Wednesday 31 March 2010

What's your Planning Horizon?

March 31st. It’s the end of a quarter, or the end of a financial year depending. A time for looking back on objectives achieved and work that still needs to be done. Whether you plan on a monthly, quarterly or annual horizon, it’s a milestone.

The length of your planning horizon is important. To some people a quarter is a lifetime; for them a month is better. Of course it depends on your business and your ambitions. Google sets “impossible bodacious goals” and then achieves them, according to one employee. They set goals for the quarter, not for the year: for Google a year is forever. They want results faster. They pay those who deliver, they get results faster, and the world stands back in awe wondering how they do it.

If you are attempting complex engineering-type changes, then a month’s planning horizon is too short. But as Google are perhaps demonstrating, a year may be too long.

Your planning/review horizon is important – whatever the time period - as is the seriousness with which you review it. Your progress vis a vis your competitors may depend on it.

Tuesday 30 March 2010

Meet with Triumph and Disaster ….

Like many others I watched the BBC2 programme “Total Recall: The Toyota Story” last week. It made fascinating but sober viewing. Toyota, famous for quality, affordability and the ground breaking Prius, are now in the dock for allegedly preferring profits and growth to safety.

Rising to be the world’s largest car maker, and overtaking the mighty General Motors, the fourth generation Toyota family President might have felt that the company was invincible. It proved to be an illusion. The once text-book example of quality and just-in-time manufacturing is now the butt of jokes about brakes not working.

Whilst many are pouring over what we know of Toyota’s demise, what I think will be most interesting is what the company does next. It will take a lot to convince car owners that any amount of functionality, at any price, is worth more than safety. It will also take a lot to convince car owners that dealing with a manufacturer who is slow to respond to deaths caused by faults in their cars is a good bet. However, both are possible.

Toyota has been revolutionary and inspirational in so many ways. They made Kaizen part of business people’s everyday vocabulary. Let’s hope there is still more to learn from them in how to recover from their current plight.

Rudyard Kipling's "If" seems appropriate, so here it is:

If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or, being lied about, don't deal in lies,
Or, being hated, don't give way to hating,
And yet don't look too good, nor talk too wise;

If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim;
If you can meet with triumph and disaster
And treat those two imposters just the same;
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to broken,
And stoop and build 'em up with wornout tools;

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: "Hold on";

If you can talk with crowds and keep your virtue,
Or walk with kings—nor lose the common touch;
If neither foes nor loving friends can hurt you;
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds' worth of distance run -
Yours is the Earth and everything that's in it,
And—which is more—you'll be a Man my son!

—Rudyard Kipling

Friday 26 March 2010

Better off without unions?

Strikes are back in the UK news. Last year postal workers disrupted daily life by not delivering our post, then BA cabin crew disrupted holidays and business flights, now it seems that rail workers feel they are being treated unfairly and may come out on strike over Easter. When I say rail workers, I really mean their union. Because that's what happens when unions aren’t happy.

What is most striking (sorry) about all of this is that we are still in the deepest recession for 60 years. A recession in which many people have lost their jobs, a recession in which many businesses have had to rethink how they operate, and a recession that has caused a great deal of hardship. I’m not saying that mistreated workers should shut up and put up, what I am saying is that organisations must be allowed to change.

Refusing to come to work because management want to reduce 12-hour shifts is an inappropriate and out-dated way of behaving. Railways, airlines, postal services and most other goods and services are part of the global economy. Which means we all have to compete in a global economy. Which means changing as they world changes. Which is something that unions seem to find difficult.

The independent Hooper Report on the UK’s postal service was entitled “Modernise or Decline.” The report says “there is too much resistance to change at a time when the company must focus relentlessly on meeting the needs of customers.” How many other businesses does that apply to? Many? Most? All? Certainly all those mentioned above, and most organisations that are likely to come out on strike when unions get upset.

So maybe unions are out-dated?

The good of any workforce will only be well served if they work for a strong business. And all strong businesses need to be able to change as circumstances change.

Thursday 25 March 2010

We are all connected

Performance measurement can seem threatening. If you measure something I’m doing, you might figure out that I’m not doing it very well. I’m not going to like that, so I’ll probably put every obstacle in your way to make sure any performance measurement initiative is killed off quietly and quickly.

