Systems & processes for “Interesting Times”

Uncertain Times

Uncertain Times

No matter what your political views it seems clear that 2017 will pose some interesting challenges for businesses in general and smaller ones in particular. Whether it is fluctuating exchange rates, uncertainty about Brexit, the possible resurgence of a cold war, rising interest rates or a return to inflation there certainly seems more external elements likely to trouble a business in 2017 than in 2016.  Whilst it is unlikely that all of these things will impact all businesses… indeed some of these things may not happen, however it seems foolhardy to believe that none of them will impact.

With the first full week of 2017 it is a good time to review how some of the possible changes on the horizon may impact business and think about ways of adjusting systems and procedures to deal with them.
Back in times where currencies and inflation fluctuations were greater many businesses put clauses in their bids concerning exchange rates and inflation – these are particularly important when making long term commitments. It was also not unusual for even small companies to “hedge” against such movements. These sort of considerations are to some extent the easy ones the more challenging ones are those that impact the way the company works.

One of the things that can happen in uncertain times is that clients seek to change how they do business:-

  • they may ask for shorter or longer contracts changing the risk profile for your business.
  • they may seek quotes from a wider range of suppliers.
  • they may try to salami slice contracts – seeking quotes for ever smaller elements.
  • seek extended credit terms.

Suppliers can also do similar things usually:-

  • seeking shorter agreements so that they can review pricing more often.
  • tighten credit terms.
  • sneak in price escalators.
  • even link pricing to delivery not order date.

It is worthwhile considering how to deal with these situations in advance.

 

In my next post I will look at how metrics and KPIs can be used to identify business changes early and react to them quickly.

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Change …. are you ready?

Are you ready for change

Are you ready for change

Change is something that is often resisted or delayed in an organisation until there is no alternative.  When change is started, most of the effort is usually spent  thinking or designing what the change is to lead to.  Preparation therefore is often at a minimum, yet this misses a great opportunity.  An organisation that is prepared for change will start from a more solid base, and have a knowledge of and contingency plans to deal with pressure points throughout the organisation.

You can get a measure of an organisation’s readiness for change at any time, and as studies have shown those organisations which understand their starting point have a more successful outcome.   Change and culture have been a hot topic in business change fora for a while, and culture in this context can be difficult to get a handle on, but getting an idea of an organisations readiness for change depends on 4 things –

Which are:-

  1.  Senior managers/executives alignment – are their goals common or at least pointing in the same direction- do they agree on what success looks like.  Do they understand the current situation of the organisation.
  2. Alignment of other members of the business – do they understand how they can contribute to the success of the organisation and are willing to do those things.
  3. Systems and procedures operated in practice as they are documented, and do they have capacity to deal with extra load generated by change.
  4. Key procedures and systems identified and are metrics and controls in placed to rapidly identify problems.

Each of the above elements is important for different reasons:-

  1. For change to be successful it is important that all parts of the organisation are pulling in the same direction and as such it is very beneficial to have the heads of the major sections of the business to agree on the major elements for example:-
    target margin
    target market sector
    product offering
    “buy in strategy”
    key metricsOne of the most common divergences I find between different executives and managers is target margin, with finance people having a different target to general management and different in turn to those of the sales & marketing functions.  Any business that does not agree on what return it should be seeking for its products is not ready for change.

     

  2. Equally to be successful other parts of the business have to understand how they contribute.  If the business understands this when gauging readiness for change it is likely that the management team communicates effectively, and makes it easy for the rest of the organisation to make things happen.Members of the organisation can often get mislead on this sort of thing for all the right reasons.  Members of the business want to please customers because the “customer is king” this can lead to margin creep especially in bespoke product situations.
  3.  If systems and procedures in reality are different to those documented this is a red flag.  It tends to mean that the management team does not really know what is going on.  In practice this often indicates that there are problems that management has not solved and therefore people have come up with their own work around.  Thus the systems is broken and it is impossible to tell how things will behave when change is thrown into the mix.

    If people in the organisation are having to work around systems and procedures then it cannot be ready for change since the management and executive does not know what is really going on in the business.

