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!


The ten signs that people are happy at work

October 9, 2009

In no particular order, people who are happy at work show the following symptoms:

  • Happy at work!They are happy to go to work; they do not suffer from stress or fear about it.
  • They smile and laugh at work.
  • They greet and interact socially with their colleagues.
  • They are rarely on sick leave, only when it is serious.
  • They do not think of leaving their employer.
  • They talk positively about their work, their boss and their company.
  • They bring new ideas to their colleagues and boss.
  • They have little physical or mental need to take a vacation; they are not burnt out.
  • They do not gossip and they do not do office politics.
  • Last, but not least: they are happy in their personal lives, too.

Copyright 2009 The Happy Future Group Consulting Ltd.


I want to hear laughter!

June 17, 2009

Here is the best anti-stress medicine I know: laughter. I have applied it in my professional life as well as in my personal life and it works superbly, and there is no negative side effects known to man.

Hahaha!I have spent a long part of my career in industries dealing with perishable products. Per definition, such products cannot be stored for very long and this makes the business dynamics quite intense, and often stressful, as “everything must go” and for a profit, mind you. Therefore, my assignment to them, next to (or I should say as part of) doing the job was to make me hear some laughter. It did not matter what the reason would be, as long as there would be fun. In that line of work, we were lucky to be able to find many reasons to laugh because we were dealing with colorful characters and we could easily find the funny absurdities of the business. The head office would involuntarily also provide for much material to us as well. If my staff would not laugh frequently enough to my liking, I would pop in and bring some craziness of my own to help them out.
The results were amazing. With a small team (comparatively to other units of the company or to competitors), we were able to deliver a performance second to none, we were able to solve more problems than the others were, and we were having fun. Even as we worked long hours, nobody burned out. On the contrary, success was constantly bring new and more energy to our team. Once again, the boring, unimaginative and bureaucratic HR department was wrong.
Managing is getting things done by your team. Therefore, you had better take good care of your people, and the best way to do that is to have them laugh on the job. It means that they are having fun, and when you are having fun at work, it does not feel like work. Good managers know what is right for their business. Have them laugh!

Copyright 2009 The Happy Future Group Consulting Ltd.


Why do great employees leave?

May 21, 2009

That is a question that I have found on the LinkedIn group “Executive Suite”.
I love those questions, because there is an army of consultants and specialists and experts showing off all they know, and their comments are incredibly detailed.
But the reality is much simpler. Employees, especially the great ones, do not leave the company, they leave their boss.
High turnover, especially of great employees, is the best indicator of poor management!
Many companies use the “grandfather” principle, but in reality, when there is a problem between the “father” and the “grand child”, grandpa almost always backs daddy, while the departure of great employees should tell him that daddy is being naughty, and daddy should be reprimanded. But that rarely happens, and the grandfather principle is kind of a joke, really.
But one thing is sure: when great employees leave, the average quality of what is left decreases, and the company is heading towards the ground.
I have seen that just too many times, in color, 3D and Dolby stereo.
The good thing about it is that companies who appreciate talent always win in the end!

Copyright 2009 The Happy Future Group Consulting Ltd.