Approaches to Change

Axelrod discusses in his book titled: Terms of Engagement, four approaches to change: i) Leader-driven approach, ii) Process-driven approach, iii) Team-driven approach, and iv) Change Management approach.

Leader-driven change is more suitable for small and medium enterprises with owner-managers. This approach works well when the manager or leader has all the necessary information and knowledge. Leader-driven changes tend to be directive and non-participative. Therefore this approach is less suitable when: a) the workforce is young and/or highly skilled, b) the business environment is complex and dynamic, and c) successful change requires active involvement of a number of people in the organization.

Process-driven changes are led by experts or outside consultants and supported by the leader; these changes are more common in large, bureaucratic organizations. This approach works well when the change requires technical or specialized expertise. Also being directive and non-participative, as in the case of leader-driven approach, this approach is therefore less suitable when: a) the workforce is young and/or highly skilled, b) the business environment is complex and dynamic, and c) successful change requires active involvement of a number of people in the organization.

Team-driven approaches are most common in large, manufacturing enterprises that have skilled and educated employees. Change management strategies—such as TQM, Quality Circles, and Six Sigma—exemplify this approach. These are highly participative change efforts that empower employees and provide them with involvement, participation and ownership of change. Team-based approaches that are properly executed can unleash enormous levels of employee energy and motivation. This can, in turn, lead to innovation and productivity gains. However, using this approach can also cause some discomfort for managers in an organization because they may not be used to sharing their power and authority with workers. Moreover, this approach requires managers to shift from a directive, authoritarian style based on power and expertise to a participative style based on persuasion, coaching and helping. More importantly, the team-based approach to execute change requires the establishment of a ‘parallel organization.’

The fourth approach to change is called the Change Management approach. This is a combination of expert-driven and team-driven approaches. Whereas the former provides a business and technical focus to change, the latter generates ownership, involvement and commitment. So as to gain this commitment, most specialists, experts and change management consultants have incorporated the parallel organization concept in their process-driven approach. The Change Management paradigm is the approach to change that most organizations use today. Although it seemingly seeks to integrate ownership of change with practical business focus, the Change Management approach has shortcomings. Instead of involvement and commitment, this approach breeds cynicism, bureaucracy and resistance. It actually disempowers employees, by reinforcing hierarchical top-down management.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

The Profit Economics

The following information is required, at a minimum, to understand the profit economics of a business:

1. How many dollars of assets are committed in each stage of each product/market business (e.g., R&D, materials, plant and equipment, finished stock, post-sale support)?
2. What is the fixed/variable cost relationship for each product/market business, that is, for each dollar of sales, how many cents are attributable to bedrock fixed costs, how many to structured or discretionary costs, and how many to out-of-pocket costs?
3. How do costs and profit change with swings in volume?
4. What is the break-even point at current volume and what actions could be taken to bring that break-even point down should volume potential decline?
5. What is the rate of incremental profit on each added increment of volume? What are the volume points where new increments of structured cost must be added?

A net profit and loss statement (after all allocations) and a balance sheet for each product line are essential for generating answers to these questions. Despite their claim that “we know all that,” very few managers actually have this information readily available.

Actually, most accounting systems are not designed to provide these kinds of statements and the accountants will argue that you can’t get them because many products run over the same machines, a lot of indirect costs can’t be allocated, and so on. To which we say, baloney! Shared fixed and indirect charges often represent the most serious cost problems in business situations where a cost disadvantage exists. And they are impossible to attack in the aggregate. They must be broken down and assigned to a discrete business unit even if done arbitrarily. Then a manager with hands-on responsibility can argue about fairness and whether there is value received for the costs involved. Although this is obviously not a precise exercise, it is effective and essential. Without full cost profit and loss and balance sheet statements managers cannot really understand the profit economics of their business. Further, they can’t make the types of intelligent business decisions and plans so important in today’s environment.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Customer Value Checklist

