Management – Performance Now

“The management boom is over; the time for management performance has come.”

                                                                       Peter F. Drucker; Management: Tasks, Responsibilities and Practices, 1985

Today’s management is all about performance and results. Management can be found in big corporation to government to non-governmental organization to military and self. Management is an organ that sits inside a body and cannot exist on its own.

Although much has been theorize on management, many institutions including self faced with inability to harness the results from management. To be an effective executive (or manager), it is important to have knowledge, be discipline and focus on action. Those are elements of management. Above all successful executive is determined by its ability to use management as vehicle to achieve its goals – via purpose and mission.

A great business must have clear and definitive idea on how the business should be run. The same goes with executives and managers. They need to crystallize what is their purpose and mission at work place. These later needs to be aligned with the company they work with. However, most executives come to workplace hoping to be told what their purpose and mission are. They thought the organization goals are their goals. While executive must make company goals their goals, it is unlikely they are solely responsible for the business goals of total company. Instead they need to have own plan what contribution they can make. It is with regret the reason why so many executives unable to perform, because they have no goals to work on at first place.  The reality disturbs me greatly. Often when asked what is your plan for the day, many executives have no clear ideas what to do. Some responded referring to work or job they are currently doing. But work and plan is different. Work is a subset of plan. Plan should also include other facets of the executive such as reading, networking, getting fit and so on.

Through management, purpose and mission will be broken down into work and processes. The central to this is customer. Without customer the business (or executive) has no reason to exist; at all. Management needs to ask four main questions. What is our business, who is our customer, what value is to the customer and what will our business be. The rest of the work and process revolves around these questions. It cuts across strategy, financial, talent, logistic, administration, marketing, innovation and so on. Only then the management become useful and productive. In other words, when management has answered all these questions, the rest of the departments must throw its weight to this goal.

The development of managers must take into consideration all these. Only then the manager will be able to acquire today’s skills for him to be effective tomorrow. “What brought you here won’t get you there.” , said Marshall Goldsmith. Effective managers must learn how to become execution specialist. Because only results count, not efforts. Manager development is the responsibility of the individual, though company and superior have an important part to play.

The aim of it is excellence. The development of a manager is to enable him or her develop abilities and strengths to the fullest extent so the goals can be attained. Ultimately the manager himself must be able to control his own performance by understanding his strengths and weaknesses. Many times when i interview executives and managers, they stunned by “what are your weaknesses” question.

Majority said no one has ever asked them, of course they grumbled and took some time to answer. People that answered “what is your strengths” on the other hand got the answer wrong. They usually say, “my strengths are i am a good communicator, honest, punctual and hardworking”. My reply is, “that’s my basic needs”. they startled by that respond. Organization really need to deal with this urgently, otherwise people come to work with all those qualities that are not strengths but basic needs.

Organization can use this as a good start to develop managers to become more effective, but more importantly becoming execution specialist. By getting more things done, organization will become productive and growth is imminent. Consequently it will be able to take more risk to go to new markets in search for business expansion beyond boundaries. New jobs can be created as well as customers and innovations. Ultimately through management the organization will have itself sustainable business strategy and all prepared for future succession.

p/s: Management is going to be the tool to boost organization productivity. We don’t talk about management as in cost cutting, downsizing, penalizing people and other negative connotations; but management is a good model to get more things done.

Brickbats please send to donkhairul@gmail.com

Advertisements

When Costs Kiss Goodbye!

Image credit: Kraft Heinz loses a lot of cheese as earnings send stock plunging to …

Interesting article about an investment company (private equity firm) that acquire food businesses (Heinz & Kraft Foods) back in 2013 and 2015 respectively. The firm believed these two companies could unlock more values by using ruthless focus on efficiency. They quickly employed radical cost cutting programs.

They fired thousands of workers, shutdown factories, used zero-based budgeting model (justify cost without regard of previous year spending), remove refrigerators (pantry) in the HQ known for stocking cheese sticks, set default settings of office printers (double sided with black toner) and limit meals spending during travel to $50 a day. Guess what happened next?

These initiatives and cost program led to industry-leading profit margins in less than 2 years! The stock price went up to more than $90 in 2017! See below.

