"Boiling the ocean" is one of those phrases that can be quite accurate but is still slightly irritating to use or hear. It refers to analyzing something to death or tackling a problem with an impossible scope. And it's an easy trap to fall into when you are looking for opportunities. The usual reason for doing what inevitably ends up as a waste of time is the lack of a hypothesis. If you go searching for opportunity without some idea of what you are trying to determine, you may well have someone throw this phrase your way.
So the starting point for any opportunity hunt is a hypothesis. We use something we call "universal customer value" to begin to identify where to focus. Universal customer value is simply the recognition that four things are important to virtually every customer: speed, accuracy, cost and service. Any of these elements can be improved, but it's helpful to choose one on which to focus. To determine which one, you must assess which attributes are most important to your customers (or users), and then identify what the gap is between what the current and desired performance levels. Analytically, speed is cycle time; accuracy is error rate; cost is productivity; and service is schedule attainment.
Even if you don't know what the right number should be, you can identify the gap between what it is and what it could be. That difference is where all the opportunities lie.
Over the years we've done a number of studies to try to help our clients find out what their customers think of them. These types of studies are often packaged under the term "voice of the customer." The idea is to survey customers to identify their key buying attributes and their priorities, and see how the company stacks up against competitors and alternatives. They are also quite predictable in many industries. Managers are also surveyed; they often score themselves highly. And so do customers. Companies often fare quite well with existing customers, and even with non-customers, on many important attributes. The problem is that competitors fare well too.
The problem that many companies face is that they exist in competitive industries where all the main players are pretty good. The big danger is that even when customers say that price isn't the most important attribute, which they often do, it sometimes becomes the most important one. If all the competitors are similar in terms of other attributes, price becomes a key factor in the decision– a point that is often leveraged by expert procurement departments. When price becomes the key focus, margins quickly erode.
It would be unfair to claim that it's a consultant's parlor trick, but the real point of the study is often to unsettle what is sometimes over-confidence in existing perceptions. The real opportunity to improve customer preference is to provide a key attribute that is significantly better, and provide it differently than competitors do. But this starts with recognizing that being really good, in your customers’ eyes, simply isn't enough anymore.
“All of us are smarter than any of us” – Seth Godin
Carpedia is proud to be a sponsor of the GREAT CEOs Speaker Series ‘Morning with Seth Godin’ taking place at the Toronto Congress Centre on June 18th 8am-12:30pm.
Seth Godin is the author of 18 best-sellers that have been translated into more than 35 languages and published worldwide. He writes about the post-industrial revolution, the way ideas spread, marketing, leadership, and—most of all—changing everything. Seth is a renowned presenter who is consistently rated among the very best speakers by the audiences he addresses. He has not facilitated an interactive Q&A in the Toronto area in almost three years and this will truly be an outstanding event!
During this exclusive three hour session, Seth will both challenge and inspire an audience comprised of hundreds of CEOs and senior executives as he shares:
Friends of Carpedia use promo code CARPEDIA to save! Register today!
- the importance of finding, organizing, committing to, and communicating with a tribe and then creating a culture of what it means to be in that tribe
- how to leverage the transition from an industrial economy based on obedience, to a connection economy based on coordination, trust, permission, and the exchange of ideas
- how ideas spread, why the stories companies tell matter, why treating customers with respect pays off, and how these and other business decisions determine whether your business becomes invisible or remarkable
- how letting go of our fear of failure, taking risks, and recognizing and embracing choices allow individuals to not just succeed, but to matter
Corporate Review Meets with Carpedia International to Learn About Improving Organizational Performance
April 15, 2015 - Boca Raton, Florida -- Many executives struggle to move their organization to a higher level of performance in a reasonable period of time. Carpedia International believes that they can help organizations achieve measurable and sustainable growth.
Carpedia is a consulting firm that provides executives with resources to help them find ways to move their company forward. The company works onsite with the client’s management teams to discuss exactly what the company would like to accomplish and the timeline that they would like to use to achieve it. Carpedia will then help the client develop tactical ideas and techniques to meet these goals.
Although many companies are hotbeds of new ideas and make operational changes regularly, when it comes to the broad scope that many companies are looking for, they begin to struggle. Carpedia has the experience and skills needed to help get people working together across various systems and departments to achieve change on a company wide level. This process can be time consuming and difficult, particularly when one considers the changes in outlook and behavior that is often required from everyone in the organization.
