Posts Tagged ‘estimate’

My client was grinning ear to ear as he told me of a new opportunity

My client was grinning ear to ear as he told me of a new opportunity.  Rightfully so, it was a natural extension of what he was already doing.  While I was mentally weighing the costs and benefits of this opportunity, he declared “I need five more people!”  It took a few seconds for me to realize that he was planning a 9% increase in staff!

I managed to rein in his enthusiasm long enough to explore his “need” for five new people.  We found that the skills he needed already existed inside the company.  “But everyone is busy!” he cried.  Yes, but busy doing what?

Further investigation revealed that the employees possessing these skills spent significant amounts of time on work that had little value.  By shifting their time from low value work to this new opportunity, my client was able to accomplish his goal while adding only one new employee.  If we assume an average $30,000 pay and benefit package, the analysis we just performed saved my client $120,000 annually ($30,000 x 4 people).

Imagine this scenario being played again and again in Fortune 500 size companies.  Using the same assumptions (a $30,000 pay and benefit package and 9% overstaffing), a company employing 250,000 people experiences excess staffing costs of $675 million annually.  Is it any wonder that we hear about layoffs of 30,000 people or more in one company?  How does this happen?  There are four root causes for these inefficiencies.

Root causes

Unbridled enthusiasm – When the economy is strong or new opportunities present themselves, it’s easy to get caught in the euphoria of the moment and forget that every wave has a trough.

Mistaken belief 1 – Managers believe that their employees are spending their time doing meaningful work.   Experience has taught me that most employees are spending over 20% of their time performing tasks that have little or no value, even in seemingly well-run companies.

Mistaken belief 2 – Managers believe that it’s easier (quicker) to hire new people than to review employees’ workloads.  The reality is that the analysis my client and I did took less than 90 minutes; less than an hour and a half to save him $120,000 annually.  Not a bad ROI, is it?

Empire building – Many managers measure their value to the company by the number of people they have reporting to them.  Shouldn’t the inverse be true?  Shouldn’t managers who can accomplish more with fewer employees be more valuable than those who need a lot of people to get the job done?

The cost of bloat

The cost is much greater than the estimated $675 million of excess payroll costs listed above.  Organizational bloat prevents companies from establishing cash reserves to sustain them in difficult times or to take advantage of opportunities when investments are cheap, during a down economy.  There’s more!

The remedy for organizational bloat is the dreaded downsizing.  Expertise, experience, training dollars and morale lost to this “remedy” can easily double the excessive payroll costs listed above.  How do we avoid these costs?  It’s much easier than you think.

Avoiding bloat

The key to avoiding organizational bloat is to require all managers to subject their staffing requests to independent review.  The requests should be reviewed by a panel, preferably no more than 3 managers, who have a record of accomplishing a lot with few employees.  These panelists bring both an external perspective to the work and a natural tendency toward efficiency which will increase productivity and avoid bloat.

The panel’s review can be as simple as what my client and I did:

• Identify the skills needed

• Determine who possesses those skills

• With the employee’s help, identify and eliminate low value work

If you prefer greater sophistication, there are a myriad of tools available today – Process mapping, Activity-based Management, Benchmarking, Reengineering, Six Sigma, Lean Manufacturing, and Theory of Constraints.  Many large corporations employ one or more of these tools; unfortunately, it’s after their systems and people are in place.

Once the independent review system is in place, you’ll find that more and more managers will reevaluate their employees’ workloads before requesting additional staff.  Why?  Put yourself in the manager’s place.  How embarrassing would it be for you to have your request denied because a simple procedural change or elimination of low-value work negated the need for the staff you’re requesting?

Over time this self-evaluation, by managers and their staffs, will drive productivity gains and avoid organizational bloat.  Require managers’ staffing requests to go through an independent review before adding staff and you’ll increase profits without adding resources.

Copyright © 2008, Dale Furtwengler, all rights reserved


Seeing change as a problem

Seeing change as a problem

In a previous article, I examined why problem solving, which is our conventional approach to change, is instrumental in creating resistance and slowing or neutralising attempts to create change.

Briefly, the reasons are as follows:

1) The focus of problem solving is usually on the ‘gap’, and the present problem/s and rarely is enough emphasis placed upon creating shared clarity about the destination.

2) The emphasis on deficiencies tends to have a disempowering effect – ‘I can see that’s the problem but I’m not sure I can change’.

3) This in turn creates defensiveness – ‘Why should I change?’ because it becomes easier to knock down the change than to admit we can’t.

4) In turn, this defensiveness and reluctance, coupled with a human dislike of being confronted with our shortcomings, fractures the relationships and depletes the trust necessary for people to make changes.

A different starting point

Every person or organisation has inherent creativity, capability, imagination and success. If we begin from this perspective then a new approach to change is possible.

Appreciative Inquiry (AI) is an approach to change that begins with the assumption that, for whatever the issue, there will always be examples for an individual or organisation of success. They may be fleeting or infrequent or incomplete but they will always exist.

Too often these successes are dismissed as being a distraction to the problem or too insignificant to matter. But, surely, it is worth finding out how these successes occurred – not because we want to revel in the knowledge that everything is OK but because if we really understood how these occurrences came about we might be much better equipped to create more of them.

The Appreciative Inquiry way

Appreciative Inquiry begins by asking exactly these questions. It also begins, critically, by asking them of the individuals who will ultimately be asked to change.

AI begins with establishing the change which is aspired. What does the individual or organisation want more of? This then becomes the focus of research, and questions are developed to look deeply into where such behaviour or outcomes already exist.

These questions are positively framed and individuals involved in the change are interviewed to explore the best examples of the chosen aspiration. The emphasis is on real stories and actual events as these are not only primary data but they tend also to be easier to collect and communicate.

The stories are then shared and discussed to establish what they all have in common. It is also useful to examine where they differ as this can uncover alternative and complementary strategies to success. The conclusions are then drawn together into a compelling and memorable vision of what success would look like and feel like.

The next stage is to create a set of statements for what will be necessary to create the desired future. These will be based in the vision but will be both provocative and practical and will provide guidance for action planning – both now and ongoing.

Using the vision and guidelines, action steps are created for who will do what and when – both immediately and into the future.

Why does it work?

Most people, when they hear this approach, say that it sounds very logical but struggle to see why it is so much more effective.

AI is based on a vast body of research into human behaviour in the fields of psychology, anthropology, sociology and other social sciences. It also shares its scientific underpinnings with other leading edge approaches to change like Neuro Linguistic Programming and Coaching. There are many reasons, therefore, why AI works but without going too deeply into the theory, some of the key ones are:

1) We get more of what we focus on. If we ask questions about our problems the issues will take up more of our attention and become more significant. If we inquire deeply and persistently into what we want we will find, inevitably, that we create the future that we are learning about.

2) Successful change needs to engage with what really matters to each individual. The interviews connect each individual with what really matters to them and thus help create a personally compelling reason to change.

3) Change is a social phenomenon. Relationships, support and co-operation are required for almost any change. AI fosters and grows these by creating energising, positive and transformative interactions between those involved.

4) Human beings move towards positive images of the future and the creation of a compelling, sensory rich picture of the destination is vital.

5) Change takes courage. People have more energy and confidence moving into the future (unknown) when they take forward parts of the present (known).

6) Change requires action. Positive practical steps, by as many people as possible, are essential to make progress and achieve results.

It’s a great theory, but does it actually work?

AI is proven in applications across the world. From major organisational change at NASA and British Airways to Imagine Chicago where over a million people have been engaged in the process. From coaching to creating self sufficiency in food in villages in the developing world AI has proven incredibly powerful. (See also the US Navy case study )

I believe that there are two particularly interesting things about AI. The first is that, in a world where some estimates say that 75% of all organisational change efforts fail, I have yet to come across a story about where AI has not worked.

The second is that AI is the only approach to change I know which is generative – which is to say that the scale of the change increases as you go further from the point of initiation in both space and time. Most change efforts work like a rock thrown into a pond – big ripples at first which gradually diminish to nothing. Because of the energy it creates in people AI goes on working long after and far away from where the change started – and that has to be worth having!

How could you use it?

AI can be applied from 1:1 coaching interactions to organisational change involving thousands of people. It can help individual change, the creation of powerful teams, in conflict resolution, cultural change, mergers, redundancies – any form of change in fact. It can transform workshop or training design for a short session of a few hours to much longer term projects.

As a student studying business and management, i heard many interesting tales of hewlett packard

As a student studying business and management, I heard many interesting tales of Hewlett Packard.  It’s no secret that the computer, printer, toner and ink manufacturers have some of the best managers and, as a company, are the envy of many a multinational organization for their empowering culture and people centred approach to innovation.

This is the story of Charles (Chuck) House, the head of corporate engineering at Hewlett Packard.  Chuck had always been an innovator and had always had a deep rooted commitment to his work.  This probably explains why, in the early eighties, Chuck decided to get to work on a large screen computer monitor.  Nothing strange about that I hear you say!  Well, the thing was that David Packard (co-founder of the Hewlett-Packard company) had ordered good ol’ Chuck to stop working on the screen and abandon the project.  History tells us that Chuck ignored the order from above and pressed ahead.

The original marketing research findings had estimated that the company would sell thirty of these high quality precision monitors and it looked like a waster of time.  Luckily, Chuck House didn’t agree.  Hewlett Packard sold more than 30,000 of the monitors and they have been used in many industries from manned space missions to open heart surgery.

In recognition of Chuck’s pig headed optimism and commitment to working for the company, even risking his own job security by closing his ears to his company orders, Chuck was awarded the Hewlett Packard in house medal for “extraordinary contempt and defiance beyond the call of duty”.  Chuck is recognised by Hewlett Packard and the computer industry and being one the great leaders of modern management.  Dr Charles “Chuck” House has since worked as Science Policy and Societal Impact Director for Intel corporation and is currently the Executive Director of Media X, Sanford University’s technical advancement and innovation programme.

References

Garfield, C. 1986. Peak Performers: The new heroes in business. Great Britain. Hutchinson Business.

MediaX at Stanford University website. [online] Accessed 17th May 2009. http://mediax.stanford.edu/about.html

Entering in 2008 has intensified competition in the domestic furniture market

    80, will subvert the furniture industry
    1, 2009 furniture industry is the winter period
Entering in 2008 has intensified competition in the domestic furniture market. 2008 year, which has led to a large number of furniture manufacturing and sales companies unable to pay wages, intermittent shutdown or bankruptcy, including some larger, more well-known brand inward-looking enterprise. However, this is just the beginning, in 2009 the domestic furniture market demand is the lowest valley, the most competitive year, more companies will be inevitable eliminated. , The market will pick up.
    
    Second, get through the cold of winter does not mean that we can enjoy the warmth of spring, as the emerging consumer groups will have to overturn the traditional definition of consumer products. The development of the domestic furniture consumer market to return to 2007 levels before the cycle is normally low compared with the faster access to more than double. I estimate that by the end of 2009 the domestic market began to pick up in 2010 began to fall into the next golden age of development of the industry. However, that can support a golden period of development to the next company will be able to become a winner on it?
    
    The answer is no. Perhaps, but suffered more and more, after the ravages of time than others to fall a bit too late Bale. Among these the most important and common reason is because the major domestic furniture from the 70s consumer groups of consumers born before the transition to the new students born after 80 years of consumer groups. New consumer groups and traditional consumer groups on the rise in the consumer concept of the nature of change.
    
    This change completely rewriting the content of consumer products – that is, the value of a product’s physical features as the main body, the general aesthetic value of the secondary to the physical function of the value of a product based on individualized aesthetic value of the main changes in appearance.
     
    This emerging consumer values, makes the traditional, physical properties of the product design and production as a core business value of the enterprise are increasingly outdated. Because the concept of the new point of view of goods, such enterprises were no longer available in the market a complete product, but rather the lack of aesthetic value of the personalized product.
     
    In fact, leading to the furniture industry into the current predicament of the most important reason in addition to rising production costs, the international financial turmoil and the real estate and other macro-economic environment at this stage, as well as the U-turn lead to export enterprises further intensified competition in the industry and excess, another is a fundamental reason is that the furniture industry, lack of innovation in product design patterns, resulting in the appearance image of a single product and a high degree of similarity can not be personalized to meet the emerging aesthetic of consumers demanding.

    Third, the old and new values of consumption, the essential difference between – VS instrumental purpose.
    Once, in large and display strong consumer market early stages of development, cheap and has the overall better-grade, high-priced, high-brand recognition implicit in the superior sense of identity more hit with consumers. Whether it is automobiles, household appliances, clothing, shoes, socks, or drink was like that.
     
    However, in recent years, such a rule in many industries produced significant changes, and even going to be completely subversive – personalized product design has become the process of consumer spending to meet the spiritual needs of the most intuitive and important the spirit of the carrier .
     
    Now, in mobile phones, cars, housing, personal items, furniture, daily necessities and other consumer markets, personalized designs are the product’s market performance has become the most decisive factor. We need only look at the car on the road or car park, even if only three years ago, the mainstream style, and now it is much cheaper than the new models than many have also become out of date – lost to the owner to gain face value. This means that the product has been built on a symbol of social and performance upstart mentality and decadent aristocracy complex aesthetic concept of universal consumption of the product designs have changed with the current socio-economic, cultural, and speed the rapid development of Xiu.
    
    This change in the 70 years before the birth of consumer spending power occupy the mainstream of the times it is difficult to emerge. This is the new generation of post-80 brought the power consumption, global emerging consumption typical of the era.
    
