Jan 24, 2012 | Management, Operations
Budgeting and storytelling are synonyms in many companies I have seen. The budgeting process usually is a source of much angst, optimism, gaming, heavy workload, and often intimidation.
We all bitch about the inflexibility and unreality of the budget setting process, as well as the disruption to operations when they are being negotiated, and for what? Usually a set of numbers based on how well individuals and functions believe they can game the system.
It seems sensible to find a way to make the performance management processes much more responsive to the environment, changing circumstances, competitive initiatives, and innovation opportunities that emerge.
Given budgets are about costs, the costs of doing business, of investing, of risk taking, of offensive Vs defensive action, and resource allocation, it seems a simple set of questions before a cost is incurred would be useful.
Instead of just asking “do we have the budget”?
Ask:
- Why is this action necessary”?
- Will the action achieve the necessary result?
- How is the expenditure adding value?
- Can we effectively execute on time?
Questions like these can drive a continuous priority review process, always a good thing.
Jan 23, 2012 | Change, Management, Operations
Most of us know that if we set out to lose weight, a crash diet usually just works in the short term, what we really need is a change in lifestyle, or at least, some aspects of our lifestyle.
Obvious.
Why then is it that in corporate life we usually take the crash diet course?
There have been lots of headlines over the last few weeks about the probability of job losses in the banking sector, a response to the looming financial difficulties. The financial services sector has been doing very well, record profits despite the problems of a couple of years ago, and have been adding jobs, close to 40,000 over the last decade, and now they need to diet, so “crash” find 10,000 to cut.
Surely the problem is one of an ageing business model, in personal terms, too much junk food, not enough veggies and exercise, so now the management reaction is a commercial crash diet. History suggests there will be a lot of pain, and long term, little or no gain.
Those customers whose business is down the shallow end of the banks customer Pareto, the SME’s who are really the engine of sustainable growth in the economy will now find it harder to borrow. The banks are tightening the screws because of their crash diet, so there will be no-one to understand their SME customers business and consider their funding needs, and requests will be reduced to decision by an algorithm. Both the banks and the SME borrowers will lose under these conditions.
Pretty soon, hopefully, someone will realise the problem cannot be solved with a crash diet, it needs a lifestyle change, and only when that happens will sustainable recovery of commercial fitness be possible.
Jan 4, 2012 | Change, Communication, Innovation, Operations, Social Media, Strategy
In the communication revolution going on currently, the infrastructure to carry it all is vital, but how relevant will the 2010 infrastructure be to the world that greets it when it is finally completed roll-out in, when?, what was the last projection? ever?. The world is changing almost daily, the NBN as conceived by our political masters will be obsolete before it is 10% implemented.
In the October issue of “Wired” magazine is a fascinating analysis of the “Tech War” going on between Apple, Google, Amazon, and Facebook. It is a must read for anyone in business, it puts a competitive context around the maneuvering we all see happening, but do not necessarily connect the dots.
We, the Australian taxpayers, are making a multi-generational investment in the NBN, billions of dollars spent by those well known, fast moving, tech savvy innovators in Canberra. Lets hope they know what is going on outside the cocooned environment of the “bush Capital that are all so pleased to live in.
Somehow I doubt they have any idea, and that is truly scary, and there will be a whole lot more of this sort of failure, and the accompanying spin before anyone in Canberra admits to a huge boo boo.
Dec 21, 2011 | Leadership, Management, Operations
The best management tool available is amongst the cheapest, a pair of shoes.
Hierarchies are vertical, they filter and modify information as it goes up and down an organisation, but real things, those that customers pay for, get done in an organisation horizontally, and generally at lower levels, at the “coalface.” So, for someone at the top to really understand what is going on below, they must be where the action is, not in the boardroom.
In Lean parlance, a “Gemba walk”.
Get yourself a pair of shoes for Christmas.
Nov 10, 2011 | Management, Operations
Writing a business plan is usually a priority in business, some do it well, some do it poorly, but what most do not do is write a business plan that evolves.
Effective business planning considers the long term context in which the business operates, and how the resources are to be allocated against the priorities, but shorter term, most tend to be fixated on a period, and the plan becomes a “set in stone” folder articulating financial outcomes that are as often as not wishful thinking, and in which all but the short term tactical stuff is dismissed as “too busy right now” to do.
Really effective planning engages with the reality of the environment right now, considers how the longer term direction will be impacted, makes judgments about emerging trends, and marshals resources and capabilities .
So, in summary to be effective:
Revisit the plan often
Reevaluate the risk assessments
Experiment and evolve.
Nov 2, 2011 | Management, Operations, Strategy
Yesterday’s question time, a childish brawl over who knew what and when about the Qantas decision to ground its aircraft, lock out staff, and leave customers around the world stranded, got me thinking. Not just about the pointless squabbling amongst the pollies over a point of history that legally is none of their business, but about the way a business can be subject to expectations way out of line with their competitors, and its legal obligations.
It is obvious that Qantas had considered grounding as a tactic in their industrial dispute, it is completely stupid to think Alan Joyce woke up on Saturday with a bright idea, there would have been a deep consideration at board level of a very aggressive and disruptive tactic that was almost of a “bet the farm” nature.
The real question is, what obligations does Qantas have to act in what politicians consider to be the public interest, when Qantas is a public company, and the Government sold their shareholding years ago in order to free themselves from the demands of being the major shareholder?
Qantas is fighting for its survival, the competitive world of aviation has moved on, and Qantas must adjust or disappear, and yet, there are clamourings for it to ignore the probability of its demise without change.
What gives the pollies, and a large portion of the public the right to demand that Qantas shareholders take a bath to satisfy an emotional attachment that is not backed by any financial commitment? If this was almost any other company in the top 100 listed companies, the tactics in an industrial dispute would be of little general interest, only the stakeholders directly involved would be making their points, and then within the legislated framework.
Why is Qantas different?