Of course what I’m missing is that improving something isn’t about me, me, me (although I like to think everything is about me, me, me). When we improve something at work it’s pretty much always by a number of people working together so that many more people (customers, shareholders, other employees) can benefit. Because we are all connected; no woman is an island. And no performance improvement initiative is about any one person. Or group of people for that matter. It’s about How We Do Things Around Here, and How To Make What We Do More Efficient.

Which kinda of leaves the whole me, me, me thing looking a bit daft....

Tuesday 23 March 2010

Do you have a business warm-up routine?

The start of my in-the-office-days is unexciting: a cup of peppermint tea, checking email, and catching up with gossip before settling down to work. Nothing unusual, but not terribly inspiring either. It doesn’t really set the scene for a high performance day.

Of course a meeting is different: I prepare differently, think differently, and take time to get myself ready. What a contrast! The day in the office I handle routinely (because it is), whilst meetings I give the respect and care they deserve.

Yet I spend far more time at my desk than I do in meetings. I get far more done at my desk than I do in meetings. My overall results are influenced every bit as much by my work in the office as those all-important meetings. So why don’t I prepare as carefully for a routine day?

My gym routine fares better. I always start with 20-30 minutes on the bike as a low impact way to get my body used to the idea of physical work. The warm-up prepares me mentally and physically for the exercise session to follow. It’s the norm in the gym; everyone knows you have to warm-up first.

Some days I get into the office already firing on all four with a clear view of everything I want to accomplish - days when I’ve done all the planning, and can get straight on with what needs to be done. But there are also days when I stare at the urgent tasks in front of me; a rabbit caught in the headlights of specifications, project plans and paperwork.

My business warm-up routine isn’t nearly as well established as my exercise warm-up. Nor is it setting me up for the high performance results I want. In fact until recently I’ve never really considered the need for a warm-up before the day starts.

Yet business is every bit as demanding as physical exercise. It may tax different muscles, but it needs focus, concentration, and preparation. If only we had business coaches in the same way we have sports coaches; someone to remind us that we have to warm up before starting work. Someone to point out that you have to see success in your mind before you can make success a reality. Someone to say: take 20-30 minutes before the day starts to get in the zone for the challenges that lie ahead.

Business borrows much vocabulary from the sports field, maybe its time to steal a few routines too. Nor only for the physical benefits, but for mental alertness, improving focus on important goals, and getting into high-performance flow mode.

Thursday 18 March 2010

Edit your way to success

Editing is the most important activity for a writer. Writers need ideas, structure, and to make their prose sing, but all that hard work is wasted without editing. How do I know? Because too often I’m a lousy editor! Editing always improves my writing and my thinking.

It’s just as true in business. What we exclude is more important than what we include. Here’s why:
  1. It's difficult to serve a defined customer niche exceptionally well. But it’s much more difficult to serve many markets. The Virgin Group try to make their brand elastic, but the failures of Virgin Cola, Virgin Brides, Virgin Cosmetics and Virgin Vodka demonstrate that it ain’t so easy. Define which markets to exclude, so as to improve the message to your chosen market(s).
  2. Too many priorities means nothing gets done well, important stuff gets missed, and half-finished jobs tug at your attention. To Do lists should be edited ruthlessly: Delete, Automate, or Delegate. Doing is a last resort but it means that important stuff gets done well.
  3. Cluttered filing systems (paper and electronic), full in-boxes, unread books and magazines are a constant distraction if left unattended. Keeping things “just in case” seems to be in my genes, but when I force myself to shed the junk my mind is clearer and more focused.
  4. Exclude “nice to have” objectives from your business plan so as to free resources and thinking time for essentials. It’s more motivating at the end of the year to see that all objectives were achieved, rather than a long list that gets quietly forgotten.
Editing, excluding and choosing are easier to write about than to do, but are hugely effective as a business tool. So if in doubt: edit, edit, edit!

Tuesday 16 March 2010

Unplan Your Business – Not!

Are business plans dead? Are events moving so fast that planning has become a bureaucratic luxury? I think not, and research indicates that business plans are as relevant today as they always have been.

An inadequate or non-existent business plan is still a cause of failure amongst small businesses. No business plan = insufficient thought and seat-of-the-pants management. All boats might float on a rising tide, but when things are less buoyant, too many sink never to be seen again. The list of why small businesses fail is long and depressing, but pretty much all of them include Poor Planning.

So why do people suggest such dangerous nonsense? Is it to be different? To shake things up a bit and get known as a popular thought leader? After all business planning isn’t exactly the most popular activity for managers.

