So sticking with the goals problem and bearing in mind what I have said, what are the main reasons we fail in our mission and what are the common mistakes we have to watch out for in the goal aspect of our plan?

Problem one: Often we do not spend enough time working on our most focusing on audacious or difficult goal.  Why – easy more comfortable goals can seem more attractive as we get some form of payback in a much shorter timeframe with much less effort.

Problem two: No form of the “SMART” principle is used. SMART stands for “Specific Measurable Attainable Realistic Time-bound” If this formulae is not applied to both the activities supporting the attainment of the goal and the goal itself the plan will be nothing more than some wishful thinking or useless navel gazing.

Problem three: Not correctly defining our compelling reasons the goal and not gaining agreement of the implementers of the action plan that the goal is worthwhile for all stakeholders. The goal must clearly be understood and valued in terms of the accepted vision and mission. It is critical that the goal setter clearly defines the benefits so it inspires those take the actions to stay committed to their tasks. Of course not clearly defining the downside and consequence of not achieving the coal can be part of the problem. We must explain both sides of the coin.

Please come back for part two of  “Goal Setting is Just the Start of the Real Work”

Finally out of frustration he, lets call him Geoff, came to me and said he was sick of waiting as he had not had any positive feedback from his friend on when he might finish. I agreed to take on the project and got to work straight away. Although I had another important project underway I finished Geoff’s job in about ten days.

After I had finished the job I coincidentally I met the other supplier for the job at a social event and on discussing building websites in general (a common interest) he mentioned Geoff and said “I have had a job sitting around for a year perhaps you should take it as I and my website techie guy are a bit busy”. He went on and said with a smirk ‘I’m sure if you do it within a year Geoff will be happy. I found this attitude appalling and I know the supplier had actually had plenty of time to get the job done much earlier.

I had also used the other supplier for some creative work and printing some time in the past. My treatment was the same; he promised a lot and delivered very little. In the process he managed to insult me by telling me my existing printed material that his designs would be replacing was rubbish. Unbeknown to him I had designed the existing material myself. Now rubbish or not I still felt insulted.

So if we are looking t advance our career or just work effectively what are the lessons.

1. If you agree to take on a task get on with it with some sense of urgency.
2. “Bullshit may baffle brains” as the old saying goes however not for long.
3. Respect your customer’s let them know where you up to during a job’s progress.
4. Don’t take on work you can’t handle, as your inability to perform will destroy your credibility.
5. The cheapest quote is not always the best quote.
6. Your reputation is important and your slowness to act will always be publicized to others and can destroy your market and your brand, particularly your personal brand
7. Never scoff at the current work or product of your customer because you never know the history of how it got to be what it was or how attached they are to what they have.

Whether you are an employee or an independent contractor the old rule still stands, if you want to be seen as effective “say what you will do ad do it and say what you won’t do and don’t do it.

I am sure there are other lessons that can be drawn from this situation and hopefully you can add a comment to express your similar experiences and the lessons that those experiences teach.

Delegation Rule 2 Trust them first, train & test for competence before you delegate,

Delegation Rule 3 Clearly define the tasks that must be done and limits of authority attached.

Delegation Rule 4 Explain what’s in it for the one you are delegating to.

Delegation Rule 5 Inform the team of your reasons for delegating the task to a particular person.

Delegation Rule 6 Answer all questions from the nominee and others in the team.

Delegation Rule 7 Define clearly the importance of the task in terms of desired outcomes.

Delegation Rule 8 Mentor the person you have delegated to particularly in the early stages.

Delegation Rule 9 Maintain your responsibility for the task while handing over authority to act to the person delegated to.

Delegation Rule 10 Ensure the resources needed to the task are supplied to the individual undertaking the task.

Delegation Rule 11 Explain how the delegated task fits into the overall work flow, give the big picture.

Delegation Rule 12 Ensure that the person you delegate to is prepared to take ownership of the task.

Delegation Rule 13 Clearly explain the reason for the task and why it must be done.

Delegation Rule 14 Explain what measurements will be used to define successful completion of the task.

Delegation Rule 15 Get agreement on timeline and deadlines and include timing for status reports.

Delegation Rule 16 Don’t constantly ask for update or hound the person you have delegated to.

Delegation Rule 17 Confirm understanding by getting the person you have delegated to, to explain in their own words what you want them to do.

Delegating Rule 18 Ensure support is agreed from other team members and recipients of the work and other stakeholders.

Delegation Rule 19 Insist that all feedback on success or otherwise of the delegation comes to you directly.

Delegation Rule 20 If the delegation fails be sure you accept the responsibility and if it succeeds share the glory.

I found this five stage model some time ago however cannot find the original reference. If you read this article and know where the model comes from I would greatly appreciate a comment on this post. It is not my intention to go into a long drawn-out thesis on this topic rather to add a quick guide to the steps required to implement an empowerment program and some discussion of the pitfalls.

