The importance of values in value chains

October 1, 2010

When it comes to looking for partnerships as part of a value chain, one area tends to be neglected. Usually, business people will develop their business plan properly, identify their market and their source of supplies, and make sure that the math is solid. Beyond the numbers, there is always the human factor that will play a role. Every company, therefore every partner in the chain has its own specific culture. This is important to realize, because when cultures, and values, do not match, the relationship will always bring some hardships at some point. This is not a simple problem to solve, and usually, only few potential partners share your values. It is also important to realize that the word “values” does not necessarily imply good ethics and honesty. After all, hyenas move in packs. Sometimes, the partner that can help grow your business the fastest might not be the right one for the long-term, but it might be the best choice for now. Depending on in which region of the world you do business, the sense of time, sometimes even of urgency, can vary a lot. For instance, North Americans tend to want to start business immediately, while the Japanese will take all the time they need to find out whom they do business with, and build enough of confidence in their potential partner before starting business. In the land of the rising sun, it can take several years before the first transaction takes place. What are the risks of a mismatch of values? It can have serious consequences, depending on how much of your business is engaged with the “wrong” partner. It can range from dissatisfaction about the profitability of your business, constant disagreements and tensions with your business partner, to your being ripped off. One thing is sure: there will never be complete trust and loyalty when values are not aligned. Several years ago, I developed a quantitative system to evaluate the value of a business partnership. It is rather simple in its design and very powerful in its implementation. It helps identify the strengths and the weakness of the business relationship, and it is an amazing to tool to use to address potentially damaging issues over time, and create clarity for future dealings. By realigning values, both business partners can develop a plan of action and look beyond the price negotiations alone.


CNN – TED Talk – Big bonuses do not mean big results

March 2, 2010

Really interesting presentation that makes you think on HR policies and performance.

http://www.cnn.com/2010/OPINION/03/02/pink.motivation.bonuses/index.html?hpt=C2


Communication and persistence can make almost impossible assignments happen.

October 17, 2009

Some years ago, I got the project to set up a fish processing operation in Klemtu on the central coast of British Columbia. Some agreement had been made a couple of years earlier, as the whole project started with the set up of fish farms.

For the processing, we needed to not only equip the plant, but also train the staff of this small coastal community isolated on an island with no road connection to the mainland. Therefore, the logistics were quite adverse: an isolated island with about no choice of carriers except the one that had been appointed on a sea that is often dangerous to the point that barges do not even venture on it. The risk was that the fresh fish could be stuck and not be delivered on time. Of course, that would have been unacceptable for our customers, who were located thousands of km away.

When it came to the facilities, the local community was providing for the plant, meaning a very basic building with no specific equipment for salmon processing. In the plant’s yard we had to browse through a pile of old tables and pipes to figure out something. Since volumes were starting rather low, it would not have been sensible to buy automated processing equipment, because the cost per pound of fish would have been horrendous. Further, the isolation of the place would have made any call for a technician about useless, as it would have taken him a couple of days to be on the premises. All the work was to be manual.

The equipment was probably the easiest part, though. We needed to train the staff to modern food production and educate them about to all aspects of food safety and quality, as they had never been exposed to this. Everyone who has dealt with First Nations knows that they are dealing with a number of social issues and poor physical health and condition, unfortunately the result of past colonization and the destruction of their traditional society. As such, this exercise was a great way of merging two worlds and recreating a feeling of community between this village and the international food business including large retailers and food service companies in the US and Canada.

We developed the training program covering all theoretical aspects as well as the practical realities of fish processing. A few chosen crew members were sent to an experienced fish plant to get exposure to modern processing. We set up an exam to have an incentive for the potential employees to study our material. As it appeared the day of the exam, half of the students did not show up and someone explained to me that some felt uncomfortable with writing. Of course, this was an awkward situation and there was a chance of losing some of the workforce, which is not good when that workforce is already limited, and replacement not easy to find. I turned this around by giving only one collective grade. After all, I had repeated so many times that this would be teamwork, what better example could I find to illustrate that than giving the team the grade, instead of individual marks?