Screenshot 2019-05-18 at 12.55.51 AM

Screenshot 2019-05-18 at 12.55.21 AM

But, unfortunately, it went to nose dive after all the radical cost programs deployed. From my research, Kraft Heinz overlooked the marketing bit, product innovations for their changing customers segments and valuable employees feedback that know how to run your operations especially in different market segments and countries.

Sometimes, big brands and companies make tactical mistakes like this. No doubt long history companies tend to have opportunities to go leaner that it was; things usually get complacent after awhile.

One of the videos, check it out.

Source: https://www.cnbc.com/2019/02/22/kraft-heinz-backers-face-reality-brutal-cost-cutting-isnt-enough.html

Lessons that we could take from here are:

  1. Look at at products and services innovations as growth strategy: There are probably a host of products that could be making money or probably there’d discover that most of the products are obsolete to modern customers. For the record, Kraft Heinz launched new products such as organic version of Capri Sun and expanded its condiment businesses. They tried, probably not enough time to see it through, perhaps these new lineups will grow later.
  1. People are not measured by their salary or price tag, rather by their value brings to the business: I tried looking for some human capital development strategies when the equity firm bought Kraft & Heinz, but I couldn’t find any. Although I may not a fan of “total spoon-feed your talent because you care”, I do believe the management should consider taking longer time to lay offs to ensure the tacit knowledge is transferred to the business. You should pay high for someone that could do more and pay less for someone who can only do routine work.
  1. There’s only so much you can do with cost efficiencies: Key for growth is innovation. I’d expect big brands and companies, should invest in ruthless innovation focus in three areas. First, new products and services that reflect current and future customers needs and wants. Second, leaner processes and automation to bringdown redundancies in capital & assets deployed and reduce wastages. Third, to find market creations opportunities that will need to be invested and R&D. You can read more about this from Clayton Christensen book titled, “The Prosperity Paradox”.

Innovations are for growth. Companies need to spend and invest together with their workforce to improve capability and capacity to innovate. I do hope to see Kraft Heinz able to come out from this plunge and see this only temporarily.

Brickbats please send to donkhairul@gmail.com 

Why Corporates Need Corporate Innovation?

I will go straight to the point this time, no BS here. 😉

Here are the FIVE Observations that make corporates need Corporate Innovation, within this year:

  1. The corporation no longer effective in capital allocation. It only spend on what it has been doing over the years since its founding days. The growth is stagnant? Right? There have been talks about why the auto market is stagnant, utilities market is stagnant, banking market is stagnant and education market is stagnant? Is it really? Think again. The corporate hiring is all time low, even if they do it is only incremental. How big can you hire anyway? How much capex do you want every year?

  2. The employees in that corporations have been out of touch from the customers worldview and realities – things they go through in every day life. The employees think that if you are an executive or business people, you will need a bank account so you will go to the bank freely without the bank having to promote to you any service. So they hesitantly “provide service” with the hope you will get out the branch quickly. The employees only know their job (think they know?) and only worry (pay attention) to their yearly increment. The employee has never thought how important you are because he is not in the marketing department!
  3. The people in the corporations no longer recognize each others strengths and passion anymore. They know each other by searching the names in the company database by their work title and department. They only care about numbers, bottomlines, KPIs, processes, SOPs and their own bosses. They forget the empathy in their colleagues and the motivation they come to work for.
  4. The corporations are a lot less helping the nation progress and becoming productive. Profiting RM100 million a year isn’t the same as elevating 1,000 people out of electrical poverty or lack internet access. The corporations care-less about the environment they operate and the shared prosperity – they only care about batches of production they need to make, the stuffs they have to deliver. They polluted the areas and take away the prosperous-ness in the areas.
  5. The suppliers and vendors of the corporations are non other than the same big boys instead of local business and startups with creative and innovative products and services with energetic and entreprneurial founders. The corporations with all their busy-ness tending to the bottom line didn’t get out of the building to look for what’s new, what’s better and what’s ahead. They are confined confidently in the comfort of large, air conditioned and well equipped office.

In the Corporate Innovation program, corporations will unbox, rediscover the untapped opportunities within the layers they have and assets they kept are abound; right on their backyard, under their nose and in their neighbourhood.

Brickbats please send to donkhairul@gmail.com 

#corporateinnovation #innovation