Motorola's Innovation Problem

Clayton Christensen

Jack Gold, J. Gold Associates 02.01.08, 5:15 PM ET

Schaumburg, Ill.-based Motorola just announced that it is exploring options to renew its financial health, including possibly selling its mobile-handset business. Despite Moto's many problems, I don't think this makes much sense for a number of reasons.

Motorola is having some significant problems in the cellphone market, and has been for some time. Moto seems to have lost its motivation to innovate. The introduction of the RAZR line of handsets took the market by storm with its unique form factor and ergonomics. It was a come-from-behind product when Moto was down in the market. But that was several years ago. What has Motorola done since that has caught on in the market?

Meanwhile, Nokia, LG, Samsung, etc. have all moved on, competing with Moto and offering new enticing products that have built market share. Even Research in Motion's BlackBerry has gained market share at the expense of Moto. Motorola is now seen as the boxy car company while Nokia is seen as building sleeker sports cars (along with LG and Samsung).

And that is Moto's biggest problem. The company needs to come up with a winner to follow the RAZR, and it hasn't. Further, Motorola has a disjointed product line at this point, with hundreds of different phones, different styles, different operating systems (OS) and even different user interfaces, and most of them not very competitive. It needs to consolidate around a few efforts and take them forward in a concentrated matter, rather than trying to be everything to everyone and not doing it very well.

As for competitors and general strategy, Moto has a real problem, and not just from Google's new Android consortium (of which it is a member) or from the sleek iPhone from Apple. It just has too many platforms! Motorola currently has or is working on Symbian, Linux, Windows Mobile, Moto proprietary, Linux and soon Android operating systems. That's way too many to manage and creates a dilution of precious resources. No wonder it has so much trouble building a compelling product!

However, Motorola does need to play in the Linux space, as open source will be a major component of the emerging markets. But users could not care less what the OS is (do you know what the OS on your phone is?). What they want is functionality and ease of use. No one really cares what the OS of their car is, or of their DVD player or HDTV. It's about usability and functionality. That is why the iPod did so well--no one asked about its OS, but loved its functionality and the way it fit into their lifestyles. That is the puzzle piece Moto is currently missing.

But splitting off its cellphone business seems pretty drastic, like cutting off all your arms and legs. What would Moto be without the phone business, which represents the majority of its revenues? I could see potential spin-offs of some of the other businesses the company has acquired recently (like Symbol or Good Technology, which are actually making money and could generate significant cash). It was a good move to make when Moto was in better shape, but investing management time to make sure those and other businesses succeed when its core business needs so much attention may not be a good idea.

Regarding the speculation about its phone business spin-out, I suspect the statement was really made more to relieve pressure in the system than anything else. I would be shocked to see Motorola do it, but saying it is thinking about it allows the company to stifle some stockholder criticism. And I can't see anyone wanting to buy the business. Many companies are exiting the cellphone business, saying it has become too competitive and too hard to make a profit. The majors (Nokia, Samsung) probably wouldn't want the Moto business, and the smaller players (Kyocera, Huwai, etc.) probably couldn't afford it.

So I think the long-term effect is that Moto will have to rebuild its business and get its act together. In the short term, it may help Nokia somewhat. Bottom line, I don't see anyone coming along to pick up Moto's handset business in its current state.

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How to Optimize your Inventory

 

Managing inventory in the supply chain is critical to ensure high customer service levels. However, it is also a very costly asset to maintain. Having the right amount of inventory to meet customer requirements is critical. Find out what inventory best practices reduce inventory costs across the supply chain.

Here are 4 solutions to help keep you on top of your inventory.

• Eliminate Dead Stock
  Dead stock is 'stuff' that has been lying around for ages. I worked for a high-end clothing retailer and they sent out all of their unsold seasonal merchandise to a clearance store, marking down prices by 70%. If it did not sell there, it was shipped to an off-site warehouse (because the main warehouse was full!) where it was checked, labeled and inventoried into the system. Massive amounts of paper reports were generated and kept in logs. The merchandise sat there for one year, where it was brought out and transported back to the clearance store. Once again, if it did not sell it went back to the off-site warehouse. I even remember seeing polka-dot dresses from the 1970's in there. Even if some of those items were sold at 10% of the retail price the company would not make a profit. Smart retailers like The Gap and H&M have a markdown policy that clears merchandise in the store – no need to transport it and inventory it for many years. Make sure that you have a pro-active policy that clears dead stock.
• Perform an ABC Analysis of your Inventory
  Pareto's Law, otherwise known as the 80/20 rule applies to Inventory Management. For example, 80% of your sales are represented by 20% of your items. Let's look at a hypothetical situation for a full-service food warehouse with 40,000 SKUs. Please refer to the the "ABC Analysis" table below.
  Only 5,000 items represent 75.7% of the annual sales volume. These SKUs are classified as 'A' items. They may include items such as milk, produce, bread and snack foods. To ensure a high level of customer service, it is imperative that these items have a high in-stock level. From a management perspective, it's sensible to keep low inventory of 'A' items and arrange for frequent replenishments, reducing capital requirements. Conversely, the strategy best suited for 'C' items is to holding inventories and looking at other alternatives such as stockless buying (discussed next). As 'B' items fall in between, they should be reviewed less often than 'A' items, however if they are 'key' items that consumers want, must be treated like 'A' items. For example, a young mother will want to purchase diapers for her new-born along with milk & bread, but if diapers are a 'B' item it must be treated as an 'A' item to ensure high customer satisfaction.
• Arrange Stockless Buying / Systems Contracting
  A good way to understand how this arrangement works is with an example. A small boat manufacturer requires fasteners & rivets to make boats. These are small-dollar value (i.e. 'C' class) items, however having the right sizes and quantities in inventory is essential to keeping on track to the monthly production schedule. Rather than buying large quantities of these items (and risk obsolescence with future design changes) the boat manufacturer arranged a stockless buying arrangement with the fastener supplier. This is how it works: The boat manufacturer would share its monthly production schedule with the supplier. The supplier is then responsible for ensuring that an adequate supply of materials is available at the manufacturer' s facility. There is a special secured area in which the supplier keeps the inventory. When a requisition request is generated in the manufacturer' s system, it allocates inventory to production. At this point an invoice is generated and the manufacturer pays for the materials it used. This introduces beneficial process efficiencies into the management of purchasing and inventory functions for both the manufacturer and the supplier.
• Vendor Managed Inventory Systems
  Vendor managed inventory (VMI) systems have placed the responsibility for the replenishment function to the vendors. For example, Heinz, a manufacturer of ketchup, will arrange to have its products available to its customers (grocery retailers, mass merchants, etc.). They will monitor sales and send the right quantities at the right time to ensure consumers will find Heinz ketchup on store shelves. The purchasing/order processing functions are more streamlined, allowing the management team of Heinz's customers to focus their efforts on other areas. VMI has evolved to Collaborative Planning, Forecasting and Replenishment (CPFR), which included additional partners in the supply chain. Wal-Mart, a world leader in CPFR, has its own proprietary system called Retail Link, which gives all of its suppliers information on product sales history, inventories, in-stock percent, etc. across all of its retail locations over the last two years. Suppliers are responsible to maintain an in-stock level of 98.5%. The relationship works both ways. Wal-Mart provides this information for free to help its suppliers; however their suppliers must meet the 98.5% in-stock level if they would like to remain a Wal-Mart supplier.

Use the above four solutions to reduce inventory costs in your supply chain. One of the few remaining ways to drive down inventory costs are a result of organizations becoming more collaborative and sharing their data across the supply chain.

ABC Analysis

Number of Items	Percentage of Items	Annual Sales Dollars ($000M)	Percentage Annual Sales Volume	Classification
5,000	12.5%	26,500,000	75.7%	A
10,000	25%	6,250,000	17.8%	B
25,000	62.5%	2,250,000	6.5%	C
40,000	100%	35,000,000	100%	Total

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Implementing an ERP System

 

Your organization has decided to implement an Enterprise Resource Planning (ERP) system. Whether the driver for change is that the current Legacy system is out-of-date, cannot handle the volume or is causing customer service issues, it is imperative that your organization not fall into the trap that plagued hundreds early ERP adopters. Here are a number of steps to a successful implementation as well as issues to avoid which may lead to failure.

