Monday 30 September 2013

Managing lists: Do not underestimate this art

Organized, productive and calm people can manage lists. You certainly know many representatives of this species, and maybe you even happen to be one of them. But, believe me, there are many people out there who would improve their performance and life quality if they mastered the art of managing lists.

Yes, there are methods and tools available, but they are not universal. Just like there are people who can be organized with half a dozen of yellow post-its sticking all around, others can't manage it even with the help of sophisticated priority, activation and control systems.

Let's propose just 3 important points on this theme:

1. Do not overlook this “science”. Recognize your problem and invest time to minimize its effects. There are many things happening out there.

2. A list is an inventory of future activities. This inventory, just like any other, has some basic attributes and qualities;

a. Not deteriorating;

b. Easily spotting what’s been stored;

c. Not occupying space with useless items;

d. Turnover.

3. The key to this is in the activation process, which occurs at the moment we pick a problem from the list and face it for its solution.

On the image a typical list is presented which almost everyone of us has - and how to manage it better.

In routine control, we all have a failure treatment process and operate a results dashboard. These are two very important tools, but with a limited problem-solving capacity.

* In failure treatment the basic question to be asked 5 times is “why”?

* In the Results Dashboard, if an anomaly is found, we use the simple Fact>Cause>Action resource; for small improvements the old 5w1h is applied.

Well, the tools above are simple and often can't achieve the proposed results. Do not try to take from them what they don't have to offer: it's more practical to recognize that we have a problem, which then goes on our list.

The list quickly grows, and our problem-solving capacity is no match to it. It's necessary, then, to have well-defined criteria to prioritize and - very importantly - not pass a lot of problems on to our subordinates at the same time. By acting thus we lose control of the situation: people start to set priorities based on other criteria and, what is worst - have extremely low productivity, going from one problem to the next.

Knowing how to manage a list keeps the failure treatment processes and results dashboard to become overwhelmed.

After a problem is identified, we need to support the people in charge so that they can find a solution for it, implement it and end its cycle, making sure it will not return.

Monday 23 September 2013

Does work drive you mad?

We have probably all tried some magic fix at some point; a training course to learn new skills, a smart piece of software that will make everything better. The road to ruin is paved with such good intentions; pretty soon going back and working the same old process gets in the way of doing things differently. The cost of the initiative is lost and no benefits are realised and we default to engrained habits.

When the going gets difficult we batten down the hatches and do what we always did, but work harder at doing it. In most cases, doing what we always did got us in to difficulty in the first place and working harder never fixes the problem; at best it enables us to weather the storm until the problem arises again.

“Insanity: doing the same thing over and over again and expecting different results”.

Albert Einstein

The only real way to realise sustained improvements is to develop effective processes and good habits, and that involves identifying and managing what really matters. Setting and using Key Performance Indicators (KPIs) is an essential step; having KPIs is, however, of no value unless they are used to support and encourage those good habits. What adds value is not the act of measuring, but the adoption of an intelligent approach, one that uses the right measures to develop a continuous improvement culture and to eliminate wasted management effort.

A good kpi system does not cover walls with obscure charts, or simply present the same data as a flashy dashboard, but makes achieving excellent results easier and faster. Qualitin’s ICG approach does that; it drives ownership and accountability throughout an organisation, it empowers and obliges everyone to focus on what matters to customers and stakeholders and it saves significant management time; that is why I’m an enthusiastic Qualitin Partner.



Monday 9 September 2013

Historians versus Futurists – Who is More Valuable?

Futurists enjoy taking out their crystal ball and projecting future innovations, but they are typically wrong. For example, George Orwell’s book, “1984,” which was published in 1949, did not come close with its projections. And in the 1960s, I recall a Walt Disney television show describing automobiles that required no driver and were guided by a magnet-like strip imbedded in the street’s or highway’s roadbed. Nice try.

In contrast, historians research the past to determine what lessons might be learned and applied today. For example, historians examine the judgments, policies and actions of past U.S. Presidents and international government leaders to assess what actions may best serve citizens today. The recent movie “Lincoln” is an example.

But which group -- futurists or historians – provides more useful information? Futurists make us think by being provocative. Historians allow us to reflect on what worked or did not work in the past.

