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.

Saturday, 7 April 2018

Be creative AND productive

There is some debate about whether a concentration on productivity is bad for creativity.  However this is a fallacy. Over-concentration on quality - and especially compliance - can be bad for productivity, but productivity and creativity are natural bedfellows. 

So it depends on how broadly or narrowly you interpret productivity.  Rigid compliance to standard operating procedures (SOPs) in the name of productivity might stifle productivity unless you give your employees another avenue where they can exercise invention and innovation.

My old friend, Tor Dahl, always used to say that a natural approach to improving productivity is to:
(a) unfreeze the organisation - allow staff the time and opportunity to contribute ideas as to how what they do might be improved
(b) experiment with those ideas to arrive at new ways of working
(c) re-freeze the organisation by creating new SOPs to reflect the new ways of working and lock in the productivity gains.

Some time later, repeat the cycle. 

Try it!   Then you ensure that creativity is encouraged and that it underpins higher productivity.
EvanCarmichael.com