Technology

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Technology

“Men have become the tools of their tools”
Henry David Thoreau

Today in business we are confronted with a mass of technological innovation that has become increasingly more sophisticated, expensive and difficult to keep up with; iPhones, iPads, tablets, GPS and so on. We often we become so intoxicated with new technology – its speed, power, gadgetry and the potential to solve our business problems that we neglect to solve problems in a simple and cost effective way.

Have you heard of the story about NASA in the 1960s when the space astronauts found pens would not work in space? NASA spent tens of thousands of dollars to develop a space pen while the Russian cosmonauts used a pencil! This is actually an ‘urban myth’, however it illustrates the need to try and solve problems in a simple, practical and cost effective way. In the first Gulf War, the fleeing Iraqi army set fire to hundreds of oil wells creating an environmental disaster. Red Adair the famous Texan oil fire expert was called in by the Kuwaiti government to ‘solve’ the problem. The solution was a complex technique of explosives to remove the oxygen from the flames thereby putting out the flames. It was complex, costly and dangerous and would take many years to complete the task. Instead, a team of Bulgarians were contracted. Their solution was simple, practical and cost effective. Using large bulldozers being driven by men in fire resistant suits they covered the burning oil well heads with sand in a fraction of the time and cost compared to the solution as advocated by Red Adair.

So next time you are confronted with a problem or the latest technology – stop and think. Can the problem be solved simply and cost effectively without technology that can often be unnecessarily complicated and expensive?

Life Cycle

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Life Cycle

“All product categories have a specific life span called the product life cycle. Brands or products typically go through five stages of growth: development, introduction, growth, maturity and decline”

Yes, we all know about a product life cycles, just look at what car manufacturers do by redesigning car styles. Business leaders and business owners have a life cycle too! The issue is to know where you are in your career or business life cycle and to then plan and act accordingly.

CEOs of family businesses often have great difficulty in “letting go”. The issue is often an emotional one. Many business owners have invested so much time and money working long hours that they see stepping down as being “put out to pasture”. Ego, loss of self-worth, so called RDS (relevance deprivation syndrome – which retiring politicians claim they suffer from!) and perceived lifestyle all play a part.

Great leaders know when it’s time to pass the baton. We saw how John Howard, the former Prime Minister refused to hand over the leadership to Peter Costello. The result was a lost election in 2007, Costello leaving politics, Howard losing his seat (only the second prime minister to do so) and the Liberal party having 3 leaders in 3 years.

All businesses must have a succession plan. There are two types of succession plans; short term or emergency succession plans (the “what happens if you are hit by a bus?” scenario) and long term succession plans which protect your company’s culture, value and future. If you are a family owned business you owe it to your family, employees and customers to have a well planned and executed succession plan.

There is no greater satisfaction than mentoring and training a replacement successfully. If you do not plan for your succession then you have failed as a leader and have failed your business.

So know where you are in your career and business life cycle and start succession planning. It is not a sign of weakness but of strength and you will be recognised for it. I have seen too many companies suffer because there was not a well planned and executed succession plan.

Start planning now…

Problems

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Problems

“Insanity: doing the same thing over and over again and expecting different results”.

Albert Einstein

Many of us in business are confronted with problems;  whether it is the business failing, parts of the business not performing or relationships at work deteriorating. I suspect that you have agonised about the reasons for the problem.  These reasons are likely to be complex and there are probably no simple solutions.

However, the first step is to admit there is problem.  I have seen many leaders in business refusing to admit that there they have a problem, even though it is obvious to everybody around them (and often to themselves although they refuse to confront it). This problem can be due to ego, ignorance, incompetence or an unwillingness to face reality. It is highly unlikely to go away and is probably only going to get worse and become more complicated as staff and customers begin questioning your judgement and leadership.

Admitting that you have a problem either to yourself, your family or your staff is essential. The second step is critical.  This is where you either become a success or continue to fail to resolve the problem. The failing business person tries to justify the failure – it’s the market, it’s the internet and so on.

As a manager or business owner it is only a problem or a failure if it continues. Like the Albert Einstein quote above which implies we must change something to get the desired result, the status quo is not an option. Do not identify an external reason for the problem as this is a ‘cop out’. You are disowning the problem – ‘it’s the economy’, ‘it’s the high exchange rate’, ‘it’s poor staff’.

The key to success is to take a few steps that will not allow you to justify the problem. The first step is to take action, even if it is just one small step. Using personal fitness as an example, the hardest step in improving your fitness is putting on your gym gear. By taking the first step you are on the way to solving the problem. Momentum has now commenced and this will help solve other problems, both now and in the future.

There is no shame in recognising a problem or failure, providing you do something about it. Learning from mistakes is only common sense. That’s what good leaders do !

Measuring

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Measuring

“What gets measured gets done” – Peter Drucker

This is a great quote for business or life, if you want to achieve your objectives or improve performance. As the saying goes “If you can’t measure it, you can’t manage it”.

In business this means all areas from people, processes to performance. However in business it is important to identify the main ‘things’ that will ensure your business’ success. These are often called Key Performance Indicators – KPIs for those that wish to use 3 letter acronyms. I shy away from using so called management jargon as it is often pretentious, arrogant and only serves to complicate simple processes, ideas and concepts.

The identification of KPIs that drive the success of your business should not exceed 3 to 5 measures or benchmarks otherwise it becomes too complicated and difficult to maintain. KPIs need to be SMART :

  1. SPECIFIC – must be clear and concise so that everybody understands it
  2. MEASURABLE – must be based on performance or behaviour that can be measured objectively
  3. ACHEIVABLE – must be attainable and what is required
  4. REALISTIC – must be a goal that can be realistically achieved and should represent significant progress from the status quo
  5. TIMELY – a goal must have time line to be achieved (e.g. by a certain date)

If we use a transport business for example, a KPI could be the number of kilometres travelled per truck per week to ensure an acceptable return on investment. It could look something like this :

By 30th June, the average kilometres travelled per week must be 8,000 kilometres per week. Currently the average is 5,000 kilometres per week.

  1. SPECIFIC – 8,000 kilometres per week
  2. MEASURABLE – kilometres per week is measurable objectively on a weekly basis
  3. ACHEIVABLE – 8,000 kilometres per week is achievable if the truck works 2 shifts per day and/or 6 days per week
  4. REALISTIC – it is realistic and is greater than the status quo of 5,000 kilometres per week
  5. TIMELY – must be achieved by 30th June

By implementing this KPI, performance can be measured on a weekly basis and compared week by week. The weekly KPI can be used to implement a plan of action to achieve the required objectives.

In conclusion, using SMART indicators your business objectives can be achieved providing you act on the KPIs to ensure you meet the required objectives. With no objective measurement system in place and no management then the status quo will remain and more than likely performance will deteriorate. So determine the key drivers of your business, start measuring them so you can improve your business’ performance.