Steps to Success

1. Create an Implementation Team
   This team should be composed of 10-15 people in the organization that are identified as the best people in each area. Quite often Jim from Marketing is not put on the team because he is 'too busy' with driving sales, so John, a recent hire, is put on the team for fill this role. John, of course, is still learning how the company operates and is not the best candidate for the team as he has limited knowledge of processes within the Marketing area. The implementation team should report to a steering committee in the organization, which is a group of the highest level executives that have authority and responsibility for the success of the project. The steering committee should act as a guide to ensure that the timelines and objectives of the implementation are being met and to remove any roadblocks that the implementation team experiences.
2. Document Processes in all Functional Areas
   The implementation team should then document all functional areas that will be on the ERP system. This includes Finance, Sales / Marketing, Operations and Human Resources. The team should create a process map for each area. In addition, ask employees in different areas what they like best about the current process, what they dislike and what would make things better. Not only is valuable information gained by this process, but it also involves employees and creates a shared responsibility to make the process work after the software is implemented.
3. Select the Software
   The implementation team should undergo a software selection phase where its goal is to match the best software package to its core business processes. It is highly unlikely that it will find a 100% match. The goal is to find software that will best mirror the organization' s business processes. If the software can match to 80% of the processes, then two things must happen to get to the other 20%; either the process must be modified or the software must be customized. The decision on which option is suitable rests on whether or not the process is a core process of the organization (a core process is defined as a process that is vital to the organization and its customers).
4. Begin Implementation
   Once the software has been selected it is time to begin the planning for the implementation. The implementation team should develop a project plan using a project planning tools (gnatt charts, etc.). Some of the main components of the process are: ensuring that the data transfer is 'clean' and that no data is lost during the transformation; creating a change management process for modifying business processes; creating a testing and approval methodology; approving the system and sign-off; and developing training processes. The implementation team should work with the supplier consultants to help them with technical issues during the implementation.

Common ERP Implementation Issues to Avoid

• Underestimating the Cost of Implementation
  Many organizations did not realize the full extent of implementing all of the modules in an ERP system. By nature, the ERP system is highly process-oriented, and if your organization does not have all of its processes documented, you have your work cut out for you. For example, not including the cost of process mapping, will increase implementation costs and lead to frustration when the budget is increased for the project.
• Cutting the Budget Too Soon
  As a result of increasing the budget for the ERP implementation, once the 'core' elements were in place, ancillary modules are not all turned on as they were not part of the main processes. Thus, the full benefit of the ERP system is undermined as this causes 'work arounds' that short-circuits the full value of the system. In addition, training becomes one of the first areas to suffer budget cuts. This creates problems as users have no-where to turn for help and go back to the 'old way' of doing things.
• Branding the implementation as an IT Project
  As this is a software implementation, many organizations believe that the Information Technology (IT) function should be responsible for the implementation. This creats a dis-connect from all of the other functional areas such as Finance, Sales / Marketing and Operations who are all stakeholders but do not give adequate input into the selection decision. This results in IT making assumptions on what the business requirements were, which are almost always incorrect.
• Not having Proper Metrics
  The first ERP implementations were a result of the Y2K bug. Rather than pay to upgrade a Legacy system, some organizations opted to install a shiny, brand-new ERP system, without calculating its Return on Investment (ROI). Each functional area in the organization should estimate what the benefits of an ERP system are; whether its eliminating redundant activities, improving order fill rates or increasing supply chain flexibility, there must be a metric that management can follow to ensure it receives the benefits of the ERP system after implementation, as well as track its progress as the modules are being implemented.. Remember, you cannot manage what you cannot measure.

By ensuring that your organization spends time understanding its processes and involving representatives of key areas, it will ensure that it has a high likelihood of success for the implementation. These efforts will pay dividends when the implementation is underway.

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A History of Logistics / Supply Chain Management

Logistics has always been a critical part as one of the 4 P's in Marketing: Product, Place, Price and Promotion. The "Place" component ensures the product is at the right place, at the right time, in the right quantity and the right quality. Read about how the logistics discipline started and where it is headed.

• Military Roots
  Logistics received recognition in military operations during World War II. It gained its momentum as it contributed to the effective distribution of machinery and supplies to troops. A service delivery failure here may mean an increase in unnecessary fatalities. Peter Drucker (a business guru in the 1960's) identified logistics as a growing concern within business. This generated more prominence towards the practice of logistics.
• Deregulation
  As the economies in North America evolved in the 1970's and 1980's, transportation deregulation changed the competitive landscape of business. Carriers were free to charge their customers (Shippers) a competitive rate for their shipments. Warehousing companies that typically acted as surplus inventory storage locations, married up with transportation companies to offer customers full-service solution capabilities. This formed the beginning of the 3rd party logistics business and paved the way for outsourcing logistical activities.
• Globalization
  With the advent of globalization, firms began to seek ways of cutting their production costs. Thus, multi-national corporations re-located their factors of production to low-wage countries to gain a competitive advantage. Increasingly, more and more countries are joining the World Trade Organization (WTO) and opening their country to foreign capital investment (most recently in China). Retail giants like Wal*Mart exploit these new efficiencies and increase their imports from new emerging economies to reduce product prices in their stores. Thus, the new challenge is how to manage the product and information flows around the world. The increased pressure on managing these operations further underscored the importance of logistics as an area for optimization.
• Information Technology
  Another contributor that led to an increased presence for logistics was the explosion in information technology and use of computers throughout the 1980's and onwards. The cost of computing has decreased year after year since then and computing power rose exponentially. The use of the Internet and increased bandwidth capacity further enhanced and enabled quick connectivity and collaborative relationships that reduced inventories and created a Just-In-Time operating opportunity for organizations. These efficiencies reduced errors, increased fill-rates and cut overall operating costs for organizations.
• Supply Chain Management
  As the above factors fuelled efficiencies, logistics gained more prominence in organizations. A natural extension was to link the logistical operations from each firm to the entire supply chain. The new paradigm became known as the 'systems approach' to supply chain management and introduced the concept of trade-offs. In order to achieve least total supply chain cost, operational integration of the 5 main areas of logistics must be simultaneously optimized: Warehousing, Transportation, Inventory, Order Processing and Lot Quantities. Optimizing any one of these areas individually will sub-optimize the system as a whole. For example, a single warehouse in a network would achieve the lowest warehousing cost. This would create high transportation costs as suppliers ship over greater distances to ship products into the warehouse and conversely, outbound to its market distribution area. The addition of a second warehouse in the network would reduce transportation costs more than the marginal cost of operating the second warehouse, which would reduce total supply chain costs.
• Future Challenges
  As the business landscape constantly changes with mergers & acquisitions and as globalization grows, there are corresponding changes in the supply chain that need to continuously be optimized to ensure least total supply chain costs. Radio Frequency Identification (RFID) and other technologies will continue to drive down inventories as better information is made available in a timely manner. Since supply chain activities cross over all functional areas in an organization (such as Marketing, Finance and Human Resources), new metrics must be developed to track true supply chain costs and identify the impact on new costs as corporate strategies change. Organizations that measure and benchmark these costs will have a sustainable competitive advantage going forward.

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Listening Effectively

Almost everyone sincerely believes that he or she listens effectively. Consequently, very few people think they need to develop their listening skills. But, in fact, listening effectively is something that very few of us do. It's not because listening effectively is so difficult. Most of us have just never developed the habits that would make us effective listeners.Research has found that by listening effectively, you will get more information from the people you manage, you will increase others' trust in you, you will reduce conflict, you will better understand how to motivate others, and you will inspire a higher level of commitment in the people you manage.

You Probably Don't Listen as Effectively as You Think You Do .... and You Probably Don't Know It A study of over 8,000 people employed in businesses, hospitals, universities, the military and government agencies found that virtually all of the respondents believed that they communicate as effectively or more effectively than their co-workers.¹ (Could everyone be above average?) However, research shows that the average person listens at only about 25% efficiency. While most people agree that listening effectively is a very important skill, most people don't feel a strong need to improve their own skill level.

Why Effective Listening Matters

To a large degree, effective leadership is effective listening. A study of managers and employees of a large hospital system found that listening explained 40% of the variance in leadership.⁴ That's a big correlation by social science standards (like r = .63). Effective listening is a way of showing concern for subordinates, and that fosters cohesive bonds, commitment, and trust. Effective listening tends to reduce the frequency of interpersonal conflict

and increases the likelihood that when conflicts emerge they will be resolved with a "win-win" solution. In addition, if you listen to the people you manage, you will learn "what makes them tick." When you know what makes them tick, you will be more effective at motivating them. You can encourage them when they need encouraging, and you will know what kinds of things they value as rewards for a job well done (e.g., public praise, autonomy, challenge, etc.).

What Effective Listening Is

Effective listening is actively absorbing the information given to you by a speaker, showing that you are listening and interested, and providing feedback to the speaker so that he or she knows the message was received. Delivering verbal communication, like writing a newsletter, involves trying to choose the right words and nonverbal cues to convey a message that will be interpreted in the way that you intend. Effective listeners show speakers that they have been heard and understood

How the Most Skilled Communicators Respond When Listening

The most skilled communicators match their responses to the situation. In discussions with the people you manage, it helps to differentiate the coaching situations from the counseling situations. Coaching

is providing advice and information or setting standards to help your employees to improve their skills and their performance. Counselling

is helping subordinates recognize and address problems involving their emotions, attitudes, motivation, or personalities.

