Sources of Innovation


The environment constitutes a very important source of innovations. Since tacit technological and market knowledge is best transferred by personal interaction, local environments that are good sources of innovation can make it easier for local firms to recognize the potential of an innovation. Take the presence of related industries. Being close to the supplier or complementary innovators increase the chances of a firm’s being able to pick up useful ideas from them.

Being close to universities or other research institutions helps in two ways. First, these institutions train personnel that can go on to work for firms or found their own companies. The knowledge that they acquire gives them the absorptive capacity to be able to assimilate new ideas from competitors and related industries. Second, scientific publications from the basic research often act as catalyst for investment by firms in applied research.

Finally, governments play a critical role in the ability of firms to recognize the potential of innovations. Their role can be direct or indirect. The direct role may be in the sponsoring of research. The indirect role is in regulation and taxation: lower capital gains taxes or other regulations that allow firms to keep more of what they make can allow them to spend more on innovation.

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.

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Traditional Manager Vs. Customer-focused Manager


A traditional manager focuses on current goals. Their time and their energy is preoccupied with a series of probably corporate internally focused objectives – whether this is making a sales target, budget, profitability or some other goal, such as market share. On the other hand a customer-focused manager is led and empowered by a vision. A vision based on quality as well as quantity and results. A vision that inherently has a customer satisfaction measure and a vision that creates a feeling of pride and satisfaction in working in that way.

A traditional manager is largely reactive – making decisions, implementing plans based on the input of those above them, around them or in the external environment. ‘If it ain’t broke, don’t fix it,’ would be a common maxim. Today’s manager is largely proactive – ‘If it’s not broken, break it,’ because it’s going to be broken very soon. Today’s manager doesn’t wait for things to need a reason for change; they change things for the sake of it. Whether this is just simply the office layout, the times people take their lunch, company policies, prices, brochures, and markets – everything else has to be a proactive activity today. If you wait for the market to change you will probably always be one step behind. One step behind what the customers need and want and what your competitors are doing.

A traditional manager will often seek, either directly or indirectly, to limit other people’s participation. Typically, meetings between managers are excluded from input from other people, or they don’t involve other people perhaps as much as they should do – this is never seen as necessary. But today it is essential. Today’s manager has to promote involvement; they need opinions, thoughts, ideas, and feedback from all levels within the organization. The best way of achieving this is by one of two methods. The first is one we could loosely name ‘random communication,’ where just by simply creating the environment where people can mix and mingle, communicate, participate and share, ideas can be distributed. The other way is by doing something slightly more formal, by putting in place a series of waterfalls or communication falls where information and participation flows around the organization.

Traditional managers will probably reward people based on their qualifications or long service. A more customer-focused manager will reward and recognize people based on their ability to enhance customers and deliver excellence. For example, it is not uncommon for managers to regularly single out for some form of payment, or just simple recognition, those people in a customer service team who have gone beyond the normal levels and delivered something extraordinary during their job. Whether it was staying late sorting out a customer problem, coming up with an idea which helped the business move forward, making big improvements in their own work – these are the things that managers reward.

Another thing that has to change if you are going to move forward and lead successfully in a customer-focused organization is that you have to let go of solving problem yourself. One very successful manager who ran a very effective customer service team had a big sign on their wall. You can come in here with any problem at all, so long as you have one idea for a solution.

A traditional manager also sees their role as controlling information. They will keep their staff and other people on a ‘need to know’ basis. This is not how it works. Information should be shared, but not broadcast. A good manager will communicate actively and pro-actively to all concerned. He or she will keep them informed of the information they need to deliver the best possible service to the customer. This means the information is timely, relevant and understood.

Managing in today’s environment, with the pressures of working with ever demanding customers, will invariably result in matters of conflict and disagreement. Rather that patching these over, ignoring them, or letting them sort themselves out, as is perhaps more traditionally done by managers, these should now be sought out and moderated to a successful outcome.

A customer-focused manager ‘walks the talk’. He or she must act congruently and with the same values and honesty that they want their staff to deliver to their customers. That means they keep commitments, it means they under promise and over deliver, and they make everyone of their employees feel special and a valuable member of the team. Nobody just does a job and goes home, there is a purpose, a value and a mission.

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.

Measuring Productivity


You are likely to be judged – at least to some extent – by your financial performance. But financial measures such as profitability and return on investment are really indirect measures of the operations, good financial performance comes from good operations. You can measure the operations more directly using measures such as productivity, utilization and efficiency.

Productivity is the most common measure of operations. It shows the amount of output that you create for each unit of resource used. You might, for example, measure the number of units made per employee, sales per square meter, or deliveries per vehicle.

