Productivity—the Japanese Way

Economists are forever telling us that we need to increase productivity in order to improve our standard of living. Productivity is one of those concepts that are so loaded with meaning and implications that is very difficult to define, much less explain. Not surprisingly then, improving “it” is one of the most difficult tasks facing business. More to the point, the time for improvement is quickly running out. Industrial performance is being outstripped at a frightening pace by the Japanese. In fact, it has reached the point where their productivity performance is so superior that they can literally pick any product and any market and quickly come to dominate it.

The idea that Japanese are uniquely gifted in only a few related areas has been debunked by their proven successes in industries as diverse as automobiles and semi-conductors. As well, the facile suggestion that the Japanese are somehow culturally inclined to be productive doesn’t wash. Japanese managers have taken over factories in Europe and the US and greatly improved productivity records. Productivity has also been high in their North American plants.

If corporate managers believe that their workers can be as competitive as anyone else in the world, and technically, there’s no valid reason why they can’t be, then they must find better ways to help their employees realize their potential. In that sense, study of Japanese methods is a jumping-off point that can lead to adaptations that will produce unique ways of improving productivity.

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, and my Lectures.

Behavior and Organizational Strategies

A competency model can be an effective way of communicating to the workforce the values of the senior management and what people should focus on their own behavior. For example, a competency-based appraisal system helps to distinguish individuals with the characteristics that are required to build and maintain an organization’s values (teamwork, respect for individual innovation or initiative) from those who do not exhibit the behaviors that will support these values. In this way competency models can translate general messages about needed strategy and culture change into specifics. There are two principles that can be followed:

• Focus on the superior performers without making an assumption.
• Focus on what they do to perform the given role.

Following are various developed models that are used as a basis for selection, training, promotion and other issues related to human resources:

• Job Competence Assessment Method—this is developed using interviews and observations of outstanding and average performers to determine the competencies that differentiate between them in critical incidents.
• Modified Job Competence Assessment Method—this also identifies such behavioral differences, but to reduce costs, interviewees provide a written account of critical incidents.
• Generic Model Overlay Methods—organizations purchase an off-the-shelf generic competency model for a specific role or function.
• Customized Generic Model Methods—organizations use a tentative list of competencies that are identified internally to aid in their selection of a generic model and then validate it with the input of outstanding and average performers.
• Flexible Job Competency Model Methods—this seeks to identify the competencies that will be required to perform effectively under different conditions in the future.
• Systems Method—this demand reflecting on not only what exemplary performers  do now, or what they do overall, but also behaviors that may be important in the future.
• Accelerated Competency Systems Method—this places the focus on the competencies that specifically support the production of output, such as an organization’s products, services or information.

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, and my Lectures.

Commitment to Action

Understanding the marketing concept is one thing; following through with the commitment to make tough decisions is quite another. Many companies stumble badly here. Companies with a superior marketing effort, on the other hand, repeatedly demonstrate their commitment to follow the marketing concept by their willingness to require cooperation from all functions, to invest for long-term goals, and to face up to deficiencies in product, price, or service.

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, and my Lectures.

Managerial Know-how

People who bring capital, labor, and resources together to fashion them into a productive organization that must face the risks of an uncertain world, occupy strategic positions. Thus, given the same inputs, presumably a country with superior management will do better than one with weak management. The importance of managerial know-how can be illustrated by the airlines industry.

Obviously an explanation of world business involves many elements. But with a basic understanding of the few elements, comparative advantage and specialization.

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, and my Lectures.

Psychological Pricing

Psychological pricing encourages purchases based on emotional rather than rational responses to the price. The assumption behind symbolic/prestige pricing is that high prices connote high quality. Thus the price of certain fragrances are set artificially high to give the impression of superior quality.

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, and my Lectures.

Product Development Strategy

A product development strategy dictates that the organization create new offerings for existing markets. The approach taken maybe to develop totally new offerings (product innovation) to enhance the value to customers of existing offerings (product augmentation) or to broaden the existing line of offerings by adding different sizes, forms, flavors,  and so forth (product line extension).

Companies successful at developing and commercializing new offerings lead their industries in sales growth and profitability. The likelihood of success is increased if  the development effort results in offerings that satisfy a clearly understood buyer need.