The Model

motivation
motivation, support
motivation, support, authority
motivation, support, authority, responsibility
motivation, support, authority, responsibility, competence

Motivation

I have said in many articles and blog posts that it is impossible for one person to motivate another as all people are motivated and depending on what is required by their leader they will constantly move either towards or away from a proposed courses of action. Motivation comes from within and is related to tension created by the need to satisfy a craving for an imagined future state or outcome that is seen as desirable to the motivated individual. What most refer to as motivating others is more correctly “inspiring others”. So what does this mean for empowerment programs? If the staff you want to empower can see no personal benefit in being empowered no empowerment can occur. I once saw a hotel chain try to implement an empowerment program in a resort located on a small island in Asia and it failed as the staff were not motivated to be empowered. Their cultural heritage  was one of “the chief tells me what and how to do things and I just follow the orders and all responsibility for the outcome is the boss’s”.

The first step in any empowerment process therefore needs to be to ask the workforce if they want to have more authority and responsibility regarding their work. This inquiry must be closely linked to what the likely effect will be on both the organization’s goals, mission and vision and on the perception of the staff as to the increased chances of success or failure of that individual in his or her role. At this point in the process it would perhaps be a good time to consider a range of motivational theories and if working across cultures of course Geert Hofstede’s cultural influence model. (see previous posts and orglearn site) Theories and models can’t give definitive answers as each individual is different however they can give a framework to start to explore the possible motivation issues that may arise.

Support

Assuming the motivation issue has been correctly addressed the next question becomes how much support does the empowering individual need to give. I think the best way to look at this issue is to use the Blanchard and Herschey Situational Leadership model where the leaders style changes with the relevant competences of the follower. For example if you are empowering someone to say, make decisions on an entire process, they are likely to have varying degrees of competence (skills and knowledge when applied to a particular problem) regarding various parts of the process. Obviously if the individual being empowered understands the technical aspects of the process little or no support in that area will be needed. If however an individual has little experience in say, the computer skills, associated paperwork, human relationship area or management requirements then you have a two pronged problem. If you give to this individual ‘too much’ technical support you will cause frustration and obviously too little support in the other relevant areas will also cause difficulty and the empowerment program to fail.

Authority

The process of handing authority over is where many attempts to empower have most difficulty. Even with simple delegation most managers are willing to share responsibility however they are reluctant to hand over their ‘legitimate’ authority. With authority comes power and all that goes with it. Regardless of what many will say those that are in a position to empower others are usually very protective of their own power base. When delegating authority we must work to each person’s strengths and avoid conflicts of interest. I will talk about the “strengths” issue further in competence. Regarding the conflicts of interest, suffice to say anyone who puts as an example a sales manager, who is paid commission, in charge of product costing is heading for disaster. I personally saw this “conflict of interests” situation destroy a small company that had operated successfully for eight years that was then destroyed in six months. Not only was the costing sloppy and inaccurate the sales manager didn’t care too much about the profit on each sale as it was easier for him to sell if he could cut the price. Short term thinking perhaps on the sales managers part however when the situation became difficult he just moved on to the next company. A similar conflict situation it appears has arisen in the worldwide banking and investment industry over more recent times.

There is also the question of how much authority to grant. A good basis to make this decision is that you should ensure that  enough authority is given to allow relevant persons to:

Get the work done in a timely and efficient manner
Allow the authorized employees to take initiative if improvements in effectiveness can be achieved and
To keep things operating at least in a normal manner particularly in your absence from the work unit

Responsibility

Remembering that empowerment is not to be confused with regular delegation it is important that those being empowered understand and accept that if they agree to being empowered they also accept responsibility for outcomes. This again is where I believe many empowerment programs fail. Staff will often seek authority however many are unwilling to take on the consequences of their decisions. Empowerment seems to me often to be seen by staff as the right to do things as they see fit, however if it all goes belly up then the stance is, it must be the company’s fault or the bosses fault or someone else’s fault. Typical responses to personal failures can be; the guidelines weren’t correct or another department didn’t do it right or a colleague let them down. If staff are to be empowered they have to understand that they have to make sure that the guidelines suit the tasks they are assigned, that they have to manage inter-department co-operation /operations and that they must through effective teamwork and communication enlist the support of their co-workers.

Competence

I have written a lot about competence over the years and have lead a competence modeling team for a major organization. If you would like to read some of the articles you will find them in past blogs and on the main website.

