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Sunday, 18 November 2018

Driving Excellence in the Business? It’s More About Driving Change!

In the early days of my career I was allocated to the Inspection Department of my employer, a major aircraft manufacturer in Manchester. My tasks consisted of checking random components against the appropriate specification and either passing or failing them.

Depending on the failure rate we could then either pass or reject a whole batch of items.

It was very simple but it did give me an insight into the need for quality across the board.  Obviously if a component on an aircraft failed the results could be catastrophic.

We used all the old type equipment, surface tables in cast iron or granite and a wide range of physical measuring equipment like height gauges and callipers that had to be calibrated against a regular schedule to ensure consistency.

Everything was laboriously recorded to set up a paper trail so that we would have a record if anything went amiss.  How things have changed.

My early experience was in inspection leading to quality control and the responsibility for compliance rested with the inspectors whose word was law.

The system was reasonably effective albeit cumbersome and inefficient and as time passed there was a realisation that random batch inspection was not an acceptable method.

Both manufacturing methods and measuring equipment improved enormously and it became feasible with advanced technology to ensure that as components were manufactured, they were automatically inspected and the machine adjusted itself if necessary.

This was a new departure called quality assurance in that batch checking was no longer necessary as every component would be compliant.

In the early days of QA I heard a story of a UK company that ordered number of components from a Japanese supplier and stipulated that the failure rate must not exceed 1%.

When the shipment arrived there was a separate bag included carrying a number of components and when this was queried the buyer was told that they were the 1% rejected items that had been specified.  We only supply correct items that are cleared to 100% of specification, they were told, so we had to make the incorrect ones separately.

Perhaps this story is apocryphal but it does emphasise  the changes in attitude that spread throughout manufacturing.

Attitudes can be catching be they negative or positive and it is no longer sensible or even feasible for a manufacturing section to operate in an ineffective and inefficient organisation.

The consequence is therefore is that quality, per se, or preferably excellence becomes one of the most significant values espoused by a business and needs to be at the centre of everything that the business projects to its stakeholders.

We must dedicate everything that we do to the constant drive to achieve excellence in all aspects of the business, small and large.

Renowned US consultant and spacer Tom Peters, says:

Excellent businesses don't believe in excellence, only in constant improvement and constant change.

The point is that excellence, like perfection, is unattainable so  we should embrace the need for constant improvement brought about by change.

The pursuit of excellence is a journey not an objective.

We live and work in a competitive environment and this must never be equated to price.  There are many other criteria that persuade people to deal with us and price is only one of those reasons.

Check how excellent are you in terms of customer service for example, how quickly is the telephone answered (no more than three rings) , do your people tell the truth (I’ll call you back in an hour and then don’t).

The best people to ask about our service are our customers.  Check on how your people relate to them, what changes do they (the customers) want from us, how satisfied are they with us.

Send them a regular three-question survey (like Amazon) and then send them the results and any action you propose to take.

Remember, we don't have to be sick to be better so we must constantly embrace constant change to achieve an ever higher level of excellence in everything we do.

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Sunday, 11 November 2018

Forecasting the Future? You Can Only Be Wrong or Lucky!!

One of the most contentious issues that leaders encounter is that of forecasting, both financial and generally commercial.

Leaders in business are bombarded on all sides by learned so-called experts with their  strictures on the absolute necessity to plan for the future and no sensible argument can be found against it.

Going blindly into the future is not a very bright idea but it must be accepted that there is a significant difference between planning and forecasting.

Planning involves the generation of an amount of data relevant to the business in the relatively short term, considering it in total and then making some assumptions that can lead to a reasonable level of confidence.

It should be noted that planning and the setting of objectives is done with intention; that is, an intention to give the business a structure for the future however short or long that might be.

The word ‘objective’ in my lexicon implies that which we intend to achieve and is not a forecast except in in a limited  descriptive sense.

The planning process therefore includes assessments of potential sales and income, possible changes in costs of supplies generated from scrutiny of published information, and possible effects of PESTLE (political, economic, sociological, technological, legal and environmental) changes that are outside our control in the wider sense.

It is perfectly feasible, for example, to look at the past performance of the business covering as long a term as makes sense and then use spreadsheet technology to calculate the average change using linear regression analysis.

This will overlay a straight line growth or decline average on the plotted graph and this can be extrapolated to give an indication (and no more) of what might happen in the near future.