  4. This is perhaps the most obvious readiness for change area, it is about the extra people in purchasing, the faster computers etc. but in reality if the procedures are not what they were thought to be a lot of effort in this area is useless.  Once the real and documented procedures are aligned then effective metrics for the key ones  (sales, sales margin, capacity, response times efficiency, client satisfaction etc.) help ensure that difficulties are spotted early.

    One of the commonest areas for overload is in costing and quoting.  Businesses in markets they understand tend to do few re-quotes, but when entering new market segments there is often a learning curve involving re-costing and re-quoting which results in overload.  Metrics can help identify problems quickly before they escalate.

Readiness for change can be measured at any time, and since we don’t always know when change is coming it is worthwhile keeping a handle on it within your organisation.

 

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Fertiliser & Communication

As organisations grow the once familial group starts to divide up into departments.  This makes perfect sense for structuring regular work, however they do form their own familial groups which can impede communication particularly in times of change.

As businesses grow departments form new "families"

As businesses grow departments form new “families”

A friend reminded me of a bit of doggerel which talks to this problem quite pointedly – I apologise for the some of the basic language inferences:-

++++++++++++++++++

In the beginning was the Plan.

And then came the Assumptions.

And the Assumptions were without form.

And darkness was upon the face of the Workers.

And they spoke among themselves, saying, “It is a crock of s@#t, and it stinketh.”

And the workers went unto their Supervisors and said, “It is a pail of dung, and none may abide the odour thereof.”

And the Supervisors went unto their Managers, saying, “It is a container of excrement, and it is very strong, such that none may abide by it.”

And the Managers went unto their Directors, saying, “It is a vessel of fertiliser, and none may abide its strength.”

And the Directors spoke amongst themselves, saying one to another, “It contains that which aids plant growth, and it is very strong.”

And the Directors then went onto the Vice Presidents, saying unto them, “It promotes growth and is very powerful.”

And the Vice Presidents went unto the President, saying unto him, “This new plan will actively promote the growth and vigour of the company; with powerful effects.”

And the President looked upon the Plan, and saw that it was good.

And the Plan became Policy.

This is How S@#t Happens.

++++++++++++++++++++++++

This is why it is always worth talking to a variety of people directly (not through the management chain) in order to get a better  understanding what is going on.

 

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When is Experience is a Disadvantage

Over recent years more and more clients have been telling me that they are seeking consultants with substantial experience in their business sector.  In many ways this is understandable, and even sensible, particularly if  the client is looking for help getting contacts or perhaps on how to enter a market.  However applying this same idea to engaging help in business improvement and change management could be a mistake; often someone who has a lot of experience of change and improvement rather than an industry expert is a better choice.  Business cartoon showing two businessmen sitting outside on a trConsider someone who enjoys racing their car at weekends… they don’t go to Vauxhall or VW to get the car adjusted for the track, they go to a race tuning specialist who has experience of getting the best out of a range of cars.  Even production car manufacturers will often go to a specialists in performance improvement to get the best out of their vehicles rather than use their own “experts” … for example AMG (now the performance arm of Mercedes) was an independent company until 1999.

Change and business improvement is mostly about doing things differently… in some respects that is easy… the more challenging part is doing the RIGHT thing differently so that the business achieves the change or improvement it is seeking.  Often the changes that deliver results are not obvious, either because they are buried deep in the business or sometimes because management has seen them everyday for years and does not see them any more.  It is often quicker for someone outside the industry to identify these potentially valuable nuggets of change or performance improvement precisely because

  1. they will start off from the basics and not discount areas that someone steeped in the technology or business sector might do.
  2. they will have to talk to people to try to understand the business and it’s problems rather than digging through reports.

