Posted tagged ‘Management’

Have we seen this challenge before?

March 20, 2009

“David, there is nothing new under the sun.”

And with that brief message, my mentor Carl, shared the first lesson about this challenging issue.

I am very fortunate to have Carl as my mentor. Besides being blessed with remarkable business acumen and a wealth of experience leading companies and divisions in the food, electronics, housewares and fashion industries, Carl possesses the most important traits that a mentor must have. He is a very giving person with a strong desire to share, better others and educate.

Carl went on to explain that in the 1940’s and 1950’s, the food industry experienced the very same issues that these houseware companies are going through now. When his mother shopped at the local grocer,  he made the decision about what brands she could be purchasing. Choices were limited. Yet, less than a generation when his wife shopped, she was the one who chose the brands.

What had occurred in the intervening years was a change in how food was sold. The grocer of the past was replaced by the retailer. This new brand of retailer stopped being a merchant and became more of a landlord. In reality, he was selling space and his “tenants” were the products that he sold.  Those who paid more for their position and location received more favorable space.

To compete, the supermarket owner had to leverage a different kind of appeal, one of better selection and lower price. Their key measure was the return on investment against cost per square foot. Their goal was to stock the floor with products that gave them the best return.

There were some exceptions and those retailers although new at what they were doing, learned about these exceptions very quickly. There were certain items that, even if they didn’t meet the ROI criteria, still had to be carried in the store. If these staples were not in the store, the consumer would have to go to another store. If the consumer did, the storeowner risked the possibility that the consumer would begin to shop in another place for not only those staples but for other items as well.

Sounds familiar, huh? A large store model replacing the mom and pop stores and more items competing for the attention of the consumer. The retailer controls the space and influences price and margins. Customers flock to these stores for convenience and better price.

So the first lesson then was that there is historical precedence to this dramatic change. In our next post, we’ll learn about the methods that Carl used to meet this challenge in the very same industry that our housewares executives are working.

Technical Support is Never Just an Expense

March 12, 2009

Over the last two days, I’ve been engaged in a very upsetting conversation about technical support.

As a follow up to verify that a client’s technical issues were resolved, an employee discovered that from the client’s perspective, one remained open. When that issue was reported to senior support management by the employee who had contacted the client, it was greeted with an e-mail response that the issue had been closed a month earlier and an attachment with a copy of the resolution. The employee responded that the issue was, at least in the mind of the client, still open and a request was made to contact the client once again.

The manager balked saying that the job of the team was to close issues and once an issue had been closed, it was the responsibility of the client to speak with his colleagues and discover the resolution so no additional call would be made.

While this issue was being brought to the attention of departmental leadership by the employee, a lead developer weighed in on a different matter. He explained that there is always a consequence of adding features and functionality. When we add features, he explained, the software becomes more complex and the clients invariably ask more questions and support is further challenged.

More on the conclusion of the story in a moment, but first, an important digression.

All of our clients have choices. If we are simply and only measuring closed calls, our measurements are insufficient. Closed calls do not lead to client retention. Client satisfaction does.

I spoke with a colleague at a very large company and asked him what his company measures. Their measures include days elapsed until there is a solution and top ten call generators. They expect a spike in tech support calls when they release a new product but the top ten call generators tell them what they need to fix to reduce the call volume. Incidentally, the costs associated with addressing these “top tens” are charged back to the group that made the product. That’s one way to make sure that they get addressed.

A percentage of customers are also called every day to verify issues are resolved. They also count numbers of calls per support-paying customers. They view these customers as their best and most important customers.

One of his most interesting insights was that his company is moving to do all support in live chat. He noted that Google and Amazon already do all of their support via e-mail. This allows these companies to track the issues and the conversations with much greater ease and accuracy.

His company, however, is moving to live chat. Live chat provides the benefit of tracking the conversations and topics but keeps the human dimension in place. Sounds like a forward thinking approach.

Now back to our story…

With no place to go on this issue, the employee contacted the client and shared the documented resolution with him. Turns out closing the issue was premature. The proposed solution did not work as expected and the issue needed to be reopened. The client was right.

As to the developer, he was reminded that without releasing enhancements periodically, the software would become stale and the company would lose clients and share. Additionally, when clients learn that enhancements are being made to a product, the will begin to suggest additional way to make the software even better. This, by the way, is usually a good thing.

Technical support is not an expense. Done right, the client experience is enhanced. Market share grows and the business booms.

In these challenging economic times, it’s a lesson worth revisiting again and again.

Talented Rookies or Experienced Pros?

March 8, 2009

One of the ongoing debates in many organizations is whether to hire young, unproven talent and develop them or engage experienced, savvy but more highly salaried professionals. There is an answer, and of course, it is that it depends on the situation.

Personnel should always be hired based on the requirements of the job. Here are many of the factors to consider:

  • Is the work time sensitive?
  • Is the work very important and can mistakes be tolerated?
  • Is the work highly technical requiring an experienced mind?
  • Is the management talent available to guide and train less experienced staff?
  • Does the client for whom this work is being performed have an expectation that it will be performed correctly the very first time?
  • Will the individual performing the work have to exercise political savvy in performing the work?

You’ve no doubt noticed that one of the factors not included is cost. This is because it often costs more to have a less experienced and lower salaried person perform the work. Less experienced staff often will need to try multiple times to get it done correctly. Oftentimes, they will need management guidance every step of the way.

When I started my first company, Flash Creative Management, I thought that hiring bright, young people was the way to go. Flash was a service based business specializing in strategy development, business process redesign, and software development to support the client’s strategies and processes. My thinking was that I’d have a greater profit margin between what we would charge the client and what we were paying the staff.

Within a few years, it became very clear that for Flash, this was not the right approach. Our clients were willing to pay a premium dollar for important services done right the first time. And they wanted dramatic results.

Less skilled talent had lower salaries but the cost of rework, management time and – this is very important – the hit to the brand we were trying to develop — were significant.

When we shifted to more “expensive” and experienced staff, our business’ growth accelerated dramatically.

So “situationally” speaking —

If the work is either very important, highly technical or does not allow for errors or is time sensitive or requires political savvy, go for the proven and experienced talent. It will prove to be a very prudent approach that will save you money.

There is a place for young talent as well. They will perform very admirably in an environment where fresh ideas are required. However, it is equally important in order for them to be successful, that a nurturing and supportive environment that is comfortable with experimentation be in place. Management needs to be patient and be willing to guide and train extensively.

Staffing Appropriately During a Recession

March 2, 2009

With each passing day, we learn of more layoffs and furloughed employees. Today, more than ever, service and professional organizations need to determine the resources needed to complete projects so that they are staffed appropriately. Not surprisingly, there is a method by which one can accomplish this goal.

To do so, one begins by looking outward and assessing the projects that one wishes to address over a discrete period of time. Evaluate what is a priority or even an emergency project. These are the projects that absolutely must be accomplished for the well-being or growth of the business. Consider how long each project will take to complete.

Then segment the remaining projects into ones that would be nice to complete as they would add some value and then ones that are critical to the growth of the company. Your focus should be to address the priority projects, then the long term growth ones and then the “nice to haves.” By organizing the projects in this manner, the ability to address some of the longer term projects will present themselves as well.

From there, one should assess the type of staff required to complete the project. Do not think of terms of names of individuals within your company; rather, think in terms of roles. This is important because when one thinks of individuals, there is a tendency to not recognize that a particular person lacks a necessary skill or to minimize the importance of that person missing the skill. Make certain that you understand the skills required within each role.

Out of this exercise, a pattern will emerge. You will begin to discover that certain skills are required over the long term and certain skills are needed temporarily. You will also learn, based on the lengths of the projects, whether you need more than one individual with certain skills.

Once the roles have been identified, it is time to inventory the skills of your team. Do you have the right people and the right mix of professionals to complete the tasks at hand? Are their skills mature or do the lack the appropriate experience?

After completing this analysis, you will be in a better position to determine if you wish to recruit or buy additional talent, rent or have a consultant supplement your team to address a short term need, or provide additional training so that members of your team can acquire the skills.

Each of these alternatives has their place within the solution set. A short-term need or the immediate requirement for expertise and depth may necessitate that the most appropriate and economical alternative is using a consultant (the “rent” approach). A longer term or less pressing need may allow for an investment in training and augmenting the skills of your staff.  A need that you believe will be required for years to come may result in your organization pursing the recruitment or buying talent option.

In our next post, we’ll contemplate whether to recruit talent that has less experience and may be less costly or talent that has more experience and a higher price tag.