Or is it because they genuinely have a crystal clear vision of their business that they don’t need a plan? And so think that other businesses shouldn’t have one either? I guess that’s the kindest explanation I can come up with, and I take my hat off to anyone who can hold the complexities of leading and managing a business without a business plan.

Like the billionaire day-traders (not too many of them around …) I’d love to meet those successful people who steer their thriving businesses without a so much as a back-of-an-envelope plan. How do they do it?

Monday 15 March 2010

What business are you in?

Ever struggled to answer when someone asks you what you do? It's one of the most common difficulties for smaller businesses.

As a photographer, it would be easy to answer “I’m a photographer”. But is that what you do? Yes, you take photographs. But it may not be why people buy from you.

After all, I take photographs (very bad ones), but I'm not suggesting you trust your wedding day, corporate, or special event photographs to me. If you hire me, I can almost guarantee that every single one of them will be dreadful. I don’t own any professional photographic kit, my eyesight isn’t so great, and I have a habit of taking photographs directly into the light - by accident rather than for artistic effect. That’s not to say I haven’t taken some nice photographs, I have, mostly of my cats. But you begin to get the idea. I’m no dead cert when it comes to creating a visual record of something that isn’t likely to be repeated in a hurry. In fact, it’s a dead cert I will fluff it up.

Which is why I don’t run a restaurant. Although I rate myself as a pretty decent cook, I’m what you might call patchy. I’m not a great one for recipes. Sometimes my cooking is brilliant, and sometimes it’s terrible. Dinner at my house and is a culinary lottery. So if you have a sense of adventure, as well as a healthy sense of humour, you could consider coming round Chez Moi for your Golden Wedding, special birthday, or I’m Terribly Sorry I Forgot Our Anniversary dinner. But probably not.

So are photographers in the photography business? Or are they in the business of creating perfect memories, capturing the real you, or taking the worry out of your important day? Of course, it depends on the photographer, just as different restaurants will come up with different answers depending on their market niche.

Figuring out what business you are in is all about taking your customers' perspective. There is no right or wrong answer, but thinking it through could inform much of how you run your business.

Friday 12 March 2010

Write Your Own Obituary

Contemplating our limited time on earth isn’t something most of us do willingly. Yet it is the ultimate goal setting exercise. How do we want to be remembered? What do we want to achieve during our lifetime?

It’s less weird than it sounds (and I know it does sound weird). When forced to consider what we could do during our lifetimes, what we probably won’t or can’t do, we are left with the choice of what we really want to accomplish. Yet the cold reality is that unless we do something about it, our obit is going to read quite differently.

“Here lies Caroline who really meant to get around to doing a whole bunch of stuff she never had time to do …” probably isn’t how I want everyone to remember me. And of course it doesn’t just have to be achievements, but also qualities, time spent with people who are important to you, and values passed on to future generations.

Charles Dickens’ Christmas Carol is the ultimate obituary, graphically set out during Scrooge’s own lifetime. The ghost of Christmas Future showed him what would happen unless he changed his ways. It left him a different man, with a wonderfully different outlook on life.

I’ve started to write my obituary and found the exercise a good deal more difficult than I thought. Striking the balance between worthiness and being realistic isn’t easy. And I don’t want my best work to be behind me.

None of us know how long we will live, so forever putting off our biggest dreams until tomorrow probably isn’t the wisest strategy. This little exercise reminds us of exactly that.

Thursday 11 March 2010

You have to believe to achieve

Having a clear, SMART goal is a prerequisite if you want to achieve something; whether you are a business, a team or an individual. It’s hard to argue with – unless you know what you are trying to achieve, the odds of achieving it are not high. The goal in itself is not enough, though. Figuring out how to achieve it is a close second. But what about those crystal clear goals, with plans, that are still not happening? What’s going wrong?

Could it be that deep down inside, you don’t think it’s achievable? So despite revising targets year after year and promising to “try harder” and “do better” still nothing happens. Simply because at some level you don’t think you have it in you.

Henry Ford famously quipped: “Whether you think you can, or whether you think you can’t, you’re right.”

Could changing your mind change the outcome? I think so. But sometimes self-doubt goes deep, so we have to dig deep to do the changing. Figuring out that change is needed is the first step, though, because once we know what the problem is it's much easier to start finding solutions. So despite its annoying symmetry, you do have to believe to achieve.

Because all the measurement and KPIs in the world are not going to make up for self-sabotage.

