Showing posts from January, 2010

Leading by Omission - Ricardo Semler Videocast

Ricardo Semler, CEO of Semco, is one of the most interesting leaders in business today. His company is not just extraordinarily successful, it is also a world class leader in workplace democracy. Ricardo Semler is one of the world's most innovative business leaders. This videocast is from a lecture at MIT. It is 48 minutes long, but well worth watching. Semler is a very good speaker and he has a message worth listening to. I strongly recommend that you read his book Maverick . Here is a link to the original page where the videocast was published .

Exchanging Bricks for Jade at Business Network International

Last Friday I visited the Business Network International (BNI) team  Draken (The Dragon) in Gothenburg. I have made a couple of visits to other BNI teams before and it has always been interesting experiences. BNI is a business reference network. A BNI team in the network consists of up to 40 people. The group meets once a week for the purpose of exchanging business references. What makes the teams work is that each individual represents a different kind of business. A team may have only one car salesman, one hairdresser, one IT service provider, one accountant... An IT service provider never has to worry about an accountant stealing her business, or vice versa. On the other hand, the accountant might have customers who need IT services. The IT service provider might know of a company that wants to lease cars, and so on. BNI team members provide each other with information that is of little value to the sender, but of great value to the receiver. This is of course a featu

10 Rules for Better Management

It is easy to get so caught up in managing messes that one loses sight of the basics. Here are 10 simple rules that I have found useful: The Interaction/Isolation Principle: Strengthen interactions with allies (customers, employees, subcontractors, partners, etc.). Isolate opponents (from customers, their own employees, from partners, from subcontractors, etc.) When you manage a unit (team, department, etc.), watch the queues ! When you manage several units (team members, collaborating departments, project portfolio, etc.), manage the interactions between the units, not the units themselves.  Both Theory X and Theory Y are self-fulfilling. Therefore: When you manage people, use Theory Y ! When you design the organization (structure, rules, etc.), use Theory Y ! (Read up on Gore & Associates, Semco, the Virgin Group, Whole Foods, Google, and somewhat surprisingly, the U.S. Marine Corps.) People overestimate themselves and underestimate other people. It follows that: You

The Cost of Coffee - How Built in Brain Rules Mislead Economic Decisions

I had promised myself not to blog today (too busy working), but just a few minutes ago I saw a prime example of cost world thinking gone wrong: I am sitting in a coffee shop, drinking coffee. Awhile ago, a family sat down at a table close to mine and began discussing a rather peculiar management policy in force at this shop: 30-60 minutes before closing, the shop won't brew more coffee if it runs out. This is to ensure that no coffee, and thus no money, is wasted. If you run your business from a Cost Accounting perspective, a policy like this makes sense. Most companies have policies like these, policies designed to minimize cost. When the financial crisis struck in 2008, cost cutting was the method most companies used to balance the reduction in Net Profit. Stands to reason, right: Net Profit = Throughput – Operating Expense. Therefore, if Throughput drops, the only recourse is to reduce Operating Expenses. This reasoning is simple, analytical, easy to understand, and tota

Looking for Trouble!

I am looking for trouble! That is, I am looking for clients that can present me with difficult, messy, horrible challenges. Forget the easy stuff! I want to help solve the worst problems you have: Is it just not fun to be the boss? Is your work draining the life out of you? I have met plenty of smart, very intelligent managers at all levels who are   drowning in their work. Too many problems, not enough solutions, day after day. I've been there. I clawed myself out of the mess the hard way. Along the road, I found out how to make managing  fun . I can show you how I did it, and help you find your own way. Let's be clear: It will not be an easy road. There will be plenty of challenges. I can promise you a lot of fun though, provided that you are willing to seriously try a couple of new things. Do you have a great vision, but your organization just won't budge from its set course? I can help you find the pivot points you can push to make your organization turn. Part of m

The Cost of Queues

Lean practitioners and scientists have known for many decades that cost effectiveness isn't all it is cranked up to be. Cost effectiveness is a measure of how much of the capacity of a resource is utilized. The resource may be a person, a computer, an aircraft, a machine in a workshop... Most people believe that people should be as close to 100% cost effective when they work. That is, their capacity should be utilized 100%. And yet, for other kinds of work, it is well understood that utilizing a resource 100% is a bad idea. Take your computer for example. If you run one application, the computer is responsive, you can work very fast. With one major application running, your computer uses only a fraction of its capacity. If you decide to run your computer in a more cost effective manner, and utilize its maximum capacity by running a large number of programs at the same time, you will find that the computer slows down and becomes unresponsive. At 100% capacity utilization the co

New Tempo! Supplement – Communications in Network Organizations

I have published a new Tempo! supplement on Scribd. As usual, you can download a PDF version from the Scribd page. Tempo! Communications in Network Organizations

Solution To the Management Challenge

A couple of days ago I posted a management problem . Here is the solution: The CEO brought you in to fix a sudden drop in sales. You got the following sales data: and a time series graph based on the data table: The key to solving the problem is being able to interpret the data correctly. The CEO told you there had been a rising trend in sales, followed by a disastrous drop, but is that really true? You would not expect sales figures to be exactly the same each month. Sales figures are subject to random variation just like almost anything you measure in a business organization. The question here is whether the variation you are looking at is random or not. You may be looking at the results of two systemic changes, one that is improving the system, and one that is making it deteriorate. On the other hand, what you see might also be random fluctuation. It is possible to figure out which by using a process control chart. (There are other tools that can do the same thing. I