Archive for May 2016 »

Why less stringent rules and less managing produce more innovation?

We all like to live and work in well established and organized environments. That is history of humans for last thousands of years. But, change started with emerging of individualism in England and later in other countries (as USA) something interesting happened. In many countries people started being more and more innovative because innovation was connected to their interests and that was to improve living conditions. Today’s wealth of top countries is based on that freedom and individualism.

In everyday business we see a diverse company management styles, but one that is distinctive is combination of lean business and promotion of innovation. You would say: distinctive in what? In output, in company value gains. To be big or to be small doesn’t need to have any impact on company health and future. The problem is because larger company is, it has more and more strict rules about every detail of business. But it doesn’t need to be the case. There are positive examples that have less waste than counterparts (Google, etc).

Rules are definitely welcome, but we have to be really careful not to overdo them. Businesses are trying to make perfect system where great rules and regulations make people irrelevant so everyone is replaceable. In real life, that doesn’t work. We have science supporting that, and even it is clearly visible by watching successful companies. Greatest companies are successful because they have successful and great individual innovators that have a vision and know what is the right path to achieve goals. For example, Steve Jobs return to apple rejuvenated that company and after he left, Apple has similar problems as before even it is much wealthier company. That is why clever businesses keep their innovators as “golden geese”.

Great managers have to nurture intelligent individuals that like to try new things, that think about solutions without dogmas learned in schools. For that reason, my experience as a manager in the university taught me to hire interns and people not too established. All of them became great IT professionals. They learned how to think freely and how to solve everyday issues. After working in the university, all of them became top tier IT professionals working for great international companies.

For that reason, if you start micromanaging people it will make them passive. Some companies hire more managers to “animate passive workers”, but that always fail. You have to promote a feeling of ownership and allow individuals to get cheers when something is good or to be responsible if something ended bad. Not to be understood wrong: you have to allow people to fail sometimes because without failures there are no innovations. I learned from one manager that you have to ask them: “what do you think?” before you say something. It is the same when you talk to a patient. Any opinion you say before patient says what he/she thinks only “pollutes” his/her opinion and removes some value from the conversation.

Do not hire people with only questions how they did something 10 years ago by focusing on technology. It is entirely irrelevant. In past experience you should research on person’s ideas, adaptability, critical thinking and problem solving ability. You are not hiring someone to solve your problems as 10 years ago, but to help your business to solve problems in the future. Especially knowing how dramatically technology changed only in the last few years.

In the future we do not know what technology we will have. Sometimes it is extremely hard even to predict. For now we see that open source, distributed computing, big data and high business responsiveness approaches are winning and for that reason ideas as NodeJS had great success. Also many others. Even some hard to change companies like corporate giant Microsoft did tremendous move forward with plans and architecture of new .Net Core by moving it to open source, opening C# and compiler to other IDEs and other servers then Microsoft. But how successful that will be, future will show.

Great individuals will make you successful as a manager. Do not even start thinking that you can be any good manager by yourself. Remember: manager is professional that manages resources in the name of owners. So, if you create great team of individuals and let them to be productive, it will return as a great success to you as their manager.

Remember, do not allow yourself to be caught in any dogma that will cut your ability to see the future clearly. Open your mind!

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How to Establish Waste Self-Trimming in Everyday Business?

Today I will try to analyze one of top problems in today’s business. It is inability to detect waste and I can assure you that there is waste in every company, in every process in everything. If you do an audit, you will not be able to see anything because of waste.

What is waste? Waste are unnecessary processes and procedures or unnecessary phases that don’t bring any value. Why that happens? Definitely not because that was an intention, but because generally there aren’t established processes detecting it. You will hear rarely that anyone is at all talking about it despite the fact that waste can easily kill any business.

Who is responsible for managing waste? As with everything, if management is responsible for managing of resources, the same management is responsible if those resources are managed improperly and if there is unnecessary spending. But that doesn’t end with management. Everyone has to be focused on trimming waste as a part of daily activities. Management has to encourage people to find waste and suggest optimization for existing processes.

How to detect that there is a problem? Just pick any meeting. If you don’t hear two sides and someone asking why we are adding something and after added asking to measure its value and update if needed you definitely have a waste. It is natural process that waste is created, so if you do not have anyone talking about process of self-trimming of business complexity and cutting of not needed pieces you will have more and more waste every day.

Because of waste, you have lean business philosophy originated from Toyota, but developed further by others. It is very attractive and helps modern companies to be focused on high-value business activities and to keep costs under control.

Lean philosophy demands discussion how to have “just enough” complexity and to actively work on keeping business productive. It asks everyone to be able to critically review processes.

For example, if there is a phase where someone signs some form before car in a production line can leave factory and after review that signature is given to 100% cars even if they are malfunctioning, that signature is a waste.

Other example would be if you have testing department that never finds a flaw in a product and really you never have issues that means you are overpaying production. Why? Because, generally, producing personnel is more expensive per hour than testing personnel. You always have to have workload spread to different departments and to have everyone working on their level of high-value activity.

Last example would be if you have two managers per employee. Why, because you are trying to better organize work. Why you need so many managers? Usual reason is when you have no trust on your senior professionals so effectively you are treating them as “entry-level”. This practice will bring many problems because managers are frequently not able to make professional decisions so they create enormous number of hours sitting in meetings for everyone. Those meetings are closely managed and guided so again value is lost. Members of the meeting are quiet and answer with “yes”, “no” and “maybe”. If you start telling someone what to do before you hear his opinion, you are losing the value of hearing unbiased opinion. How to detect this? You have very passive professionals and all activities are initiated by management which is not a good idea. And instead of actively working on getting professionals to be more involved you are trying to fix the problem with more managing.

Ok. Whose interest is to have low waste business? Primarily owner’s. Management will always inflate numbers to extremes because everyone wants to have larger budget and more employees to manage. To prevent that, owners have to connect well with top management, to share ideas with top management and also know how to measure performance and following of business goals. If owners are not able to do that, they have to add few very trusted board members that will represent owner’s interest and that will not have executive powers (to avoid conflict of interest). For the same reason it is not good idea to have Chairman and CEO in same person (if it is not the owner himself).

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