The most common mismatch of response types to situations is the tendency a lot of us have--myself included--to give advice or deflect in a situation where counseling is appropriate. When you are counseling, "reflecting" and "probing" are usually more appropriate responses than "advising" or "deflecting."

 

Reflecting. As mentioned above, when we listen we should show the other party that what they are saying to us is being heard. Since we can think at about four times the speed that speakers can speak, our brains have a lot of capacity that can be used to process the meaning of what's being said. Reflecting is paraphrasing back to the speaker what they said. A lot of us have difficulty with this skill. Reflecting without sounding phony or like a parrot takes creativity and lots of practice. Reflecting can take other forms than paraphrasing back to someone what was just said. For instance, a listener can summarize what he or she heard and also take the conversation a step further by asking a question for clarification or elaboration.

 

We often notice when we reflect during a conversation that the meaning we have ascribed to what we've heard was not really what the speaker intended to convey. When speakers hear us reflect, they get a chance to correct any misunderstanding that we have. That proves that this technique does truly clarify communication. For most of us, it takes a lot of practice before we become natural and effective at reflecting. Our first few efforts may sound forced, phony, patronizing, or as one of my MBA students put it, "moronic." However, that doesn't mean we should give up learning how to reflect. Over time, we can all learn to do it naturally and effectively.

 

Probing. In addition to reflecting, the most skilled communicators' responses in counseling situations involve a lot of probing. Probing means asking for additional information. Not all questions you might ask will be effective. Avoid questions that challenge what has been said because that will put the speaker on the defensive (e.g., "How could you have thought that?"). In addition, a question that changes the subject before the current subject is resolved isn't effective communication. Effective probing is nonjudgmental and flows from what was previously said. Good probing questions ask for elaboration, clarification, and repetition (if, for instance, an important question you asked wasn't answered).

 

Deflecting. Deflecting responses shift the discussion to another topic. When we deflect from what we've been told, rather than acknowledging it, we can unintentionally communicate that we haven't listened and that we aren't interested. Deflecting shows that we're preoccupied with another topic.

 

Many of us deflect unwittingly by sharing our personal experiences when we should be focusing on the other party. Think about this from the speaker's perspective: When you share a concern with someone and they respond by telling you about themselves, do you feel like they are interested in listening to you? The responder gives you the impression that they aren't even listening, and that they just want to talk about themselves. Sometimes we mention our own experiences as a way of saying that we can relate to the speaker's experiences. Our intention is to say, "You're not alone." But, when we tell our stories we risk sending a message that we aren't listening and don't care. Don't be a topper--the kind of person who can tell a story to top any story that they're told. We all know a topper, don't we? In a small way, toppers are trying to communicate that they are superior. That's not supportive!

 

This is not to say that sharing your experiences is never helpful. On the contrary, mentors often help their protégés by relating their own experiences as a way to reassure their protégés that their concerns are normal and that their problems are solvable. But, in counseling situations, be careful to use deflecting only at appropriate times. Speakers may not know that you have heard and understood what they have said if you deflect by moving on to another topic or shifting the focus to yourself or your own experiences. The best listeners keep deflecting to a minimum.

 

Advising. Did you know that you can offend some people by giving them advice after they've told you about one of their concerns? In fact, Deborah Tannen's research has found that this problem is particularly common between men and women in the workplace.⁵ Women often discuss their problems and concerns with men just as a means of developing interpersonal bonds. It's a way of making conversation that goes a little deeper than small talk (because it's personally revealing), and it can help foster a mutually supportive relationship. When men respond by giving advice, they may believe they are being helpful to their female counterparts. But, when no advice is solicited, providing it is actually a little presumptuous. When you tell someone how they should solve their problems you assume a position of superiority, not mutuality. Of course, being supportive often involves giving advice. My point is that we should (a) recognize that sometimes people share their problems with us just because they want us to listen, and (b) advising people who tell us about their problems can sometimes be taken as condescending or belittling. Sometimes it's better to just reflect.

Typical Objections to These Effective Listening Techniques

As I teach these principles to managers on and off campus, I hear a lot of objections to using them. Here are three common objections:

Reflecting slows down the conversation and wastes time. Yes, your time is a valuable resource, and you do want to invest it carefully. Reflecting takes time, but it can save time too. Many times reflecting does more than show the other party that they are being heard; it also serves as a check for accurate understanding and provides an opportunity for clarification. Reflecting takes time, but so does correcting errors due to miscommunication.

Reflecting sounds phony/patronizing/moronic. Skilled listeners know that tactfully showing that you have heard what someone has said by reflecting it back to them requires creativity, and they've had to practice creative paraphrasing and reflecting to become good at it. Yes, the process of learning how to use reflecting can be awkward for people who are inexperienced with it. However, be very careful not to avoid practicing and learning a skill just because you're concerned that you will not immediately be proficient. It's better to develop communication skills over time, despite the possible awkward stage, than to completely avoid developing those skills due to a fear of the initial awkwardness.

I don't have time to be the confidante of all my direct reports. Yes, there is a time management

issue. It might seem that the best way to use your time is to hear the problems, give advice, and move on. That may or may not be good time management. Think carefully about the consequences of showing your staff that spending time listening to them is not important enough to be a high priority for you. Managers who make listening a high priority develop strong relationships, employee commitment and a support network for themselves.

Practicing This Management Skill

Fortunately for those of us who want to develop our listening skills, we get lots of opportunities. To develop your listening skills, plan to use the response type that you think you need to emphasize (e.g., reflecting) and plan to avoid using the response types that you want to de-emphasize (e.g., advising). Then, after you have a conversation, evaluate how effective you were at giving good responses as a listener. Identify what went well and where the opportunities for improvement are. Think about what that challenges to being an effective listener were and how you can deal with those challenges more effectively next time.

Monday mornings are a perfect time to practice your effective listening. Just start a conversation with a co-worker or employee by saying, "How was your weekend?" From there, just probe and reflect. In ten minutes, you can actually get to know the other person a little better and show that you're interested in them.

Kids seem to be willing to let us practice our effective listening. Seems like if you ask kids questions, reflect their answers back to them and probe a little further, they really open up. It's like you're their new best friend because you've shown an interest in them. They'll forgive us if we sound a little patronizing--they're used to it. Making a tape recording of a conversation, if you can find a willing partner, can also help you evaluate your performance. With a tape of a conversation, you can examine each response you give in detail, without relying on your memory.

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Basics of Production Inventory Management

Production inventory management differs from general
warehouse management because it involves the
determination of how quickly to produce a particular
product. The factors involved in many cases are
similar, though there are some variances in making the
final decision as to how quickly manufacturing should
push items through the production line.

Available Materials

Of course, the first concern in production inventory
management is on the front end of the process. If you
don't have the materials required for production, then
you can't move forward in providing the products to
others. You must make certain that you have all the
supplies you need, from raw materials to factory
workers, to complete the production process.

Supply and Demand

You must determine the current demand for the product
on the market. Good production inventory management
occurs when you produce just enough material to
satisfy customers' needs without overextending the
production line and manufacturing too many of any
given product. You don't want an incredible amount of
backstock lying around, as this detracts from your net
profit. On the other hand, you don't want to be in
short supply when a large order comes in, so having a
little extra on hand is a great idea, and making sure
you are prepared to make a production run for such
orders is vital.

Quality Control

Never simply assume that everything manufactured will
be flawless. An important consideration in production
inventory management is to allow room for error. In
other words, calculate a sufficient amount of product
to assume that, even with flaws that get past quality
control efforts, there is sufficient stock of the
product required.

Cost Analysis

In many instances, even the best production inventory
management strategies fail in the long run due to the
cost of the production process being overlooked as a
factor. It is important to maintain a cost effective
production process, and this includes making sure that
your inventory is not an overwhelming factor. This
comes back to not overproducing any items that come
off the assembly lines. Doing so is a waste of time
and materials, costing you excess money to create.
Obviously, conservation of the materials, time, and
energy consumed in manufacturing unnecessary goods is
essential to maintaining a cost effective production
inventory management strategy.

Be proactive in keeping close watch on all occurrences
in your production or manufacturing facility to make
sure that there is no waste, and you are guaranteed to
achieve a greater standard of success and profitability.

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Goal Setting

Strategies for a Balanced Life

by  Dinae M. Eade

 

Caught up in the hectic daily activities of clinical practice and administration, health care practitioners can easily lose sight of long-term goals … easily forget what they set out to accomplish for themselves and for their loved ones. Yet proven strategies exist to help busy professionals achieve happy, healthy, productive, and well-balanced lives. To help you regain some perspective, an expert in life planning and personal productivity presents the following tips.

