We All Make Mistakes
We all make mistakes -
but that's an excuse for making them. When people pay you to do something, they
expect you to get it right.
We’re all human, but that's no reason not to do our best,
check what we’ve done, keep our promises, arrive punctually and so on.
Common causes of mistakes are:
- No/insufficient training
- No/unclear instructions
- Failure to check
- Failure to follow up
- Not turning up on time
What these all have in common is that they are under our control. We can train people, check they understood
our instructions, check work done, keep our promises and arrive on time for meetings
so we’re ready to start on time.
So why don't we? In
reality because it’s…
- “Too expensive” (in the case of training).
- “Too much work” because we’re under pressure to “get things
done) or because we need to catch our breath.
- “We got caught up by…”
- “Not that important anyway”/”Just not worth the extra
effort”…
In some cases, not training people sufficiently above may
only result in delays. In others, it may
result in loss of business, reputation or even of life.
I’ve caught myself using all the above. They’re excuses,
not reasons. An excuse is when we abdicate responsibility
for something, finding a convenient “3rd party” to blame it on (“You
didn't remind me”, “I didn’t understand”, “You didn’t make it clear that…”, “He
didn't say that…”). These all attempt to
shift the burden of accountability for getting something done to outside causes
theoretically beyond our control. Taking
accountability is harder (“I forgot”, “I failed to check my understanding”, “I
didn't clarify”, “I didn’t ask/check”…)
Taking responsibility for our actions is harder in a
corporate world where mistakes can cost you your bonus, promotion or job.
We all make mistakes, and we’ll never be able to stop this. What we can
do is ensure that we give our very best and that, if we do make a mistake, we
sort it out as quickly as possible and learn
from it.
I have spent more than half my life
delivering change in different world markets from the most developed to
“emerging” economies. With more than 20 years in international financial
services around the world running different operations and lending businesses,
I started my own Consultancy to provide solutions for improving performance,
productivity and risk management. I work
with individuals, small businesses, charities, quoted companies and academic
institutions across the world. An international speaker, trainer, author and
fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of
services. For strategic questions that
you should be asking yourself, follow me at @wkm610.Labels: Career, Customer Care, Leadership, Productivity, Strategy, Teamwork
Could You Cut Deep And Fast?
One day (if not
already), we will face the need to cut costs fast in order to survive. Traditionally, this has been done by making
staff redundant as labour is generally a business’ single highest cost. Identifying and clearing away unproductive “dead
wood” is a continuing and vital activity, as long as the genuine “dead wood”
goes.
Traditionally, businesses start with “non-essentials” e.g.:
- Training;
- Advertising;
- Free coffee/tea;
- Other “fringe” expenses/benefits.
These may not amount to much (maximum 10%, of spend), but
represent a useful “tweak”.
The next to go will be any expenditure planned for new
equipment, unless this is vital to
continuing production.
Next come the “layoffs”: a numbers game in which even “better”
performers may no longer be required.
Some businesses still use a “rank and yank” system whereby, every year,
the bottom (say) 5% of performers are “asked” to leave. Scientifically, this sort of culling is
acceptable, but the risk is that it theoretically raises the performance bar
(surely a good thing?) every year until people are at the stage where they
spend more time massaging their results than working for the benefit of the
business.
Unless things are carefully planned and managed, the
inevitable result is a reduction in:
Morale;
Performance;
Customer service;
Productivity.
During the recent global financial recession, businesses cut
bit by bit. One UK bank kept making
small cuts and became know as the bank of the “death by a thousand cuts”. One assumes that management were trying their
best to maintain staff levels in the face of a crisis, but could, and should, they
have cut deeper and faster? It’s
difficult to tell.
Assuming that we decide to use the “deep and fast” approach,
what do we need to do? In my view, we
need to:
Understand our
customers.
Why do they come to us? What differentiates
us from our competitors (assuming we aren't the sole provider of that
product/service)? The airline industry
is a prime example of where cheap competitors offering a basic service have
undercut their more “expensive” rivals on certain routes or with certain
customers. Even established
carriers now compete on price on different routes and are cutting the “fringe”
benefits they offer to stay in the air. However, some people will pay for good service, a reliable carrier and fewer problems. They go “established”. Others just want to get there and don't mind
leaving/arriving in the early hours of the morning, how long it takes, or
carrying just a small holdall. They go
low-cost.
Understand our cash
flows.