1. Does your company do a good job of listening to its customers? Give a specific example of how listening resulted in improved service quality to your customers?
2. Reliability is the ability of the company to perform the promised services dependably and accurately. On a 10-point scale, where 1 is unreliable and 10 perfectly reliable, where would you place your company and why?
3. How well does your company perform the “service basics”—that is, knowing and responding to the fundamental service expectations in your industry?
4. How effectively does your company manage the service design elements or systems, people, and the physical environment? Provide an example of how a lack of planning in one of these areas resulted in a “fail point” during a customer encounter.
5. Service recovery refers to how effectively companies respond to service failures. Cite an example of when a service failure occurred in your company and how it was handled.
6. Teamwork is an important dynamic in sustaining service workers’ motivation to serve and in minimizing service-performance shortfalls. Rate your company on its ability to foster teamwork on a scale of 1 to 10, where 1 indicates the absence of teamwork and 10 indicates maximum teamwork. How would you improve teamwork if you rated your company low on this attribute?
7. Internal service is crucial to service improvement, as customer satisfaction often mirrors employee satisfaction. To what extent does your company assess internal service quality (i.e., asking employees about the adequacy of systems to support the service, how the systems interact and serve one another, and where service failures are occurring)? Give examples of how internal service might be measured in your company.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Crisis Communication

One of the most visible functions of the PR department is to help management plan for and respond to crisis. A good PR professional looks for potentil problems, constantly scans the business environment, then alerts management to the implications of such problems, and suggests the best course of action.

Disasters of earthquake proportions fall into the category of public relations nightmares created by sudden , violent accidents. Plane crashes, oil spills, chemical leaks, and product defects all belong to this group. The other type of crisis is the sort that builds slowly and occurs because of a company’s conscious, but ill-founded, decisions.

Whn disaster strikes , a defensive posture is generally counterproductive. The best course is to be proactive, admit your mistakes and apologize.

When disaster hits most companies respond, to some degree, through their public relations department, but they often ignore the audience that is likely to be hit hardest—employees. To minimize the impact of any crisis on employees, be sure to communicate honestly, openly, and often, actively encourage employees to share their concerns, and use caution when sharing personal opinions.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Implementing the Sales Program

As with any kind of management, implementing a sales program involves motivating and directing the behavior of other people—the members of the sales force. To be effective, the sales manager must understand why the people in his or her sales force behave the way they do. Then policies and procedures can be designed to direct their behavior toward the desired objectives.

The model of the activities involved in implementing a sales program suggests that five factors influence a sales rep’s job behavior and performance:

1. Environmental variables: Regardless of how highly motivated or competent salespeople are, their ability to achieve a particular level of job performance is influenced—and sometimes constrained—by environmental factors. The ability to reach a given sales volume, for instance, can be affected by such things as the market demand for the product being sold, the number and aggressiveness of competitors, and the health of the economy. Similarly other elements of a firm’s marketing mix, such as the quality of its products and the effectiveness of its advertising, can affect a salesperson’s ability to reach a high level of sales performance.
2. Role perceptions: To perform adequately, a salesperson must understand what the job entails and how it is supposed to be performed. The activities and behaviors associated with a particular job are defined largely by the expectations and demands of other people, both inside and outside the organization. Thus, a salesperson’s job (or role) is defined by the expectations and desires of the customers, sales manager, other company executives, and family members. The salesperson’s ability to do the job well is partly determined by how clearly the sales rep understands those role expectations. Also, the salesperson may sometimes face conflicting demands, as when customer wants a lower price but company management refuses to negotiate. The salesperson’s ability to resolve such conflicts helps determine success or failure on the job.
3. Aptitude: A salesperson’s ability to perform the activities of the job is also influenced by the individual’s personal characteristics, such as personality traits, intelligence, and analytical ability. No matter how hard they try, some people are never successful at selling because they do not have the aptitude for the job. Of course, different kinds of sales jobs involve different tasks and activities, so a person with certain characteristics may be unsuited for one selling job but tremendously successful at another one.
4. Skill levels: Evan when salespeople have the aptitude to do their jobs and an understanding of what they are expected to do, they must have the skills necessary to carry out the required tasks.
5. Motivation level: A salesperson cannot achieve a high level of job performance unless motivated to expend the necessary effort. A person’s motivation is determined by the kind of rewards expected for achieving a given level of performance and by the perceived attractiveness of those anticipated rewards.