Your competitors are always trying to gain an advantage, and an effective way of doing this is by increasing their productivity. You then have to match their improvement simply to stay in business. So the benefits of higher productivity include:

  • Long-term survival;
  • Lower costs;
  • Less waste of resources;
  • Higher profits, wages, real income, etc;
  • Targets for continually improving operations;
  • Comparisons between operations;
  • Measures of management competence.

These are good reasons for improving productivity. But how can you do it? At the very worst, you simply make people work harder – problem solved. In reality there are four ways of increasing productivity:

  1. Improve effectiveness – with better decisions;
  2. Improve efficiency – with a process that gives more output for the same inputs;
  3. Improve the process – getting higher quality, fewer accidents, or less disruption;
  4. Improve motivation – getting better results from the workforce.

One of the problems with improving productivity is that employees see it as an excuse for sacking them. Productivity is really a measure of improvement performance, and it has very little to do with the old-fashioned idea of getting people to work harder. An enthusiastic person digging a hole with a spade can work very hard, and still be far less productive than a  lazy person with a bulldozer. Typically, 85 percent of productivity is set by the process which is designed by managers and only 15 percent is due to the individual workers.

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.

Disambiguating the Role of Managers


Managers are the employees who are responsible for coordinating organizational resources and ensuring that an organization’s goals are successfully met. Top managers are responsible for investing shareholder money in resources in order to maximize the future output of goods and services. Managers are, in effect, the agents or employees of shareholders and are appointed indirectly by shareholders through an organization’s board of directors to manage the organization’s business.

Managers’ contributions are the skills they use to direct the organization’s response to pressures from within and outside the organization. For example, a manager’s skills at opening up global markets, identifying new product markets, or solving transaction-cost and technological problems can greatly facilitate the achievements of the organization/s goals.

Various types of rewards induce managers to perform their activities well: monetary compensation (in the form of salaries, bonuses, and stock options) and the psychological satisfaction they get from controlling the corporation, exercising power, or taking risks with other people’s money. Managers who do not believe that the inducements meet or exceed their contributions are likely to withdraw their support by leaving 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.

Social Influences on Consumer Behavior


Behavioral scientists have become increasingly aware of the powerful effects of the social environment and personal interactions on human behavior. In terms of consumer behavior, culture, social class, and reference group influences have been related to purchase and consumption decisions. It should be noted that these influences can have both direct and indirect effects on the buying process. By direct effects means direct communication between the individual and other members of society concerning a particular decision. By indirect effects means the influence of society on an individual’s basic values and attitudes as well as the important role that groups play in structuring an individual’s personality.

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.

Problems of Conduct


In Japan’s early history, a serious disregard for manners could be punishable by death, and any samurai could kill any common person who failed to show him proper respect. The Japanese were required to behave in precisely prescribed ways—wearing permitted clothing, walking only a certain way, sleeping with their heads pointing in a certain direction and legs arranged a particular way. Eating, greeting, gesturing with hands, opening doors and many work tasks had to be done in assigned ways without deviation. Conduct became a measure of morality, and virtue in manners was visible for all to see. Even today, the code of conduct plays a significant role in the lives of the Japanese. Many societies, not Japan alone, have a prescribed form and manner for every familiar situation that might arise. Unforeseen situations can cause intense embarrassment or discomfort. Throughout East Asia, actions are judged by the manner in which they are performed. More important than the accomplishment of a task is the question of how someone went about trying to complete the task: Did he act sincerely? More important than winning the race is the grace of the runner. More important than expertise is the way one gets along with others. More important than profits is harmony. In contrast, Westerners and particularly Americans are more concerned with the principles of things, hard “measures” and objective facts. Although rules of ethics are extremely important, we are more goal oriented than method-conscious, we say “a good loser is a loser.”

One aspect of form is the concept of “face.” Much has been written about “face-saving” in Japan and China, but face-saving is important absolutely everywhere. The difference is only a matter of degree and nuance. Where an American might feel a little guilty or inadequate, an Asian, Arab or South American may feel deep shame and humiliation. What an American might see as a little honest and constructive criticism, the foreigner may take as a devastating blow to pride and dignity. A foreigner is likely to be sensitive to feelings of others in transactions that an American would consider strictly impersonal, such as returning a defective product or switching hairdressers. The traveler simply must be more conscious of saying things or behaving in ways that cannot be taken as disrespect, criticism or humiliation. In some countries it seems just about anything can be taken personally, even such indirect affronts as not taking your shoes off in a mosque or complaining about the heat.

Harmony with the environment can be as important as sensitivity to people in some cultures. In Japan a woman wears a soft pastel dress to a flower show so as not to take away from the beauty of the flowers. In countries where people believe in reincarnation they are careful about all forms of life. In India, for example, people are careful not to swallow gnats or step on ants—one might be a relative.

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

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