Which products, services and people bring in the cash? Which are the "low-effort/high reward" ones (if any)? Once we know this, we need to…
Identify what’s needed
to preserve those cash flows.
If our business depends on frequent, repeated customer
visits, ensure that the people looking after customers are
well-trained and have the support they need to keep customers happy. These resources are both “physical” (e.g.
desk, phone, computer) but also “mental” (staff need to feel both empowered and supported in their work and that procedures support them and customers). Other “hygiene factors” such as free
tea/coffee, a place to unwind when not on duty, well-lit surroundings) are nice
to haves. Happy staff are motivated staff. Motivated staff look after customers
better. Customers who are well-looked
after are happier customers and come back
for more. We then move onto…
Understand where the
money goes…
Clearly, some must go on keeping happy the staff who deal
with customers. They are a “profit
centre” (they cost money, but they bring
in money). They are the priority,
but we also need to…
Understand the “Cost
centres”.
Those areas which consume - but don't produce - money. These are the support departments like HR,
IT, Audit, Compliance. Whilst they need
staff to keep things running, this is where we might expect to see heavier
headcount cuts falling. Depending on the
type of business and how it operates, we might see a ratio of 1 “Profit Centre”
staff to 2 “Cost Centre” staff.
One of the problems we see is that, during “good times”,
businesses tend to increase spending, resulting in a higher likelihood of
wastage. Whilst things are good, this is
tolerable. However, people get used to
having certain things as a “right”. When
the crunch comes, they feel unhappy if that “right” is taken away (morale
issue). A clear policy on what makes a
“good” investment goes a long way to minimising this.
Another policy is to make sure that profit margins are preserved and overheads are controlled. In an age where many products and services
are can be copied relatively easily and cheaply, this isn’t easy and means that
any additional expense must be subject to rigorous analysis to determine what
would happen if it had to be curtailed during tough times.
In short, it takes deep knowledge of the business and
competition, coupled with hard decisions and skilful communication.
I have spent more than half my life
delivering change in different world markets from the most developed to
“emerging” economies. With more than 20 years in international financial
services around the world running
different operations and lending businesses, I started my own Consultancy to
offer solutions for improving performance, productivity and risk
management. I work with individuals,
small businesses, charities, quoted companies and academic institutions across
the world. An international speaker, trainer, author and fund-raiser, I can be
contacted by email . My website provides a full picture of my portfolio of
services. For strategic questions that
you should be asking yourself, follow me at @wkm610.Labels: Crisis Management, Financial, Leadership, Strategy
The Pros And Cons of “Silos”
One of the terms one
hears in many organisations is “silo”. A
silo is:
- “A pit or other airtight structure in which green crops
are compressed and stored as silage”;
- An underground chamber in which a guided
missile is kept ready for firing”;
- “A system, process, department, etc. that operates in
isolation from others,”
…
according to Oxford Dictionaries. We talk about “silo management’, operating
“in silos” or “silo mentality” to mean teams, departments or even entire
business units that seem to operate without reference to each other or to
whether they are aligned with organisational goals.
Generally, silo management is considered
“bad”. At times, though, I’ve asked
whether this is altogether true…
Among the common disadvantages of silo
operations are:
Ineffective
Communication: different functions, departments or
teams may be working “against each other” without knowing it because they’re
unaware that their actions may be harming a profitable relationship for another
team. This may result in…
Duplication/Wasted
Time: … as effort and/or resources are replicated across
teams, leading to increased costs and reduced shareholder returns.
Blame
Games: it’s easy (and common) to blame Marketing/Sales/IT/Compliance
etc, when things go wrong if you're not talking with each other.
Competition
For Resources: … between silos leading to “turf wars”.
Alignment: objectives
of one silo may run counter to other silos’ or not be completely in line with
organisational goals.
When considering the advantages of “silo
operations”, I see the following:
Independence:
some
functions may actually need to be
silos, e.g. Internal Audit, Compliance to ensure that good corporate governance
prevails.
Focus:
teams/departments/business function can operate without interference. This may be critical when bringing a new
product or service to launch stage ahead of the competition. Aligned with tis is…
Concentration
of expertise: expertise centralised “under one roof”
dedicated to delivering the product/service for which that unit is responsible,
without distraction.
Internal
communications: those within the “silo” can communicate
easily and effectively with each other in the furtherance of organisational projects/goals.