The technical issues of competence modeling and competence development aside, this final step in the empowerment process is often overlooked. To my way of thinking a mismatch between competence levels and level of empowerment to be granted is a road to disaster. Before you can empower anyone you must closely look at the desired outcomes for the empowerment program you are implementing, analyze the skills and knowledge required and then asses the level of those skills and knowledge in the individuals you are to place your trust in. Detailed instruction and training must then be undertaken to overcome any shortfalls in competence levels before any empowerment can be implemented. The definition I use for competence is “knowledge and skill applied to a particular problem”. It is always a mistake to assume that a person is fully competent. For example if you wanted to empower staff to approve payment terms/loans for your customers you may find that a staff member has a great understanding for wholesalers however little competence in approving terms for small retailers. You would therefore need to give different levels of authority for each market segment. It would also be wise to set up a cross checking system with perhaps another staff member also having to sign off on the retail accounts.

Conclusion: The benefits of empowering staff are well documented and highly desirable. The implementation of empowerment programs however is often fraught with pain and frustration so hopefully the few words above will at least give some readers a skeleton to work with.

If you are controlling your work group, rarely leave your department, constantly micro manage all processes to check what the staff are up to, constantly defining what a ‘good’ job looks like, stipulating standards, insisting on a rigorous regime of task methodology or requirements and allocating authority based on tiles and seniority then you are managing.

If however you are freely encouraging a culture of finding ways to develop and implement new ideas, fostering creativity and initiative by letting ‘followers’ participate in a flexible situation where authority is shared and allowing some percentage mistakes for the sake of overall improvement then you are leading.

If you are overseeing the survival of your organization by merely dealing with short-term operational needs and processes whilst strictly controlling costs and watching a budget set by others you are managing.

If you are on the other hand constantly looking for growth through identifying new and possibly risky ventures that could be the basis for future income or if not turning out as you would wish possibly losses you are leading.

Management is about… instructing, allocating, delegating, following up, organizing, overseeing activities, processes & individual tasks, control & supervision and directing whereas leadership is about… inspiring, helping, encouraging teamwork, coaching, supporting,  aligning with your workforce, planning, seeking process improvement, implementing change, agreeing goals and empowering followers.

The concepts of leading versus managing are really quite different however in most organizations managers are expected to play both roles at once. This challenge of almost needing a dual personality is one, that if you wish to gain greater authority in your organization, you will need to deal with for your entire career.

Now if you cannot see the chance for advancement in your current organization that your desire perhaps its time to move on to another. Here is a resume example that may assist in your quest to find a challenging role as a leader manager. resume example

Remember by taking on a management role you will need to accept that with authority comes responsibility. The responsibly you will need to live with is not just to see that the organization’s rules and procedures are followed, you must be able to take responsibility for outcomes, both now and in the future. Bearing responsibility of course is where the real money can be earnt.

Some pertinent quotes from article one:

“We are really focusing on leadership attributes and finding the people with these qualities [talent] and then training them [in the technical aspects of our operation] as required. We look for people who connect well with others and are able to build relationships and effectively communicate.”

“People who are involved in their communities often have the opportunity to demonstrate leadership skills.”

‘We need people who have strong interpersonal skills and who work well in a team environment, because we want people who can build trusting relationships which are critical to gain customer loyalty, [hence] strong interpersonal skills are an absolute must.’

The article goes on to state a 2005 study for Leadership IQ found that it’s not a lack of technical skills, rather poor interpersonal skills that are the primary reason some new hires fail in all industries. It found that about one-quarter fail because they can’t accept feedback, about one-quarter fail because they’re unable to manage and understand emotions and about one in five fail because they lack the necessary motivation to excel.

The edited quotes above come from Maureen Galway, vice-president of human resources at ATB Financial. The article is: Financial sector focused on leadership skills by Shannon Sutherland, The Calgary Herald and it can be found : http://bit.ly/feJGSi

Another article from Australia states:  “The Australian finance and accounting skills shortage isn’t going away and actually appears to be worsening” and they aren’t talking about technical skills.

Quote… “As well as overseeing and delegating work, managers have a significant effect on job satisfaction and employee morale. Robert Half’s survey of 345 Australian finance, accounting and human resources professionals found that 52 per cent of employees would leave if they had a conflict with their manager, and 42 per cent would leave if they thought another company had a better management structure.

The survey survey found that “many employees feel their managers’ skills are not up to scratch, with 40 per cent describing the management skills of the person they report to as average or below” and that “a perception gap between how managers rate their own skills and how their employees rate them, with most employees disagreeing with the results of their manager’s self-evaluation”. It goes on  to discuss various attributes mangers think they display and how that employees disagree with the mangers self perception:

38 per cent of managers say they consistently lead by example, only 20 per cent of employees agree.