The problem then arises as to how much further can this be expected to be realistic.   In general terms given, say, a 3-4 year monthly rolling annual plot of sales it would not be sensible to assume much more than a few months.

Good planning for the future makes absolute sense but it must be constantly understood that the underlying results will always be based on uncertain information, that is, what will the future look like?

On the other hand, however, the very process of forecasting is based far more on PESTLE criteria and as a consequence, is subject to much more uncertainty.

My great friend and top Vistage speaker, behavioural economist Roger Martin-Fagg says with much perspicacity that when we forecast there are only two alternative outcomes; either we are wrong or we are lucky.

Most of the polling organisations in the UK use a weighted sample of around 1,500 respondents to come to what they cheerfully would call a conclusion about voting intentions.

Sampling theory is a science on its own or at least within the science of statistics and it can be shown that after a certain time and number of responses, there is virtually no change in the results.

The clues are in the words”weighted” and “virtually”.  The weighting of the sample covers age, gender, socio-economic considerations and much more and it is obvious that a very minor variation in the assumptions could lead to a major variance in the results.

Accordingly most polling companies publish their finding without mentioning that there may be anything up to +/- 2% error.  Is it any wonder that their conclusions can be viewed with some scepticism.

We are being battered on all  sides by so-called experts pontificating on the malign (they are always malign) effects of what is going to happen in their estimation but once they have pontificated, no-one remembers what they have said and in truth doesn’t care very much.

If I hear another gloomy prediction about the dreadful consequences of a no-deal Brexit I shall have to be very cautious not to want to put a brick through the TV.

Treat every forecast, considered or otherwise, with the respect it deserves.  Remember that it is only guesswork in the end.

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Sunday, 4 November 2018

When Should We Start The Sales Campaign? It Should Have Started Ages Ago!

Many years ago I started my own business consultancy practice and was very fortunate to be able to secure two or three client’s business in the first couple of weeks.

Looking back I am not really sure how this happened but it served me well and for the first several months I was kept very busy.

However, to coin a cliche, all good things come to an end and the contracts did the same leaving me with happy memories and not much else.

In something of a panic I went to see my Bank Manager (remember when we had Bank Managers?) who looked at me with some surprise and said: “What’s your problem?

I explained that while I had been gainfully employed for the past several months I would be short of work in the immediate future and this was an initial warning.

Much to my amazement he brushed my concerns aside saying that if I could again secure business like I had then he would have no issues. This cheered me up and reassured me that I was doing the right thing.

Of course, I wasn’t doing the right thing.  I had fallen into the trap of unwitting complacency and that can be the death of small businesses.

The one thing that I had done during my busy and productive activity was to forget the great lesson that sales and marketing can’t just be turned on and off like a tap whenever we need business.  It is a never stop activity and needs to be viewed as such especially when we are busy.

A great friend of mine (George) was a partner in an engineering design business in Liverpool and was also regarded as the person who generated new business.

However they were always in the complacency trap and that resulted in his partners, early one Friday afternoon, pointing out with some asperity that all the work was running out and they had thirty or so mouths to feed.

Suitably admonished, George made immediate arrangements to go to see one or two of his major contacts to see what could be achieved.

His first visit was successful. The contact told him that they had been trying unsuccessfully to design some tooling and as George reassured him that they could rely on their experience to solve the problem he happily passed it on.

On his way back to the office George popped into the library and took out a book on tooling design that could help with the project, one that was completely new to them.

Of course, it was successful and the client was delighted as were the partners to have such a prestigious contract.

Luck?  Of course it was but just consider the alternative. It was a situation that could have been a disaster as easily as a triumph.

Last minute solutions made under pressure are usually undesirable mainly because the decision is likely to be made emotionally rather than rationally.

It strengthens the realisation that one of the most desirable attributes of any company is that of a sensible pipeline of orders is very desirable. It removes or at least diminishes the feeling of panic that results from an uncertain future.

I recall an occasion when a possible consultancy client called me in to discuss their difficulties.  I asked him how the problem manifested itself and he said:

The phone has stopped ringing

and that summarised the whole position. There was no conventional marketing, they were unaware that Far Eastern competitive imports were flooding the market, they had no promotional material or indeed any formal sales activity and overall were in a downward spiral.  They just sat and waited for orders to come in as before and they didn’t know what to do when they didn’t.

The answer is to be thoughtful and rational. It is not sensible to undertake a strategic plan without an underlying marketing plan. It is that which will consider and hopefully establish the sales line of the strategy which seems to me to be a fairly sensible starting position.

