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The hunt for opportunities

opportunity analysis improve productivity

"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?

In search of opportunities

performance improvement opportunity

Observation #52

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?

What are specific management behaviors?

management behaviors

Observation #51

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.

What does changing management behavior really mean?

management styles and behaviors

Observation #50

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?

The problem with management training

is management training beneficial?

Observation #49

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.

A specific target is better than a range

true value of opportunity

Observation #48

When we work for a company, we always do our due diligence upfront to pinpoint a specific improvement target for the project. Well, almost always. Sometimes we estimate the potential improvement based on our experience, and to be extra cautious we use a range, rather than a specific number. We peg the expected target number in the middle of the range. This is usually a mistake.

How many managers does an organization need?

Span of Control analysis

Observation #47

Sometimes we do a study that we call the "Span of Control" analysis, where we look at how many subordinates report directly to each manager in an organization. It's a more difficult study than it sounds, because the way organizational charts are drawn is not always how they really are. Reporting lines are sometimes blurry and titles can be misleading (e.g., some managers aren't really managers). The numbers alone don’t reveal the full story, but the study does help one learn a lot about the organization.

The difficulty and importance of managing "shoulder periods"

performance improvement gains during shoulder periods

Observation #46

Many industries experience "shoulder periods." These are the time periods leading up to and away from the peak volumes. Figuring out how to manage these periods can be a difficult task for managers, but it’s also very important for realizing performance improvement gains.

What are your three key indicators?

what should management focus on?

Observation #45

Over the years, one of the things we've noticed is that each new manager tends to create new reports, for whatever purpose they have at the time. Old reports are not eliminated, so over time there are a mountain of available reports – and a mountain of performance indicators -- in the system. But like a software program with too many features, this is not necessarily helpful. Sometimes it's just confusing.

Grow with your customers

how does your business add value?

Observation #44

Growing sales volume with existing accounts is sometimes referred to as "increasing your share of wallet," but it's actually not a very good description -- or even objective. We've found that companies are generally most successful increasing sales volume with existing accounts when those accounts are themselves growing, and they manage to maintain a share of that wallet.

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