"To be what we are, and to become what we are capable of becoming, is the only end of life," wrote Robert Louis Stevenson in Familiar Studies of Men and Books1. Simple as that goal may sound, most people get so caught up in the day-to-day activities of living that they never come even close to realizing their full potential or their lifelong dreams.

Physician assistants and nurse practitioners, like other health care providers, are particularly vulnerable to this "activities-of-daily-living" trap. Starting with The Oath of Hippocrates ("With purity and holiness I will pass my life and practice my Art.... Into whatever houses I enter, I will go into them for the benefit of the sick....") and ending with the rigors of daily practice, health care demands personalities willing to place the needs of others ahead of self. Does this leave the practitioner with no time to pursue personal goals and dreams? Sometimes. But there are ways to assure personal growth and fulfillment, which ultimately improve a provider's ability to care for others.

GOAL PLANNING: WHY BOTHER?

Goal planning challenges the individual to give life a preplanned direction by employing specific exercises and strategies. Through goal planning, a person can take the shapeless life "direction" that most professionals have fermenting in the back of their minds - that fatalistic voice that says "work hard, do your best, and let whatever happens happen" - and learn to control many of the key events that ultimately give form to a person's life.

The first step in goal planning is to ascertain the control you do have over your life. Try this exercise: First, on a clean sheet of paper, list the past five years vertically along the left side (1994,1993,1992,1991, and 1990).. Next to each year, list the most important event that occurred in your life during that year. Now examine that list and estimate the percentage of control or influence that you had over those events.

After using this exercise with numerous groups, I've observed that most people exert a significant influence over at least 80% of the most notable developments in their lives. Too few, however, take the time to reflect on their influence, allowing themselves to drift into believing that external forces really chart the course. Seeing how much control you personally exert over your life helps you to realize that you really are in charge, and that you can chart a course to success.

How does someone actually plan for success in advance, rather than letting things happen and hoping for the best? Skeptics still balk; even though, in retrospect, they acknowledge some influence over events, they do not concede an ability to plan these events in advance. To some degree, their argument is true: Goal setting is not a crystal ball, nor does it carry with it any guarantees. But goal setting definitely improves your odds for a successful outcome.

Many companies use "Management By Objectives" (MBOs) to motivate their work staff to higher levels of achievement. This is a simple method of translating an organization's business objectives down to each individual's specific contribution. For instance, if the goal for your entire office is to see 500 patients each week, your individual objective might be to see 125 of those patients personally.

In one review of studies on MBOs2, 66 out of 68 studied (97%) attributed positive results to their use. In fact, in 28 studies using objective measurements, productivity was shown to increase by 44%. The studies also showed that when commitment on the part of the management is high, results are even better. When goals are personal and individual, rather than corporate or vague, they are more readily adopted.

TARGETING YOUR GOALS

To get the most out of each aspect of your life, start by creating a life plan from which to set specific goals. This way you'll know where you want to end up. Setting goals "programs" our minds: The goals we set direct our mental focus. Subconsciously, the mind works continuously to satisfy the expressed need.

Notice that, here again, I said "life plan," not "career plan." Goal setting has application far beyond one's career. In fact, those people who set only business-related goals decrease their odds of having a well-balanced, happy life: Those who direct their subconscious to solve only business problems risk creating lives that focus on careers and neglect all other areas.

MEASURE YOUR LIFEBALANCE

Use The Wheel of Life to measure your overall degree of life satisfaction and to identify areas that might benefit from goal-setting. On a scale of 1 to 10 (where 1 is low and 10 is high), ask yourself how satisfied you are with your: financial situation and career; social and cultural situations; spirituality and ethics; family and home; mental and educational levels; and physical well-being and health. Consider your answers carefully, taking into account the following issues:

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A Market-Driven Approach to Retaining Talent

Traditional strategies for employee retention are unsuited to a world where talent runs free. It's time for some fresh thinking.

 

by  Peter Chappeli

If you're like most executives today, you're a poacher. You regularly look outside your organization to find talented individuals to fill key posts. And when you spot attractive candidates, you do what it takes to lure them away from their current employers. You offer big signing bonuses, you buy out stock options, and you provide rich compensation packages of your own. All the while, you know that other companies are busily rifling through your own organization, hoping to poach your best talent.

The open competition for other companies' people, once a rarity in business, is now an accepted fact. Executives know that fast-moving markets require fast-moving organizations that are continually refreshed with new talent, and they've become adept at outside hiring. (See the sidebar "Strategic Poaching.") But if they're comfortable bringing talent in, they remain distinctly uncomfortable about seeing talent leave. To poach is fine; to be poached is not. One reason for the discomfort is emotional. Executives tend to judge themselves on their ability to instill loyalty in their people, and the departure of a talented employee can feel like a personal affront. Another reason is rational. In a time of tight labor markets, talent can be very hard—and very expensive—to replace. When a good employee walks, the business takes a hit.

 

In trying to stop people from jumping ship, many companies have fallen back on traditional retention programs. I recently attended a talk by a senior manager from DuPont who was telling of a corporate initiative to "re-engage" with employees. By designing and promoting new, long-term career paths and investing heavily in employee development, the company hoped to win back the loyalty of its workforce. When a member of the audience asked him if he really thought the company could stop the outflow of talent, the speaker replied, in a moment of unexpected candor, that he did not—the competition was simply too intense. But, he went on, the company's executives saw no alternative. They had to make the effort.

The speaker was right about one thing. It is futile to hope that by tinkering with compensation programs, career paths, training efforts, and the like, a company can insulate itself from today's freewheeling labor market. That doesn't mean, however, that companies should just go through the motions. There is an alternative: a market-driven retention strategy that begins with the assumption that long-term, across-the-board employee loyalty is neither possible nor desirable. The focus shifts from broad retention programs to highly targeted efforts aimed at particular employees or groups of employees. Moving to a market-driven strategy is not easy. It requires executives to take a hard-headed, analytical approach to what has long been viewed as a "soft" side of business—the management of people. But it is necessary. The clock can't be turned back.

Rethinking Retention

To adopt the new strategy, you first have to accept the new reality: the market, not your company, will ultimately determine the movement of your employees. Yes, you can make your organization as pleasant and rewarding a place to work in as possible—you can fix problems that may push people toward the exits. But you can't counter the pull of the market; you can't shield your people from attractive opportunities and aggressive recruiters. The old goal of HR management—to minimize overall employee turnover—needs to be replaced by a new goal: to influence who leaves and when. If managing employee retention in the past was akin to tending a dam that keeps a reservoir in place, today it is more like managing a river. The object is not to prevent water from flowing out but to control its direction and its speed.

Prudential is one company that has begun to adopt this market-driven perspective. Its "Building Management Capability" program, which integrates recruiting, retention, and training efforts, is geared toward an increasingly mobile workforce. "Gone is the notion that employees are going to stay with one company for life," says Kurt Metzger, a human resources executive at the company. The Prudential program is anchored by a sophisticated planning model that projects talent requirements and attrition rates. The model enables business-unit managers to develop highly targeted retention programs and create cost-effective contingency plans for filling potential gaps in skills. The model also provides a mechanism for constantly measuring the impact of human resources decisions, a capability crucial to managing people in this rapidly shifting labor market.

Prudential has begun doing what most companies avoid: making a truly honest assessment of how long the organization would like employees to stay on board. Such an analysis inevitably reveals that different groups of employees warrant very different retention efforts. There will always be some people a company will want to keep indefinitely—an engineering genius, an inspiring business head, a creative product designer, or a frontline worker deeply respected by customers. Another set of people will be important to retain for shorter, well-defined periods—employees with specific skills that are currently in short supply, for instance, or members of a team creating a new product or installing a new information system. And finally there will be people for whom investments in retention don't make sense—employees in easy-to-fill jobs that require little training or employees whose skills aren't in demand in the market.

Once you know which employees you need to retain and for how long, you can use a number of mechanisms to encourage them to stay. The key is to resist the temptation to use the mechanisms across the board. Tailor your programs to your retention requirements for various employees and to the level of demand for them in the marketplace. Let's look at some of the mechanisms and their strengths and shortcomings.

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Monday Motivation - Don’t Be Afraid To Fail

 by Jeremy Enke

I have written on this topic before, however I feel it is very important so I will publish another post on this. Everyone knows that in order to be successful long term, you are going to have to take some risks and experience some failures along the way.

Every entrepreneur or millionaire I know can probably count on one hand the ultimate successes that got them to where they're at. Yet each could probably fill a book with the stories on their failures. When I look back over the past 10 years of my professional life, I have to shake my head at some of the decisions I've made. I have failed at so many projects, sites, and ventures it is almost comical. The good news however is that the ones that worked out have put me exactly where I want to be in life.

I have a great home, a career that I always dreamed of, and most importantly a great family at the age of 31. The times I have failed or lost a ton of money in various endeavors sucks, I am not going to lie about that. The thing is though that I was able to put these failures behind me and keep moving forward to achieve my goals.