This question is relevant for today’s organizations because many enterprises fail to successfully execute their executive team’s plans and allocate an appropriate mix and level of resources to complete those plans. This involves strategy and budgeting – two disciplines that are widely criticized today. 

Historical Lessons Applicable to Strategy Execution and Budgets

In the book, “The Art of Action,” author Stephen Bungay reflects on lessons from war and military campaigns that can be applied to leadership skills and planning. He specifically addresses how an organization can implement and achieve the formulated strategy and plans of its executive team.

Bungay’s premise is that the leaders of almost all organizations can define reasonably good strategies. Where executives often fall short is in leading their organization to execute their strategy. Bungay describes this problem as a gap and advises how to close the gaps.

His assertion is that, similar to military campaigns in war, when a strategy encounters the real world, three types of gaps appear. He describes gaps in terms of expected results and reality, particularly related to outcomes, actions and plans. Gaps result from the complex and unpredictable environments that all organizations deal with and are made more severe by globalization. The three gaps are:

1. The Knowledge Gap - The difference between what we would like to know and what we actually know.

2. The Alignment Gap - The difference between what we want people to do and what they actually do.

3. The Effects Gap - The difference between what we expect our actions to achieve and what they actually achieve.

Based on knowledge as a historian of military practices, Bungay observes that a key to successful strategy execution is delegating more decision-making authority to managers and employee teams. 

Empowering Managers and Employee Teams

Bungay recounts lessons from the 19th century Prussian army. Following an unexpected military defeat, the Prussian military reformed its tactics. Lower-level officers were given more flexible command to make decisions. What mattered was that they fully understood the battle mission. Allowing the officer corps to make more decisions resolved a problem: The higher-ranked military leaders were from farther from the battlefield and less aware of the current situations. Officers could pursue local actions as they saw fit.

The Prussian army solution was the institutionalization of military genius with centralized and elite generals, and increased accountability of the field officers with rewards based on their performance and outcomes. This reform was successful, and the army conquered other countries.

In terms of today’s managerial methods, the parallels of the Prussian army reforms are the application of balanced scorecard methodology and the adoption of “Beyond Budgeting” concepts, first written about by Robin Fraser and Jeremy Hope.

The balanced scorecard’s primary feature is the development of a strategy map that visually displays a dozen or more cause and effect-linked strategic objectives. Using four sequenced components (referred to as “perspectives”), the linkages move from employee learning, growth and innovation to process improvement initiatives to customer loyalty objectives, which all impact the outcome of financial objectives. The KPIs reported in the balanced scorecard are derived from the strategy map. The KPIs monitor the progress toward accomplishing the strategic objectives and, with each KPI assigned targets, the foundation for accountability is established and alignment with the mission and strategy is achieved.

The “Beyond Budgeting” concept views the annual budget as a fiscal exercise done by accountants that is disconnected from the executive team’s strategy and is usually insensitive to forecasted volume and product/customer mix. It acknowledges that budgeting annual line-item expense limits are more like shackling handcuffs to managers; they may need to justifiably spend more than was planned for and approved many months ago in order to take advantage of newly emerged opportunities.

This method advocates abandoning the annual budget, which quickly becomes obsolete. It proposes removing the budget’s controls by giving managers the freedom of decision rights, including hiring and spending decisions without requiring approval from superiors. It invokes controls by monitoring non-financial KPIs against the targets defined by the executives in the balanced scorecard’s strategy map. Managers do not escape accountability, and there are consequences. The time frame is not annual, but rather dynamic. Historians versus Futurists

The message here is not that organizations should not be researching emerging and imminent new technologies and methods, like analytics and big data. The message is that granting decision rights to managers – but holding them accountable with consequences – is effective at closing the three gaps. And this is a lesson learned from historians.

Gary Cokins, CPIM (gcokins@garycokins.com; phone 919 720 2718) http://www.garycokins.com

Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and book author in business analytics and enterprise performance management systems. He is the founder of Analytics-Based Performance Management LLC, an advisory firm located www.garycokins.com . He began his career in industry with a Fortune 100 company in CFO and operations roles. He then worked 15 years in consulting with Deloitte, KPMG, EDS, and SAS.