Clarity Management Consulting

Archive for August, 2010

The Executive Suite Versus Wall Street

Tuesday, August 24th, 2010

“…you can’t make men work for money alone – you starve  their souls when you try it; and you can starve a company to death the same way” – from the movie “Executive Suite” (1954, Robert Wise, Metro-Goldwyn-Mayer)

I had never seen the movie “Executive Suite” until one day last week when I caught the last few minutes on one of my favorite cable stations. In 1954, this masterpiece of a movie captured the essence of the conflict that many companies still face decades later.

Across industries, strategic decisions in many companies are influenced by concerns about the way Wall Street analysts will interpret them. Corporations have focused on short-term gain in the hopes of affecting share price. Auto manufacturers’ incentives, which are designed to pull sales forward simply to make monthly or quarterly numbers, are but one example of this dilemma.

These observations are reflected in a variety of studies on similar issues. Several papers by Mary J. Benner, Assistant Professor of Management at Wharton, assert that Wall Street analysts are reluctant to embrace the innovative efforts of companies when they are designed to expand their technological horizons. The bias is for extending current offerings as opposed to breaking away from the pack. This is remarkable given the fact that one of the top commandments in marketing is that an entity must differentiate itself from its competitors.

Wall Street analysts, of course, are not to blame for the effect they have on a company’s product decisions. Analysts are constrained by the need to be able to quantify the effect of any given action. As such, they must evaluate every decision in terms of its financial impact, particularly the short-term results. Net present value and payback period are critical financial metrics that must be accounted for, and rightly so. That said, corporations cannot live on near-term success alone. Yet leaders are still rewarded for the current month, quarter, or year despite the fact that their short-term success often comes at the expense of the future.

It is up to the management of every company to settle these matters for themselves. Strategic product moves must reflect a willingness to be true to the corporate mission, vision, and strategy. Ultimately, customers will judge such product choices. If leaders take the easy route and construct product portfolios to match analysts’ expectations, they will likely fail to satisfy customers who are the real arbiters of their success. The commitment to the corporate vision must serve as the counterweight that keeps the desire to please financial markets in its proper context. It has to be the overriding factor if a company is going to enjoy long-term viability beyond the next quarter, the next decade, or the next century.

Viewing Safety as an Aspect of Quality

Saturday, August 21st, 2010

This week the Bureau of Labor Statistics released some interesting findings for 2009. An Associated Press article reported that the Bureau documented a 17 percent drop in workplace fatalities last year. The article notes that much of the decline can be attributed to a reduction in hours worked as a result of the recession.

This is good news when taken at face value. However, occupational health and safety practitioners know that the number of fatalities can start to climb as the recession subsides and more people join the ranks of the employed. Now is the time to consider new strategies for elevating safety as a primary workplace concern in the competitive business environment. One means of accomplishing this is to provide an entirely different frame of reference for the safety debate.

Safety is, very simply put, a quality concern. An incident is really a defect produced by a failure in a process or work flow. Process and layout designs should reduce the risk of such incidents just as they should reduce the risk of defects. Safety advocates can gain support in their organizations by using this context to discuss workplace concerns.

Lean and Six Sigma techniques can be used to assess and mitigate the risk of injuries and other incidents. These methods are used together to facilitate the improvement of a wide variety of processes. Examples include manufacturing and assembly, medical services, financial transactions, and environmental testing. Other disciplines such as project management can be used in concert with Lean and Six Sigma to ensure the success of improvement efforts.

Lean techniques are used to: (1) identify the portions of a process that create waste, and (2) facilitate the process redesign. The first step is to map the process to understand how it works and to highlight problem areas. In the safety arena, this translates into looking at the process flow and the physical layout to determine where hazardous conditions exist.

Six Sigma encompasses a variety of tools that are used to reduce process errors and quality defects. Six Sigma can also be used to gather and analyze data on safety incidents and dangerous occurrences to evaluate possible causes and improvements. The approach consists of a series of steps known as DMAIIC: Define, Measure, Analyze, Improve, Implement, and Control. These steps address each phase of a process improvement effort, and all are required to evaluate potential sources of errors, defects, or hazards. From there, improvements are recommended, implemented, and evaluated. The tools used in Six Sigma include Statistical Process Control (SPC), design of experiments, and individual statistical analysis tools, to name a few.

Using Lean and Six Sigma to assess hazards and safety incidents provides an opportunity to evaluate these issues in a broader context. Treating incidents as a type of defect or process failure allows workers and managers to see the business impact of safety as well as the personal impact. This analytical, performance-based methodology provides an excellent framework for the due diligence needed to make safety improvements and enhance the overall health of the work environment.

Outsourcing Institute Webinar Recording Now Available

Monday, August 16th, 2010

“Outsourcing Vendor Selection” is now available at the following link – select the 8/12/2010 webinar:

http://www.outsourcingintelligencenetwork.com/oi_prod/index.php?option=com_oievents&type=2

Want to Transform Your Organization? Look at the Work.

Wednesday, August 11th, 2010

A friend of mine recently initiated a transformation in his physical health. One day he learned that his cholesterol was dangerously high. He realized he had a choice to make. He could take incremental steps and hope for a prolonged period of improvement, or he could make radical changes and improve his condition very quickly. He took charge of the situation. He changed his eating and exercise habits so dramatically that his cholesterol level dropped by 20 points in less than a month.

This story is analogous to the challenges that corporations face daily across the global marketplace. Some have stepped up to the plate and made the radical changes needed to become financially healthy and maintain their viability in the market place. They decided that they wanted to live and not die.

