Monday, January 31, 2011
Innovating the Business Model
Armed with this perspective, where might management innovation go from here? I offer three short predictions:
First, Management Innovation will become more collaborative. Opening up the innovation process will not stop with accessing external ideas and sharing internal ideas. Rather, it will evolve into a more iterative, interactive process across the boundaries of companies, as communities of interested participants work together to create new innovations. Organizations like Syndicom, for example, have already established a community of spinal surgeons who meet up virtually to share effective protocols for screening patients for new therapies, and new methods and techniques to achieve better patient outcomes when utilizing those new therapies.
Second, Business Model Innovation will become as important as technological innovation. It is generally accepted that a better business model can often beat a better technology. Yet companies that spend many millions of dollars on R&D seldom invest much money or time in exploring alternative business models to commercialize those discoveries. Not all business models are created equal, and we will learn how to design and improve business models in the coming decade. The rise of multinational companies from BRIC economies will further advance this trend.
Third, we will need to master the art and science of innovating in Services-Led Economies. Most of what we know about managing innovation comes from the study of products and technologies. Yet the world's top advanced economies today derive most of their GDP from services rather than products or agriculture. To preserve prosperity and high wage employment in the advanced economies, we will have to learn how innovation works in services, which is likely to differ from how it works in products. If we incorporate the above two predictions as well, one can predict that the winning formula for managing innovation in the next decade will be via open services.
Monday, January 24, 2011
Business Principles from the Book of Proverbs
What is the best book on business that you have ever read?
If you visit the typical bookstore-at least in the U.S.A. you will find hundreds of volumes in the business section, each claiming to hold the ultimate secrets to business success and professional advancement. Some are biographical; others suggest multiple step "how-to's" of becoming a great business leader or high-producing salesperson. Some focus on motivation, trying to convince you that you can do whatever you set your mind to do, while others offer cute little stories in which they convey basic business truths.
I have read dozens of these books, and I'll agree that in them I have found many worthwhile insights and principles. However, I don't think that all the books displayed in the business section can come close to the substance that is available in what I consider the greatest business book ever written-the Book of Proverbs by Solomon. In fact, there is more practical business wisdom presented in one small section of the book of Proverbs than you can find in any other book, even those written by today's foremost business leaders.
Right now I am rereading King Solomon’s Book of Proverbs: I love to read the most about business ethics, positive working attitudes, sales, and management. All this and more can be found in the Book of Proverbs. The book of Proverbs of Solomon written between 960 and 922 BC and his thoughts were remarkable and if you read today’s writers like Tracy, Rohn, and Canfield you will find traces of Solomon in their writing.
I know what you are thinking (saying)… Hey I am not a bible reader, nor do I want someone pushing me to a “churchly” dialogue. You would be mistaken, however, if you do not investigate the wealth of information that can be found here for the 21st century businessperson.
It behooves all of us in business to seek competent information, wherever the source. You may be surprised just how many business coaches apply the Proverbs principles.
The Book of Proverbs may be the most practical book ever written for the modern day businessperson. It was designed to be a success manual.
Proverbs defines success far more broadly than economic success. It includes economic as one mark of a successful person. But these proverbs make it clear that economic success apart from wisdom is a snare and a delusion.
The book applies its principles to such areas of life as money, work, planning, peace, goal setting, self-discipline, and other topics. It covers the following in detail:
1. The steps to personal success
2. The standards of personal success
3. Success indicators
4. Failure indicators
5. The function of riches
6. The basis of riches
7. The concept of ownership
8. The nature of economic causation
9. The marks of an ethical economy
10. The purposes of inheritance
Whatever your persuasion, non-religious or religious, should you not at least investigate a tested resource that can aid you toward a professional and personal path toward success?
I would love to hear your comments and opinions. You can publicly display them on my Blog: http://businessmanagementcounselingservices.blogspot.com/
Or e-mail me in private: stevehomola@gmail.com
Your opinion is always highly regarded and respected!
Monday, January 17, 2011
The Art of Customer Service
Customer service isn't just the job of your customer service department and representatives; it's the job of every employee in your company. And service starts at the highest levels of a company.
The four key elements of good customer service are:
1. A high level of trust in your company and in the people customers deal with
2. Knowledgeable employees who understand what customers are talking about
3. The company and its employees not wasting customers' time
4. Friendly employees who go the extra mile for customers
The question is: "How does my company get to a high level of customer service, where the key elements become second nature to my employees?" Here are five steps you must take to achieve great customer service:
• Make sure that everyone in your company understands and measures the customer experience. Employees must know how their jobs impact the customer, and they must become obsessed with providing satisfaction to the customer.
