The Mobile MBA: 112 Skills to Take You Further, Faster (Richard Stout's Library) (15 page)

Every time you reorganize, the old timers will shake their heads knowingly: the corporate carousel keeps on turning and what goes around, comes around. First you have the functional organization, then you move to product focus,
then geographic focus, then process focus, then customer focus, then industry focus with all sorts of matrix organizations in between before coming back to the simplicity of the functional organization. They have seen it all before: the more things change, the more they stay the same.

So why bother with all the hassle and grief of reorganization? Occasionally, a well thought through reorganization can genuinely drive efficiency and effectiveness. But even if there is no compelling prospect of the great leap forward in performance, you still have three compelling reasons to reorganize:

•
Take control.
There is nothing like a few ritual executions to concentrate minds. As a new boss, if you reorganize you have the chance to get rid of some power barons and move others around. If you do not deal with the power barons, you may nominally be the ruler but in practice they will be in control. After you have reorganized they will have neither the means nor the will to challenge you.

•
Send a message to your organization
or team about your priorities. Shifting from a product to a customer focus is a simple way of saying, “We have to focus less on our own internal brilliance at designing, making and marketing products and focus more on what our customers really want and how best to serve them.” But that means you need to back up your restructuring with changes, where needed, in how you measure and reward people, in your systems, and training. Restructuring is not a standalone activity.

•
Send a message to each member of your team.
Even if you only have a small team, use a restructuring to reset your psychological contract with each member of your team. It is an obvious opportunity. Don’t just tell them what their new role is. Take time to explore with them what it really means: how you expect them to behave and perform, how they can benefit, how you can help, and what the change means for them.

Restructuring is not just about structures. It is about people.

Over the years reengineering has become cost cutting with a smile. And the smile is optional. So reengineering has a bad name. It conjurs up images of highly paid young consultants mapping all your internal processes, turning your organization inside out and then leaving you with a big bill. This is a shame, because reengineering as it was originally created is a very powerful idea. At its heart are three ideas which all managers can use.

1. Focus on the customer.
Reengineering does not start with your internal procedures and processes. It starts by understanding what the customer wants and what we need to deliver to them. From this simple insight, you can revolutionize your business by stripping out unnecessary services and processes. Eliminating a process is more powerful than streamlining it. Arguably the discount airlines and discount hotels have taken this approach to an extreme: everything that is strictly not necessary for your flight or hotel stay has become an ancillary service for which you usually pay full market rate plus.

2. Focus on processes not functions.
When IT, operations, marketing, R&D are all doing their own thing, they may do it very well but the result can be that nothing actually gets done for the customer. Success does not come from each function optimizing its own performance. It comes from integrating all the functions to deliver a market result economically. And most of the waste between functions comes about because of management: each functional manager defends territory, so decision making gets slowed down, costs increase, and the competition kick sand in your face.

3. Simplify your processes.
This is like the parlor game where you have to speak on a given subject for a minute without hesitation, deviation, or repetition. And that is what a good, customer driven process looks like:

a.
No hesitation: no down time for slow decision making, waiting for parts or approvals. Delay causes waste.

b.
No deviation. The process should be relevant to a market need and should deliver value to the firm. If it does not, cut it.

c.
No repetition. Rework is a disaster for costs, time, and quality.

As ever, simplicity triumphs over complexity. The PC industry shows what can be done. In the days before Dell, the PC industry was a classic make and sell business. PC makers made computers and then tried to sell them. So their core process was 1) make and 2) sell. All very sensible. Except that if you forecasted incorrectly, then you were left with excess stock and fire sales, or you missed out on revenues by underselling and would then desperately try to ramp up production and reduce time to market while beating up on your forecasting department. It was, in other words, business as usual.

if you want to do reengineering, be bold

Michael Dell did not have the money to make computers before selling them. So he took a radical step: he sold the computers and then figured out how to make them. It was a classic, if accidental, form of reengineering. His core process was not “make and then sell” but 1) sell and then 2) make. He turned the industry upside down. With that
one change, he got rid of all the problems of forecasting, stock outs, fire sales, and reducing time to market. And in the process he made himself a billionaire. So if you want to do reengineering, be bold. Reengineering your HR evaluation system misses the point. To be effective, it has to be a whole firm effort.

Everyone loves to hate consultants, and yet everyone uses them. We hate them because they are paid more than us, they have access to the CEO, they are too smart for their own good, and they don’t have to endure the hard grind of day-to-day management. And they have an MBA. But we still use them because... why do we use them?