Tuesday 9 March 2010

An example of a powerful metric in use

Mortality ratios

Yesterday’s posting about performance metrics in the UK’s NHS system provoked much comment and discussion. The BBC’s Panorama investigated the discrepancies between certain hospitals’ own assessment of their performance, and independent assessments of their performance. In rather too many cases the discrepancies were significant.

One metric that caught my attention was discussed by Professor Brian Jarman of Imperial College, London. The hospital standardized mortality ratio compares the number of deaths expected and the number of in-patients at a hospital who actually die. Professor Jarman’s response to the interviewer’s questions was particularly instructive. When asked about the relevance of the metric he replied that it could indicate:
  1. Data had been incorrectly entered
  2. Something was wrong with the calculation
  3. There is a problem with patient care
And he listed these possibilities in that order. In other words, the metric was an indicator that highlighted the need for further investigation. It was not an indicator that provided cut and dried proof of a problem. He went on to say that in one instance the ratio had highlighted a problem for ten years.

This is how performance metrics are designed to be used:
  • An alert to a potential problem
  • A need to investigate further
  • Trends (upwards, downwards, consistently bad, consistently good) tell you more than any one single metric.
From my own experience I know that the NHS is not the only example of this mis-match between reported performance and actual performance. If there is any justice for tax payers this will run and run.

Monday 8 March 2010

Learning organisation or measuring organisation?

The Sunday Times’ article yesterday about the failings of the NHS performance management system was disturbing: Labour hid ugly truth about National Health Service.

Any organisation that gives higher priority to performance measures, rather than to its core business, needs to ask some harsh questions. In this instance it will be the country asking the questions – not only of the NHS but also of the government.

Since the days of Florence Nightingale we have understood the need for basic hygiene in order to prevent infection. It seems that performance measures were able to wipe away 250 years of performance improvement by not following the most basic of health procedures.

So when results like this are achieved from a performance measurement system that we can only presume was meant well, where does the blame lie?

It would be both true and too easy to say the blame lies with the leadership. Fish rot from the head down, and those in positions of leadership must shoulder the greatest share of the responsibility. But when a trained nurse does not pay attention to basics such as washing hands, or disinfecting areas where patients are cared for, there is either a massive culture problem, or a problem with basic training. My money would be on the issues of culture, many of which have been well documented.

However, those who devised and rolled out the targets must be feeling uncomfortable now the results of their performance management exercise have been revelealed:
“Most targets and standards appear to be defined in professional, organisational and political terms, not in patients’ experience of care.”

Maybe that’s easy to say with hindsight, but for the rest of us it is a chilling reminder that performance measures must be appropriate, tested, and constantly reviewed to ensure the organisation is achieving the results it needs. And not dysfunctional results it doesn’t want.

Performance measures are a way to understand and learn what works and what doesn’t. We all make mistakes, and performance measures are not easy to get right. But what is unforgiveable is to let such a bad situation go on so long. Performance measures should be a tool for the learning organisation, not a control mechanism for the measuring organisation.

Friday 5 March 2010

What are your core competencies?

Which competencies are essential for success in your business?

Business competencies are the things we are not only good at, but better than your competition. Being good at things, therefore, is an important part of succeeding.

Of course there are many, many things we have to be good at to succeed in business - time management, financial control, relationship management, etc. The list will be long and varied. Also, perhaps, quite interesting to see how many skills are needed for you and your team to do your jobs.

Core competencies are different, however. These are the things that you build your reputation on: the things that you want your customers to remember. The things that if you do them very well ensure your customers choose your business rather than another.

So from that long list of things you could do very well, you need to choose a few that you will do very well, and compete on those. They are your core competencies that will have your competition wondering how you manage to achieve such good service or make such good products.

Suddenly, competencies start being a powerful and important part of your business. Not just things you take for granted.

Thursday 4 March 2010

Do things differently

I’m currently on a quest to do things differently. By my ripe age I’ve got myself into some good and bad habits, and I’ve certainly established a lot of routines. Of course good habits can be a great time saver, but from time to time they need to be reviewed. What serves you well at one time may not be appropriate forever and ever.

So occasionally we all need to be given a jolt, and encouraged to try new things. It’s not easy. Habits, once formed, are difficult to break.

For example, not checking email regularly is a great time saver, but has now become a habit. Ignoring email for an hour or so hasn’t resulted in any catastrophes; not so far at least and it helps concentration enormously. It’s a “do differently” that may yield some big benefits.