41 per cent of managers believe they consistently show interest in staff’s problems, only 23 per cent of employees agree

33 per cent of managers believe they set realistic goals, only 17 per cent of employees agree

22 per cent of managers think they inspire their team, however 82 per cent of employees think otherwise

‘To become a better leader, managers should think of the traits they want to see in their employees and demonstrate such traits themselves’. “Managers should also work to build strong, personal relationships with their staff”. Successful managers need to engage in “open communication [as it is an] “imperative to boost staff morale” and can I suggest to know what is really going on in their area of responsibility.

“Good managers are those who involve employees in the goal-setting process and discuss whether the goals are realistic and achievable.”

‘Good managers are those that encourage their employees to provide ideas and offer input. Managers should also take the time to learn what employees’ interests and skills are, and how they can best be used in the company. They should also take the time to recognise an employee’s contribution to the team.

‘Strong and effective management skills are therefore key to employee satisfaction and retention, as well as the continued success of an organisation.’

Quotes from Andrew Brushfield is director of Robert Half International at http://bit.ly/fTfWPK

Article three is titled – On Leadership, Teams, Success & Happiness

The telling quote for me in this article is: “I want somebody who can inspire you to produce great products but not know your trade better than you do.  I’m looking for somebody who can sell, but not better than our head of sales.  I’m looking for somebody who is good at planning but doesn’t try to do the work of the VP Finance. I want somebody that sets a stretch plan we can achieve, gets consensus amongst the team to shoot for certain goals and the path to achieve success.  I want somebody that can deal with partners, interest future investors and keep everybody calm in moments of set-backs.  If they’re from the industry – that’s a nice to have. But I want to be sure they’re not stuck with legacy thinking.”

Read more: http://read.bi/e6jxjh

The final article is: Edge Of Now, Leadership In The New Paradigm (see ref. below)

Here are some starting principles that leaders need to adopt now:

1. ‘Deeper recognition leaders in thought, word and deed of the changed nature of authority in all its forms’

2. “More humility and caution” when dealing with their constituents or for that matter staff

3. “More focus on the real and underlying engines of prosperity and social harmony and on the conditions” that exist in the current reality

4. “Wholesale revision of views about the processes of economic (read business) and social development (read corporate culture)”

5. ‘Less faith in [inflexible, slow to adapt] big is good culture and more understanding of the need for smaller more flexible and innovative’ organizations and structures

6. “Above all, stronger moral leadership” is being sought by all levels of business and society. The authors conclusion is that: Leaders in the new paradigm will be expected to illuminate, to see a little further beyond the edge of now, to have confidence in their own assessments and to be bold enough to respect the virtues, qualities, truths and values which it is their duty to maintain.

Can I add that they need to develop a more spherical view of reality rather than just sticking to their own narrow ‘truths’ based on past traditions is a must.

Reference & Read more at: http://read.bi/i31bmP

Although the topic of leadership is long and complicated I believe these four articles give some sound insights into what is required for modern business leadership. In fact these principles and stated personal or individual characteristics are just as valid for national or international leadership. For young people looking to establish themselves in a management leadership role much can be cleaned from reading these articles in there entirety.

No chance to lead where you currently work, here’s a resume example that may come in handy if you a looking to move on.

Not a silly question, many think they know and don’t. Delegation of a task or activity to someone in our team or department, even though it is a central function of management, is often a greatly misunderstood process. Recently I read a paper by a gentleman with a PhD who stated that delegation was basically the act of “sharing the responsibility for a project’s outcomes”. This is a typical, however incorrect, assumption about delegation.

In a course I facilitated in the past the definition we used was, “delegation is the granting of all or part of your authority to decide or act where you the delegator always retains responsibility for the outcomes”. This delegation definition exposes one of the problems managers have with delegation, as obviously many managers are happy to pass on responsibility, however most them/us want to retain or protect our authority.

The big issue here for many managers I have trained is the issue of having, or developing, the trust in the person to whom they are delegating.

The reasons for delegating are obvious: efficiency, effectiveness, staff training and preparation for succession. The ultimate benefit of delegating is that the delegator, through developing efficient and effective staff will eventually release themselves from their current position so they can move to higher positions. If advancement is a goal it follows that effective delegation is probably the most important competence a manager can develop.

Practical aspects of delegation

Bearing in mind what I have said above the first issue to address is that a manager must be prepared to let go of the desire to undertake the tasks or the implement the actual project him/herself. Secondly, the staff member must be prepared to accept the delegated tasks. Issues of ‘I’m the best at this job’ from the manager’s perspective and ‘why should I do extra’ from the staff member need to be addressed at the outset.

Delegation is not simply asking somebody to perform an activity to help the delegator get his or her work done or finish a project. True and effective delegation requires that the manager explain the purpose of the delegation and conduct the necessary skills assessment or training to ensure the receiver can perform the tasks adequately. The key as I said is to hand over the necessary authority to get what is required done to a fully competent staff member.