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Sunday, 28 October 2018

What is Your Management Style? Don’t be a Hammer!

There was a period of time in my career when I had a role as a visiting lecturer at Manchester Business School and was primarily involved in presenting to groups of Chief/Senior Executives of SMEs.

One of the subjects was Management Style and I realised pretty quickly that with twenty or so top people in a wide range of businesses in front of me,  I had fertile ground on which to enhance my own knowledge of how people manage their companies.

Since that time it has become evident that management styles have changed or at least are becoming more collaborative and inclusive.

Of course, this is not a surprise.  The norm years ago was that of the “boss” who laid down the law, who directed pretty well everything in the business and who brooked no dissent or challenge.

It was the era of authoritarianism and overall, it sort of worked.  It wasn’t particularly popular or attractive but if it worked then the business flourished and people were gainfully if not particularly enjoyably employed, then there wasn’t much to cavil about.

Things have, of course, changed dramatically since that time and there is less talk of “management” and more of “leadership” with all its ramifications.

Naturally some of the old habits die hard and some leaders still find it difficult to trust their people completely.  The situation can and does arise where the leader who has been reading all the right books and listening to all the right speakers, suddenly has a rush of blood to the head and decides that a task is far too important to allow anyone to accomplish it without total direction.

The hard fact is that if we think like a hammer, after a while everything tends to look like a nail.

This is the time when the leader decides that whatever is happening, it is far too important to risk some underling taking responsibility and achieving something as a consequence.  Rather the leader feels it necessary to dive in, take charge, exhibit some heroic leadership and solve the problem for all to see and wonder at.

It is the hammer/nail syndrome at work and it is toxic.

It contributes nothing to the level of trust (in both directions), nothing to the desire of people to learn, to take responsibility and subsequent action, nothing to any feeling of self-esteem and usually very little to the likelihood of a successful outcome.

The old form of conventional management structure was a triangle, apex uppermost, with the leader at the apex and the troops across the base.

This is the conventional top-down structure with the “boss” atop the whole triangle and from which all things emanate.  It is the “I pay then to work, not to think” attitude that sadly has not entirely died away yet.

If however we rotate the triangle so that the apex points downwards and the base is now at the top, great things can ensue.

For example, it has been wisely said that the most important people in the business are the customers so it makes sense to place them at the top where they can be properly cared for by the people who are tasked to serve them.

That means that the leader is now at the bottom of the pile and instead of directing events, asks that wonderful and incisive question, “What can I do to help you achieve success for the the business, the community and yourself?”

In other words the role of the leader is not as a hammer to batter any nail that is around, but rather is in a supportive role that offers responsibility, decision making and action to those who are prepared to accept them.

Trust the people.  Don’t batter them down with instructions and them complain if something goes amiss.  Steve Jobs said it is madness to appoint great people and then tell them what to do. Better we should expect them to tell us what to do.

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Sunday, 21 October 2018

Want to Reward a Team Member? Try the ABCD Route!

Some years ago I was in the reception area of one of the members of my Vistage CEO peer group passing the time by reading what had been posted on the wall for all to see.

Most of it was local interest apart from one small range of certificates that took my eye.

Each one was headed ABCD and praised the mighty efforts of a member of staff who had apparently gone out of their way to satisfy the customer and thereby the business.

Intrigued, I questioned the member who told me that the idea had been started by a major supermarket customer who had appointed one of his team to their ABCD award scheme.

It means:

Above and Beyond the Call of Duty 

and is restricted to those who had genuinely gone out of their way to achieve a completely satisfactory outcome of a task.

It did show, apart from being a very good idea and as far as I could see an excellent motivator, that some supermarkets do have a heart as well as deep pockets.

My member had taken the idea on and had started to use it to publicise and compliment those who had taken responsibility, had made decisions and had gone ahead and done something admirable to satisfy a customer.

He mentioned that on one occasion a member of the administrative team had, on her own initiative, stayed very late to ensure that a very urgent problem was solved for a customer.

He, accordingly, had sent her a hand written card, a bunch of flowers and a voucher for two at a restaurant in order to say “Thank you”.

Six months later another member of the team was at the recipient’s house and noticed that the “thank you” card was still on the mantelpiece.

We underestimate the power of praise and thanks for a job well done.  Yes, I know that people are paid to do a job and as such, should perhaps put themselves out occasionally when the situation demands. However, this shows that a little courtesy will never go amiss.