Some years ago, on one of my earliest assignments, I was called in to a technology business that was having great success.  Its product was ground breaking and suddenly it was taken up by an industry leader with demand increasing 300% – unfortunately productivity was not matching demand and the industry leader (customer) was getting worried.  I was brought in by a senior manager who knew me from a previous career.  My client had already tried the internal project and industry expert route to try to get things moving but nonetheless received a lot of criticism for bringing in a non-industry expert to deal with what was “obviously” a highly individual  and maybe even unique problem.  Within a couple of months the business had increased output by 300% and as a result profitability was through the roof. The client was happy but the Corporate HQ was surprised at the speed of the turnaround from an industry outsider and  I was summoned to a meeting of the Group Board.  The Board Meeting was a heavy weight affair (many PhDs and even a Professor and a “Sir” if I recall), and I was asked by the CEO how I was able to do something that his very specialised team could not.   I was feeling pretty “fire proof” because of the results and told him it was because I was totally ignorant about his business process but knew how businesses in general worked and therefore had to start looking at things form the ground up.  I guess the reply worked because I got a contract to do a similar thing at another troubled division of the Group.  This second project was a completely different technology and market place, and did take a little longer (about 5 months) but similar results were obtained.

Ignorance can be a very powerful business analysis tool because it forces you to ask the really basic questions.  A truly ignorant contractor asks a lot of people the same or very similar questions.  By collecting these varying answers from people in different areas of the business it is usually possible to obtain a good understanding of the business and how people interact within it.  This, in turn, often points to where the problems lie.

The practice of  recruiting employees and consultants from the same or similar industries to either build a permanent team or help with a shorter change or improvement term project are missing a trick.  People from similar industries are likely to have similar responses to challenges and are unlikely to ask the “basic” questions which often have the most interesting answers.  Recruiting someone who has had success in a number of different industries might be a better choice to get to the bottom of things.

Diversity is Good!

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The Power and Danger of Stories

Talking to a friend recently we discussed the value of stories in communicating and marketing strategy and indeed its use in change management is, although there is a dark side to stories.

PrintThe power of stories in a strategic or project/change situation is that they link ideas and actions together and helps us make sense of a situation.  Humans have a strong need to control and in order to control some understanding is needed.  For leaders and managers to feel in control means they often try to build a story about situations they find within their business  (based on the maxim that understanding = control).  Unfortunately people are sometimes over eager to develop these stories and do so on too little data, equally these stories are often clung onto when new data points in other directions.  In addition the prevalence of stating a problem in terms of it solution… for example “if only the people on the shop floor could build it better……”  generates its own story with a ready made action plan, 2 for the price of 1 .  As the US marketing guru Seth Godin says:-

People don’t believe what you tell them
They rarely believe what you show them
They sometimes believe what their friends tell them
They always believe what they tell themselves
                                                                  Seth Godin

A  couple of clients I worked with a little while ago demonstrate this quite well:

The Capital Goods firm felt its problems could only be solved my M£1+ investment in equipment it felt to be the production bottle neck.  The budget was approved and ready to go,  but the lead time for the equipment was long and I was brought in to try and find a way of increasing output until the new equipment came on line.  As I and a small team dug into things a little more it was discovered that there was an unofficial re-work loop caused by a cleaning system.  We fixed the cleaning system (for about k£50) and output increased by 400% with no further investment.  Another firm that was eating through operations leaders due to their leaders conviction that all their problems were down to poor operational delivery.   A little study revealed that lax specification at the point of contract meant that the operations team had little chance to deliver on time and on quality due to vague and imprecise specifications – a little more rigor at contract time and warranty costs were cut by M£2.

The stories we tell ourselves and others are powerful,  they give us a feeling of control, make it easier to communicate with other team members and are a powerful spur to action.  However the links and investment human beings put into stories can result in us ignoring evidence that points in a different direction.  For example in the first case everyone in the production team  knew that as throughput went up product yield dropped dramatically however this was ignored because it did not fit with the “more capital equipment story”.  A little more thought led to a study of  other processes which were worked harder by greater throughput and this led inexorably to the marginal cleaning regime.