• Educate your people about how they should act and treat customers. They must realize the importance of good customer service and what you expect from them.
• Communicate examples of good customer service to your employees.
• Make sure that potential and new employees have the kind of customer-service mindset that you want.
• Deal with employees who can't or won't deliver the customer service you need. You can move them to other areas of business or let them go, but you have to take action quickly.
Not dealing with the employees who don't have a customer-service mindset can be deadly to your company. Bad apples can spoil your efforts to deliver satisfactory levels of service to your customers.
The modern customer is a pretty savvy consumer. He or she hears what you say and promise and then watches closely to see if you deliver. You've probably had some experiences as a customer in which a company's walk didn't match its talk, and you probably took your business elsewhere. In your business, you have to continually find out whether you're delivering the things you promise to your customers. It's natural to want to promise your customers the world, but you can't do so unless you know that you can deliver the world.
So, how can you find out how you're doing in the promise-delivery department?
• Ask your customers for feedback.
• Keep in close contact with your employees and get their feedback, too. Ask them how they're doing and solicit ideas about how you could help them do better.
Monday, January 10, 2011
Holding On to Dumb Business Concepts
It’s a truism that “nothing is certain in this world except death, taxes and bad management.” Why does bad management remain so pervasive, even after decades of MBA courses, millions of management books, and billions spent on management training?
The root of the problem lies in five basic management concepts that became popular in the 20th century and continue to propagate stupidity. As long as the business world kowtows to these obsolete management concepts, managers who screw up plague their company, employees, vendors, suppliers, and their customers.
Some of these concepts are dearly held panaceas for much of the business world. Even so, they were ill considered and ill conceived from the start, and should be jettisoned for the good of everybody.
Dumb Concept #1: “Downsizing”
Thousands upon thousands of articles in the mainstream business press characterize CEOs as “courageous” because they instituted a downsizing. Apparently, the decision to fire people is so difficult, that the CEO who takes that path must be a brave and lonely soul. He’s putting the interests of the investors ahead of his own kindhearted inclinations, and making the difficult decisions that will allow the company to remain profitable.
But, wait a minute! How, exactly, did the company get into a situation where it needed to fire people in order to remain competitive? Sure, markets change like crazy in today’s world and business conditions become challenging. But isn’t it the job of the CEO and the management team to predict those changes, and to staff the company appropriately, and retrain people, so that those challenges can be addressed?
Here’s the truth. Downsizing is a sign of failure. It means that management has failed and rather than doing the right thing — which is to quit without severance — they’re passing along the penalty for that failure to the people who, in good faith, tried to execute the flawed strategy that top management pursued.
That’s why top managers (and the kiss-butt journalists in the mainstream business press) love the word “downsizing.” It makes the results of failure sound like a strategy, rather than a desperate way to remain profitable after top management has made a complete pig’s breakfast of things.
So as we go forward, let’s stop calling it downsizing. Let’s call it what it is: firing productive workers because top management was ineffective to protect and run their company.
Dumb Concept #2: “Leadership”
A few years before he died, Peter Drucker was interviewed on NPR. In that interview, he pointed out what should be obvious to everyone — that all this talk about “leadership” is a bunch of horse manure.
Yeah, yeah, the idea of leadership sounds neat — especially if you’re in management — and it makes a manager sound all charismatic and exciting.
But what is a “leader,” anyway? What does a “leader” do?
I can’t hear the term without thinking of the leader of a marching band. That’s the person who takes a big stick and makes it go up and down, while the band does the work of actually making the music.
One reason I think of that image is that, in my experience, most of the time the “leader” of the team is the person who found a parade and then got out in front of it. (I once heard an executive in Fortune 50 Company describe that odious behavior as “smart business practice.”)
The concept of a “leader” means that credit for what the team does goes to the leader. And you see it every day, in the bloated salaries paid to “business leaders” and in the ridiculous way that some CEOs parade themselves as if they were rock stars.
You see it in the lower levels; too, where managers’ illustrate about leadership and “inspiring” people, when in fact they’re usually just making everyone under them want to puke.
What Drucker said — and I agree with him — is that the business world doesn’t need leaders. It needs managers — people who can actually manage a team of people.
Being a manager means being in service to the team. It means giving the team credit and making everyone else successful. So, as we go forward, let’s stop enabling all these tin-pot “leaders” by pretending that they’re doing anything other than grandstanding. Let’s value the real managers, who actually do the hard (and largely thankless) work of making other people productive.
