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


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.