What I see far to often happen when people fail is that they give up. People get discouraged and just go back to their comfort zones. One of the other most important attributes you see in successful people is perseverance. It's not that "failure is not an option" for these people, it's that they NEVER GIVE UP when faced with failure.

So no matter what mistakes you have made, or what failures you have encountered, there are 3 things you need to do:

1. Accept the failure

2. Learn from the failure

3. Stay Positive and move on with your life's goals.

The beauty about being an entrepreneur is that you get as many chances as you want to try new things in your path to success. The unfortunate thing however is when you look at the big picture, in life you only get one chance to "make it happen". So stop procrastinating or feeling sorry for yourself about past failures. Right now is the time to get out of your comfort zone and take some risks. And always remember, there truly are a million ways to make a million dollars, you only have to find one. Make it a great week!

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An Introduction To Compressors

Compressors are machines that compress air or gas. Compression is achieved through the reduction of the volume that the gas (or air) occupies. As a side effect of the minimization of volume, the temperature of air or gas increases.

The higher the compression ratio, the higher the temperature tends to rise. However, compressor manufacturers do take this into consideration. The problem is resolved by compressing on a per-stage basis and simultaneously cooling the gas.

There are many compressor types. Different compressor types achieve different compression ratios. Moreover, the horsepower that different compressors can achieve varies from 1 to 2 HP (Horsepower) , up to a few thousand HP. Some compressors require oil in order to operate while others do not.

The most important compressor designs are listed below.

Reciprocating compressors are equipped with a crankshaft, which drives the pistons. They are commonly found in versions that produce 5 to 30 HP. However, larger ones used for industrial purposes can produce up to 1,000 HP.

Centrifugal compressors are used for heavy industrial purposes. Centrifugal compressors produce from ~100 HP up to a few thousand HP. They are usually stationary, and one of their applications is small gas turbine engines.

Rotary screw compressors are compressors aimed at commercial use. Their horsepower varies from 5 to 500 HP, and they are usually employed as superchargers in automobile engines.

Diagonal/Mixed- flow compressors are similar to centrifugal compressors except for some technical characteristics.

Axial-flow compressors are mostly used in large gas-turbine engines.

Scroll compressors are not as efficient as rotary screw compressors. They can be found as superchargers in automotives.

Along with the uses listed above, compressors are used in fields such as jet engines, refrigeration, medicine manufacturing, SCUBA diving, turbochargers, submarines, and air conditioning.

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Are You An Innovator?

Innovation has once again become a hot topic in the executive suite. That's because of a growing recognition that operational effectiveness alone can't deliver the results today's shareholders demand. A 2005 survey by the Boston Consulting Group, for example, found that 90% of executives believed that their company's growth and success requires true innovation.

Unfortunately, my research suggests that is easier said than done.

The problem isn't bad management, as I explained in The Innovator's Dilemma. In fact, many companies get into trouble precisely because they follow the principles of good management. They listen to their best customers, innovate to meet those customers' needs, charge higher prices, report record profits and miss a transformational change innocently incubating at the fringes of their respective markets.

My subsequent research, summarized in The Innovator's Solution and Seeing What's Next, and field work with my consulting company, Innosight, has convinced me that companies can address key elements of this dilemma. The first step to recovery is almost always admitting that there might be a problem. Therefore, I suggest that any executive who is seeking to assess their company's innovation capabilities ask the following three questions:

1. Do I have a balanced portfolio with different types of growth strategies?

Most investors know the value of balancing their financial portfolios across different classes of assets, like stocks and bonds. But it is amazing how many companies forget this principle when building their "innovation portfolios."

When many companies actually sift through such portfolios, they discover that the overwhelming majority of their efforts focus on what we call "sustaining" improvements. These are better products that a company hopes to sell for higher prices to current customers. Think about Procter & Gamble creating a version of its Tide laundry detergent with a new scent.

If existing products or services are not yet good enough, sustaining approaches typically promise attractive returns. Sustaining strategies are the bread and butter of most established firms. A balanced portfolio, however, augments those strategies with different approaches to branch away from the core business.

My research suggests the best way to succeed in these new markets is to take a "disruptive" approach. Proctor and Gamble, for example, has created the "clean small spills" market with its Swiffer brand, and the home-based teeth whitening market with WhiteStrips. Generally, disruptive innovations are simple, onvenient, affordable solutions that make it easy for individuals to "do it themselves." Remember, the goal is to create a portfolio that balances core-sustaining investments with those intended to create new growth businesses.

2. Have I allocated resources to achieve a balanced innovation portfolio?

Just saying you have a balanced portfolio isn't sufficient. You need to allocate resources appropriately to create different types of innovation. Executives often think it's strategy that determines how they should allocate resources.. But it's the other way around: It's how a company allocates resources that should determine strategy.

To innovate, a company must master the resource allocation process. Doing that requires investment in multiple strategies. Companies that simply pour all their resources into a single pot often find that they are investing in the status quo. While close-to-the-core, sustaining initiatives are less risky, they also provide lower returns. What's worse, such initiatives may actually crowd out the development of truly innovative products and services that could provide greater returns in the long run.

 

There's good news for cost-conscious companies just starting their innovation journey. Early on, the biggest investment that companies need to make is time, not dollars. Don't spend too much on a new venture too soon, otherwise you risk locking into a failed strategy before you really know the right approach. The best advice is to "invest a little to learn a lot."

 

3. Do I have a distinct screening and shaping process for different types of opportunities?

Processes, by their very nature, are designed to be inflexible. A process that is good at doing one thing is almost always bad at doing something else. Many companies have adopted stage-gate processes that impose rigorous discipline on their innovation efforts. New proposals must meet certain financial metrics--such as net present value or return on investment--before they're given the green light. This effectively streamlines the development and commercialization of sustaining innovations.

Financial metrics are ill-suited, however, for disruptive projects that charter unknown territory. Instead, companies should develop a checklist of qualitative measures to which a new product should conform.

Start by looking at previous innovation efforts and assess what worked and what failed. Successful disruptive solutions, for example, might be simpler, do-it-at-home versions of a previously complex product. Often they have low overhead costs and high asset utilization, which allows companies to offer low prices or serve small markets. And in many cases, the pattern you identify can point the way to high-potential opportunities more reliably than financial metrics.

By asking these three questions above, executives can begin to get a sense as to whether or not their organizations are properly positioned for growth. Taking action against identified weaknesses can help companies create capabilities that make the pursuit of growth more predicable and repeatable.

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The Art of Successful Negotiation

Whether you are working on a joint business venture, a new job, the price of an auto or your child's new curfew, negotiation is a key success skill. So how can you improve your negotiation skills? Here are a dozen techniques I try to practice in every negotiation.

 

Be Prepared This is not just the motto of the Boy Scouts. Preparation is the single most important element in successful negotiations. In negotiations, information is power. The more relevant information you have, the better your position is. Preparation for your negotiations can not be overdone. Allow yourself adequate time to prepare prior entering any negotiation.

 

Understand The Needs Of Your "Adversary" Your "adversary" in this context is the other party in the negotiation. Your relationship with this party may not normally be described as adversarial, for the purposes of this discussion we will view the negotiation as an adversarial relationship.

Put yourself in your adversary's shoes. What would they like to gain from the negotiation? Write down as many possible goals as you can think of. Prioritize your list in the order that you believe your adversary would. Identify the items you are willing to negotiate and those items which are nonnegotiable.

 

Know What Your Needs Are What do you need out of the negotiations? More money? More flexibility? Better opportunities? Access to broader markets? Make a list of those things you would like to receive as a result of the negotiations. Refine and prioritize your list before starting the negotiation. Identify the items you are willing to negotiate and those items which are nonnegotiable. This list and the one created above will allow you to know what your true "bottom line" is.

 

Most Negotiations Involve On Going Relationships With the exception of large purchases, most negotiations involve parties involved in a long term relationship. Whether the relationship is family, friends or business associates, it will be necessary to continue to deal with your "adversary" outside the context of the negotiation. Always be sensitive to the potential impact of your negotiations on these relationships.

 

Every Negotiation Is Different Negotiating with a loved one is different than buying an automobile. Buying an automobile is different from negotiating with a new employer. They key difference is the relationship you wish to have with your adversary once the negotiations are complete. When negotiating with a loved one, you may be willing to make more concessions in the interest of harmony. When buying an automobile harmony may be less important than paying a fair price. Keep these intangibles in mind when creating and prioritizing your lists.

 

Understand The Situational Dynamics In order to negotiate successfully, you must understand the dynamics of the situation. Identify your role and the role of your adversary. Know what are the "power positions" of each role. The dynamics of negotiating in a parent/child relationship are significantly different than the dynamics of and employer/employee negotiation. Be certain your desires are appropriate and achievable in terms of the situation.

