Blue Ocean, Red Ocean…

21 04 2009

If you have not read the book on Blue Ocean Strategy, I would highly recommend it.  No matter what industry you are in or how competitive your market is, it should make you think about innovation.  Most companies I have worked with find it difficult to integrate innovation into their management cycle, and therefore innovation is done in an ad hoc manner.  

While a Blue Ocean (Red Oceans are competitive markets where everyone has spilled blood) market play may not be for everyone, you can think of new ways to measure the business, process improvements, compensation plans, marketing tactics, etc if you create a more formal manner for innovation.

Additionally, you might find a great deal of value of reassessing the competitive landscape.  It never hurts to discuss how would a new competitor attack the market.  All great businesses find themselves under threat from unseen ideas – this may just give you a more proactive manner to see the ideas coming.  

The Continuous Improvement Meeting – CIM

2 04 2009

Including on this blog, much has been written about meeting management: how to run a more effective meeting, improving meeting outcomes, etc. All concepts in which I am in complete support. I’ve found, however, that it is very difficult to implement wholesale change into an organization’s meeting culture. And there are several characteristic profiles of meeting culture within organizations.

Meetings typically occur for the purpose of communicating information, yet most meetings I’ve witnessed over my career consistently end with no action or accountability to do something. So, what I’m going to suggest here is not a change in your existing meeting culture. Continue to hold the meetings that your organization routinely conducts, for whatever the purpose. But, if your organization is serious about driving operational performance improvement, you need to add a meeting to your schedule. Yes, that’s right. I’m advocating yet another meeting. This meeting is specific in purpose. It never deviates its agenda. And it is a critical management tool for driving performance improvement.

The continuous improvement meeting or “CIM” has five objectives.

1. Review progress against KPIs
2. Identify barriers to performance
3. Share best practices
4. Develop action plans for next period
5. Recognize superior performance

The CIM is 45 minutes in length, maximum. It is conducted at every level of the organization. This is critical to insure all levels of the operation are aligning their efforts with the strategy. Typically, the meeting should occur weekly at the front line to monthly and/or quarterly at the executive level.

The keys to successful implementation of the CIM are:

  •  It is a separate, distinct meeting. Not part of another meeting agenda.
  •  45 minutes maximum
  •  It is held at the same time & day every period
  •  It must be group meeting

One of the biggest gaps in operational performance management is the area of management effectiveness. We tend to focus on effectiveness and efficience of front line contributors. But how exactly does management improve its effectiveness at managing? Try implementing the Continuous Improvement Meeting into your management process and see how much more focus you create around the metrics that are important to your organization’s strategy.

Rewards – The “R” in Continuous Improvement

24 03 2009

In continuing to explore a framework for driving sustainable continuous improvement in operational performance management, I’m taking this opportunity to outline the most critical, and often most difficult element of the Expectations-Capabilities-Rewards “ECR” model discussed in a previous entry.

There has been no shortage of press coverage recently about executive compensation. Even before the AIG bonus debacle of late, terms such as “performance pay’ and ‘retention bonuses’ have become a regular part of the business press vernacular. While we can all debate the ethical, moral and logical merits of these compensation practices, when an organization is implementing a performance management system to drive sustainable continuous improvement, the total reward system, not just compensation, is the most critical lever of change.

However, unlike these currently accepted pay practices, particularly in the financial services industry, reward elements within an effective performance management system don’t just translate to paying people more. The crux of an effective reward system is the alignment of rewards, recognition and compensation to the strategic goals of the organization – paying employees for the desired behaviors.

As example of a misalignment of rewards with corporate strategy; a personal experience. In a past role, I joined a $300mm public software company to launch a value-added services business unit. The CEO’s strategy was to transform the company from a hardware & software seller to a services-led solution provider; eventually generating +60% of revenue from services. The CEO was making significant investment throughout the organization in this transformation. However, there was institutional resistance to changing the sales compensation plan in order to drive sales people to focus more on selling these services. While corporate leadership was investing in service capacity, training sales people how to sell services and promoting this new value proposition in the press and to the investment community, sales people had no quota for selling services, received no quota relief and had no bonus kickers for including services in their software deals. The result? The strategy failed. Officially, the executive committee decided to refocus on software licenses, acquiring two other software firms two years later. But it was clear that the refusal to change the incentive comp plan contributed to this failure.

While traditionally the most difficult element to evolve, in order for any change to sustain within an organization, the rewards and recognition system must align with the expectations and strategy in order to drive the desired behavior that results in improvement in the new KPIs.

Continuous Improvement – 3 Acts at a Time

17 03 2009

One of the key items we seem to struggle with is creating a process for continued process improvement. We typically look for dramatic and immediate improvements and lack patience to see things through.

  • When was the last time marketing sat down to specifically improve its top three marketing programs?
  • When was the last time, sales management took the top three clients in each territory to lunch?
  • When was the last time you promoted your three top suppliers?
  • How do we create a mentality and culture of continuous action?

Simple, don’t think, just pick something and get it done this week. All too often we get stuck in a mentality of trying to figure how to improve everything at once, instead of tasking a bunch of good people with three things to do by the end of the week.