Sources of Innovation


There are two sources of innovation: functional and circumstantial. Functional sources answer the question: where do the innovations come from? Do the come from within or from outside a firm? Where exactly within the firm? Circumstantial sources answer the question: when or under what circumstances can one expect the innovations?

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.

Unrestrained Empowerment: Value Killer


A bank performs many different functions, but in the long run it has value for its customers only if it handles their money accurately and safely. Therefore the foundation of every role within the bank, whether it is trader, investment adviser, or teller, is the need to do it accurately and safely. To show employees exactly what it means to be “accurate” or “safe,” the banking industry has defined regulatory steps, and each bank has its own internal guidelines. The bank’s employees must adhere to these. This isn’t the only part of their job, but it is the foundational part. Any manager who forgets this, who gives his employees too much room to maneuver, runs the risk of destroying the bank’s value.

All roles demand some level of accuracy or safety, and therefore all roles require employees to execute some standardized steps. Great managers know that it is their responsibility to ensure that their employees know these steps and can execute them perfectly. If that flies in the face of individuality, so be it. Unrestrained empowerment can be a value killer.

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

Defeating Fear with Preparation


Preparation helps defeat fear. Winning prizefighters prepare for a bout by selecting a sparring partner who has a boxing style similar to their opponent.

A football coach helps defeat fear and builds team confidence through exhaustive preparation. Films of the other opposing team in action are reviewed, “special” plays are practiced over and over again, and restrictions are placed on players’ activities all because, in an even contest, confidence is the deciding factor and confidence comes from preparation.

People are afraid of selling more than any other occupation. And again, preparation is a key to overcoming the near paralysis people have in making a sales presentation. People fear looking stupid, hearing the prospect say “No,” being embarrassed, forgetting what they want to say about the product, asking for the order, and not making the sale.

The only way to gain the high level confidence needed to sell successfully is preparation. And preparation is knowledge—knowledge of what you sell, knowledge of how your product will help the prospect or client, and knowledge of the person you’re selling.

Know your product or service. Know exactly what it can do for the prospect. Be so well prepared you can answer any question that comes up. Know construction, desirability and guarantees. Know the limitations, when not to use the product.

Know how your product or service will help your prospect. Your customer is the law of self-interest in action. As a salesman makes a presentation, the customer is asking, “How does this relate to my problem? How would it benefit me?”

The third confidence builder is knowledge of the prospect. You don’t sell to machines, you sell only to people. Just as you feel confident and have no fear when you’re around people you know well, you’ll have confidence around prospects when you know more about their personal interests, personality, personal responsibilities, or responsibilities, and family.

To act confidently in a sales situation, prepare yourself with knowledge of what you sell, how it will benefit he prospect, and who the prospect is. But more than knowledge, practice is required to gain confidence needed in selling. Practice your presentation with people who act the role of a customer. Practice before a mirror, or better yet, film yourself on a video camera. Watch your mannerisms, list to your voice, and observe your expressions.

You’ll destroy fear and build confidence in selling through preparation. In any activity, confidence comes in direct proportion to preparation.

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

Accrual Accounting and Cashflow


Before the end of World War 1 most managers kept track of cash out and cash in. many senior citizen owner-managers still do today. There is an inherent problem in keeping the records that way, however, if the business offers and receives much credit. Doing business on credit displaces the time of the exchange of cash from the exchange of goods and services. Sometimes very little cash comes in during a particular month and very much cash comes in during other months. The same is true of cash out.

Keeping in track of what you pay or get paid for credit transactions causes the monthly reports describing the operations to fluctuate from month to month even though the goods and services flowing in and out of the business may be very much the same. About 1920 the accounting profession began placing emphasis on the accrual method of accounting to overcome this difficulty.

The accrual method portrays the smoothed-out profit as if all the transactions had been for cash and as if the business had purchased only exactly what was needed to make the sale. It is not an accurate portrayal of everything going on in the business, but it is a good approximation of the net effect of those things that affect profit. The problem is that so much emphasis has been placed on the accrual method income statement and balance sheet that the importance of cash has been regulated to virtual obscurity.

Even this result is satisfactory when the reports are describing large businesses with access to external financing through the stock market, commercial paper, and bank loans at the prime interest rate. But companies that do not have access to these external sources of financing have a different problem. For them, the flow of cash through the business means life or death, whether the accrual based profit is great or terrible. When new or small businesses need cash they must turn to the bank, the banker will look to the personal savings and assets of the owner-manager for collateral.

Accountants have not forgotten nor overlooked the importance of cash. They recognize the need for cash in sufficient quantity to keep the business operating. For their purposes, however, they often infer the cash available to the business from the income statements and describe future cash availability with the balance sheets. They, and others, frequently describe it as: cash flow equals net profit after taxes plus depreciation and other noncash expenses, such as amortization.