 

Never Lie Very few negotiations are a single contact event. With the possible exception of making large purchases, most parties involved in a negotiation have continued contact after the negotiations are completed. When you are caught in a lie, and it is inevitable that you will be, your future credibility will be lost.

It is possible to prepare to handle those areas where the need to lie may be felt. Examine the areas where your case is weak. Work to strengthen your case. In those areas that remain vulnerable, prepare how you wish to handle them should they arise.

 

Be Fair Negotiation is not an "I win, you lose" proposition. Webster's dictionary defines negotiate as "to bring about by mutual agreement". The best negotiators I know create "win - win" situations in every negotiation.

 

Don't Tip Your Hand Uncertainty is your key advantage in most negotiations. If your adversary knows what you desire most, your negotiating position is not as strong. Play it close to the vest.

 

Be Flexible Understand that negotiation frequently involves compromise. Look for creative solutions to the problems presented in the negotiation. Make tradeoffs in order to gain those elements you most desire.

 

Winning Isn't Everything It is easy to get caught up in the competitive spirit of a negotiation. Remember that the point of negotiation is to reach a common agreement on how to move forward. While it may be possible to bludgeon your adversary into agreeing to your terms, this does not create the "mutual agreement" that makes for a truly successful negotiation.

 

Quit While You Are Ahead Too many people have to see just how far they can push a negotiation. They have to try to get just one more concession. This attitude can be a deal breaker. The best negotiations are brief and to the point. Get agreement on your major points and stop. Additional items can be addressed in subsequent negotiations.

Copyright 2001, 2008 Tony L. Callahan All Rights Reserved
Tony L. Callahan, is a successful Internet Promotions Consultant with more than twenty years of industry experience and is president of his own Internet marketing company, Link-Promote. He also publishes Web-Links Monthly, a newsletter full of tips, tricks, tools and techniques for successful web site promotions.

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The Reality of Office Politics

Tips for How to Survive an Office Minefield

The good, the bad and the ugly is present in virtually all companies. Office politics, however, can work in your favour. This article looks at how to play the game.

The Greek philosopher Plato said many, many years ago, "Those who are too smart to engage in politics are punished by being governed by those who are dumber." Unfortunately it's just as true today as it was in Greece two thousand years ago. If you are one of the millions of people who work in a cubicle within innumerable office complexes across the U.S. and the world, sooner or later you'll find yourself caught in a power play of some kind whether you want to participate in it or not. If there are people, there will be politics, period. Here are some helpful tips about how to handle these tricky situations, and what to do if things take a turn for the worse.

Be Prepared to Play Rather than Sit on the Sidelines

Let's face it, sometimes people fight dirty and are not easy to get along with. When it comes to promotions for example, the atmosphere in any office can become tense and decidedly uncomfortable. One of your closest friends might become your worst enemy when the prospect of advancement comes up. If you refuse to get involved in office politics you might unwittingly make yourself a target for the next bully to come through the door. Learn to stand up for yourself and be prepared for a showdown at any time.

Do an Exemplary Job

No matter how big or small the job might be, throw yourself into your work with dedication and enthusiasm. At some point in your career you're going to have to deal with somebody who will try to give you a hard time, and the reason is undoubtedly because they want to disguise their own inadequacies by lashing out at others. It's tremendously draining to face these individuals every day. The best defense is a good offense, so to that end make sure your colleagues are aware of your good work.. When trouble arises, they will probably be there to back you up. If in doubt about this, remember this quote from Fabricius, the Renaissance era Italian zoologist, "Death comes to all, but great achievements raise monuments which shall endure until the sun grows cold."

Be the Voice of Reason

It can be extremely hard to respond to an annoying co-worker calmly. Never scream or shout, if you do it will be interpreted by the office malcontent you are susceptible to intimidation and he/she will intensify their efforts. Similarly, you can try to get in the middle of an office feud and negotiate a truce and be a fire extinguisher of sorts. If you can learn to approach these situations diplomatically, it's far less likely somebody will make you a target in the future.

Things You Shouldn't Say at Work

1. "That's not my job."

This can be the kiss of death for you in any company. If you want to show you are a team player and a problem solver, promptly erase this remark from your office vocabulary.

2. "To be honest with you......"

What does this mean, really? Honesty is irrelevant in office politics because people will often just say what they want to communicate, and they would expect the same from you.

3. "I didn't have time to finish that."

In the mind of your boss what it boils down to is this, you are unreliable and you don't take your job seriously.

4. "Do it, or else."

Most people don't appreciate being threatened. Your list of office friends will be shorter and you'll also have a reputation for being difficult.

Additionally, if any or all of the above statements are directed at you, document them. Put a name to a face and inform your supervisor. It would be even better if others can hear them for added corroboration.

When Things Become Ugly

Form an alliance with a more experienced colleague who can advise how to handle the more intense effects of office politics. Remember, you should be prepared to defend yourself at any time. If you go to a supervisor to compain about a co-worker, be sure to suggest some possible solutions to the problem. After all, the boss will want to hear both sides of the story.

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Conflict Management--Style and Strategy

It's important to remember that there are many strategies we can use in conflict situations, but each of us tends to habitually use some strategies more often than others.. To most effectively resolve a conflict, we should use the strategy that is most appropriate for that particular conflict situation. However, that strategy might not be the strategy that we habitually use.

The Wrong Strategy for Shaun Williams How often do we make the mistake that Shaun Williams (celebrating in the photo above) made on Sunday; i.e., responding to a conflict situation the way we feel like responding rather than the way we should respond? The incident occurred at the end of a very close game--a time when his team could not afford any penalties. When tempers flared between one of Williams' teammates and an opponent, Williams ran across the field and began to fight. Predictably, his team was penalized and he was ejected. The penalty was very unfortunate as his team, the Giants, narrowly lost the game. The loss brought their season to an end. Williams' poor choice of a conflict management strategy was a giant blunder. To manage conflict well, we have to remember that there are several conflict management strategies. The key to managing conflict well is choosing and executing the strategy that best fits the situation.

Conflict Management Strategies There is a menu of strategies we can choose from when in conflict situations:

Forcing - using formal authority or other power that you possess to satisfy your concerns without regard to the concerns of the party that you are in conflict with.

Accommodating - allowing the other party to satisfy their concerns while neglecting your own.

Avoiding - not paying attention to the conflict and not taking any action to resolve it.

Compromising - attempting to resolve a conflict by identifying a solution that is partially satisfactory to both parties, but completely satisfactory to neither.

Collaborating - cooperating with the other party to understand their concerns and expressing your own concerns in an effort to find a mutually and completely satisfactory solution (win-win).

Research on conflict management styles has found that each of us tends to use one or two of the above five strategies more than the others. For instance, some people predominantly use collaborating when in interpersonal conflict situations. In other words, although there are five different ways to handle conflicts, such a person is more likely to collaborate than they are to force, accommodate, avoid, or compromise. There are many advantages to using a collaborating strategy to handle interpersonal conflict situations. Collaborating with the other party promotes creative problem solving, and it's a way of fostering mutual respect and rapport. However, collaborating takes time, and many conflict situations are either very urgent or too trivial to justify the time it takes to collaborate. There are many conflict situations that should be handled with one of the other four conflict management strategies rather than collaboration. Managers who are very skilled at conflict management are able to (a) understand interpersonal conflict situations and (b) use the appropriate conflict management strategy for each situation.

Matching Strategies to Situations

There are a few key variables that define conflict management situations and determine which conflict management strategies are likely to be effective. Time pressure is an important variable--if there were never any time pressures, collaboration might always be the best approach to use.. In addition to time pressures, some of the most important factors to consider are issue importance, relationship importance, and relative power:

Issue importance - the extent to which important priorities, principles or values are involved in the conflict.

Relationship importance - how important it is that you maintain a close, mutually supportive relationship with the other party.

Relative power - how much power you have compared to how much power other party has.

When you find yourself in conflict over very important issues, you should normally try to collaborate with the other party. But, if time is precious and if you have enough power to impose your will, forcing is more appropriate. Realize that you might need to repair the relationship after using a forcing strategy if the other party feels that you did not show adequate consideration for their concerns. Again, collaborating is normally the best strategy for handling conflicts over important issues.When dealing with moderately important issues, compromising can often lead to quick solutions. However, compromise does not completely satisfy either party, and compromise does not foster innovation the way that taking the time to collaborate can. So, collaborating is a better approach to dealing with very important issues. When you find yourself in conflict over a fairly unimportant issue, using an accommodating strategy is a quick way to resolve the conflict without straining your relationship with the other party. Collaborating is also an option, but it might not be worth the time. Avoiding should normally be reserved for situations where there is a clear advantage to waiting to resolve the conflict. Too often, interpersonal conflicts persist and even worsen if there is no attempt to resolve them. Avoiding is appropriate if you are too busy with more important concerns and if your relationship with the other party is unimportant. However, if either the issue or the relationship between the parties is important, then avoidance is a poor strategy.