If you find that your consultants cost too much, deliver too little, have taken up squatters’ rights in your office, and are a parody of bad consulting, whose fault is that? We get what we deserve, even when it comes to consultants.

For the most part, consultants want to do a good job for you, however surprising that may seem. It is in their interests to do a good job for you, because they really, really want to sell the next piece of work to you. They want a relationship, even if you do not. Their simple rule of thumb is that it costs seven times as much to sell to a new client than it does to an existing client; and existing clients give larger assignments. The career of the smooth partner taking you out to dinner depends on hitting their annual sales target, and you are their best prospect.

With the law, prevention is always better than cure. So make sure you have a good lawyer. A good lawyer is one who finds how you can do things, not one who finds why you can’t do things. And they will help you avert disaster. As a rule, when you go to litigation you have already lost: in many cases it is simply not worth contesting employment cases or customer disputes. The cost exceeds any potential benefit.

Increasingly, business has become a legal minefield. Firms are continually hit by three things:

• Some employees regard the law as a free lottery ticket: win an employment case and make a million. Real or perceived slights and injustices can be turned into big winnings by lawyers keen to take their cut of the employee’s hurt.

• Government regulation gives firms ever more opportunity to fall foul of new environment, health, safety, and employment legislation. The intention of the legislation is often good, the application by zealous officials can ruin a firm.

• By the time clients go to law, you will have lost them. So the best defense is to avoid the problem in the first place. There are three classic legal problems with customers (and suppliers):

– Know when you have a contract. Just because you have not signed a formal contract does not mean you do not have one. If money has been exchanged for actual or expected services, a contract has already arisen. The lawyers will make a fortune finding out what the nature of the contract was based on your email traffic, witness statements and the like.

– Just because you have a contract does not mean you can enforce it. In dealing with retail customers, the Unfair Contract Terms Act does what it says: you cannot impose unfair terms. For instance, you cannot get a client to sign away all their statutory rights and you cannot exempt yourself from all liability if your product or service fails catastrophically and causes damage.

– Know when you have liability. Even better, assume you are liable. In common law there is a basic concept of “duty of care” which you owe to employees, customers and others who deal with you. You cannot contractually sign away your duty of care.

Finally, if it all goes wrong and you are sued: don’t panic. Do not get emotionally involved, it is a waste of time and effort. Your righteous indignation will have at best no impact, and possibly a very negative impact, on legal proceedings. I was sued for $12 billion. Find the best advice and let the lawyers get on with it. You would not think of personally designing your IT systems, and you should not think of building your legal case. Let the experts do it so that you can focus on your day job.

•
Introduction
96

•
How to take control
96

•
What your team wants from you
97

•
Setting goals
99

•
How to delegate
101

•
How to motivate: the theory
103

•
How to motivate in practice
104

•
Styles of coaching: coaching, counseling, or dictating?
106

•
Coaching for managers
107

•
Giving praise
110

•
How to criticize
111

•
Managing MBAs and other professionals
113

Business schools struggle with leadership. They all have ideas and theories about leadership, but find it very difficult to teach. That is not because business schools are defective, but because leadership cannot be taught in the classroom. MBA courses excel at transferring bodies of explicit knowledge: these are know-what skills like finance and accounting. Business schools cannot teach tacit knowledge or know-how skills like leadership. Know-how skills are typically learned from experience.

The purpose of this chapter is not to transform you into a great leader within 20 pages of brilliant prose. The goal is humbler: to show what challenges leaders normally face inside the firm, and how you can better deal with them. There are consistent patterns of failure and success, and it pays to know what they are in advance.

Just because you have been given a position of power does not mean you are in power. Even at CEO level, there a plenty of people who have the title but they are not leading: they are simply administrators of a legacy that they inherited from the last executive. This is your challenge: make sure you are in control.

Follow four steps to take control:

1. Have a plan.
A good plan, or a vision if you want to be grand, is a story in four parts which you should be able to communicate in 40 seconds or less.

a.
“This is where we are.”

b.
“This is where we are going (and how it will be different from the past).”

c.
“This is how we will get there.” This part will be sketchy to start with, and will become clearer and more detailed over time. Do not wait for all the detail to be clear before announcing the overall direction: you will never make any progress.

d.
“This is your really important and worthwhile role in helping us get there.” Make your plan personal to each person you speak to, and be clear about how they can help. This is motivating for your staff and gives clarity to your colleagues.