The keys to successful delegation are: planning and prioritizing tasks, effective time management, setting of proper agreed deadlines, follow-up at half and three quarter time, giving up favourite tasks particularly after you have been promoted and ensuring the appropriate skills are present in the person being delegated to.

Developing Willing Employees

Effective management requires an ongoing process selecting people that can be trained to take on more stretching tasks. If you are familiar with Blanchard’s Situational Leadership II the method by which you do this will become obvious. By first giving small amounts of authority to complete basic tasks and then by monitoring their progress and making corrections where necessary, is a great way to start.

It is also important to look your group’s workload as a whole. The delegation of tasks will affect the whole group and it is wise to find out how work is now allocated and how much time is available for each member to do new, developmental tasks. It’s a good idea to involve your entire group in the process. All of us are somewhat motivated by a sense of equity and an equitable distribution of both workload and learning opportunities is essential.

For delegation to meet both work and development goals managers need to:

1. Delegate assignments that a team member needs to strengthen areas of weakness.
2. Delegate a variety of activities broaden and add interest to the recipient’s job.
3. Delegate activities that will, if carried out effectively, lead to advancement of the individual/s being delegated to.
4. Remember you may need to delegate in a chain effect. What I mean here is A takes over say two or three of your tasks and B takes over two or three of A’s task’s. You will need to keep a watchful eye on both A and B.

The Four Stages of Delegating

The Blanchard Situational Leadership (or Hershey & Blanchard) model is I believe the best approach. Although the model is used as a “Leadership Model” it still provides a great basis for assessing “what and how much” to delegate to employees. The categories they use are often misconstrued as generalizations about an individuals overall competence. It must be remembered that the categories need to be task specific. This means that employees can be at development level 1 (D1) in one task and perhaps D4 in another. I have changed the level descriptions below from the original model to better reflect the delegation discussion.

1. D1:  Staff member is both unwilling and unable to take responsibility for performing a task.
2. D2:  Staff member is unable however they are willing to do a job task.
3. D3:  Staff member is able however unwilling to perform a task.
4. D4:  Staff member is willing and fully competent to do what is asked of them.

Responsibility of the Delegator for each level is to follow the delegation approach (referred to in the model’s original form “Leadership Style”)

1.      (S1) Telling or directing, characterized by one-way communication in which the delegator defines the task of the person being delegated to and tells them how, when, and where to do it. To gain more commitment and motivation from your employee, then you should of course use a participative style.

2.      (S2) Selling/Coaching for D2 tasks is required as while providing clear direction as to responsibilities, the delegator needs to employ effective two-way communication and emotional support, to get the individual to “buy into decisions that have to be made.”

3.     (S3) Participating (high relationship/low task behavior). Here decision-making and task management is shared between the delegator and the person nominated to do the task – the main role of the delegator is to “facilitate and communicate” and to ensure the approach is based on “high support and low direction”. Low direction is used because the person being delegated to is competent in the task.

4.     (S4) Style 4 – is referred to in the original model as “The Delegating/Trusting Leader” With a task being delegated to someone whose is both competent and willing the delegator just needs to hand over the task. The problem here is that if the delegator is not trusting of the employee taking in the task he or she will tend to over control the situation and frustrate the person doing the job.

If the manager uses the approaches (S1 to S4 above) and remembers to praise people for doing a ‘good’ job, rather than just correcting them when they fall short, great improvements in delegation practices and performance can be achieved.

Another key to effective delegation is to ensure that the individual you have delegated to understands the overall purpose of the project or task being delegated and where it fits into the overall process or operation. Always provide picture of what a successful outcome or output will look like including measurements to be used regardless of the level of delegation or style being applied.

A final point: Keep The Task or Assignment Delegated!

One of the most common reasons for the delegation process to fail is that the manager takes the work back! Do not do this… as an effective delegator a manager must fix the problems not avoid them by taking back the task.

If you delegate effectively remember you will need to evaluate the improvement (or otherwise) on an ongoing basis and… be patient… as successful change and improvement through delegation can take some time.

Two critical planning issues are, quantity and quality.

QUANTITY – The almost sickening pace of ever-changing market conditions means annual sales plans (and budgets) are a thing of the past. In the current environment ‘living’ (continuous) plans, or at least quarterly targeting are needed. How quickly do motor vehicle models change, telephone systems evolve and computers become outdated? How quickly does a fickle customer base move to a new brand or make a substitute buying decision? Mechanisms for adjusting to an ever-changing reality are a must.