 

 

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Seven Dynamics of Change

Whatever the kinds of change that people encounter, there are certain patterns of response that occur and re-occur. It is important that change leaders understand some of these patterns, since they are normal outcomes of the change process. Understanding them allows leaders to avoid over-reacting to the behaviors of people who, at times, seem to be reacting in mysterious, non-adaptive ways.

Ken Blanchard, well known management consultant, has described seven dynamics of change designed to help managers better address employee reactions to change. They are worth summarizing here.

People will feel awkward, ill-at-ease and self-conscious

Whenever you ask people to do things differently, you disrupt their habitual ways of doing things. This tends to make people feel awkward or uncomfortable as they struggle to eliminate the old responses and learn the new. Think back to your own experience and you will discover this theme. Whether it be learning to use a computer, the first time picking up your infant, or dealing with a new reporting relationship, recall the self-consciousness that you probably felt. People want to get it right, and fear that they will appear inadequate.

People initially focus on what they have to give up

Even for positive changes such as promotions, or those that result in more autonomy or authority, people will concentrate on what they will be losing. As a change leader you need to acknowledge the loss of the old ways, and not get frustrated at what may seem to be an irrational or tentative response to change.

People will feel alone even if everyone else is going through the same change

Everyone feels (or wants to feel) that their situation is unique and special. Unfortunately, this tends to increase the sense of isolation for people undergoing change. It is important for the change leader to be proactive and gentle in showing that the employee's situation is understood. If employees see YOU as emotionally and practically supportive during the tough times your position will be enhanced and the change will be easier.

People can handle only so much change

On a personal level, people who undergo too much change within too short a time will become dysfunctional, and in some cases may become physically sick. While some changes are beyond our control, it is important not to pile change upon change upon change. While changes such as downsizing bring opportunity to do other positive things, the timing of additional changes is important. If you are contemplating introducing changes (that are under your control), it may be a good idea to bounce your ideas off employees. A good question to ask is "How would you feel if....."

People are at different levels of readiness for change

Some people thrive and change. It's exciting to them. Others don't. It's threatening to them. Understand that any change will have supporters and people who have difficulty adapting. In time many people who resist initially will come onside. Consider that those people who are more ready for the change can influence others who are less ready. Open discussion allows this influence process to occur.

People will be concerned that they don't have enough resources

People perceive that change takes time and effort, even if it has the long term effect of reducing workload. They are correct that there is a learning time for most change, and that this may affect their work. It is important for change leaders to acknowledge that this may occur, and to offer practical support if possible. In the downsizing scenario this will be even more crucial, since resources themselves are cut. Consider following the downsizing with a worksmart process, whereby job tasks are reviewed to examine whether they are still necessary.

If you take the pressure off, people will revert to their old behaviour

If people perceive that you are not serious about doing things the new way, they will go back to the old way. Sometimes this ill be in the open, and sometimes this will be covert. While Blanchard uses the word pressure, I prefer to think of it in terms of leadership role. The leader must remind people that there is a new course, and that the new course will remain. Coaching towards the new ways is also important.

Conclusion

It is important for leaders to anticipate and respond to employee concerns and feelings, whether they are expressed in terms of practical issues, or emotional responses. When planning for, and anticipating change, include a detailed reaction analysis. Try to identify the kinds of reactions and questions that employees will have, and prepare your responses. Remember that the success of any change rests with the ability of the leaders to address both the emotional and practical issues, in that order.

1 The seven dynamics of change in bold were taken from an article by Ken Blanchard, and published in The Inside Guide, Oct., 1992. Commentary on each of the principles was written by the Editor of The Public Sector Manager.

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Transform Your Company for Growth

Scott D. Anthony and Kevin Bolen 04.04.08, 7:00 PM ET
Transformation. The word oozes with potential. Shed the skin of the old and embrace the new. Emerge better, stronger, more powerful. Companies are increasingly recognizing that mastering transformation is becoming a competitive imperative. As formerly isolated markets collide and competitors from emerging markets hone disruptive approaches, product lifecycles are shrinking and competitive advantage is dissipating more rapidly than ever before.
Case studies of sweeping organizational transformation--Nokia moving from rubber boots to mobile phones, Kimberly Clark shifting from a paper provider to a leader in consumer packaged goods, Apple sextupling its stock in five years after a decade of stagnation, Google going from a technology company to an advertising powerhouse, Procter & Gamble hopping from soaps to laundry to skin care to health care--show that successful transformation is possible.
But the breathless hype behind these stories obscures a brutal reality: Most efforts at transformation fail miserably. This unnerving and frustrating reality should not be a surprise--after years of pervasive "continuous improvement" programs, executives are reaping what they have sown. Their organizations, from executives down through the rank and file, have been motivated and compensated to focus on incremental improvement, measured quarterly and annually, along competitive performance parameters established years earlier.
Five Lessons To Transform Your Company For Growth
To expect this system to create the breakthrough innovations that power transformation is simply unrealistic. Years of continuous improvement training have caused corporate innovation muscles to atrophy.
To ascertain the scope of the transformation challenge, our company, Innosight, surveyed more than 300 managers, directors, vice presidents, and senior leaders from a wide range of companies. We asked these practitioners whether their companies were walking the walk or just talking the talk around their transformation efforts. Did they have the necessary focus, tools and talent to drive meaningful growth from within?
Their answers are sobering for any executive telling investors about their deep commitment to "growth through innovation." Most survey respondents said their companies are struggling with transformation and they don't know quite what to do about it.
However, there are signs of hope. In this article, we blend insights based on this research as well as our field work, to provide guidance for companies seeking to master transformation.
A Multi-Faceted Problem
"How do you transfer intent into sustainable and reasonable organizational action?" One respondent suggested this is the most important question to answer to make progress on transformational efforts. This question lies at the heart of most organizational struggles around innovation.
It is clear that practitioners bent on transformation face a steep challenge. They have to address a multi-faceted problem with unclear answers and inadequate tools. Our research and field work over the past 10 years suggests transformation requires four interlocking elements: dedicated resources, lead opportunities, tools and processes and appropriate mindsets.
Transformation is about change, and so the resulting acronym--"DeLTA," for dedicated resources, lead opportunities, tools and enablers and appropriate mindsets--is appropriate. We asked survey respondents detailed questions about 11 specific factors related to transformation that fit into four categories:
Dedicated Resources:
Human resources dedicated to transformational efforts: In many organizations, the scarcest resource isn't money, it's time.
Financial resources dedicated to transformational efforts: Organizations can struggle with transformation because natural forces within the company allocate financial resources toward core initiatives.. Dedicated financial resources can avoid this trap.
Senior management engagement and leadership: It is hard to overcome the hurdles inhibiting transformation unless senior management actively engages. Transformation is rarely accidental.
Lead Opportunities:
Selection of opportunity areas for new growth efforts: Companies hell-bent on transformation sometimes think they ought to let chaos reign. Our experience is that strategic selection of opportunity areas is a critical component of success.
Development of new business models and approaches in specific opportunity areas. "Doing what we've always done" is rarely sufficient to power transformation.
Companies need to develop new approaches and at times even challenge their core business model. Capability to scale new growth businesses that power transformation: Generally speaking, the development of ideas involves an "exploration" period and an "exploitation" period. Managing the second part of this development process is critically important to realize the full impact of transformation.
Tools And Enablers:
Utilization of new tools to assess and shape transformational ideas: Any well-run company has tools to manage ideas in its core business--tools that can be ill-suited for nascent opportunities, where judgment and intuition are critical.
Unique and different process for transformational initiatives: Standard processes and procedures can subtly reshape transformational ideas so they resemble what has been done before. However, separate processes can foster transformational potential.
Appropriate metrics and incentives for transformational efforts: What gets measured gets done. Even the best-intentioned companies can struggle if they do not have appropriate metrics and incentives to support their transformational efforts.
Appropriate Mindsets:
Formal approaches to overcome internal resistance to transformational efforts: Left to their own devices, "corporate antibodies" can severely impact well-intentioned transformational efforts. Specific approaches can help defend against these antibodies.
Mechanisms to teach the new mindsets required for transformation: Getting transformation right can require taking actions that can appear counterintuitive or even antithetical to most managers. Developing a "common language" can address this issue.
None of these factors are by themselves silver bullets. When given the chance to evaluate each criterion independently, 90% of respondents said all five factors are somewhat or very important, and 80% said all 11 criteria are somewhat or very important.
This is consistent with our field experience, which suggests that transformation is multifaceted. Throwing money at the problem isn't sufficient if you don't have the right ideas, tools, and leadership. Tools and leadership are worthless without resources.
The wrong mindsets can sink the most well-thought-out transformational efforts. Simply trying to create a compelling mission statement or adopt a new philosophy is insufficient to drive transformation. A few leadership memos and the addition of "innovation progress" to the monthly metrics package are insufficient: cultural change does not occur through PowerPoint.