A sales manager can use several policies and procedures to influence the aptitude, skill levels, role perceptions, and motivation of the sales force. Implementing a sales program involves designing those policies and procedures so that the job behavior and performance of each salesperson are shaped and directed toward the specified objectives and performance levels.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Intuitive Leadership and Sound Business

Intuitive Leadership is a term that has come into vogue only recently. In fact, tough-minded male executives have confessed to using intuition in their decision-making. Intuitive leadership is more than simply old-style leadership with some intuition added in to guide the corporate decision. It is leadership that takes into account both (a) the executives’ appreciation of their inner resources that are available but often not used and (b) the changes in institutions and society that are accompanying the “awakening” of employees and the public at large. The term “awakening” is used to describe the general phenomenon whereby people are becoming aware that they no longer have to accept their adopted beliefs, beliefs that they developed or accepted throughout most of their lives. These beliefs can include belief in the inderiority of certain ethnic or gender groups, beliefs in the sacrosanctity of economic customs and business practices (even if they are demonstrably not good for people or the planet), belief in powerlessness before the “big system,” or belief in the limited extent of one’s own ability to create what one wants.

In view of these changes, what is sound business for the future? What do these changes mean to business people? Of one thing we can be sure: business life will be replete with challenges. Some of these challenges will stem from the global dilemmas, with growing recognition of the role business has unwittingly played in accelerating modern society’s race towards self-destruction. Some of these challenges will stem from the changing attitudes of employees and the general public—the customers. The new environment for business will emphasize innovation and will be highly competitive. To prosper in such an environment, a business firm will need to attract and hold its most creative people. To do that, businesses will have to provide a work environment that fosters creativity development.

Developing intuitive leadership in the future will not be a luxury or a passing fad; it will be the heart of business. The challenges will be great. It will be necessary to deal effectively with the increasing complexity, interconnectedness, and systematic nature of the economic system. There is both good news and bad news. The bad news is that there will be persistent problems of mediocrity, debt, trade balance, global dilemmas, and worker morale. The good news is that we have inner resources we haven’t been using—untapped resources that are quite capable of dealing with these problems.

Thus “intuition” is not just a new gimmick in management decision making. Intuition is a code word for a necessary transformation of business—indeed, of global society.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Involving Employees

To be successful when facing multiple tasks, often on multiple projects, more employees at all levels will need to delegate some of their activities and responsibilities to other organizational members. This means that employees are going to have to be give certain amounts of authority to make decisions that directly effect their work. Even though delegation was once perceived as something that managers did with lower levels of management, delegation will be required at all levels of the organization—in essence, peer delegation, or using influence without authority.

In addition to being required to take on more responsibilities, employees will be expected to make decisions without the benefit of the tried-and-true decisions of the past. And because all these employees are part of the process today, there is more of a need for them to contribute to the decision-making process. In most organizations, the days of autocratic management are over. To facilitate customer demands and fulfill corporate expectations, today’s employees need to be more involved. Group decision-making enables these employees to have more input into the processes, and greater access to needed information. Such actions are also consistent with work environments that require increased creativity and innovation.

Another phenomenon of involving employees will be an emphasis on work teams. The bureaucratic structure of yesterday—where clear lines of authority existed and the chain of command was paramount—is not appropriate for many of today’s companies. Workers from different specializations in an organization are increasingly required to work together to successfully complete complex projects. As such traditional work areas have given way to more of a team effort, building and capitalizing on the various skills and backgrounds that each member brings to the team.

