Thursday, December 31, 2009

A Management Challenge

Here is a little management challenge for you:

You are a world class management consultant. You have been brought in to fix a problem at Big Company, the world's premier Thingamajig producer. The BC CEO tells you that except for the occasional hiccup, Thingamajig sales have been good for the past two years. Sales have been climbing for some time, but now they have suddenly dropped dramatically. The CEO shows you a sales chart to drive the point home:

Some finicky person has provided a table with the raw sales data next to the chart:

The sales department has 12 people. Most are experienced sales persons. There are three junior sales persons with less than two years of experience. One of the more experienced sales people got married in June.

The CEO wants you to bring sales back to the original level, quickly.

What should you do? Assume that the CEO trusts your world class reputation as a management consultant, and will do whatever you tell her.

If you want to take up the challenge, comment this post directly, or tweet me: @Kallokain.

I will post the correct solution in a couple of days. I should warn you that the solution is probably not what you expect.

Wednesday, December 30, 2009

Tuesday, December 29, 2009

Monday, December 28, 2009

Building Better Offices

I am interested in working environments, particularly for knowledge workers. The following tweet was quite interesting:
RT @menloprez: Coolest offices in America ... we didn't see this one coming! (Inspired by IDEO and Kent Beck).
By Ron Jeffries 
I found the article quite inspirational, but all of the examples are high profile, and quite expensive, examples of building better workplaces. I'll show an example of a low cost, but at least as effective, way to improve a workplace in a (near) future blog post.

Wednesday, December 16, 2009

Leverage Points - Where to Intervene in an Organization or Other System

I have mentioned Donella Meadows and her list of places to intervene in a system before in this blog. Meadows worked out the original nine item list when she was at a meeting about the North American Free Trade Agreement (NAFTA) and the World Trade Organization. Later, she expanded the list to twelve points.

The list is very, very useful for business executives because it provides insight into where to intervene to improve an organization. The list does not tell how to intervene. I'm glad it doesn't. Keeps life interesting and me in business :-)

Without going into detail, or the science supporting the list, here is a version that has been slightly simplified and adapted to business:

Figure 4 shows the intervention points in order of increasing leverage. Of course, there are other considerations than the power of a leverage point. Weaker leverage points are often easier to apply, but the results are not as good as when using a stronger leverage point.

In her paper Donella Meadows points out that people do find the right kind of leverage fairly often, but tend to push the wrong way. The reason is that many systems, including business organizations, are so complex they become counter-intuitive.

My personal experience is that business organizations often fall back on setting numerical targets, simply because it is easy to do. Working out how to optimize buffers of Work-In-Process (WIP) or Design-In-Process (DIP) is more difficult, especially if no one in the organization has prior experience, or even know why it is important to do so.

On the other hand, managers today have access to all the information they need to get started on improving their organizations. It is not that difficult to get going: learn a bit of theory, practice it, learn a bit more, practice a bit more...

If you do that, there will be a benefit that may seem a bit unlikely at first: Management will be fun.

Tuesday, December 15, 2009

The Logical Thinking Process Workshop with Bill Dettmer

I rarely do announcements in this blog, but there are exceptions. Here is one. If you go, I think you will enjoy it:
Catalysts in Linz, Austria, are organizing a five day Jonah workshop about The Logical Thinking Process with Bill Dettmer.

Date: May 21st – 27th, 2010 (Wednesday – Friday, Monday – Tuesday)
Location: Park Inn Hotel, Linz

The fee is 3,200 EUR (+ VAT) with a rebate of 20% for groups of 2 or above (i.e. 5,120 EUR for 2 people).

You can get all the details by clicking on the link above.

Bill is a well known and very well respected management consultant. He has written several books about manufacturing processes, brainstorming techniques, and of course about The Logical Thinking Process. (Scroll down a bit and you can see my very enthusiastic video review of the book.)

Tuesday, December 08, 2009

Certain To Win

Sinan Si Alhir (@SAlhir) and I discussed a very interesting book, Certain To Win by Chet Richards. Sinan tweeted:
@Kallokain I have a few copies that I have warn-out due to re-reading so many times ;-)
@Kallokain I also distribute Certain to Win to teams that I coach; it is simple & compelling; beautifully elegant...
Well, here is what my copy of Certain To Win looks like. I have put plastic markers at noteworthy passages.

In case you are wondering, there are 22 markers, but that number is likely to increase the next time I reread it.

Monday, December 07, 2009

Solve your own darn problems!

Jamie Flinchbaugh has an excellent post on a very basic mistake most managers make. He describes how managers believe that the number of problems each report has add up, so that the manager's problems are the sum of the problems the reports have.

Why not just pop over to Jamie's site? You will find other valuable insights there too.

Saturday, December 05, 2009

Motivation - How Business Runs on Folklore, not Science

In this TED Videocast, Dan Pink talks about how extrinsic motivators reduce performance. Hard to swallow for business people, but well known in the scientific community.

If you are interested in looking closer at the scientific evidence, I recommend:

No amount of scientific evidence will convince people who have a reward system. Rewards are addictive. Facing up to facts requires breaking the addiction. On the other hand, if you consider starting a company, I suggest you look at the evidence before charging ahead and implement the same kind of extrinsic reward systems that are holding your competitors back.

The research showing the problems with extrinsic rewards goes back at least 50 years. Business people are ridiculously behind. So much so that management consulting giant McKinsey is speaking up about the problem. McKinsey must of course careful not to offend their clients, so they are softening the blow a bit in their article. I think it is great that they speak up, despite the risks inherent in going against prevalent management superstitions.