QUALITY – When the sales plan is done who is involved? It should be the entire executive team supported by all the sales staff and any outside consultants that contribute to the sales and marketing efforts. Advertising agents, marketing and PR consultants and yes even the financial advisors, economists and political scientists. All departments must get on board with the concept that ‘the sales department is not the whole company, however the whole company had better be the sales department’ and that…

‘THE ONLY REASON A COMPANY HAS TO EXIST IS TO SERVE A CUSTOMER’

Changes in the market place…

Hotels can provide a great example of market place myopia and a reluctance to walk away from a traditional perspective. To start with, say we decide to focus on catering to the government sector which through budget constraints suddenly decides meetings, conferences and expensive ‘private room dinners’ are out. How about if we rely on the Japanese tour markets and the economy collapses and oops no customers and a lot of highly paid Japanese speaking staff who are doing little more than eating up the payroll. What if we set ourselves up as a five star super deluxe property that caters to high-end corporate customers and September 11 occurs so everyone starts teleconferencing? The problem is that while, say the government sector is flourishing; often too little attention is placed on developing other markets. Constant repositioning and adjustment to capture market opportunities and close monitoring of market trends is a must to survive in today’s volatility.

If we are going to cater for an ever-changing future we need to constantly train to meet that future. Many organisations (including hotels) don’t seem to invest enough in modern business methods and particularly in modern selling and lots of sales staff still do boring ‘presentations’. Example: I remember a tourism publication that stated that Thailand (a great holiday destination) is going to loose major market share because it can’t find trained managers to run its tourism related businesses. I mean the entire country may well suffer because a few key industry operators are too short sighted to invest in the ‘soft skills’ needed for the future. Thailand’s woes were exacerbate then of course by the political turmoil that racked the country for some years.

Corporate culture and fine traditions are great however…

‘WHEN THERE IS A PARADIGM SHIFT EVERYONE GOES BACK TO ZERO AND PAST EXPERIENCE CAN MEAN NOTHING’ (Joel Barker)

A big danger that I have seen overlooked time and time again is … too much business from one customer. For hotels (as an example) this seems to be the problem of constantly struggling with big time ‘introducers’ whose buying power is so great they are able to command the market at minimal profit whilst reserving large percentages of a hotels inventory. I think perhaps the evolution of the modern independent traveller using direct ordering through the Internet may in time put paid to this lot. Hotel groups selling across the 3, 4, 5 star and super deluxe properties might give us all a clue on how we all need to think. Capturing different market segments and reducing our reliance on one or two major introducers should be a commandment. (I can never understand why more hoteliers don’t design individual properties that cater for a broader spectrum of customers, perhaps along the line of some cruise ships).

Sound business practice also means sales people must think ‘big picture’ and to make sure they/we are acting as a ‘company team’ and that we are putting the organization’s overall results ahead of our own ‘small area’ priorities. A friend in the event management business recently told me that he had two hotels in the same group arguing over his business and cutting each others prices and he was both amused and perplexed by this situation. He had decided that in future he was going to use another chain as although he had made a short term gain, the hotels sales team’s behaviour made him nervous and question their professionalism and he felt uneasy about accommodating his customers in either hotel. Were the sales operators of these organizations acting as a team and looking at the big picture… maybe not and what damage was done to the long-term result for the organization and its prospect for future sales?

SELL THE COMPANY, NOT JUST THE PRODUCT AND ALWAYS THINK… ‘RELATIONSHIP’!

Poor sales and marketing and the role of intelligence…

Company difficulties can also arise from insufficient understanding of the competition and not knowing one’s strengths and weaknesses in relation to those of our business rivals and in relation to a changing market. This lack of knowledge and understanding will inevitably lead to us forfeiting opportunities. How much competitor analysis is undertaken by those businesses that fail? I suggest little or none. (Do we do competitor analysis and market trend analysis on a regular basis… no huh)? Managers need to carefully look at the total market for new business opportunities rather than just trying to do the same old same old at 110%.

We must avoid becoming blinded by our own perspective (or lack of perspective) on the market or of becoming too immersed in operational details that can cause us to lose sight of how the overall operation is progressing. Lets face they guy on TV who sometime back said ‘Germany will never again be a leading economy if it insists on continuing to make manufactured products that no one wants to buy’, was right. The best production in the world won’t save us from the bloody-minded attitude that “this is what we do and we don’t want to change”.

On a more light hearted note, maybe we also need to look at the ratio of sales staff to administration and production and perhaps sack two accountants, four engineers, fifty percent of the HR department and anyone we are carrying on the payroll out of some perverse sense of loyalty. Then spend the money we save… to hire, train, encourage, cajole, push or even glorify the sales team. That’s where to money is… with their ‘best mates’… “THE CUSTOMERS”

SHARP CORPORATION OF JAPAN STARTED OUT MANUFACTURING BELT BUCKLES AND MOVED ON TO MECHANICAL “EVERSHARP” PENCILS AND NOW…?

ERICSSON ONCE SOLD ARMY BOOTS AND TOILET PAPER TO THE RUSSIANS.