I’m also attending different events, and meeting new people to challenge to my established ways of thinking.

Apart from being great fun, “do differently” has a very serious purpose. Performance improvement is all about doing things better. Better, by its very nature is different from the original. So it’s important to get used to thinking differently, challenging the status quo, and being prepared to change. Not always easy, but important.

And depending what you decide to do differently, it can also be fun.

Tuesday 2 March 2010

It’s not about the numbers

I must be the last business person alive to read Jack Welch and the GE Way by Robert Slater. Not something I’m proud of, but at least I’m getting around to it now. It’s a better book than I expected.

A theme that comes up over and over again is Jack Welch’s insistence that business is not about the numbers. “Don’t focus on the numbers”, he is supposed to have said. “Numbers aren’t the vision; numbers are the product. I never talk about numbers.”

Yet it is equally clear that Jack Welch cared deeply about the numbers: cost control, market share and profitability. So what’s it all about?

Of course Welch was right – the financial numbers are the result of everything else you do. If you get the rest of business right – the right people, the right products being sold into the right markets, and the right focus on quality, the financial results will also be right. And GE’s numbers were right.

According to Slater, Welch focused on getting the right people into top positions, and on sharing good ideas between different businesses – both internally and externally. He was also a big fan of Six Sigma – the quality system with a big emphasis on measurement.

So Welch used numbers to inform him of what was going well and what needed attention. He focused on making sure things happened when and where they were needed.

Oddly enough, it’s just what the rest of us need; even though we are not running GE. Because no matter how loud we yell, or how hard we try, getting the numbers to improve without carrying out all the necessary stuff that goes before, isn’t going to cut it. We should put our focus on the things that build better products and services for customers, and the things that get them to market faster. Then the numbers will take care of themselves.

Monday 1 March 2010

Nurturing innovation and the measures that drive it

Cocreative founder Jacqui Hogan specialises in helping businesses be more creative and innovative. She is passionate about innovation and doesn’t pull her punches. With her trademark sunny smile she will tell you that:

“If you always do what you always did, you will always get what you always got.”

So I asked Jacqui why innovation is so important in business.

“The business world is constantly changing, so if you are not innovating you are losing out to competitors who are. It’s as simple as that. Unless innovation is part of your business you will still be going to meetings on horses while your competitors are polishing their fleet of fuel efficient hybrid cars.”

Jacqui works with small and medium sized businesses on the full cycle of innovation – from idea generation to implementation and risk analysis. But innovation is by definition a creative process. I asked Jacqui whether it can, or should, be measured.

“Measuring innovation poses some challenges, as it is a highly uncertain process. Businesses define innovation differently; it can be anything from incremental improvements to big step change developments.

But unless you measure it in some way, you have no feedback on what is happening. Innovation is important to all businesses, so there needs to be some sort of framework that includes targets, so you can make sure there is always something coming through the innovation pipeline.

There are three basic ways to measure innovation:
  1. Input – the time and resources that go into the process. KPIs might include % of time or % of turnover spent on innovation.
  2. Output – what you get from what you spend. KPIs include number of patents or ideas generated.
  3. Effectiveness – this is how successful you have been. Performance indicators might be number of new products brought to market, or % revenue from new products.

Not all new ideas are successful, but that doesn’t mean you should stop innovating. Also, there can sometimes be a significant time lag between having the idea and implementing something. And even then, it might have changed considerably from the original idea. So measuring effectiveness can be difficult.

As with all performance measurements, you need to use measures as just one tool, not the whole toolkit. Measuring the number of ideas generated might make you feel you are being innovative, but unless ideas are progressed they are worthless. So you need measures at each stage.

I also think you need to be very clear about what you want to achieve through innovation, and measure your performance accordingly. Different businesses, and different executives, can have very different ideas.”

Given the challenges with measuring innovation I asked Jacqui what her advice would be to businesses who want to be more innovative.

“Don’t expect people to do it in their spare time. That just sends the message that it’s not important. Build some sort of innovation measure into the appraisal process; that helps everyone focus. You can’t expect everyone to be creative and innovative, and in fact that’s not necessary. Many different talents are needed to turn ideas into something that can be marketed.

But most of all I would advise companies to make sure innovation is included in their performance measurements because otherwise it won’t happen consistently. And that’s important if you want to stay competitive.”

Jacqui Hogan is the innovative energy behind cocreative, a consultancy that helps businesses be more successful with innovation and creativity.