Important considerations in planning a product deployment strategy concern the market size and volume necessary for the effort to be profitable, the magnitude and timing of competitive response, the impact of the new product on existing offerings, and the capacity (in terms of human and financial investment and technology) of the organization to deliver the offerings to the market(s). more importantly, successful new offerings must have a significant point of difference reflected in superior product or service characteristics that deliver unique and wanted benefits to consumers.

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, and my Lectures.

Organization Structure and Innovations

Organizational structure fulfils many functions—everyone in the organization knows who he or she reports to; how various repetitive/routine activities are to be discharged; who has what authority and responsibility; how personnel are grouped together (e.g., by departments or divisions); which individuals/groups have decision-making authority and which have primarily advisory functions (line versus staff functions); and what mechanisms are deployed primarily for reducing decision-making uncertainty, for ensuring differentiated or specialized responses to the operating environment, and for coordinating and integrating these differentiated or specialized responses. A well-designed structure that is compatible with strategy or is internally coherent and compatible with the organization’s operating environment tends to contribute to superior organizational performance.

Can organizational structure facilitate innovations? Possibly. Relatively flat managerial hierarchy and extensive decentralization or delegation of authority, including extensive use of profit centers and SBUs.

Certain kinds of structural changes, notably creating many self-contained, substantially autonomous units with stretch targets, extensive delegation of authority to lower level decision-makers, and delayering (removal of some of the managerial levels to reduce the number of approving authorities for innovation)  may increase the potential innovations of the organization.

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, and my Lectures.

Creative Management Operations

Operations management was a major area of organizational creativity in the era of scientific management during the late 19^th and early 20^th centuries. It got a recharge in the 1950s and 1960s when mathematics and computer science were utilized through operations research models to schedule production, arrive at optimal inventory levels, and so forth. The superior productivity and quality of Japanese manufacturing induced a further revolution in operations management in the 1970s and 1980s, and management vocabulary was enriched by Just-in-time (JIT), Kanban, Total Quality Management (TQM), quality circles, continuous improvement, and so forth. And yet there is much scope for operations-related creativity.

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, and my Lectures.

 

Beyond Customer Satisfaction

Satisfying the customer is no longer the ultimate business virtue. Companies need to look for ways to create and increase customer loyalty. The key to this new loyalty-centered approach to customer relationships is creating and managing the customer value package – the combination of factors (price, product quality, innovation, and company image) that creates what the customer perceives as superior value. Five steps are recommended:

1. Clearly define and communicate your objectives. The company needs to make sure that every stakeholder clearly understands the importance of  creating and delivering customer loyalty and knows how to make it possible.
2. Let customers define, in their own words, their criteria for quality, price, image, and value. The company needs to distinguish between basic requirements and loyalty builders. Meeting the basic requirements will get the company on the approved vendor list, but generating loyalty will encourage a customer to stick with the company during difficult times.
3. Conduct a critical need and value assessment. The company must set priorities among important customer requirements and determine the relative importance of these aspects of the customer value package.
4. Develop an action plan and move to implementation. This turns management of customer loyalty into a way of doing business. The company must make sure that the voice of the customer becomes the principle around which the business processes are organized.
5. Monitor the marketplace and organization results. Managing customer value is not a one-time effort, so all the loyalty-building components of customer value have to be monitored regularly with a focus on the relationship between customer value, customer loyalty, and financial performance.

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, and my Lectures.

 

Self-Respect

Self-respect is a rule of successful living. Think about it everyday until you apply it to everything you do.

People respect us in direct proportion to how much we respect ourselves. If you think of yourself as a first-class person, others will show you first-class respect. But if your self-concept is “I’m a second-class nobody,” you will receive little respect. You are headed straight for the land of nobodies.

No store carries a product called “self-respect,” so we cannot buy it. Nor can we inherit self-respect. It doesn’t come with the genes. And we can’t borrow self-respect from someone who has it. It has only the source: One’s self.

Meneius, a wise Greek said 2400 years ago, “A superior person will not show narrow-mindedness or the lack of self-respect.” We do not respect the person at work who belittles other people, rides hard over the workers, looks like a bum, and constantly uses profanity. The behavior of such people tells us they lack self-respect, so why should we respect them? Lack of self-respect is instilled in many people by a negative 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, and my Lectures.