If your company is not constantly reinventing itself can I suggest your need to move to an organization that is. The big question we all need to ask… Is my organization moving with the times, does management have a sound vision of its future and is the vision appropriate for where the world appears to be heading?

As managers (or for that matter effective staff members) it is a wise career move (our responsibility) to make up for our personal inadequacies from a work point of view. We can do this by seeking professional advice in the specialist areas that are critical to our department’s, division’s or company’s success. Some questions we should be asking of ourselves:

Do we currently invest astutely in developing the areas outside our technical area of expertise?

When looking for training, public relations, advertising, marketing, financial or accounting advice is it just a tender process where we choose the cheapest, or is it a… ‘they are the best in their field’, decision?

Are any of these other areas of expertise sometimes ‘in company service departments’, used as a dumping ground for inadequate individuals so we can avoid the hard decision of sending inadequate staff on their way?

If we seek advice do we then learn from the advice we are given or do we ignore it because we don’t like to change?

A real example:

A now non-existent finance company I once worked for sent a senior technical expert to conduct a study overseas on trends in his field. He came back told the company what they had to do, which included the setting up of an ‘out of the hierarchy’, non standard business department. Someone was going to lose control of a major business area and have his traditional power base eroded. So the answer was no…! The ‘expert’ left and went to a very small competitor who within 6 months was making nice profits from the new business opportunities developed, probably in excess of those of our entire operation. How dumb is that! The same finance company commissioned an in depth study of their business practices by a world-renowned leader in their field (at the behest of a major shareholder I believe) and then refused to implement the recommendations. The reason for the failure to adopt the new ways of doing things was that it was going to cost too much and again (probably more importantly) dismantle some traditional power bases. Two years later when the company was still struggling the consultants where back to do the expensive survey/study again… too late the 40% major shareholder became the 90% shareholding parent and intervened with its own rules, suddenly they just a department of ‘the bank’.

DON’T ASK QUESTIONS IF YOU DON’T INTEND TO LISTEN TO ANSWERS AND… NEVER STOP QUESTIONING!

So what are the issues we must think about to avoid being myopic and locked in the past and what are the causes of financial trouble directly attributable to inept management?

1. Lack of foresight or disinterest in the future (other than how to get the next promotion)

2. Inept or even zero monitoring of the market and incorrect use of the gathered information.

3. Allowing dangerous or incorrect debt levels in relation to our operation.

4. Failure to address financial issues including constantly asking if our debt to equity ratio is reasonable or how adequate is our return on funds invested, or are we using short term borrowings to fund long term projects (and all that other boring stuff)?

5. What about technology, are we being bypassed or are we leveraging on the new technologies available?

6. How are our key relationships… key clients, financiers, suppliers and distributors? Are we, to use an old example, Ford and do we use Firestone tyres on any of our products? I wonder if ford and firestone (little “f” s intended) have ISO certification.

7. Quality Quality Quality is a must and I don’t mean certifications, I mean a management and staff attitude that really puts quality as a priority. I once watched as a file was quickly constructed a day before a quality audit (to serve as a good example), the audit was passed and the few hundred other files where never touched. Now is that quality or Bullshit Baffling the Brainless (big “B” s intended) and pardon my language.

Also we need to consider (if the surveys on failure are correct)…

8. Whether we expanding too slowly, or too quickly?

9. Linked to that are we so diversified that we’ve walked away from our core competencies, and or are we even aware of what our core competencies are?

10. We need to ensure we are not too dependant on one customer (or supplier), the finance company I mentioned lent an amount approximately equivalent to its paid up capital to three major borrowers in one industry, all of whom went bankrupt… oops!

11. We should also constantly check to see if we are overstaffed (the American Government and the Australian Public Service perhaps?).

12. We constantly need to check that our control systems are adequate, does our accounting, manufacturing, sales activity system give us the answers we need on a day to day basis?

13. What is the profit per employee, what is the ratio of sales staff to administration, how big is the personnel department and do we have a bureaucratic purchasing department?

14. Finally the team… is there dissension among the management team (or is it a team at all?) or has the team and our business reached the “level of its own incompetence”?

15. The big issue of course is to decide if there is a lack of leadership by the senior executives, or worse the chief executive. One small example of a leadership failing: Do we have a problem if all the middle management attends major training programmes because it is compulsory however the senior management doesn’t come because it’s optional? If training (and the change process) doesn’t start at the top the participants are likely to say things like “that’s OK in theory, ‘but’ that’s not how the boss acts back at the office” and a disconnect between what is needed and what actually happens occurs.

PHEW… no wonder effective managers are busy!

Cash flow and sales… next post!