I make no apology for mentioning yet again the work of psychologist, Frederick Herzberg, of the University of Utah (19230-2000) who in essence postulated the distinction between positive and negative motivational factors in the workplace.  

Examples of the negative factors are salary, workplace conditions, relationships with line managers and so on, while the positive factors are:

  • Achievement
  • Recognition
  • Work itself
  • Responsibility
  • Advancement
  • Reward

These are factors that are the responsibility of the leadership and if that is the case, how much time and effort do we put into making sure that they are all available for our top people?

Please notice that reward is listed somewhat as an afterthought.  It does not imply that financial reward is a positive motivational factor, anything but.  It does however show that the right form of reward in terms of praise and recognition can have a dramatic effect.

In the end we want happy, satisfied, committed and enthusiastic people in the business.

The culture therefore must be angled towards the needs of the people who work in the business and frequently know more than the leadership knows about what actually goes on.

In the Nissan car factory there is an enormous board with the names, photographs and learning achievements of people on the assembly line so that anyone, internal or external, can see the quality of the people in the plant.

If we recognise exceptional effort or service and make sure that everyone knows about it, then the culture will change.  People will take on responsibilities, will make decisions and take action as they think right and will as a consequence gain far more than just having a job. It used to be called job satisfaction.

There is a vast shortage of good people in industry and commerce right now in the UK and anything that we can do to promote and/or recruit great people can only be for the good.  Moreover that sort of culture means retention of good people is strengthened and that can only be to our advantage.

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Sunday, 14 October 2018

Retweet, Like, Share? We Need More Meaningful Feedback!

Social media has led us into the mistaken belief that "retweet", the “like” and “share” are genuine feedback whereas they are not much more than the “mine is bigger than yours” syndrome.

In much the same vein all my members give numerical feedback ratings and comments on the speaker’s presentation as well as their satisfaction with their Vistage experience.

I always emphasise that while the numerical assessment is useful, the real feedback of value will be found in the comments.

Trawling back through an archive of more than 500 blog posts I was slightly surprised (and pleased) to discover that I had not posted a blog on the subject of feedback.

Pleased I was because after nine years of Ivan’s Blog finding new and different topics is becoming more and more taxing.

It is always a pleasure to have feedback on the blog and I enjoy wading past the spam comments to discover what my readers really think about it.

If I am called upon to give feedback to one of the members of my Vistage CEO peer group then I like to give it some thought before committing myself.  The point is that feedback can be anywhere on the destructive/constructive continuum and pitching it correctly seems to be a black art.

Feedback, obviously, can be destructive if,as happens so frequently, it is tinged with reprimand.  On the other hand it is said that we learn more from our mistakes than from our successes. How then as leaders can we pitch the feedback to be honest without being destructive and wholly negative?

I am a great fan of TV cookery programmes one of which is The Great British Menu where chefs compete for their dish to be selected for a major culinary event.

In the early stages three high end chefs are judged by another usually veteran on each of their dishes and the feedback (pardon the pun) can be both hugely complementary and/or brutal.

Take a look at the delivery of the judgements and learn how not to give feedback.  Typically the judge will say something like “I loved presentation, the sauce was delicious, there was a range of textures.......”. and then comes the killer word, BUT...followed by criticism.

The reaction of the chefs being judged is fascinating. Their body language is there for every viewer to see, going from pleasure and surprise to misery as soon as they hear the dreaded BUT……

I accept absolutely that this is an artificial environment but just ask yourself, how often do we give feedback like that?

Most good feedback, if it is totally honest will have negative and positive components. Not many people come to a one-to-one to hear nothing but praise or nothing but complaints about their attitude or behaviour.

We are dealing with complex organisms called people and we need to adjust our input to cater for the many and varied aspects of their (and our ) needs.

However on a simple note remember the chef example. Consider whether we should start off with praise or the need for improvement.  Solicit their feedback on a regular basis so that we, as leaders, can better understand complex situations that inevitably arise.

Above all, if we give critical feedback then we are entitled to expect a change in attitude and/or behaviour which will be checked on a regular basis.

Psychologist Frederick Herzberg suggested that recognition and reward by praise are major factors in motivating the team whereas other factors such as salary and the working environment have little or no effect.

Simply because as leaders we are expected to offer a motivational environment to the team we can use feedback that is evidence based to help people to change.

There is no other satisfactory way. We can’t change people or even expect them to change unless we give them an environment in which they can change IF THEY SO DESIRE.

Great, honest feedback is the best starting point.

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