Considering how important it is to gut and cut the fish properly, I was more interested in the quality of the work than the productivity at first. Once they would master the technique, we could think of increasing the pace of the processing line. So, we started with the equivalent of half a truck the first day, and the second half for the following day. In a normal plant, a full truck was processed in five hours in those days. I was expecting that our first half load would be done in eight hours at most. The reality came out quite differently. After two hours, the staff got physically tired and I could notice that moment when all the shoulders started to drop. After eight hours, many of the workers went back home because they were tired. We finished the first production day in thirteen hours! The second day was even worse with some people not showing up at all, and it took 23 hours! The situation looked lost. However, my sense of persistence made me refuse to give up so quickly. I re-planned the next round of harvests to be only a third of a truck per processing day. This was the magical number, and from there, our staff was able to work within normal hours, and get more productive, while producing the proper quality. Within two weeks after this, they were able to process a full truck in 9 hours! What a turn-around! As production volumes were increasing, we were able to justify for the purchase of machines to help speeding up the operation and by then we were able to process fish as quickly as any other regular plant.

As time went by, some of the locals showed capacities to take charge of more and more things, and even the original agreement was clearly that management activities had to be carried out by non-locals, we created several positions that they could fill successfully.

Yet, beyond the business case, the most valuable experience for me had been to see activity coming back in a community plagued by 80% unemployment before this project started. Getting work did not only give them money, but it helped them become healthier, with many of the employees recovering from diabetes. The most important of all was a boosted self-esteem, as they found a new purpose in their lives.

They felt successful, happy and fulfilled again!

Copyright 2009 The Happy Future Group Consulting Ltd.


Genchi genbutsu

October 16, 2009

This is an interesting article from Economist.com about the Japanese way of getting out of your office and about having a look at what is going on in the plant.

I like the part in which the author tries to compare the Japanese way and the American way. In my opinion, there is not much point in doing that. The best is to review what the strengths of both approaches are and build an even better system from there.

If you want to be an effective manager, you need to have a hands-on approach!


Managing the emotional and the rational

September 28, 2009

NeuronsWe all know the feeling of having to deal with an emotionally loaded happening or decision, or when we need to communicate about something emotional for the other person(s).
The main problem is to be able to see the rational aspect of what we are dealing with in a moment when we have lost this ability to calmly analyze and put things in perspective. Our brain is reacting in the here and now and what leads us is to escape the situation as well as possible immediately. In this process, we rarely have the ability to think about the consequences of our behaviour.

Controlling one’s emotions
Although this is quite difficult for some people, the best way to start reacting is to not react, because your reaction can make others react back to you and there always is a risk of escalation. Before saying or doing anything, try to get as much information as you can by asking questions or even by keeping quiet. Generally, being silent is a great way of getting others to do the talking. Do not be afraid to ask for suggestions and listen before reacting on the answers.
Two emotions always can get you in more trouble than serve you: anger and fear. In both cases, the ideal way to deal with your emotions is to buy some time before reacting, in order to relieve the impulsivity and start to get a look at the larger picture. If possible, allow yourself a night of sleep before completing the process. It will calm you down; it will allow you to start thinking more rationally and put things back in perspective. It also allows you to develop your own plan on how to deal with the matter that happened to you.

Connecting with another person’s emotions
Although you are not dealing with your own emotions and you are in a position of thinking rationally, this situation is not any easier. The key here is to be able to literally get on the same wavelength as the other person. To do this properly, some empathy is obviously a great asset, but empathy alone is not enough. You need to assess the level of emotionality involved, and adjust your level of rationality accordingly. The best way to connect with the emotional person and to identify how intense the emotions are is to let the person vent and express what is causing the trouble. S/He will feel comfortable with this, because you create the conditions for it. Ask questions when necessary but do not make this an interrogation. Also, realize that, in an emotional interaction, verbal communication is a lot less effective than in a rational conversation. Therefore, your body language is quite important, which makes it even more important that you are sincerely willing to listen and connect. Since when it comes to non-verbal communication, the body follows the mind, any lack of sincerity on your part will probably be perceived.
Once you have connected, you will be a position to lead the conversation and, one step at a time, bring it back to increasingly more rational level. You will know that you have completed the process when the smiles come back and you reach an agreement on the next step.

If you are interested in this subject, feel free to contact me.

Copyright 2009 The Happy Future Group Consulting Ltd.