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Bringing lean systems thinking to six sigma

For years companies have struggled with the dilemma of which quality improvement program to use: lean or six sigma? While some are still debating the either/or issue, others have come to realize that lean tools and six sigma work well together to achieve quick process improvements and greater product consistencies. This is true particularly if you subscribe to a top level and often misunderstood and misaligned definition of each. Lean equals zero waste. Six sigma equals zero variation. Certainly there's some overlap here because lean includes variation elimination as well. But the point is you really can't separate the two when it comes to developing an overall improvement effort.

Lean encourages action along a broad front by empowering people at all levels to contribute. This allows organizations to welcome challenges and implement improvement initiatives. Of course, improvement starts by using the appropriate tools such as process mapping, kanban, kaizen and 5S. Kaizen can help to standardize a process or eliminate waste, and often results are seen within days. 5S can help to structure an environment so that problems can be identified more quickly.

Six sigma brings the discipline of define, measure, analyze, improve and control (DMAIC), as well as the rigor of statistical analysis to identify a root cause, sustain improvement and provide the solid measurements that create a balanced scorecard. Most of us know by experience that six sigma is a solid, scientific methodology for reducing process variability. Process variability affects quality because the more variation is reduced, the more likely it is that the process will produce a good product. It's not just quality, though. Variation reduction also affects the entire value stream (a uniquely lean view) because reducing variation will provide more consistent yields, which means that you can predict what you will get out based on what you put in. Therefore, a process can be designed to flow more continuously, with less just-in-case inventory and improved lead times. Often this is an underappreciated benefit of reducing variation.

Looking at improvement through both lean and six sigma lenses, the necessary tools, methods and strategies exist to not only uncover root causes, but also to concentrate on the obvious. In the old days, this was known as "common sense," and as Mark Twain once observed, "There's nothing common about common sense anymore."

A winning combination
For many of us, it's no longer a matter of lean vs. six sigma, but one question still remains: How do you integrate the various improvement efforts to deliver sustainable results?

To answer this question, you have to know how companies fail at integrating lean and six sigma. One major way of failing is to do this improvement work strictly for the sake of lean or the sake of six sigma. These are the wrong reasons. Companies should execute lean and six sigma for the sake of business results. If leaders don't clearly provide a "why" and "how" for lean and six sigma, the focus will not be on leveraging the methods for business results.

The second most common way companies fail is in choosing a few tools – whether lean, six sigma or something else – and drastically overusing them. An example of this is the overuse of kaizen. There are no magical tools that can do all things. It takes the right tool at the right time. If you can't find a tool to do what you need, you shouldn't force-fit one. Develop your own tool to accomplish what you need.

A major utility company that leveraged its improvement project selection criteria for business results used the right combination of lean tools and six sigma to solve a problem with respect to third-party billing. Challenged with improving the billing process, eliminating the defect and retrieving lost revenue, the company assembled a team consisting of a lean six sigma black belt from finance, a green belt from the pole yard, a pole yard foreman and various yard personnel. One of the first steps was a kaizen workshop where the current state was documented through a series of process maps. Next, waste and non-value-added activities in the current state were identified. From that information, the team worked to redesign a more ideal state. At that stage, specific lean tools such as one-piece flow, 5S, visual control, control point standardization and error proofing were used. Proving that six sigma can be equally effective outside the manufacturing arena, the company also used tools such as failure mode effects analysis (FMEA) and hypothesis testing to understand, measure and systematically reduce the variations in the billing process. The result? A $1.4 million revenue enhancement.

Another example is that of a food company that wanted to improve its processing. Like the utility company, this organization was focused on business results and used both lean tools and six sigma to realize them. For the six sigma initiative, one of its suppliers "loaned" the food company a black belt to help establish baseline data.

The company was faced with a regulation that required it to completely purge, clean and check its system every 72 hours to test for bacterial growth before running production again. This cleaning process was taking too long, chewing up capacity and resulting in back orders and quality issues. The challenge was to reduce the 10-hour cleaning cycle time without sacrificing the quality of the product or equipment.

The company mobilized the key people involved with the process and attacked the problem like a NASCAR racing team pit crew. The crew was coached by a lean six sigma black belt using process mapping, lean layout, visual management with digital cameras and process capability analysis in the product packing area. Cycle time was reduced by more than 2 hours and improvement in the overall capability of the packaging line equaled an additional increase in annual production of more than 30 percent. Backlog was eliminated.

Lean systems thinking
Chances are you've never sat on a two-legged stool, and with good reason: It's tough to do when you can't find the right balance.

Balancing lean and six sigma in your operation might give you the best of both worlds, but not the best of all worlds. Without a third essential component, real success doesn't have a leg to stand on (pardon the pun). The cultural transformation brought on by lean leadership and lean systems thinking within an organization provides the long-term stability – or balance – necessary to sustain quality improvement efforts.

Whatever combination of lean tools and six sigma is used, when it comes to quality improvement, they work. This is good news, but it's not the whole story.

The real "Aha!" moment for companies comes when lean systems thinking is factored into the quality improvement equation. Lean systems thinking is about empowering people to drive change. This is accomplished by following these five key principles:

1. Directly observe work as activities, connections and flows.
2. Systematically eliminate waste.
3. Establish high agreement of both what and how.
4. Systematically solve problems.
5. Create a learning organization.

The fundamental message here is simple, yet not universally understood. No technique, tool or methodology alone can improve a process or system and sustain that improvement long-term. It takes lean systems thinkers to successfully implement lean tools and to drive six sigma change.

To see lean systems thinking as a distinct leg in the stool analogy – separate from lean tools and as a companion to six sigma – is to understand that it's not just a series of events or methodologies that contribute to problem fixes. These efforts often lead to the three Fs of improvement: frustration, flavor of the month and, ultimately, failure to deliver sustainable results.

Lean rules provide the guidance needed to implement improvement, explaining the "why" behind lean tools and the six sigma methodology. Lean rules also help develop new solutions to problems. For everyone in an organization, these rules help structure activities, connect customers and suppliers, specify and simplify flow paths, and bring improvement through experimentation at the right level.

Imagine driving in your car. You have all the tools at your disposal: an easy-to-read speedometer, a clear windshield with an accurate view of the speed-limit sign, a smooth accelerator pedal and even cruise control. However, if the principles or beliefs of the driver are inconsistent with the correct use of these tools, there's little chance that individual will stay within the speed limit. No amount of tools or rules will change people's behavior. They can guide, coax, constrain and aid, but they cannot change how someone acts. Only by changing their beliefs can you change their actions for good.

Lean tools and six sigma initiatives can help to change the way you do things, but without a mechanism such as lean systems thinking to align the organization' s goals and objectives for the most effective application of these tools, an improvement strategy won't be complete.

The best of all worlds
Consider one plant manager who recently bought a new piece of equipment designed to increase production by 30 percent and free up 3,000 square feet (279 square meters) of floor space. While he couldn't wait to get it into his shop, he wondered how he would get the equipment up and running without causing order delays or increasing his number of defects, which averaged about 2.5 percent.

With the assistance of a lean six sigma specialist, the plant manager trained, engaged and empowered a cross-functional team to accomplish this mission. On the lean side, the team's efforts included a kaizen workshop, waste walks and process mapping. As for six sigma, the team performed process capability studies, looked at quality data for defect identification and gathered baseline metrics for all product lines.

The team was also introduced to lean systems thinking. With an understanding of the current state, the team established an ideal vision and developed an action plan. This process improvement plan encompassed input measurements around safety, delivery and cost – all of which directly affected output. The team is now implementing a complete re-layout of the shop floor and undertaking a substantial 5S effort to uncover other improvement opportunities. All of this has been done, by the way, during the company's SAP implementation, which included the introduction of bar coding on the shop floor.

It seems like an impossible task, but the balanced effort provided by lean tools, six sigma and lean systems thinking helped the team to achieve the goal of installing and implementing the new equipment in a smooth, undisruptive manner. Thanks to the third leg of the proverbial stool, the team approached the challenge systematically, with a shared vision.

Successful quality improvement involves using all the available tools and methodologies. Traditional lean efforts will help to reduce flow time and waste, leading to improvements that will boost overall quality. Six sigma, with its focus on statistics, will help to deliver a more consistent product. But to fully support long-term goals calls for an all-important third component: the cultural change that comes with adopting lean rules, principles and vision.

About the author Jamie Flinchbaugh is a founder and managing partner of The Lean Learning Center, Novi, Mich. Through years of research and application, including previous stints at DaimlerChrysler Corp., DTE Energy and research at the Massachusetts Institute of Technology, Flinchbaugh has created, presented and successfully implemented new and powerful approaches to lean.

 

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