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May 2013

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The Undermining of Management

A major challenge experienced by managers and key employees, is the undermining of their positions and actions by their superiors (whether senior management or the business owner).  This can be deliberate or completely unintentional but the fact is, if managers were empowered in their work, with superiors being clear, concise, trusting  and direct in their instructions, the workplace would be a lot healthier than it currently is. 

Situations I've come across include:
  • a manager acts responsibly according to what’s expected of them, only to find out later that their superior has acted on the same issue, told the relevant parties to disregard the managers directions and to do it their way
  • a manager takes personal responsibility for a situation and initiates change,  only to find out that it wasn't acceptable with no direct communication from senior management about the issue
  • a key employee is accountable for certain roles, responsibilities and performance measures,  but it always seems that others cross over into their territory, muddying the waters. When addressed, senior management are vague, say they’ll look at the situation or just let them know “this is how it is.”
  • a person is promoted to a management position with a verbal job description only. They become frustrated, their superiors are frustrated but nothing is done to rectify the situation with the superior hoping that the recently appointed manager will resign. Silently undermined!
A few things to consider

For senior managers and business owners. 
  • Take time with your key people to discuss the issues at hand. Learn to listen to them
  • When you delegate responsibility take your hands off unless you've agreed prior. TRUST
  • Welcome failure. If a manager initiates a project and they fail, at least you have someone who is thinking and is exercising leadership, not just merely following the pack. Take time with them after the failure and discuss better ways to mitigate disaster next time.
  • Praise. Nothing goes down better than a dose of ‘well done’. Your people need to know that what they are doing counts. 
  • Accountability. You might have annual performance reviews in place, but bring these down to monthly or quarterly, even if a simplified version. Keeps everyone on their toes.
For managers and key employees
  • Ensure you have a very clear position description with corresponding performance measures. This way you will know exactly what is objectively expected of you.
  • Ascertain what the subjective expectations of management are. These are often more powerful than anything written
  • Meet the expectations
  • Always work at having open lines of communication
  • Address openly the fact that management undermined you, when and if it happens. Are they teachable? Do they see your point? Have they owned the fact that they could have done better?
  • Choose to stay or go. Sometimes its best just to leave the situation and find another job
The undermining of key people by senior management and business owners, serves to slow an organisations rate of change and increase the unhappiness factor with corresponding attrition rates. When key people know they are supported, communication is transparent with strong decisive leadership, a business culture and its results speak for themselves.

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Financial Performance
QUICK Turnarounds 

Increasing workers productivity, invoicing outputs, achieving 'loss to profit' turnarounds and a number of other areas that affect bottom line results, is best done by establishing a system of data input and the corresponding reporting and analysis from short term periods. This could be daily or weekly. It’s one thing to have a beautifully bound business plan outlining the strategic design of turnaround and output goals but without shortened periods of analysis, where you get the opportunity to drive ‘just in time’ changes, it will take forever to achieve key results.

Case Studies

A trade based firm I consulted too, implemented this shortened period analysis. Turnaround from an annual loss of $380,000 to break-even occurred within a six month period as the business owner and managers drove change through shortened period analysis

An accounting firm conducted key area analysis on a weekly basis. From what the data was revealing, they were able to make these 'just in time' changes. 237% nett profit increase over seven months from taking the time to input data, analyse results and take the required action. And all this with the current workload; no marketing, increased sales or revenue increases.

It takes time and effort to measure the current output status in selected areas but you can see from the above studies, it is well worth the effort.

A final note on cashflow. As I mentioned above, cashflow and profitability is often a surface indicator of deeper issues. Many think that if they increase sales it will result in better cashflow. Yes, partly true, however, many companies experience such low outputs in key areas that correcting these will correct cashflow and profitability automatically.

Good luck!