“Company-wide changes can be enormously difficult for organizations, but failure to do so can hold these businesses back from achieving their potential. When we learned about how Carpedia International helps companies make the operational changes they desire and move forward in their industry, we wanted to get them on the show to share their ideas with our audience,” says JL Haber, the Vice President of Programming for Corporate Review.
Carpedia International offers clients a distinct advantage because of their individualized approach for each company. They do not rely on formulas or predetermined mechanisms. Instead they will form a strategy from meeting with the company and guiding them towards their goals.
Those interested in learning more about Carpedia International and the work they do with company efficiency should watch this episode of Corporate Review.
About Corporate Review
Corporate Review is an award winning business and health program that is independently produced by MMP (USA), Inc. The show provides its viewers an in depth opportunity to find solutions to the industry problems from some of the top business leaders from across the world. With more than 5,000 companies participating on over 500 shows, Corporate Review continues to be the premier and targeted outlet for the latest business and health stories. Corporate Review airs on cable networks to over 100 million potential television households.
For specific market-by-market air dates and times, please email Moniqueh@mmpusa.com. For more information, please visit www.corporatereview.tv.
When we look for opportunity, we categorize time into green and red components. Green time is the current productive part of a process, while red time is the non-productive waste. Green time typically takes up 50-60% of a process, which means red time usually takes up between 40-50%. It surprises most managers to learn how much time falls into this red component. This is in part because people often equate productive time with effort, but the two aren't necessarily related. Non-productive time can take as much or more effort than productive time. It's also a little misleading because this somehow implies that a process could or should be 100% green. But some red (or non-productive) time, is actually required to allow some flexibility of operations. Other factors can also have an impact, such as machine versus people-driven processes or union verses non-union environments. Even so-called world-class processes generally have 10 to 15% red time due to real-life variability.
Improving either the green or red components of a process requires different types of problem solving. Improvements to green time require changing the process as it is designed. This was called "re-engineering" until the term fell out of favor and is now more popularly referred to as "innovation". Improvements to red time require eliminating or reducing waste that is inherent in the process. This is where "lean" and its numerous variants are commonly applied.
"Opportunity" is one of those euphemisms we use instead of "problems." It's arguably a better word, because most operating problems are, in fact opportunities for an organization to improve. Before we take on a project for a client, we do what we call an "opportunity analysis," which is like a financial and operational due-diligence. A key purpose of the analysis is to identify opportunities that exist in the current process and, more generally, the magnitude of the total opportunity. But given the complex nature of many organizations, where do we look for opportunity?
To help structure our thinking, we break down organizations (or specific functions or processes) into four separate, but interrelated areas: product, process, management systems, and organizational behavior. Within each of these four areas there are a number of things we look for, and a range of studies we can apply. One of the things we've learned over the years is that although organizations are complex and can differ significantly from one another (even within the same industry), there are a number of operating problems (i.e. opportunities) that are quite common.
In this era of hyper-competition, managers are constantly being asked to improve the productivity or effectiveness of their area of responsibility. This series is designed to provide insight into some of the more common opportunities we see across many diverse types of organizations and industry sectors. While not everything will be applicable to all organizations, we are sure you will find many ideas that can help you in the never-ending hunt for opportunity.
Opportunities exist everywhere in organizations, because businesses are constantly changing in both subtle and not-so-subtle ways. We spend a lot of time observing organizations of all shapes and sizes, and it is truly fascinating to see how they operate. Hospitals, wineries, hotels, transportation firms, production plants: they are all remarkably complex. So while opportunities may exist, they are often not obvious. Unfortunately, competitive reality demands that companies never stop improving their performance and, in turn, that managers never stop looking for opportunity. But where and how do you look for these opportunities?
To answer the "where" part of this question, we ask ourselves four questions:
- Are there any gaps between what your product or service provides and what customers (or users) actually want?
- Can the process be made faster, more reliable or with less cost, without impacting quality?
- Are the management-system tools effective and used properly by managers?
- What do managers actually do with their time and is it what the organization needs?
The "how" part can be a little trickier. When you spend as much time as we do looking for improvement opportunities, you start to create mental checklists of both what you should be looking for and where you're likely to find them.