Involving employees allows them an opportunity to focus on the job goals. By giving them more freedom, employees are in a better position to develop the means to achieve the desired results.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

HRM and Global Competitiveness

HRM is a system within other systems. The most complex of these is the international business environment. The forces which act on people management are not purely internal to an organization. They include innumerable active players in the world economy, including international agencies, governments, competitors, unions, speculators and consumers—each pursuing their own goals.

Changes in the business environment have major consequences for people managers. In essence this means that factors outside a company’s control will affect its requirements for human resources and the way they are managed. For example, unexpected changes in competitor technology or currency exchange rates may compel a business to abandon long-term human resource plans and shed staff in order to survive.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Characteristics of Analysis

Analysis uses scientific methodology: a systematic, rational, critical appraisal of the phenomenon under investigation based on emperical facts. Analysis in the social sciences is different in some respects from analysis in the natural sciences, which take a much narrower view of what can be measured and known. However, the basic motivation—to understand and to establish control over the environment—is the same, as are the essential methods. The distinction between analysis in the natural and social sciences lies in the kinds of questions explored.

The intellectual activities of analysis are directed toward practice issues and practical application. Assessment of the data and the search for relevant research and theoratical constructs are part of a progression toward action. The goal is to enable the change agent to make informed choices.

In addition, analysis is carried out within a social context and involves subjective judgments, preferences, and values. Naturality and disinterested inquiry are not characteristics of social science analysis. Ideologies, beliefs, and assumptions affect both the perception and the interpretation of imperical data.

The purpose of analysis in the planned change process is to facilitate decision-making. Analysis clarifies the nature and dynamics of the change opportunity and the relevance of possible responses. However, it is not realistic to expect analysis to provide “the answer.”

Different planners can assess the same situation and produce quite different analyses insofar as each shapes the problem in terms of his background, training, experience, and values. The reality of competing views of human service conditions, problems, needs, issues, and change opportunities in no way lessens the importance of analysis.

Analysis, then, may be expected to clarify options, trace implications, and provide grounding for judgments. Useful analysis will be critical, thorough, and systematic and will be oriented toward practical application.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Planning for Uncertainty

Uncertainty has become so great as to render futile, if not counterproductive, the kind of planning most companies still practice: forecasting based on probabilities.

Unique events have no probability. Yet executives have to make decisions that commit to the future current resources of time and money. Worse, they have to make decisions not to commit resources—to forgo the future. The lengths of such commitments are steadily growing: in strategy and technology, marketing, manufacturing, employee development, in the time it takes to bring a new plant on steam or in the years until a commitment to a store location pays for itself. Every such commitment is based on assumptions about the future. To arrive at them, traditional planning asks, “what is most likely to happen?” Planning for uncertainty asks instead, “What has already happened that will create the future?”

The first place to look is in demographics. There have been two revolutionary changes in the workforce of developed countries: the explosion of advanced education and the rush of women into careers outside the home. Both are accomplished facts. The shift from blue-collar labor to knowledge and service workers as the centers of population gravity is irrevocable. But so is the aging of both the workforce and population.

Business people need to ask: “What do these accomplished facts mean for our business? What opportunities do they create? What threats? What changes do they demand in the ways the business is organized and run, in our goals, in our products, in our services, in our policies? And what changes do they make possible and likely to be advantageous?”

The next question is: “What changes in industry and market structure, in basic values (e.g., the emphasis on the environment), and in science and technology have already occurred but have yet to have full impact?” It is commonly believed that innovations create changes—but very few do. Successful innovations exploit changes that have already happened. They exploit the time lag—in science, often twenty-five or thirty years—between the change itself and its perception and acceptance. During that time the exploiter of the change rarely faces much, if any, competition. The other people in the industry still operate on the basis of yesterday’s reality. And once such a change has happened, it usually survives even extreme turbulence.

My Consultancy–Asif J. Mir - Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight