Category: Management practice

Developing employees to manage crisis

The current problems of James Murdoch and News International highlight two problems relevant to bquest readers:

1) The sons and daughters of successful business leaders are not always cut out to take over. OK, this is an obvious statement, but like many obvious things many small family businesses choose to ignore it. You never really know whether someone is capable until you let them have a go. And the evidence of James Murdoch’s performance before a British Parliament select committee shows that, even with his Teflon denial’s of ‘I didn’t know’ and ‘I am right, he is wrong’, he can’t hack it at running a large business.

This is going to hurt News International, but not catastrophically. They will survive and, we hope, learn and do better as a consequence. But in a small business, the behaviors of James Murdoch might well be terminal for the company. In a small business, choosing the situations to let the next generation ‘have a go’ needs to be done with great care.
2) All businesses, big and small, need to have advanced crisis management systems and skills. When working with bquest clients on crises, we often find there is a lot to learn, but the results are very worthwhile as having the systems and skills make for a much more secure and manageable company. Here, I highlight two aspects of crisis management:

Crisis prevention - In addition to having the usual things like a data backup system, fire prevention, an informed and supportive bank manager, insurance for downtime, etc. (you do have these, don’t you?), the James Murdoch story shows you need to prevent future crises by learning from and really solving current problems. When faced with information and advice some years back about the deeply embedded culture of phone hacking, Murdoch (or his people, depending on whom you believe) ‘solved’ the problem by addressing the symptoms. They paid off people to keep quiet. And then buried their heads in the sand. They did not get to the root of the problem. And, as often happens, that failure has led to a crisis.

They are not alone of course. BP is another horror story of failing to prevent a crisis by solving the real problems earlier. The current Eurozone crisis is another. I am sure you can identify many, many others.

So, small business manager, whenever you have a problem, you should get relevant people together and invest some time to get to the root of it. Simple. But have you learned how to ask the right questions to do this? Have you developed the mindset to be open to self-criticism and unpleasant facts? Could you benefit from an external and objective person who can facilitate a deep review process?

If you set up a problem review team, many, many crises can be prevented

Crisis management – Some problems move so quickly that you cannot prevent them becoming a crisis. Then you need to have a crisis management system and skills.

A data crisis will be solved by the data backup system kicking in. This should be straightforward for all such simple crises. A serious downturn in business may be solved with some redundancies, other cutbacks, and a re-focus on core, profitable products. Again, if you have the right systems in place and the right management skills, you can manage this more or less easily.

James Murdoch’s crisis is more complicated and dangerous however. It is, I expect, being managed by a team of people with varied skills brought together for the period of the crisis - a lawyer, a PR specialist, a coach to help Murdoch answer difficult questions, a PA to collect data about the timeline and relevant documents, and dad Rupert as a mentor and backbone. I expect these people, whoever they actually are, have all agreed a strategy and goal, and have developed a common message to give the outside world. (Unlike James Murdoch’s questioners in the select committee who sometimes seem to have their own agendas and goals.)

In a small business, you can also benefit from having a small team of specialists – relevant to the crisis – to work together. One person cannot deal with everything. One person cannot see all perspectives. One person cannot carry all the emotions and stresses of a crisis.

Take a few minutes to think about potential crises that may happen to your business. A sudden loss of a big customer? The loss of production for two weeks because of a flood? The collapse of your currency? A big company dumping their products at a loss on your customers? The departure of sales director? A patent infringement lawsuit from some sharks in Texas? (All real crises for someone.)

How would you manage, preferably prevent, your crisis? Who would you involve? bquest can help you answer these questions, and develop your systems and skills.

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Developing your employees to be good partners

For some small companies, or perhaps I should say for some people inside a small company, anyone outside the company is the enemy. Customers included. Some people are so competitive or so paranoid that they cannot trust anyone or they have to out-compete everyone. Are you one of these people? If you are, stop reading because your mindset will block any further rational discussion about partnering.

Why is partnering worth considering? Well, anyone who has a regular supplier or customer is already in a form of partnering relationship. You get to know each other, you get to understand each other’s strengths and limitations, you reach a degree of trust. Maybe you even sign a long-term contract or memorandum of understanding (MOU) that puts the relationship on a more formal setting. Most companies are already partnering to some extent.

What other forms of partnering can there be? One client of ours has been developing a relationship with another company in the same industry. The other company was told by one of its key customers to find a backup manufacturer who could take over production in case of some emergency. This would protect the key customer’s supply chain. Who to turn to? The only companies with the capability to produce their products are actual or potential competitors. They approached our client.

Our client - who have an open-minded management – was willing to produce samples of the other company’s products to show they could provide backup. The other company has agreed to do the same for our client. So, the two companies now have the beginnings of a working relationship and a degree of mutual trust.

At bquest, we wondered what else could they could collaborate on. At a getogether – personal contact is important – the two companies discussed:

  • the possibility of selling each other’s non-competing products in their own territories
  • benchmarking costs and performance, and production optimisation
  • joint projects

Selling each other’s products should allow each company to increase the range of products it can offer to its customers, but at no extra cost. Benchmarking is good for both companies as it helps identify where you are not performing and what can be optimised. Maybe some development costs or purchasing costs could then be cut by working together. And, working on joint projects should allow you to compete togther for business which you might not be able to compete for alone. All good things for small businesses who don’t always have enough muscle to go it alone.

Who knows where this will end up. Maybe nothing much more will come of it. Or maybe the two companies will get closer, maybe at some future point even merge. Whatever, for the moment, both companies are engaging in ‘coopetition‘.  (Here’s a book summary.)

So, coming back to the title of this blog, what knowledge, skills and mindset do you need your employees to have to partner with other companies?

  • a willingness to collaborate, and a willingness to compromise (See Thomas Kilmann – this is about managing ‘conflict’ but it is a valuable mental model for raising awareness about and skills in collaborating and compromising in any relationship.)
  • ways to build trust – if you have some interactions that work, even simple ones, then you have the basis for building trust further.
  • a creative and positive mindset – what can we do together, what opportunities can we see?
  • a sound partnering model such as coopetition.

These can all be learned with bquest.

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Developing your employees by getting them to think straight

‘Think straight’? This is how one client called it. Others may say ‘think logically’. Or ‘think systematically’ or ‘think in a structured way’. Whatever, thinking straight is a fundamental  is skill your employees need but often fail to use.

Here’s an example of how it should be done. It is a logic tree, you can visualise it on paper as a cascading tree:

An employee is not performing her job as you want her to:

Question 1 - Is the problem a ‘can’t do’ or a ‘won’t do’? This is a key question, as it sets you on the right path. Once you have ‘learned’ the question, like a ‘mental model’, it is simple to remember and it can be pulled out of your memory whenever you need it.

Let’s explore both of the possibilities offered in Question 1.

Question 2 – What evidence is there to suggest it is a ‘can’t do’?

When we say ‘can’t do’ we mean that something is preventing her from performing.

Question 2.1 – What might prevent her from performing? Let’s brainstorm some possibilities. A lack of knowledge and skills? Someone or some system stopping her? Insufficient resources such as information, authority, time, equipment, money, etc.? No KPIs and/or no feedback on the KPIs? Something else?

Let’s take each possibility and look more closely

Question 2.1.1 – What evidence is there that the problem of ‘a lack of knowledge and skills’ is a real one or a perceived one?

Question 2.1.1.1 – If a ‘lack of knowledge and skills’ is a real problem, what can we do about it? etc.

Question 2.1.2.1 – etc.

You continue the logic tree this way and examine all the ‘can’t dos’ in detail. You then go back to the first question and look at ‘won’t do’.

Question 3 – What evidence is there to suggest it is a ‘won’t do’? When we say ‘won’t do’ we say the person ‘can do’ i.e. they have all the knowledge, skills, resources, etc. to do the job, but some motivational factor is stopping them from actually doing.

Question 3.1 – What are the motivational factors that stimulate people to perform? Let’s brainstorm some possibilities. They get a financial reward for performing? Or there are negative consequences for not performing? They believe that performing is important – for the company, for themselves? They see value in performing? They get a sense of achievement and satisfaction by performing? The method they use is efficient and effective? Something else?

Let’s take each possibility and look more closely.

Question 3.1.1 – What evidence is there that there is a problem of a lack of financial reward for performing? Is it real or perceived?

Question 3.1.1.1 – If it is a real problem, what can we do about it? etc.

Question 3.1.2.1 – etc.

You continue the logic tree and examine all the ‘won’t dos’ in detail.

Thinking in this way, you get to the root cause of the problem or, as one client puts it, ‘you get to the truth’.

bquest provides in its system of employee development for small businesses a range of structured thinking tools that both increases the quality of analysis, and gets it done more quickly, and with less stress.

 

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Employee development and time management

If you want to learn and develop, you need to spend some time on it. So when someone says to me “I want to improve my time management” I know we are going to have one of those chicken and egg discussions. To improve your time management, you have to find some time to spend on it; to find some time, you have to improve your time management.

One tactic I have used with clients to get over this problem successfully is to say that before they can improve their time management they have to commit to allocating two hours a week for a period, usually between four to six weeks, without their phones and email, away from people, in a place where they cannot be interupted.

This is a behavioural change that does not require ‘learning’, it is a simple discipline.  I say, “Just do it!” I defy anyone to say they absolutely, categorically, 100% cannot find two hours for themselves.