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Efficient Process
A Process for Problem solving

Problems are a deviation from a standard, complications impeding the path of progress. As business owners and managers, our days can largely be spent simply putting out fires and dealing with the ongoing issues of running a business. Getting to the core of a problem, getting there quickly and selecting and implementing the best method of corrective action is an absolute necessity.

Here is a simple process for problem solving to get to the bottom of things quickly.
  1. What are the problems and issues being experienced?
  2. Immediacy Factor. Categorise the problems into urgent and non urgent 
  3. Define the boundaries that the problems are related to eg.  Invoicing section of administration  
  4. What are the possible causes?
  5. What is the most likely cause?
  6. What are the possible improvement actions?
  7. What is the most effective course of action?
Take for example the problem of a company losing money month after month

- unhappy customers
- customers going elsewhere
- staff don’t get on; constant infighting and unhappiness
- backlog of work
- inaccurate billings
- low productivity by workers

Immediacy Factor - Urgent vse Non Urgent
- backlog of work (if we fix this we will solve the unhappy customer issue and stop the attrition rate)
- inaccurate billings
- low productivity by workers
If we correct the backlog, billings and productivity issues we will return to profitability (the profitability model having been previously established)

Within workshop division 

Possible causes
- no coordinated approach to streamlining work operations
- the tradesman. A no care attitude and inaccurate with paperwork
- the division manager. Is re-active, has a  lot of time off, seems distracted, always has excuses

Most likely cause
If you take a look at the possible causes above it's pretty easy to see that if you dealt with number three – the division manager, the issues being currently experienced would begin the profitability turnaround. 

Possible actions for improvement correction
- train the manager 
- replace the manager
- streamline operations

Best action for improvement correction
Replace the manager

The above example demonstrates a deliberate drilling down from surface issues and problems to the most likely cause to setting a course of improvement actions. 

My observation in problem solving is that we spend inordinate amounts of time focusing on putting out the daily fires rather than going to the source. Find the fire-lighter and you stop the fire.

Note: this is a system I have used over the last few years and found to be very effective. I recently read  'The Rational Manager' by Kepner and Tregoe which has a similar process and is worth the read.

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The Cellar Notes
A simple quick meal that makes your friends think you know what you’re doing. 

Main Ingredients

Chicken Tenderloins
Fresh green beans
Fresh carrots

Marinate the chicken for a few hours in a blend of garlic, olive oil, fresh lime and lemon juice with a small amount of zest thrown in, chilli (small amount), fresh chopped basil, salt and pepper to taste.

Dice potatoes and saute using olive oil and a couple cloves of garlic. Once done, distribute onto dinner plates in a warm oven.

Fry the tenderloins. Make sure they are just cooked (nothing worse than dry chicken).

When the chicken is almost done, add the beans and finely cut carrots to a pot of boiling water, cooking just enough to remain crunchy.

Once the chicken is finished distribute to the warmed plates

Once the beans and carrots are done, throw them into the frying pan, still hot with the oil from the chicken, for about 30 seconds, just to coat them with the marinade and oil residue.

Take the plates out of the oven, add the carrots and beans, squeeze some lemon juice over the top and complete with some short stalks of basil on top of the chicken.

Wine to match would be any white wine with citrus notes. Riesling and Sauvignon Blanc work well.
On The Lighter Side
One of the things I love to do is watch live music. I meet some interesting characters. Last week, a woman walked past me, turned, looked at me and said “you’re a pretty boy aren’t you." Just wasn't quite sure how to take that!

In This Issue:
Ray Hodge is the Director of Ignite Business Consulting. He speaks and consults to businesses & organisations, a notable event being the Department of the Australian Prime Minister and Cabinet.

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“Working with Ray has been beneficial in helping us to effectively look at our business costs and analyse them so that we were able to break it down and really discard our inefficiencies. This has given us the confidence in our own budgeting and structure, that if we wish to expand further, we will do this with confidence; that our costs will be kept to a minimum and we will be using the most cost effective ways to expand but still minimise our overheads”. 

Annette Edwards:Red Soil Constructions

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