    In addition to this change because people’s living standards improve, more importantly, by the western developed countries, consumer attitudes, business values, and self-entered the information era, the world’s next generation of consumers of traditional cultural values, lack of inheritance and psychological exclusion a combination of factors such as the impact of the reason.
      
    Although more and more emphasis on the traditional consumer groups to meet the spiritual needs of consumption. However, compared with the new consumer groups, and they will become more secular.
     
    For the traditional consumer groups, the consumption of home decoration and furniture in addition to practical functions, the psychological demand is very simple and uniform, but the “face to the guests the exhibition project” and “standing one’s own heart of hearts Root thick pillars to prop up their fragile minds “work. Also, always want to once and for all – long-term impact, although this illusion will soon be shattered.
However, the new consumer group is different, their consumption needs of more and more reflect the aesthetic of self-worth in order to meet the characteristics of identity, so they demand for the product has a very diverse aesthetic characteristics. More often, it does not require the value realization in the public’s face, eyes, or compliment the rhetoric confirmed.
     
    For the 80 post-consumer, sales of furniture currently on the market has undoubtedly become the pursuit of fashion in the home during the biggest obstacle. If we have any doubt, then take a look at other household product design industry, the status of good, in particular, is the same as a large area, the background of products, such as tile, wallpaper, curtains and so on. If your house even if it is renovated three years ago, and now and then to decorative materials store you see, you will find your house with decorative materials, is now simply have old fashioned compared to the Buxing Le.

     4, personalized look and feel creative design for furniture industry, the importance of the development – shorter cycles of consumption and expand the scale of consumption.
     In fact, all consumer products industry to a stage of relatively saturated flocked to reduce product consumption cycle approach to expand the consumer market demands. Early shorten the product consumption cycle is usually rely mainly on new technologies and features, while the latter is necessarily more personalized products depends on the aesthetic value of innovation. This is the inexorable law of development of human needs, is unstoppable.
     
    Through personal consumption, shorten the product design cycle approach is mainly manifested in relatively mature industries or high technology industries rely on relatively small, such as clothing, tableware, household commodities, handicrafts, home decoration, food, toys and other industries. Even with high-tech industries, a high degree of saturation in the market because the product will be a state of personalized design and greatly shorten the product consumption cycle. In recent years, consumers change the frequency of mobile phones is very high, among which there are few consumers are really useful new features in order not to plan the replacement of fresh style and it? Now even the cell phone decoration has become a small industry.
     
    If we say that the value of product features based on market demand is a natural demand, then the individual aesthetic based on product demand is clearly the characteristics of creative needs.
      
    Demand in the natural state, the current market size depends primarily on the actual needs of today’s consumers, consumer prices, the market supply – these three factors. Clearly, in these three elements, the first element for the commercial power is uncontrollable, while the second element of the traditional industries in the short to medium term is not much has changed. As for the third element, nor are individual enterprises can be easily changed or controlled. Therefore, the demand in the natural state, traditional industries, the market size of commercial power control is minimal in an extremely passive position.
    However, in the consumer products personalized aesthetic era of the passive position of commercial power has been fundamentally improved. This is because:
     1, in the consumer demand for the product function under natural conditions, the product features and consumer demand should be and is relatively stable, increasing or changing the product features are often meant for businesses to face considerable difficulties and enormous The economic costs.
     
     2, the products, the value of aesthetic value of the composition of the increasing proportion of the consumer whether to replace the new product is no longer depends solely on whether the loss of use value of existing products or new products to replace the old product is more cost-effective in the economic level of the. Because, for the new generation of consumers, personalized with the aesthetic value of equal importance and value in use, or even greater than that (such as household commodities, clothing has long been the case).
     Personalized designs for expanding the size of the current furniture market consumption effect is bound to be obvious, but also for the survival of furniture industry is also of decisive significance. Because the furniture the appearance of the aesthetic value of individual product value will become an important component of the composition, the lack of it, the product is incomplete, and who would have to buy a crippled product home?

     5 Conclusion
     To sum up, the new changes in the old concept of consumer spending as well as the inexorable law of the times and market development point of view, reflect the needs of individual consumers to the aesthetic value of furniture products to become an irreversible core element of competitiveness of their products. Enterprises are to the next round of economic recovery in large-scale development of products to create a comparative advantage, and thus rapid development, it must as soon as possible to change the traditional product development, design patterns, to explore an individual can meet the emerging needs of consumers the new model.
      
     Contemporary fashion design industry is based on the performance of individual consumers to the most representative of beauty and fashion trends of the industry, so we may put this performance aesthetic needs of individual customers to develop innovative furniture design pattern known as the “fashion-oriented model of development and design of furniture.”

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