Effective
allocation of resources: assuming that the expertise is
concentrated where it’s needed, resources can be allocated without reference to
organisational constraints. Economies of
scale can be achieved to a limited degree based on the focus of that particular
“silo”. It is not constrained by having
to wait for “Head Office” to make a decision, send the relevant expert, or
allocate centralised resources needed.
This could mean increased profitability and shareholder returns.
In a global business, managing each
geographical region as a separate, self-contained “silo” may actually be a more
effective way of doing business, given time zone constraints. The military also operate a hybrid “silo
system” through the concept of “Mission Leadership” where the general briefs
his subordinates and orders cascade down to the line to individual fire team
leaders who are many steps removed from the man at the top, but can operate independently
to achieve their part of the overall objective within limits prescribed.
In short, there are times when silos are necessary for a number
of reasons, but care should be taken that they are limited in scope and size to
prevent them from turning into unstoppable beasts that proceed to rampage out
of control, accountable to no one. This,
sadly, is all-too often what happens…
I have spent more than half my life
delivering change in different world markets from the most developed to
“emerging” economies. With more than 20 years in international financial
services around the world running
different operations and lending businesses, I started my own Consultancy to
offer solutions for improving performance, productivity and risk
management. I work with individuals,
small businesses, charities, quoted companies and academic institutions across
the world. An international speaker, trainer, author and fund-raiser, I can be
contacted by email
. My website provides a full picture of my portfolio of services. For strategic questions that you should be
asking yourself, follow me at @wkm610.Labels: Leadership, Strategy, Teamwork
Are You Losing Money (Without Knowing It)?
Most businesses know
if they’re making or losing money, even if not down to the last
cent/penny. After all, they know how
much they’ve sold and what their costs are, right?
Not always… I ask my
clients to distinguish between “active” and “passive” waste and get some
interesting answers. For clarity,
“active waste” is when you can see money going out, but no income coming in as a
result. A simple illustration of
“active” waste would be buying a piece of equipment that didn’t work as
advertised.
“Passive” waste is where a salesperson spends time on a
prospect who never buys, but keeps encouraging them to come in. The salesperson is spending time which could
be spent on more promising prospects or existing paying customers.
Another example would be for an outsourced service provider
whose contract stipulates that they provide management information to the client. Whilst that client is using the provider,
that’s OK, but when they don't and the contractor still has to provide that information, that’s more passive waste (for the contractor) because the management time could be spent on something more
productive/remunerative.
The above was one of the reasons underlying why certain
banks back in the 80s cut down their relationships with big companies. They felt that what they earned from that relationship was insufficient for the risk taken and work done.
Staff time is worth money.
A business will want to see that time put to the most profitable (or
least loss-making) use possible. As
humans, we make decisions every day on what we will spend time on, based on:
- The perceived effort required in spending that time on that
particular task/person;
- The degree of effort needed;
- The risk involved;
- The rewards that it will bring.
All have to be seen as acceptable for that time to be
allocated.
For example, if something “high effort” brings minimal return,
we might pass it over in favour of something else that requires “medium effort”
but results in a high return or something “low effort” that brings in medium return. Of course, some tasks (e.g. Health &
Safety, regulatory compliance, tax returns, etc) may be “high effort” but will
result in our business being shut down if we don't comply. Sorry, they must be done…
One problem that I notice is that senior managers or
business owners often don’t understand how much time their staff require to
complete a task because they (the
manager) aren’t involved. As St.
Bernard said, “what the eye doesn’t see, the heart doesn’t grieve over.” The senior manager or business owner who
insists that time be spent on that client may be directly responsible for that
loss without knowing it…
The best thing to do is know:
- How much our staff’s time is worth;
- What they do;
- How much effort is involved;
- What the “rewards” are for doing it.
How do we do this? Walk around, talk to people, see what they're doing, ask questions (particularly if they can suggest a better way of doing it). After all, they're the experts. Leadership means legwork.
In this way, we may be able to minimise or even avoid high
effort/low-return tasks and contracts.
I have spent more than half my life
delivering change in different world markets from the most developed to
“emerging” economies. With more than 20 years in international financial
services around the world running different
operations and lending businesses, I started my own Consultancy to offer
solutions for improving performance, productivity and risk management. I work with individuals, small businesses,
charities, quoted companies and academic institutions across the world. An
international speaker, trainer, author and fund-raiser, I can be contacted by email . My website provides a full picture of my portfolio of
services. For strategic questions that
you should be asking yourself, follow me at @wkm610.Labels: Financial, Leadership, Productivity, Strategy, Teamwork