Historically, individual budgetary concerns and department performance have weighed too heavily on work processes in many corporations. This behavior helps organizations optimize at a functional group level, but sub-optimization is the result for the overall entity. If a company is to avoid the iceberg of corporate mortality, then everybody had better start moving the ship – and they better be moving in the same direction. Serving customers and succeeding as an enterprise must drive decisions and, consequently, work flows.

Does your organization reflect the sub-optimization reality? Don’t feel badly – you’re in good company. Where should you start so you can experience your own transformation?  Glad you asked. Keep these two things in mind:

1. Prioritize Carefully

Project portfolio management and prioritization are imperative. No organization can do everything that comes across the radar screen. Your team needs to be allowed to focus on the “critical few” items in order to accomplish its strategic goals. The list of the critical few should be populated with projects that address customer-driven products and services, quality, safety, and compliance. This list should also be limited in scope. Furthermore, items on the list should be important enough to be fully resourced.

2. Eliminate or Reduce Non-Value Added Work

Non-value added work can consume a disproportionate amount of time each day. Tasks that fall into this category typically are driven by departmental requirements, not by the needs of your customers. Figure out how much time your organization spends on activities that serve your customers versus those that only serve the bureaucracy. Empower your organization, and charge them with eliminating or at least reducing the latter.

How to Select Innovative Supplier Partners

Sunday, August 8th, 2010

Organizations are using supply chain management as a means of creating value and managing cost. Companies are using their supplier partnerships to drive innovation and are pushing greater responsibility upstream to their partners. Consequently, performance expectations are increasing and supplier selection activities must yield stellar results.  An organization can transform its supply chain by selecting real value partners who support the strategic direction of the enterprise.

The right sourcing tools can play a critical role in identifying and building value-based relationships. My article “How to Select Innovative Supplier Partners Using a 5-Step Project Management Approach” offers a step-by-step approach for ensuring success in your sourcing efforts. In addition, check out the “How to Select Innovative Supplier Partners” presentation for detailed tips as well as helpful templates.

Outsourcing Webinar Coming Up August 12!

Thursday, August 5th, 2010

Outsourcing Vendor Selection: Get Schooled on How Not to Get Schooled

Sponsored by the Outsourcing Institute

Date: August 12, 2010
Time: 12:00pm – 1:00pm EDT
Registration: Click Here to Register for the Webinar

Cost: Free

Choosing your outsourcing vendor can be risky business. If you are unfamiliar with proven methods and criteria for selecting your vendor, valuable time and money can be wasted.

Join us on Thursday, August 12, from noon-1pm EDT so you aren’t learning the ins and outs of vendor selection from…the school of hard knocks.

This webinar will focus on the importance of a robust vendor selection process and cover key aspects of vendor selection methodology. Expect to learn the following take-aways:

  • Developing a vendor strategy aligned with your business strategy
  • Understanding the vendor market landscape
  • Developing vendor evaluation criteria
  • Maintaining objectivity
  • Managing risk
  • Avoiding pitfalls in contracting and negotiations

Join Kevin Parikh, CEO of Avasant, as he explores these and other topics while fielding your questions on all things vendor selection along with an expert panel. Panelists include Monica D. Johns, MBA, PMP, President and CEO of Clarity Management Consulting.

Registration:  Click Here to Register for the Webinar

Self-Sufficiency: A Key Factor in How Women Entrepreneurs Approach Risk Sharing

Wednesday, August 4th, 2010

Self-sufficiency is a characteristic that influences the way women share risk as entrepreneurial leaders.  Women play diverse roles in their professional and personal lives.  Consider a woman who has a career, a family, and an elderly parent.  Each role demands a high level of commitment.  These roles do not always come with additional resources for delegation.  Consequently, the woman who has to fulfill these commitments must do the job herself in many cases.  This results in a level of self-sufficiency that is unique to women.

Women develop an acute sense of responsibility in these situations.  This is an essential part of risk sharing.  Entrepreneurs shoulder complete responsibility for their businesses.  These leaders often have to step in and take up the slack in critical situations to ensure success.  Women who succeed as entrepreneurs become proficient at delegating responsibility while holding themselves accountable for business results.  They learn to share risk over time.  Their self-sufficiency in meeting the challenges of their day-to-day lives provides a unique foundation upon which to build these skills effectively.

Comments on Management Styles

Sunday, August 1st, 2010

Changes in Management Styles

Management styles have evolved to meet the challenges of a tumultuous business climate.  The global environment has been in flux for well over five years.  The financial meltdown of the last three years exacerbated this.  The managers who have been effective during this period are those who were either adaptable already, or who learned to adapt as things changed more rapidly.  In turn, they helped their teams become flexible as well.

The Role of A Manager

Managers must realize that they play multiple roles.  Managers are part of the team and as such, they have to know when to play a collaborative role.  They also serve as coaches when needed.  On the other hand, they must communicate the overall strategic direction, as well as defining boundaries and required outcomes.  Teams are rendered ineffective when a manager is not proficient in juggling these roles or does not recognize what is needed in a given situation.

How to Identify the Impact of Your Management Style

You need to find out how you are affecting your team members, and the only way to do that is to ask.  360-degree feedback is indispensable.  The approach can vary.  I recommend that managers do things to cultivate relationships with direct reports so that healthy communication becomes the norm.  This will help ensure that feedback comes naturally rather than just being part of a formal discussion.

Ways to Change Your Management Style

Build a level of trust with a few key direct reports who can serve as sounding boards.  These people will benefit the most from any improvements in your behavior.  Conversely, they will suffer the most if you do not change.  Why not get their input on how to change?  A simple approach would be to ask a team member to observe various behaviors and report the observations, with some thoughts on how to be more effective.  This will provide some critical and, perhaps, surprising insights.