So whilst they can be highly motivating we should always be cautious of the stories we tell ourselves and be aware that they can result in us being less receptive to conflicting data.  The best defence against the “story blinders” is to get someone else to look at the problem, ideally from outside the business,   or be rigorous in the use of W. Edwards Demming’s  oft quoted maxim “in god we trust but everyone else bring data”

for more information contact  Robin Johnson or call 0794 1161321

 

 

 

 

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People like Sprinting to finish projects faster

One of the challenges of a project manager is to keep the project on time, and the weapon of choice is usually the project meeting.  I confess I have been to some mind numbing project meetings which review all the future actions, get every ones agreement as to deadlines and then…….the deadlines get missed.  Irrespective of the frequency of the meetings, the strength of admonitions to hit deadlines, the seniority of those delivering them …. the deadlines were still missed.

In my experience these problems are both rooted in lack of recognition of the human element.

In a small business the root is often the challenge of fitting the project or change initiative work around the day job.  Most jobs involve relatively short term work horizon (often a week or less) so  that project plans with time horizons of several weeks are out of alignment with the usual work patterns and soon get forgotten.

In a large business which can put dedicated people on a project the challenge is often  associated with the perception of risk especially if a person is being measured largely in connection with the project.    A Harvard Business Review Blog suggests short term actions are perceived to be more positive (and thus less risk) than longer term actions.  According to Carol Muller (in the same blog) positive tasks tend to generate action whilst more negative (longer term) ones tend to attract inaction.

So longer term actions seem to be a potential problem with projects and if one is to believe another blog only 20% of people do any serious planning in their own lives … so personal experience is not helping..

The solution to this challenge is to take an idea from the Agile

planning philosophy called a “Sprint”.  This is where the focus is on completing a project using a number of “Sprints”.  Each Sprint focusses on  tasks required over a short interval (a week or less).  When you combine a number of “Sprints” together perhaps for  different projects or sub-projects then you end up with something I  call   a “Control Room” and it can be highly effective..

A “Control Room” is a short 15-30 minute stand up meeting (often a couple of times per week) which focuses on the actions and co-ordination necessary for the “Sprints” over a relatively short period.  The idea is to explicitly list out the tasks to be done, identify and resolve any conflicts or road blocks and set priorities if required and perhaps most important … confirm completion of tasks from earlier “Sprints”    The Control Room works well to co-ordinate diverse  individuals (and groups) with differing “day job” pressures and where there are a number of sub-projects using the same resources,  although each business needs to find out the best time horizon for the Control Room to cover, long enough to make it worthwhile but short enough to engage people.  In it’s best implementation a Control Room also keeps the end objective visible to all and to this end a white board and a set format can be helpful.

Click to Enlarge

Click to Enlarge

By keeping the time horizon short the immediacy is high and tasks tend to take a bigger share of people’s minds.  The format also gives the same satisfaction as ticking items of a ToDo list by generating small, encouraging wins as each task is completed. A Sprint or Control Room does put more emphasis on project managers and leaders keeping the longer horizon items organised, but if the project is running to time this is usually not arduous.

Using Control Room type techniques Business Transformers Ltd has regularly halved project duration and cut costs by 15-20% , in multi-project custom build environments, whilst increasing individual and team satisfaction.

Sprints or Control Rooms might add a little work for project managers and leaders, but they are often more understandable and engaging for the individuals that actually have to do the work!

 

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Why individuals make or break change projects

I was at a business services launch over breakfast a couple of weeks ago  – a couple of hundred people and quite good bacon rolls. I talked with a couple of dozen people and was surprised by the number whose organisations were having difficulty implementing change. They talked about staff briefings,status updates and organisation changes, it all sounded very good but why were they reporting poor people engagement and low enthusiasm.

In project and change management it is common to focus on new equipment, changed work flows,  new procedures  etc., and it easy to consider the people involved as another part of the machine.  We often re-enforce this view by communicating on a team or group level, and this is a good way of ensuring people all get the same message,

Connected puzzle pieces form a circle but one is of different color

Teams are made up of individuals – teams change when individuals change

however we should not forget that teams and groups do not change the people within them do, so we have to be able to build enthusiasm with individuals in order to make teams and groups enthusiastic  and contribute to positive change.  Organisations have more options today to communicate on a near one to one level with the members of their company than ever before.  However it is difficult to imagine a more effective way of encouraging enthusiasm and commitment to a project than a 1-to-1 conversation with an enthusiastic and informed person.