Dumb Concept #3: “Human Resources”
When you talk to people who work in “Human Resources”, they pretend that they’re all about helping people to become more successful. But the truth is that the entire concept of HR is really just a way to make sure that employees don’t act uppity.
What better way to let people know that they’re expendable commodities than calling them “resources”? Indeed, the entire concept of HR is designed to make the process of dealing with real live people as bloodless as dealing with electricity or shipments of iron ore.
As for the functionaries who’ve glommed onto the term, whenever an HR group gets involved in anything, you get a patina of psychobabble that overlays the opinion that an employee is about as important as making sure the trash gets picked up.
Let’s face it. Many, and probably most, HR groups are just spies and shills for management. Don’t believe me? Try taking a complaint about your manager to the HR group and see what happens.
Once people are reduced to “resources”, you can pretend that making them work unpaid overtime, or firing them because top management screwed up is “better resource utilization.” Most of all, the term communicates in no uncertain terms that you’re completely expendable.
How come you never hear C-level executives being called “management resources”? No, no, of course, not. Those guys are essential! Those guys are the leaders! They’re not replaceable like the hoi-polloi, the plug and play “human resources” at the bottom.
You want to know what a CEO does? He manages a group of 10 to 13 people. Here’s the truth, boys and girls. Being a CEO is marginally more difficult than being a line manager who manages a group of 10 to 13 people.
CEOs do not “run the company”. They manage a group of other managers who presumably are smart enough to — guess what! — Manage the group of people who work for them. There’s no reason in heaven or hell that a CEO should get paid more that few multiples of what the “human resources” who actually do the work.
So, as we go forward, let’s stop talking about “human resources” and start calling people what they are: people. People who have real lives and real ideas and real emotions and who, frankly, are doing work that’s often more important than that of the top executives.
Dumb Concept #4: “Empowerment”
Back in the 20th century, there were all kinds of talk about how technology was going to empower people. Applications like email and, later the Internet, would create a free-flow of ideas, making it possible for individuals and small organizations to counterbalance the power of large institutions.
Today, however, it’s abundantly clear that technology isn’t empowering employees; it’s empowering management to spy upon employees. And technology isn’t empowering small organizations; it’s making it easier for large organizations to drive the smaller ones out of business.
As evidence of this, look at what’s happening to Wiki-leaks, probably one of the only organizations in the world that’s actually making a stab at the kind of information empowerment that was promised in the past. The big financial institutions, one by one, are using their clout to shut it down, even though the organization has not been charged with any crime.
Consider as well, the so-called “net neutrality” act recently passed.
There’s a concept in business called “the law of inverse relevance” which can be stated as “the less you plan to do something, the most you must talk about it.” That generally takes the form of laws and regulations that do the exact opposite of what their title says they’re going to do.
The “net neutrality” act is a perfect example. Rather than making sure that the net remains neutral, it actually makes certain that wireless companies will be able to throttle any business or business concept that threatens their profits.
The way this “empowerment” concept plays out in business is the insane idea that new technology is going to make people more innovative, more entrepreneurial, more creative, yada, yada, yada. All those things come from the heart, not from the hand.
So, as we go forward, let’s stop talking about technology as “empowerment” and start talking about what really counts: human creativity freed from the limitations imposed by bonehead “leaders” who think they’re managing “human resources”.
Dumb Concept #5: “Business Warfare”
Many traditional business leaders have a militaristic view of the way the business world works; A glance at the titles of popular business books-Marketing Warfare, Leadership Secrets of Attila the Hun, Guerrilla PR-offer ample testimony for this widely held viewpoint. We’re told that we must imitate generals and warlords if we want to be successful managers.
Taking all this to heart, many executives talk as if they were planning the next world war: “This product will do major damage in the marketplace! We’ve armed our sales force. We’ve targeted the right set of customers! The new ad campaign will explode into the territories! This is going to be a major victory! Our troops are ready!”
Ugh.
Here’s the problem. If a company’s executives really believe that business is warfare, then that dogma will be reflected in nearly everything that goes on inside the corporation. Strategies that don’t fit the dogma-regardless of their potential for success-will be rejected because they are literally “unthinkable.”
For example, executives who believe that business is a battlefield will almost inevitably assume that victory in business goes to the largest “army” and they’ll build large, complicated departments stuffed full of people and resources. Even when customers would be better served by a smaller, more focused effort, there will be an overwhelming drive to build a massive corporate “army” that’s “strong” and ready to “fight.”
Military-minded managers also find it all too easy to become control freaks. Because they see themselves as generals and officers, they tell people what to do. They think that good employees should shut up and follow orders. This behavior destroys initiative as people wait around for top management to make decisions.
