vis the task at hand, the quality of role models to which the individual is exposed to, and the quality of his motivation concerning the task all affect individual performance.

Cause and effect

Clearly then, individual performance, which is measured in terms of behavior have both cognitive (e.g. ability and organization cues) as well as emotional (e.g. motivation) roots.

Beyond this, from a sustainable performance point of view, it also makes sense to understand how general performance norms are formed. What differentiates the peak performer from the mediocre? How are the habits that lead towards sustained performance developed? One of the theories propounded to explain peak performers is that of efficient thinking (Katzenbach, 2000). This theory essentially says that it is a person’s essential mindset that determines his emotional response to events, and, hence, his reaction or behavior. Thinking leads to feeling leads to doing.

A similar process occurs within organizations. The outward and observable layer of organization performance is what I think of as the mechanical facet of the organization. However, under the mechanical facet is the emotional undertone—the culture of the organization. Underneath of all of this are the roots of culture, the deep shared mindsets of the organization—those that are planted in values and policies but are formed by the daily operations of governance and management decision-making.

Layers of change

Every organization is defined by a set of mental constructs shared by the members of the organization. In a stable organization, these constructs are congruent with the formal policies, systems and structures of the organization as well as its unwritten mores and its culture.

When an organization is underperforming, change is required.

Organization change involves the co-creation by organization members of a new set of mental constructs and the creation of a new set of policies, systems, structures and mores that define the new reality for the organization.

Cameron and Green (2004) build on the work of Morgan (1986) and identify four organization metaphors that are most used to provide insights on organization change:

• Organizations as machines

• Organizations as political systems

• Organizations as organisms; and

• Organizations as flux and transformation.

The reality, of course, is that organizations are all of the above. They are machines in that there are formal structures and policies and standard methods of doing things. However, unlike true machines, organizations have pieces that think for themselves—and therefore, do not always follow the set direction. Organizations are political systems because they are composed of people. Organizations are organisms because groups of people working together evolve a rhythm, a way of thinking together and doing things together. Finally, organizations are a process of flux and transformation because they exist over time, and therefore, evolve.

In fact, I suspect that one of the easiest ways to think of organizations is as a sort of super-organism. Like any organism, the organization super-organism interacts with its environment. However, because its parts are self-aware, the organization must necessarily be seen as, at least partly, the sum of its many thinking, independent yet cooperating parts.

This is important because organization change involves changing two things: the organization and the individuals in the organization.

It is almost impossible to inflict change on an individual. Change can be offered—enticing, tempting, compelling.

In an organization that is changing, a battle rages. Entrenched forces of resistance battle the invading agents of change. Successful change requires that the fortresses of resistance be converted or eliminated— lest they calcify into seeds of destruction. --(Manila Standard Today)