In a large organisation this involves generating a group of  (I hesitate to use a much abused word) “champions” who can engage in such 1-to-1s  and feed back any new concerns to the central team.  However in a smaller organisation there is no reason why the senior member of the organisation cannot do this role themselves and perhaps improve on the results of a Yankelovitch & Partners study in the US that noted “63% of employees feel that their managers did not know what motivated them”

 

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The Plan – be Agile

The Key to a Project Plan - Keep moving forward and adapt to obstacles

The Key to a Project Plan – Keep moving forward and adapt to obstacles

So far in this series of blogs we have taken the definition of the project goal for granted and  looked instead at the start up of a project; understanding where the project is starting from and how to gauge progress toward the identified goal.  You may have noted how each of the steps we have looked at so far has a significant human and communication element and as we move on to the Plan it may be no surprise that this continues.

The project plan is often seen as a highly technical exercise of identifying EVERYTHING about the project and allocating it a time and someone to do it.  This is a bit of an arrogant view particularly if the project has multiple contributing groups with their own critical expertise and knowledge.  Choosing the level of detail in which you plan a project is critical – over plan and not only are you doomed to long hours of correcting adjusting and updating the plan, but you risk loosing any enthusiasm of your teams by coming into the drawing office and asking ” the pencils were supposed to be sharpened by 8:30 – have they been done” (OK that shows my age but I cannot think of a digital equivalent).  Equally if the plan omits major elements you could find the whole thing running dramatically over budget and time.  So what is the top level plan for?  I would suggest it is to:-

  • Identify major deliverables/desirable outcomes
  • Identify Major Risks/Critical Items(within each work block)
  • Allow effective co-ordination and communication between different groups (particularly what will be passed over and when)
  • Allow a timescale to be defined for delivery and tracking.
  • Allow a budget to be generated for approval and measurement.

The last one is interesting and is the major victim if the planning is in the inappropriate degree of detail.  From a motivational point of view getting the degree of detail correct is key – too much and contributing groups feel they are being over managed and too little and they feel that management is not taking the project seriously.  People’s commitment to a project is critical after all they are doing the work.

A good method for getting the level of detail is to focus on the above items in order with the groups involved.  Start by planing the risky activities and critical items and allow the routine to be other things to drop into “other activities” simply as a to-do list with a resource allocation which has got to be completed by a certain time.  Then consider the co-ordination activities within groups such as work handover etc.  This method expects Group Leaders to fit in the to do list items when it seems most appropriate – so if the critical or risk activity is delayed for some reason the team can get on with the to-do list, equally if there is the opportunity to take advantage of an unexpected occurrence (eg. early availability of test equipment etc) the team can plough on with the risk/critical activities and push the to-do list back a little.  The over-riding aim of the plan is to hit the group co-ordination deadlines since in my experience it is these “hand-offs” that cause the most delays and disputes in a project.

By using the above techniques you are implementing one element of what is called Agile Project planning.  This type of approach helps to ensure commitment from the groups involved and also results in a less “top heavy” plan, by just planning the critical items and leaving less critical issues to be organised within the groups.  Many project planning systems including MS Project have methods of dealing with this sort of approach by allowing sub-projects (controlled by the groups) to be defined within an overall project.

So talk to your teams and try this type of slimmed down Agile planning you may find it useful and we will talk about some of the other elements of Agile in later blogs.