Types of Measures

February 20, 2009

There are three types of measures:

1. Activity measures

2. Output measures

3. Impact measures

Activity measures tells us how efficiently something was done. It answers questions such as:

  • How long does it take?
  • How productive is the department?
  • How many resources were used?

It focuses us on internal tasks, timing and resources but it is NOT about outcomes. As an example, profitability is an activity measure because it relates incoming revenue to internal operational costs. It measures the efficiency within which resources are utilized to produce income.

You’ll find activity measures are usually used with internal operations groups and frequently these are the measures used for multiple phases of processes

Output Measures emphasize the results of the work rather than the work activities themselves. Outputs tend to be physical products, services and communications that one group sends to another. These types of measures answers questions about what has been produced such as:

  • Does the product meet quality standards?
  • Was the product sent on time?
  • Was the product delivered on time?
  • Was the customer satisfied?

Output measures are about products NOT about production. They gauge quality, timeliness and evaluation by the CUSTOMER or USERS and therefore the measuring source is usually outside of the group producing the output.

Customer satisfaction is an output measure that requires obtaining feedback from outside the organization (this can be a customer internal or external to the organization.) Most output measures are using internal standards. These measures are useful when you are interested in whether the results meet certain standards.

My personal favorite is the last of our set and the one the President and our legislative leaders truly want to cause.

Impact measures ALWAYS require feedback or customer research to develop meaningful measures. So what is the difference between customer satisfaction measures and impact measures?

Customer satisfaction measures what the customer likes. Impact measures what the product does for the customer. It is all about value.

Impact measures answers questions such as:

  • Does the product make the customer more productive?
  • More successful?
  • Do the services make the customer more effective?
  • More influential?
  • Do the products help the customers reach their goals?

These measures require serious examination of the customer because there is no other way to get information about the customer’s productivity, success measures or goals without their input and evaluation.

Most important it shifts the focus to “What do you need from us to help you succeed on your own measures of success?” This type of measure alters relationships and makes what you achieve more valuable.

It makes you realize exactly what is the point of what we do.

Keeping Your Balance

February 16, 2009

As I mentioned in an earlier post, it appears that President Obama is getting quite an education from both the Democrats and the Republicans. This type of education will hopefully result in the President learning how to keep his balance.

The life of a leader is always a balancing act but never more so than during a transition. Uncertainty and ambiguity can be crippling. One does not know what one does not know. Keeping one’s balance is a key transition challenge.

It is essential that the new leader avoid these seven traps.

1)      Riding off in all directions. You must focus yourself on what is important.

2)      Undefended Boundaries. It is important to establish boundaries around what you are willing and not willing to do. Otherwise bosses, peers, and direct reports will take all that you have to give.

3)      Brittleness. The uncertainty inherent in transitions breeds rigidity and defensiveness, especially in new leaders with a high need for control. The likely result will be over commitment to a failing course of action.

4)      Isolation. Isolation can occur because you do not take the time to make the right connections, perhaps by relying on a few people, on “official” information or, by discouraging people from sharing bad news with you.

5)      Biased Judgment. This difficulty manifests itself as over commitment to a failing course of action because of ego and credibility issues, confirmation bias (the tendency to focus on information that confirms your beliefs and filter out that which does not), self-serving illusions (a tendency for your personal stake in a situation to cloud your judgment), and optimistic overconfidence or underestimation of the difficulties associated with your preferred course of action. Vulnerability to these biases increases in high stakes, uncertain, ambiguous situations in which emotions can run high.

6)      Work Avoidance. The leader avoids making a tough call by choosing to bury him or herself in other work. This causes tougher problems to become even tougher.

7)      Going over the top. All these traps can generate dangerous levels of stress. When stress is too high it becomes counterproductive.

To avoid these traps the author recommends following the leadership transition program outlined in this document, creating and enforcing personal disciplines, and building support systems at home and at work that help you maintain balance.

Personal disciplines that should be considered are

  • Planning to Plan
  • Deferring Commitments until you are certain that you have time to fulfill the commitment
  • Setting aside time for hard work by prioritizing and eliminating distractions so as to concentrate on what needs to be done
  • “Going to the balcony” and allowing yourself to step out and distance yourself so that the problem may be perceived in a different light
  • Focusing on the process of influencing others through consultation
  • Checking in with yourself to privately reflect on the situation.
  • Recognizing when to take a break in order to reenergize yourself.

