Saturday, 26 May 2018

Why isn't your company more innovative?


We hold innovative firms up to the light- as rare, glorious examples.

Most organisations have a number of creative people - whether or not in avowedly creative roles.

When these creative people come up with ides that could become innovations - the ideas tend to be evaluated too early and too harshly.  Evaluators look for ways in which the idea could fail rather than looking for ways in which the idea could succeed.

Some products will fail because they are not technically feasible - they don’t do what it was thought they would do.  Others will fail because they are financially not viable - they cost too much or will fail to generate sufficient additional revenue.

However, the biggest killer of innovation is a lack (rarely explicit) of organisational feasibility. It just doesn’t fti with what we do - or how we do things. We don’t have a department where it fits.

If you have good ideas, treat them kindly - look for ways to make them fit and make them work. Otherwise you are never going to innovate.


Saturday, 19 May 2018

Are you like India?

India is often cited as the next major economic powerhouse - perhaps even overtaking China.  This is based on India's recent record in moving up the international GDP league.

However, look just below the surface and you will see that this impressive growth has largely been fuelled by widening employment participation.  India has been very good at creating jobs.  It has been significantly less successful in creating productivity.  India's GDP per worker is very low. This is OK for growth in certain sectors but limits India's ability to compete in some sectors - and in overall terms.

India knows it has to improve and increase skills - and is trying to find ways of doing just that.  But this is much trickier than simply employing more workers.  It is, however, essential to securing and sustaining long-term growth in productivity.

The same goes for your organisation.  Producing more is easy.  Producing more productively - and making real gains - is harder but necessary.

Saturday, 12 May 2018

Correct Coaching

Coaching has become 'fashionable - the number of business coaches has multiplied dramatically over the last 10 years.

However many of thee coaches are 'consultants' under a different name.

What is the difference?

Well, a consultant attempts to improve your business.

A coach, on the other hand, is trying to improve you - so  that you can improve, and continue to improve, your business. The focus, the approach is quite different - as are the skills required.

So, if you - or a member of your team - need coaching, make sure you employ a coach with the right (personal ) skills and the right focus.

Saturday, 5 May 2018

Get them on board - but do it quickly

Careers have been changing for some time. More and more people have portfolio careers, switching industries, roles and employers frequently to fit in with a more flexible lifestyle and give a better work-life balance.

This means most firms have higher labour turnover and greater recruitment costs.

It also means it becomes necessary to improve the effectiveness and efficiency of recruitment and induction processes - what is often called 'onboarding' these days - so that shorter tenure employees get up to speed quickly.

It can take months to get an employee fully up to speed in a skilled job.  Every week you can save is worth money to you.

Saturday, 28 April 2018

Tariffs and prices

The US is imposing tariffs on a number of imports - notably steel and aluminium.  The aim is to protect US manufacturing by making foreign goods more expensive - thus making domestic products more competitive.  Now I haven't seen the details of the tariffs - but I do know that this is an area in which there are often unintended consequences - and my experience also tells me that the 'pain' from unintended consequences often outweighs the 'pleasure' from the intended consequences.

I hope President Trump's advisors have remembered that US auto manufacturers import steel and aluminium parts from around the world.

There is evidence that - mot surprisingly - countries like China will respond in kind, imposing tariffs on goods most likely to come form the US.

There is other evidence that Modi, in India, is also looking towards forms of protectionism - it seems to becoming into fashion as politicians become more populist - looking for short-term vote grabbers rather than long-term economic success.
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Trade wars are a bit like price wars .... they can end up being a 'race to the bottom'.   Countries use their energy thinking about the next trade skirmish - instead of how to grow trade in the longer-term.

Keep your eyes on the prize - and set your strategy accordingly.  Use pricing intelligently - as part of that strategy, not as a blunt weapon.

Saturday, 21 April 2018

Provide a stimulus

Sometimes, well-performing organisations move into 'coasting' mode - they know they are good, so they keep doing what they are doing, perhaps taking advantages of new technologies or 'obvious' improvements when they come along, but not actively striving for change and improvement.

If this is your organisation, then you as the leader of the organisation have to find some way of providing a stimulus - forcing your managers to think more deeply about improvement opportunities.

One such stimulus can come from zero-based budgeting where the organisation makes departments bid for all the funds they need rather than taking last year's budget and adjusting it to reflect changes.

If you, at the same time, suggest that the total budget allocation will be no more than, say, last year minus 5%, then your departmental managers have to think more deeply about how they can run their departments and achieve agreed outcomes.  Your departmental managers  might think such an approach is 'unfair' - but if it unleashes creativity and higher productivity, perhaps a bit of unfairness is what is needed.

Saturday, 14 April 2018

Business people who come from the product, manufacturing or engineering disciplines have a natural instinct to try to exercise process control to improve efficiency and profits.

Those without such a background often aim at controlling costs.

Some take one or other of these approaches to extremes. (Think Six Sigma.)

The great advantage of the former (exercising process control) is that it involves the establishment of useful metrics and experimentation to see what makes those metrics move in the right direction.

The problem with he latter approach (exercising financial control) is that this measurement/experimentation process becomes much more difficult as the linkages between actions and financial consequences are often either too indirect or occur over too long a time. By the time the results are in, it is too late to change the parameters that have resulted in poor results.

So though financial control might be the ultimate aim, something more direct is needed to give you useful levers to pull (or push).  You need some intermediate, relatively direct measures that will tell you promptly what is happening when you make changes.

If you control the process properly - your finances will take caee of themselves.
EvanCarmichael.com