 

 

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You cannot manage what you cannot measure…

Man measuring distance with caliper

“..you cannot manage what you cannot measure…”

In the last few blogs we have tried to give some insight into the starting point of a change or transformation project and also some ideas on how to get under the skin of the organisation and understand what is ACTUALLY going on.   The aim is an improved understanding of change requirements and getting change projects of on the right foot.  Change is a processes  and it is equally important to understand where the project stands at any particular point so that one can understand whether the plan needs modification and also to provide encouragement to stake holders in the project that things are being achieved.  As W E Demming (one of the architects of Japan’s industrial renaissance in 1950s & 1960s) is reported to have said “….you cannot manage what you cannot measure…”

Many of the project management software packages have a facility to track progress often  indicating 50% through this & 25% through that – this feels like a measurement of progress, but it seldom is.  Often times it is more a measure of % of planned time expended rather than a measure of project progress.  A better way I believe is to measure completion of some element eg.  “when we have the equipment on site” or “when we have completed the first transaction” or when “first item is shipped to customer”.  These are binary points – they can only have been achieved or not so that there is no ambiguity, in addition they are real achievements which mean something to those involved in the project.

Some projects particularly those associated with changes of business culture and approach are more difficult to measure.  The ultimate aim is surely to make a better business in terms of turnover, profit, customer satisfaction etc but these are not too good at measuring cultural changes in a business.  There are of course no direct measures, but there are some that can be used to give some indication:-

  • People coming in a little earlier and leaving a little later.
  • Meeting room use.
  • E-mail traffic

When working with a high tech business one of the challenges was a silo mentality between the different technology groups, one of the metrics used by the executive was to take snapshot views of how people mixed between departments on lunch tables in the canteen.  It was assumed if people in different departments mix together at lunch then that should improve communication and thus generate a more open and communicative structure.  This proved to be so since as mixing at lunch tables increased, e-mail traffic dropped and the number of “information” meetings dropped.

 

Measurement is Important!

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“What have you got on today..” the office equivalent of “Management by Walking About”

A recent post was about why business projects, especially business change projects, fail when there is so much written about how to make them work. In my view one of the major problems is that studies report over 60% of organisations do not adequately understand where they are starting from. This lack of understanding can be the situation within the company, within its target market or within society as a whole and there are a number of tools – most commonly SWOT (strengths, weaknesses, opportunities, threats) or PEST (political, economic, social, technological) plus a load more including PESTLE which adds legal and environmental to PEST. All are good tools, if often a little “Big Picture”, to try to get our heads around where the business sits. However I would suggest that there is another much neglected way of getting a handle on things particularly within the business and that is to use our ears.

Many business leaders do not make enough time for casual conversation as a way of getting an understanding of the business. Perhaps an example would help:-

A few months ago I was asked to do labour efficiency study at a company (one of my pet hates because they so frequently start from the assumption that the people are the problem and I seldom hold myself to such narrow briefs). I make it a policy to talk to as many people as possible within an organisation, and to split the conversation into “casual” and “work”

Businessmen talking while walking with bicycle outdoors

Casual conversations frequently supply information not easily obtained in any other way

– often the casual is “I need some time with you today – what have you got on – when can I fit in”. It is amazing what you learn. At this particular company I was talking with the sales team (I said I don’t hold myself too rigidly to briefs) and a couple of the members of the team said they had to do re-quotes to customers. I found this a little strange since the organisation felt it was extremely close to its customers. As I love to measure I had a look at the quote database and found that at over 50% of jobs were re-quoted at least once and around 25% were re-quoted more than once. Taking things a little further, when I met a customer of my client I also asked them “what have you got outstanding with my client” and surprise surprise they said a re-quote.

There could be a number of reasons for re-quotes all worrying to a greater or lesser degree.

At a conclusions session with my client I asked them what made them think they were really close to their customers – and got the usual “love stuff” – I then caused consternation by reporting my examination of re-quotes and suggested that something was going on that the business did not understand. After things calmed down and some discussion it was agreed to try to understand the issue better by collecting data on reasons for re-quote and as a result a program to encourage a fuller understanding of customer “wants” was put in place. A few months later not only are the sales department doing less re-quotes, but more business is being converted presumably because end customers are not throwing outlyer quotes straight in the bin.

So in my experience it is worth senior managers setting aside non-task related chat time (around the coffee machine or when greeting people in the morning) and asking casually – “what have you got on today” – it could end up with a better understanding of business improvement opportunities.

 

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