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Execution: the Difference between Profit & Loss

November 20th, 2010

Lately, I’ve been thinking about trends among my consulting clients and how my value has most helped in driving bottom line results. Undoubtedly, it boils down to execution. Those clients who are able to execute strategies and plans are those who are the most successful – grow the business even in a downturn and improve profitability. And, my greatest value occurs when I help my clients execute successfully.

It isn’t surprising in today’s business and economic environment that execution and pragmatic advice prevails. The low-hanging fruit is gone. Sales remain lackluster. In the most recent earnings season, companies have increased profit yet not necessarily revenues. And, what I’ve been hearing most recently from executives is two-fold:
1. “We cannot cut our way to continued profit growth.”
2. “How do I grow the business in today’s environment?”

After all, every company needs someone to pay employees, reconcile the books, manage the systems, sell, produce, ship, provide customer service etc. Thus, although many companies have been able to increase profitability by slashing costs, it cannot go on forever. I’ve found that two items are essential in today’s environment:
1. Establishing / encouraging a culture of innovation – for more information on this topic, please refer to my recent articles and tips (http://bit.ly/cEUeoF, http://bit.ly/99JFrr).
2. Flawless execution – it achieves nothing to have good ideas (whether innovative, cost savings etc.) if they are not implemented successfully.

As a former VP of Operations & Supply Chain and as a Business Consultant, I’ve found that there are a few keys to success in execution: 1) Clarify the objective. 2) Communicate, communicate, and communicate. 3) Follow-up.

1. Clarify the objective: Simple yet overlooked. It isn’t enough to be a cheerleader for your team. Or, worse, a dictator, hoping to threaten to success. Instead, what works is to make sure everyone understands where you (and the company) are going, why you are going there, how they fit in, why it matters, etc. Of course, one of the reasons this is overlooked is that it can become difficult. You have to address the hard questions and roadblocks head on.

There are no fast, easy solutions. It requires hard work, integrity (you must do what you say you’ll do!), appreciating people’s value, leveraging strengths, and tackling issues head on. Not rocket science but it requires solid leadership.

2. Communicate, communicate, and communicate: Similar to “location, location, location” in real estate, “communication, communication, communication” is vital in execution. Repetition is not only desired but proven as the only effective strategy. Try varying the modes of communication as people learn in different ways – via listening, seeing, through examples, etc.

Also, I’ve found another key to communication success is to be able to translate the objectives so that it’s meaningful for each team and individual. You don’t have to know everything; however, you must have baseline knowledge, be able to ask effective questions and be trusted.

3. Follow-up: Last but not least, follow-up is cornerstone. Here is what follow-up is NOT – interrogating your team or employee, panic emails/ calls as a critical task is due. Instead, integrate follow-up into the daily culture. Ask questions – don’t waste people’s time with useless questions as it will ensure failure; however, think about and ask insightful questions.

Provide tools and support. This isn’t as easy as purchasing a software tool or voicing support. The key to success is that your support must be viewed as support by the receiver – and only then if it contributes to results. Does your support help them overcome roadblocks? Does it help them address issues? Do you thank employees for their efforts which contribute to company success?

I’ve yet to see a client who consistently delivered bottom line results with poor execution. If it will give you an advantage in the marketplace, why not consider a focus on execution?



Lisa’s Tips – Safety

November 6th, 2010

Bedrock – always appropriate. I want to thank my mentor in this topic, Debra Daniels for her expertise – Debra, have I incorporated your wisdom appropriately?

Build safety into the culture – most safety programs are pointless as they are considered an outside program (and many times, meetings are viewed as something to survive through). Instead, build it into the daily routine – it is the ONLY road to success.

Emphasize common sense – instead of complex programs and useless signs that most employees ignore, emphasize common sense. If sticking your hand into the machine might cause it to be cut off, don’t do it. Obvious but not necessarily common if the company focuses all communications on efficiency at the expense of all else.

Involve the employees – who knows best what is safe and how to ensure safety? The person dealing with the topic on a daily basis.

Make safety a top priority – it doesn’t work to say it’s a top priority but only follow it when convenient or easy. Instead, communicate its importance. Assign key resources to the topic. In essence, show that it’s a priority.

Don’t forget to track progress – TIR or total incident rate is a common metric. Track progress. But ensure that employees are encouraged to report close calls and opportunities; otherwise, you’ve violated the #1 rule of “saying it’s a priority but not demonstrating it’s a priority”.



Hiring: How to Avoid a Fatal Flaw

November 1st, 2010

As I’m preparing to give a speech at the APICS (Association of Operations Management) International Conference in Las Vegas on “Innovation for Supply Chain Success”, it occurred to me that one of the reasons for failure with innovation is due to a fatal flaw in hiring. In my experience in working across multiple functional areas with many different companies across several industries, one of the most common detriments to success is not having the right person in the right role. This simple yet profound issue results in millions of dollars of lost opportunities.

Why does this occur so frequently when it seems obviously avoidable? My guess – cash! We are programmed to think “save money, save money, save money”. Of course, this is not bad in and of itself but it can result in “a penny saved a million dollar savings opportunity lost”. Unfortunately, I can count on more than one hand how many million dollar opportunities were lost or significantly delayed due to this issue – so what does that say about how many smaller opportunities were lost?

What should we do? Don’t focus solely on saving money! I’m sure many are thinking, “heresy!” Yet it is what’s required. Instead, we must focus on the total value of hiring decisions.

For example, if you have a major project that will be led by your new hire, consider the full scope of experience, leadership abilities and industry expertise required. Do not settle for who is available, has some experience and seemingly inexpensive (a deal perhaps?). Whether searching for a new hire, a contractor/ consultant or a project lead from within the organization, consider the total equation – hiring cost, potential organization or project benefits (which will have varying probabilities of success with different skills), and intangible benefits/ costs (such as effective teamwork or inefficiencies / other organizational issues).

Which decision will lead to the best outcome? My bet is 80%+ of the time, the inexpensive, quick decision isn’t the best. I’ve found that having the right people is #1 to success; thus, it is worth the effort. Unfortunately, many times, it isn’t prioritized. I certainly have run across too many inefficient organizations or project teams with lost potential directly resulting from poor hiring/ promotion decisions.

Leaders and Business Owners, embrace total benefit thinking! Interestingly, a successful executive recruiter recently told me that he only works with organizations that see the value of hiring the appropriate person and are willing to pay for him/her. Otherwise, he might get a quick sale with a nice payout; however, he knows it won’t turn into a solid long term relationship with long term benefits for the client.

Team Members; think about how to convey the benefits to leadership. A few tips include: 1) Spend the time to research the total picture / facts to present to management. Ask colleagues. Ask your mentor. Research on-line. 2) Focus the 80/20 of your time on the benefit for the company – what can be achieved? Why does it matter? 3) Put together a 1 page summary or simple presentation and proactively discuss with your manager. What do you have to lose? Worst case, the manager sees a proactive team member who has spent time to try to help the company succeed. How bad can that be?

The bottom line is to think carefully about hiring, promotion and project team decisions. Consider the complete picture and total cost in order to deliver bottom line results AND to encourage a productive and happy workplace.