Building your Support Systems means getting your personal office set-up, stabilizing the home front as your spouse and family are transitioning too, and building your advice and counsel network. This network should include people who can guide you on technical issues, such as expert analysis of technologies, markets and strategies; cultural interpreters who will help you understand the culture; and political counselors who will help you deal with political relationships.

Creating Coalitions

February 11, 2009

Anyone who has been observing the stimulus bill negotiations surely has become much more cognizant of President Obama’s need to build coalitions and the early lessons he is learning. To paraphrase his comments last evening, “old habits die hard.”

In order to exert influence without authority to require that people take certain actions, one needs to create coalitions to get things done. Influence networks – informal bonds among colleagues – can help you marshal backing for your ideas among colleagues. However, to do so, one needs to create an influence strategy. This means figuring out whom you must influence, pinpointing who is likely to support and resist your key initiatives, and persuading “swing voters.” .

Many new leaders make the mistake of focusing on the vertical dimension of influence, i.e., direct reports and supervisors, and not enough to the horizontal dimension, namely peers and external constituencies.  Think about who might be critical to your success and whether you have engaged and enrolled them.

Start by identifying the key interfaces between your group and others. Customers and suppliers, within the business and outside, are natural focal points for relationship building. Another strategy is to get your boss to connect you. Request a list of ten key people outside your group whom s/he thinks you should get to know. Then set up  meetings with them. (This strategy should be employed for your direct reports as well. Create priority relationship lists for them and help them to make contact.)

Another productive approach is to diagnose informal networks of influence. Observe the interactions at meetings including who defers to whom on crucial issues. Identify who is sought after for advice, who shares what information and news, and who is owed favors.

Identify the sources of power that give people influence such as expertise, access to information, status, control of resources (such as budgets and rewards), and personal loyalty. Talk to former employees and people who did business with the organization in the past. Seek out the natural historians.

Eventually, you will identify the opinion leaders. If these vital individuals align behind your A-item priorities, broader acceptance of your ideas is likely to follow.

There is a diagramming tool known as an influence map that will help you identify who influences whom. An influence map will help you identify supporters, opponents, and “convinceables,” people who can be persuaded.

Potential supporters typically share your vision of the future, are quietly working for change on a small scale, or are new to the company and have not yet become acculturated to its mode of operation. You must solidify and nurture this support. It is not a given.

Opponents will oppose you no matter what you do. They may believe that you are wrong. They may be comfortable with the status quo, have a fear of looking incompetent, see you as a threat to a value that they hold dear or to their power, or that your arrival will have negative consequences for people that they care about.

When you meet resistance, try to grasp the reason behind it. This will allow you to counter arguments and you may be able to convert some early opponents.

“Convinceables” are the swing voters who are either indifferent to change, undecided, or may be appealed to based on their interests. Take the time to try to figure out what their interests may be. Ask them or engage them in dialogue about the situation. Ask if there are competing forces that prevent these people from listening to you.

Now you are ready to think about persuasion strategies. People tend to weigh status quo vs. change. People will more likely gravitate to the status quo unless remaining with the status quo is perceived as a future threat or if there is a reward for change. If the leader has earned sufficient credibility, merely asking people to try something new is sufficient. These persuasive appeals can be based on logic and data or on values and the emotions that values elicit, or some combination of both.

There are action-forcing events that require change. Review meetings in which people must discuss progress publicly are one such event. These meetings encourage action and enforce accountability.

If people are unable to move at once, a leader may employ strategies to allow people to make incremental steps towards change called “entanglement strategies.” For example, getting people to participate in an initial meeting may cause them to participate later on. Entanglement works because each step creates a new psychological reference point for deciding whether to take the next small step.

Another way to do this is to get people to participate in data gathering. Once the person recognizes the problem, have them participate in refining the problem definition. From there it is a small step to solution planning and then, to implementation.

Finally, if you get people to change behaviors, right attitudes often follow. This is because people look for consistency between their behaviors and beliefs.

This all leads to a concept called “sequencing strategy.” By getting individual influencer’s alignment and support, group actions follow. If you approach the right people first, you can set in motion a virtuous cycle. Approach people in the following sequence:

  • Individuals with whom you have supportive relationships first
  • People whose interests are strongly compatible with yours
  • People who have the critical resources to make your agenda succeed
  • People with important connections who can recruit more supporters