In the previous Observation, we discussed how everyone agrees that management behavior is a critical issue in organizations. However, the meaning of the term itself is often a little fuzzy. What behaviors are we actually talking about? If we look at the specific behaviors that most organizations would like their managers to possess, we can group them into four broad categories, which aptly reflect Deming's PDCA model: plan, do, check, act.
Plan (planning behaviors)
- Strategic planning
- Sales and operations planning (S&OP)
- Improving performance
- Managing change
Do (execution behaviors)
- Assigning work
- Communicating expectations
- Following up and actively listening
- Giving performance feedback
Check (analytical behaviors)
- Monitoring activity volume
- Tracking key performance indicators
- Identifying variances to plan
- Improving processes
- Problem solving for root causes
Act (improvement behaviors)
- Prototyping possible solutions
- Making decisions
- Persuading others
- Training to improve skills
- Coaching for improved performance
We use this list when studying and observing managers, evaluating skill levels, and for training and development programs.
We often say it's tough to change management behavior. Universally, executives nod their heads in agreement. But when we all say it, what do we actually mean? What specific behaviors are we all talking about? What does changing management behavior really mean?
Like all of us, managers tend to repeat the same behaviors over many years, and in time those behaviors become deeply entrenched. Behaviors help form individual management styles and are the basis of familiar, comfortable work routines. Changing management behavior means getting managers to actually act differently from what they have done in the past. This could be setting clear daily expectations for staff, following up on planned work, actively listening or giving feedback. While these behaviors may seem very basic, they are not always common practice. Interestingly, they're actually more common in production environments than they are in office environments. When a behavior isn’t performed by a manager currently, it will be hard for him or her to start doing it in the future. Furthermore, not only does the manager not know how to do it, employees don't know how to respond to it.
Another aspect of changing management behavior is to modify the "style" of management that people use. We are strong believers in an active management style that is controlled, collaborative, and focused on results. On the other hand, we are not fans of management styles where an aggressive manager bullies subordinates, or a manager feels the need to flatter someone in order to get something done. We also are not fans of what we call "passive management" styles, e.g., where managers shy away from issues and avoid confronting poor performance. Nor are we fans of the management style where a manager asks an employee to do something but is apologetic and does not accept responsibility for giving the assignment -- or blames it on the company.
It's a lot easier to modify specific behaviors than it is to modify a person's management style. Behaviors are usually the result of doing something over and over again, which can often be tweaked or adjusted. Management styles tend to reflect both the social style of an individual and the culture of an organization. Some organizations are aggressive and some are passive; this often mirrors the styles of key executives. On their way up through the ranks, executives tend to hire and promote similar kinds of people, which over time creates a corporate management style. It's one of the reasons why corporate mergers can be so difficult: two similar businesses can have very different management styles.
Management styles can -- and do -- change over time, but from a practical perspective it's far easier to focus on modifying specific management behaviors.
In the relatively early days of our company, a few partners took a high-speed driving course on an old Formula 1 race track just outside Montreal. The conversation over dinner on the first night was not about how interesting or exciting it was to drive open-wheel race cars -- it was about how good the actual training approach was. In a nutshell, the instructors broke down racing into two things: driving in a straight line and driving around corners. To be a good driver, we had to master these two skills.
The instructors broke down each of these skills into specific steps. For example, driving around corners consisted of breaking on a straightaway, turning at a steady speed to the apex, then accelerating to the corner exit. They would teach one skill in the classroom and then take us out to the track to practice. Gradually we learned how to combine the skills.
Good athletic coaches use a similar technique to teach athletes where to position themselves and what to do while their often chaotic environment swirls around them.
The problem we have found with most management training programs is that they don't use this approach. They tend to overload managers with PowerPoint slides that tell them, in technical terms, what they should do and what to expect. They rarely break down management skills and get managers to practise those skills in pieces before trying to put them all together. One of the results is that many managers know what to do, but they don't always know how to do it. There is a lot of training about problem solving for example, but it's largely academic. It may instruct managers to identify the problem and look for root causes. But how exactly does a manager do that? Where and how do they learn about a variance? How do they look for root causes? What studies do they need to do? How do they do those studies? Who should be involved? What should they be trying to achieve? These are the questions that management training needs to address to be helpful.
The driving course left an indelible impression and made us go back and change the design of our training programs. We've still never achieved the clarity of the original course, but they are certainly more useful as a result of that experience.