Refs:

http://www.tuta.hut.fi/studies/Courses_and_schedules/Isib/TU-91.167/Old_seminar_papers/Ojala_Juha_final.pdf

Time to question where you are? Resume Blank | Resume Form | Resume Examples | Resume Sample | Cover Letter Fill in the free online blank resume form (positive statement examples), a handy self-analysis to evaluate the commercial realities of what you have to offer current or potential employers.

According to years of surveys of business failures the most common cause of their demise is the lack of money. OK that’s a ‘no-brainer’ Richard everybody knows that, HOWEVER where does the money come from and what sort of money is critical? Well money comes basically from three places:

1)     Capital (investors) – too little of that and we are obviously doomed from the start

2)     Efficient and effective operations i.e. control of costs and the ability to obtain the maximum outputs for the minimum inputs (the management and the staff) and

3)     Cash flow from sales (the customers).

Assuming that our organisation has adequate capital, lets look at the other two areas.

Firstly to maintain EFFICIENT AND EFFECTIVE OPERATIONS, what are critical money issues for us as managers/leaders?

Record Keeping and Financial Control (the easy stuff first) – do we and our team really understand how to read the trends in the financial reports or… do we just do a yearly budget and wonder at the end of the financial period why we missed the target?

Do we constantly review the budget in light of changing conditions in our industry, technology or our market’s tastes?

How often do we update our projections in light of changing circumstances and do we use adequate financial control mechanisms? Are we still doing obsolete annual budgets or are we engaged in a worthwhile an ongoing process i.e. a living document?

Are we constantly assessing what we do and asking if our activities are real value adders or just habitual energy suckers?

Silly things can happen, are we over controlling the petty cash and under controlling the major purchases or project expenses just because they are approved in the budget? It does happen in real life.

Not too long ago I had a discussion with a senior executive who was dismayed by the fact that their annual budget was being prepared to give the business owners a good dose of “what they wanted to hear” rather than to provide a true indication of the state of the market and the real prediction (or at least best guess) as to the true potential for the upcoming year. This same company was often three or four months behind in balancing its actual figures in spite of it having a “giant accounting department” by its industry standards.

A personal question you may consider: BASED ON WHAT HAS ALREADY BEEN SAID, IS OUR COMPANY HEADING FOR SUCCESS OR FAILURE AND IS IT TIME TO GO SOMEWHERE SMARTER?

Critical company success factors as they relate to competence:

a)     The ability of our team to make the correct money or business decisions – is our business managed by people with sound industry experience and/or are we educating our staff on the industry they belong to or do they just specialise in ‘their job’? Businesses managed by people without prior management experience have a greater chance of failure than firms that are managed by people with prior experience. How well educated and competent are our managers?

b)     Are we hiring or training to make sure we have effective management or are we only promoting from within, mainly based on length of service and loyalty? Are we just handing out big titles to keep the staff happy and give them an unjustified salary increase so they won’t leave and make us start all over again? Don’t laugh in a couple of countries I worked in… it happens all the time! Educated people have a greater chance of making a business succeed than those who are not educated. What is our company’s ongoing education policy do we provide incentives for our critical employees to improve their knowledge and expand their perspective? Also it is important to understand that businesses that cannot attract and retain quality employees have a much greater chance of failure than firms that can.

c)     Do we attract quality staff and are we seen as an employer of choice or do we constantly resort to taking the best of a bad bunch?

A few more searching questions

Do we plan to make money? Businesses that do not develop revenue/profit driven and specific business plans have a greater chance of failure than firms that do.

Does everyone on staff know what our corporate vision and mission is?

TEST: Go outside and ask a few people what the corporate vision and mission are and when you’re though stressing out (or crying) go and kick the corporate communications director/manager/officer in the head.

Do we test our plan against our values, for that matter, do we plan at all, are we ALL really working to a plan… or is it just another day at work?

Do we have an action plan for each strategy and then make sure we know who is to take the action… and by when… and how to measure each action’s success or failure…and do we then replan based on the outcomes? I have conducted a lot of planning sessions with and for a variety of organisations and everybody likes visions, missions, goals, objectives and strategies and participants readily contribute to the brainstorming. Unfortunately as planning sessions progress and when we get to the real work and I ask “who will take the actions”… silence… or at best reluctance.

PLANS WITHOUT STRICTLY IMPLEMENTED AND MONITORED ACTIONS ARE JUST A WASTE OF TIME.

Refs:
10 reasons why businesses fail, Home Office/Jeff Wuorio http://www.bcentral.com/articles/wuorio/150.aspFlusche, Van Beveren, Kilgore, P.C.
http://www.fvbkcpa.com/articles/E-toolbox_ Articles/Why_Small_Businesses_Fail.htm

http://www.tuta.hut.fi/studies/Courses_and_schedules/Isib/TU-91.167/Old_seminar_paper/Ojala_Juha_final.pdf