Understanding what went right

August 12, 2009

We all know our reaction when things go wrong. We ask why. Why me? Why now? And more similar questions that tend to try to find out the reason behind the unfair treatment we perceive.
In business, when things go wrong, the same thing happens. Your boss asks you lots of questions to find out the reasons of the poor performance. During press conferences about company results, the CEO is always prepared to give all explanations about the cause of the problem. Typically, the causes of underperforming are generally found in challenging “market conditions”: the world economy, the value of the dollar, the price of oil, market oversupply (which by the way is created by the industry itself and is usually the result of overoptimistic planning), etc…

Finding out why it went right is as important as finding out why it went wrongBut what happens when things go right? Do we try to analyze the reasons things are going our way? Do we wonder why these good things happen to us and why now? Generally speaking, the answer is “no”. We simply take it for granted and we consider it the most normal thing in the world. Yet, there has to be reasons, just as valid as the ones we find for setbacks. To get back to the example of the CEO during the press conference, great results will rarely be attributed to the world economy, the value of the dollar, the price of oil or a market in short supply. Next time listen carefully: great results generally are the results of a great management team executing superbly a great strategy!

The main problem with our attitude towards good things happening is that we actually do not learn from them, or at least we learn very little. This is quite a different situation when things go bad. As we all know, there is nothing like learning from our mistakes to build experience.

So next time you deliver a better than expected performance, you certainly must enjoy it and give yourself a compliment about it, but do not forget to analyze why it did happen. Find out the reasons within yourself or your organization, but look for reasons in the conditions that played around you during that period. Carry out this analysis with the same thoroughness as when you analyze poor performance, and do not exclude any reason beforehand. Maybe the outcome will not boost your ego as much, but avoiding complacency will help you stay on your toes and avoid making mistakes. The benefit for you is that you will increase the odds of repeating your top performance on a much more consistent basis!

Copyright 2009 The Happy Future Group Consulting Ltd.


The importance of a cohesive team

August 10, 2009

Helping each other creates cohesion and successIn sports, everybody knows the importance of having a group of talented people who can play together harmoniously for the interest of the group. Not only must the team members be good at their specialty, but they also must have the understanding of the other players’ needs and skills, so that they can create for them opportunities to score. Moreover, everybody understands in sports the crucial role of the coach to create the proper interaction to achieve success. Terms as goals, help and support are common.

In business, having such cohesive teams, although always mentioned as very important, tends in many cases to be suboptimal. Many companies perform below what they should and could perform, simply because the interconnection and the fostering of the relationships are very often neglected. It almost looks like everyone sticks to their job description, on which by the way the nature of the interaction with colleagues is not even mentioned. Recruiting people and telling them what they have to do without telling them with whom and how to achieve the goals together will simply not deliver good results. When you take a look at reward systems, you will see that it generally never include collective goals, except the very general profit. Most of the time, bonuses are based on individual performance indicators that usually ignore the performance indicators of your direct colleagues.

Sport or business, the principles are the sameSo, how to achieve superior performance and build cohesive teams across departments? Actually, it is rather simple, at least in theory. Just copy what they do in sports. They draw charts about the strategy to reach the goal and beat the opponent. They review it together, and everybody gets to hear what their specific role is going to be. They will have to pay attention to what the adversary’s moves are and they will develop alternative strategies to deal with them. Everyone in the team knows their function, and most importantly, they know what their fellow team members will do for them and what they expect from them. Further, the coach is present on the sidelines and is very vocal giving instructions at once all the time as the game develops. Unfortunately, such a presence and such a hands-on support are often missing in business, because the coach is in a meeting.

Of course, running a business is not quite like playing the main event game, but they are simple ways to create that sense of support and quick reaction to changing situations and applying alternative plans. One of the most effective approaches to create cohesive teams in business is to develop the supplier-customer partnership at all levels of your organization (see our presentation about this subject). Everyone must know what the colleagues needs are and must communicate what their own needs are as well. This shortens discussions as there is clarity created beforehand and it enhances a sense of anticipation by all participants, as they will recognize what to supply their team members with in a timely manner. Last, but not least, creating and sustaining cohesive teams requires a strong hands-on leadership (read Presence: the prerequisite for leadership).

Copyright 2009 The Happy Future Group Consulting Ltd.