This statement is incorrect except under some very stringent preconditions that rarely exist in practice for a small business. This statement is an approximation that is valid for large and stable businesses in which changes from year to year are small and the statements from which the cash flow is inferred are annual reports. For a small and new business looking at monthly financial reports this approximation is inadequate. In a small, growing business the net cash flow to the firm’s bank account does not equal the net profit plus depreciation. Profit is not cash nor is it cash flow.

Although this pronouncement may be unconventional, entrepreneurs are realistic. Successful entrepreneurs ask how it really works and then get on with building their business. In the conventional approach the analysts, having inferred cash flow from profit, depreciation, and amortization, stop there, allowing their readers to assume that the resulting cash is in the bank wiating to be spent.

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

Adapting to Change


Competency models provide a tool for determining exactly what skills are required to meet the different needs of the present and probable needs of the future. For example, general agents of a life insurance company are responsible for managing the overall operation of the agency. With increased competition the focus shifted to strategic marketing, territory development and building leadership teams. The company was concerned that the people it was selecting to fill the agent’s role might not be able to meet the challenges of the changing business environment. By using a competency model to determine what behaviors the general agents were now required to perform, the company realized that the job was very different from what it had been five years earlier. Consequently, the company could begin to adjust in selection criteria to reflect the changing demands of the role. It could also ascertain the training needs of the current general agents by identifying their skill gaps and deciding which of those gaps ought to be addressed immediately to ensure high 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, Line of Sight

Smart People Add, Foolish People Take Away


The most important way we learn is by thoughtful observation. Lessons that teach us success fundamentals are available in every encounter with other people.

Consider this example. You visit a candy store and order a pound of unboxed candy. The person behind the counter puts a big scoop of candy on the scales, maybe 20 ounces, and then begins to take away your candy, piece by piece, until the weight is exactly 16 ounces.

How do you feel? Cheated. Subconsciously, you perceived the big 20-ounce pile of candy as your candy. Now, as the person behind the counter takes some of it away, you feel your candy is being stolen.

Intelligent people behind the counter use the add-to approach. They put a relatively small amount of candy on the scales, maybe 10 or 12 ounces. Then, they add a few pieces until the scale shows 16 ounces. Subconsciously, this makes you feel good because you perceive you are getting extra candy.

Sixteen ounces are still 16 ounces. But the way a pound is counted makes a mighty big difference. To be sure, computer personnel must be careful in weighing merchandise. The point is that never make the customer feel cheated.

Successful business search for creative ways to use the generous add-on tactic to increase sales. The magazine subscription that includes a free pocket calculator, a remote-control device that comes free with the purchase of a television set, and the two-for-the-price-of-one sale by a drug chain are examples. People like you and buy from you when you give more than they expect in exchange for their money.

Evidence that generosity, the add-on approach, works wonders is overwhelming. Nevertheless there are still many businesses that believe success is spelled CHEAT. Store that advertise non-existent appliances at a ridiculously low price and then try to browbeat and intimidate the customer into buying a much higher priced product are common examples. Observe such scoundrels only to learn how to succeed.

You can use the “add-to” principle in every facet of life:

  • Give unexpected, extra service to your employer and you become a candidate for more pay, for more fringe benefits, and for promotion.
  • Put something extra into your assignment at school and get a better grade.
  • Give more time to your kids and get more love and cooperation in return.
  • Show respect to the parking lot attendent and your car gets better treatment.

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

The Japanese Philosophy


Everyone is aware, to some degree, of the major inroads the Japanese have made and are continuing to make in US markets, including automobiles, electronics, cameras, computer hardware, machine tools, and aerospace. In automobiles, the United States has fought back strongly.

There are many examples where the Japanese have taken over an American plant, kept the same workers, laid off half of management, and doubled productivity! Some of the elements of Japanese philosophy include:

  1. 1. Worker Flexibility: Rather than being specialized, workers are trained to do many different tasks, making for a flexible process and reduced WIP.
  2. 2. Jidoka Quality at the Source: If a bad unit is made, it is not set aside. The entire process is stopped, and everyone looks to find the problem. This again reduces WIP and does not allow continued production a bad goods.
  3. 3. Just-in-Time Production: An item is produced exactly when it is needed. This works best for repetitive manufacturing, so all processes are designed to be repetitive manufacturing. Kanban control systems were developed for this situation.
  4. 4. Uniform Plant Loading: Confusion and shock waves from changing things are avoided by having exactly the same thing made every day. One way to do this is to establish a standard mix of products to be made every day.

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

Previous Older Entries Next Newer Entries