The two hours are used as their time for time management. Like all topics however, you can enter the world of time management from different perspectives. To find the right entry point, I like to group ‘problems’ of time management into four categories:

  • Self-management skills: the usual skills you get from time management books, for example how to plan, how to prioritise, time budgeting, when to do certain jobs, cutting out time wasters, etc..
  • Interpersonal skills: the skills needed to negotiate with other people about deadlines and quality standards, the ability to say ‘No’, the skills to get extra help, etc.
  • Intrapersonal attitudes: not really skills, but the ability to understand and manage those pesky voices inside your head that manipulate your behaviours. For example, the desire to please makes the willing horse take on too much work, which then causes her to fail to deliver. Or, the desire to be perfect makes a person spend too much time on a task when they only have to deliver what is sufficient. Or a lack of trust means you do someone else’s work, etc.
  • System-wide problems: the problems of the organisation or wider system that are not within your remit to solve. For example, R and D is notoriously difficult to time manage. Or dealing with company buraucracy, etc.

Where do you think your own time management problems sit? Maybe in one or maybe there is an overlap with a couple of categories? With bquest, we help you choose the right entry point for your development so you don’t waste your time trying to solve the wrong problems.

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Cost optimzation, yes, all the time – but you also need agility

A June 2011 report by The Conference Board finds that CEOs say growth is their number one challenge, with innovation, new markets and cost optimization being critical to growth. I quote:

“Quality departments are uniquely positioned to help accelerate growth through better execution and alignment. If today’s quality leaders are to meet this challenge, however, they must both contribute to operational efficiency and possess a macro view of the business that cuts across functions, geographies, and business lines.”

Well, surprise, surprise! Is this new? Aren’t these factors always important?

It always saddens me that ‘cost optimization’ usually means cutting head count. We had some great exceptions in the early days of the current global crisis when some companies were able to cut costs immediately but avoided cutting people by going on short time, taking holidays early, negotiating lower wages for a period, and other simple but effective means to retain good workers, and retain their know-how and morale in readiness for the upturn. Contrast this with what we now see the big bank HSBC now doing with its plan to cut 30000 employees, though to be fair some of those cuts will be the result of a change in business model rather than optimization.

To avoid the need for this head cutting type of  ‘cost optimization’, I think management should be much more careful about the ‘architecture‘ of their company, that is, how it is designed and how all the parts fit together. (Have a look also at ‘soft systems’.) With a good design, you can get ‘agility’, the ability to move quickly and painlessly in different directions.

For example, every company has peaks and troughs in volumes of work. So, can you design the company to have a core set of employees to service the lower volumes, and have a pool of part-timers or co-producers who can help out with the peak volumes? Or, can you design your contracts with customers in a way that allows flexibility in volumes and changes in focus when the market situation changes? Or can you design your product or service so that it allows a degree of quality customization, for example to provide cheaper variants when times are tough for your customers and to get back to higher quality when times are good? Can you organise your company so people from different functions bring their brains toegther and generate quicker problem solving and more innovation? Can you train your employees so they can adapt quickly to deal with new challenges? And on and on…

There are so many ways, many cost-free, to create agility in your business, even in mass production line scenarios where the line is often a key determinant of how the business works, that should enable you to manage the ups and downs and external changes of ‘normal’ business life.

And cost-opimization? Come on, using your resources optimally should be a fundamental characteristic of any company, 24/7, in both good times and bad, and not just occasionally important.

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60 second pitch – what business are you in?

At bquest we have just joined the BNI networking organization. It is not just a meeting forum, it brings some discipline to the process of getting people to network and collaborate for mutual gain.

One of the routine activities is to get people to make a 60 second pitch about their business. Some people call this an elevator pitch.  Of the many websites which offer advice about how to do one here are two that are typical (1) and (2). The examples of pitches given are often done by entrepreneurs aiming to raise money, but the technique works just as well when selling your products or services, or when looking for a job. It forces you to think very, very carefully about what you really do and what you are offering.

Getting the pitch right is hard and takes practice.  So I have been practising! Here’s an early effort for bquest:

“I have 25 years experience in developing managers and professional people to be more effective.

I work mainly with smaller businesses and business units. They often find universities too detached from practical issues to help them and consultants too expensive and too inclined to sell their standard solutions.

I use work-based development methods that are customised to each business. With my help, employees learn to solve their own problems and increase their value to the company. With my help, employees bring real results and added bottom-line value.

I like to work with companies that want to grow and build a permanent culture of learning and innovation among their key employees for sustainable success.”

I will try this out at the next BNI meeting. Only by testing it will I know it works.

What would you say about your business?

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