And because top management is often the most isolated from the customer, the company loses track of what’s needed in the marketplace. Further, the “business warfare” mentality makes it impossible to put the decision making where it belongs-at the lowest level of the organization.
Military thinking also distances employees from their customers. To the militaristic company, customers are, at best, faceless territory to be “targeted” and “captured” with marketing and sales “campaigns.” This strategy discourages the viewing of customers as living, breathing human beings with opinions, interests, and concerns of their own.
BTW, the entire “business warfare’ concept, with its buddy-buddy, band-of-brothers, shoot-’em-up consciousness seems ludicrous to many women. Not having spent their childhood playing soldiers in the sandbox, many women find it pretty ridiculous that a bunch of grown men can act as if their boring meetings and dry-as-dust ideas were high adventure and global conflict.
The militaristic organization almost always discriminates against women. From time immemorial, warfare has been a male pastime, and though women have often fought and died in wars, they’re generally considered second-class soldiers. Men who think that executives should be generals in three-piece suits find it extraordinarily difficult to envision a woman in a position of power.
So, going forward, let’s deep-six the militaristic jingoism and start talking about business in terms of relationships, agreements and profitability. Then we’ll all be better off.
The aforementioned is a point of view. It is generated to make you think, hopefully to add your rebuttal, if you dare?
Your argument can be placed on my blog:
Your comments and criticisms are always welcome!
Monday, January 3, 2011
The Seriousness of Making a New Year Business Resolution
Welcome back from the holidays. Now back to work!
As in our own lives, the start of a new year energizes us as business owners to sit down and plan out our goals for the coming year. We consider what sales figures we hope to achieve, the many directions we can take our products, and how to tap into any unsaturated markets that we can find. Here are four things that are important to keep in mind while strategizing for 2011.
1. Self evaluations can be very useful and never hurt.
Often we encourage our employees or managerial staff to conduct evaluations on team performance or client satisfaction. However, we often overlook evaluating ourselves as business owners and proprietors. I have noticed this first-hand over the past year. I believe building in a work flow that will provide a system of checks and balances not only on my team, but also myself, will help me make better informed and consequently smarter business decisions in the coming year. While it is never good to have too many people trying to make one decision, one individual with many people’s insight and wisdom can never hurt. Restructuring decision making schemes and organizational workflows are something that can improve the overall efficiency of any business, and more importantly its effectiveness at providing quality products and services
2. Set metrics that you can use to reliably track both successes and failures.
Whether you use a system of quarterly reviews, or weekly debriefs, there is a lot to be said about metrics. That being said, the best metrics are the most unobtrusive, transparent, and seamless to integrate into daily business. Many companies use time tracking software for logging their employees’ work, but that doesn’t always guarantee success. In fact, large companies like Apple and Google have been known to have a more project oriented perspective on getting things done, and favor strict deadlines rather than hourly logs. At the end of the day, how things get done matters less for these companies than the end result, and to a certain degree this is a good policy. Metrics that can be used to take notes on minutes as well as scalable content management systems that allow for better cooperation amongst teams are a must in today’s world. All businesses, no matter how big, should have a consistent manner in which they can gauge the efficacy of their actions and decisions.
3. Desire for growth must be matched with market limitations and innovation.
The companies that fail, or begin to earn significantly less profit are the ones that don’t understand market limitations. Unfortunately, this happens to the best of us. It’s only natural, after all, when something seems to be going well we expect it to continue. We go on our way and fail to notice warning signs that the market and or customer demands are changing, we fail to adapt to new economic conditions. In other words, sometimes we’re not scalable, and we’re not dynamic. A solid company needs to have contingency plans. Furthermore, no company should neglect to have a division that focuses on market research and understanding the evolving consumer market. Whether that person is the single proprietor, or a team of individuals within a large corporation, having people who can keep their heads up when so much is going on around them enables companies to steer themselves in the right direction all while seeing the bigger picture.
4. 2011 is going to be the year that advertising must evolve.
One thing I believe that badly needs even greater attention given to your resolution is new methods of marketing and advertising that are not overly pushy but actually work in a very overly saturated market. Some studies have shown that the average individual is exposed to 3,000 advertisements per day. We hardly remember any of them. Advertising is pivotal to any business, and those who use more effective methods of advertising are often the industry leaders regardless of the quality of their products or services. Many companies are working on coming up with new advertising platforms and new methods to try, but I can’t help but think a major overhaul is needed. The people to figure out how to create advertising 2.0 are going to be the true winners of 2011.
Best wishes for a happy, healthy, and prosperous 2011 to you!
Best wishes for a happy, healthy, and prosperous 2011 to you!
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