Thee Perf Th Perfect Pas Pass hat the manager can learn from the footb oot ball train trainee r
Ed Weenk Foreword by Carmelo Canales
1st edition: January 2013 © 2013 Marcus Eduard Weenk © 2013 Libros de Cabecera S.L. Rambla de Catalunya, 53, ático 08007 Barcel Barcelon onaa (Spain ( Spain)) www.librosdecabecera.com Without limiting the rights under copyright reserved above, no part of this publi publication cation may be repr reprodu oduced, ced, st stored ored in or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, phot photocopy ocopyiing, recor recordin ding g or other otherw wise) is e),, without the prior written permission of both both the copyri copyrig ght own owner and and th the above publi publish sher er of this book. book.
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Para Pau y Marc. Mar c. Seeing you run around pretendi pret ending ng you're you' re Mess Messii or Vict Vi ctor or is i s trul t rulyy touchi t ouching. ng.
Simple Simple is the most difficult. Johan Cruyff
They keep moving the cheese. Spencer Johnson, MD
For [t [the manager's] job job is is workvery hard, demanding, risk-taking work. And while there t here is plent plentyy of
laborsaving machinery around, no one has yet invented a "work-saving" machine, let alone alone a "think" think saving" savi ng" one. P eter et er F. Drucker Drucker
My defi def init nition of success is that' that'ss it's it' s not not about about wealth, ealt h, fame fame or power, it's it' s abou aboutt the number of shini shi ning ng eyes I
have around me. Ben Ben Zand Zandeer
About the quotes on the previous page: 1 A typical example of "Cruyffian": a famous linguistic style style existing in Dutch and Spanish, mastered and practiced principally by only one person person,, Joh Johan Cruy Cruyff, with witho out any do doubt on one of the best players and most visionary people in football history. 2 From: Spencer Johnson, "Who moved my cheese?", G . P. Putnam's Sons, 1998 3 From: Peter F. Drucker, "Managing for bu busin siness es s effec e ffecti tiv veness", eness", Harvard Busi Busin ness Review, May-June 1963 4 From: Ben Zander, principal conductor of the Boston Philharmonic Orchestra, in a TED-Talk in the TED-conference in February 2008 (see www.TED.com
Tab Table of con conte ten nts
Foreword About the book Let's play!
The trainer's big picture Prepare the season Prepare a game Game–time!
Analyse game and adjust the tactics
Building a football legacy: longterm view From the stadium's press room: epilogue Appendices
1. All reflecti eflection onss togeth ogether er 2. Compe Compettitive adva advan ntage, age, big big pict pic ture, re, ali alignment ent, coher coheren ence ce 3. Recom Recomm mended ded viewing
readin di ng
and
4. Sales & Operations Plannin (S&OP) 5. "Doin "Doi ng without thout doi doing" 6. Balanced Balanced Score Card
7. SMART SMART Indi Indica cator torss 8. Abou About the the author thor
Foreword
It is likely that some people with whom I shared my life with intensity in the past and who know my way of thinking may be surpr surpris ised ed to to fin find d me me as the the wri w ritter of the foreword to a book like this one written by Ed Weenk. In fact, when the idea idea of wri w ritting ing the foreword forew ord was proposed propos ed to to me, me, my my first ir st th thoug ought w as: what does a prologue writer like me do in a book like this? On the one hand, my professional experience of nearly thirty years as a
management consultant and my period as vice president of Athletic Club de Bilbao between 2001 and 2004, seem to put put me in in the rig righ ht condi condittions ions for for rel r elat atiing to a book which connects the world of football with the field of business management. And on top of this, I am also a founding partner of the publishing Bedsi de compan company y Libros bros de Cabecer Cabece ra (" ( " Bedside ooks"). So far, it all adds up. However, beyond these objective facts, the truth is that I have been, and still am after reading the book, very sceptical about the usefulness of using analogies betw between the worl w orlds ds of sport sports in i n gener eneral al and football in particular with the complex tasks involved in managing.
Well, in all honesty I think that in relation to my initial position of sceptic scepticiism, sm, Ed's Ed' s book repres epr esen entts the famous exception to the rule. The Perfect Pass is a management book based based on the heal healtthy foun oundation dationss of reflecting and questioning and it is an excellent tool for the manager who is willing to think in a structured and ambitious way about the challenges he or she is facing in their profession of making decisions in the field of business and enterprise. In the book there are about twenty reflections and almost seventy articulated questions about this thing that nowadays would be called a story about the reality of management,
and I think they are very good ammunition for those who are looking for continuous improvement in their work as manager. In short, I honestly believe that this is a Bedsi de Book , in the multiple great Bedside meaning of the term. It is a book that opens issues, rather than close them and I also think that it is one of those books that you keep near your desk just to review it from time to time, to reread a passag passagee or ref refresh resh cert cer tain ain ref reflect lection ions. s. It is true that after reading the book I'm still keeping a healthy scepticism about the use of analogies between sport and management. My first-hand experience with the management of sport
organizations and the world of management is profound enough not to have it changed on the basis of one fortunate exception. Overall I think most of the time people overly simplify things when they try to use sports challenges as navigation guide for facing the world of busi busin ness. ess. However, I think Ed gets the balance right. Using the parallelisms with the footbal ootballl coach succee succeeds ds in in democratizing the starting point for different readers and serves as a guiding line for the main story, and it doesn't actually limit the richness of it, nor does the comparison become too rigid. Moreover, the reader will find in the
pages pages of th the book more exam example pless and and references than which the world of sports by itself could offer. It is very very well ell possible possi ble that th the reader r eader may see somewhat idealized this figure of the trainer, who helps the author to articulate his message. In fact, I tend to think that not many coaches are part par ticu icularl arly excel excelle len nt in coveri cover ing the different aspects and elements that are reviewed in the book. Especially, I do not think that the long term view is an attribute about which you can learn a lot from them, in general. But I believe that even this little inconsistency in the analogy can lead to additional food for thought that may be valuable for the
curious reader. Please allow me to encourage anyone reading this prologue to add the book to their collection of preferred management readings; I think it is worth it. It has definitely made me reflect, it has helped me to structure my own introspection and, especially, reminded me that even the most ingrained prejudices can be challenged. If besides this, the reader is also fond of sports and football, the reading is going to be even more entertaining without losing a bit of its conceptual soundness. I have the feeling that those who choose to read the book of Ed Weenk will agree with me to catalogue it as one of their
Bedside Books because it offers encouragement and useful ideas, relevant to executing the tasks of managerial responsibility and to the mental gymnastics that all improvement requires.
Carmelo Canales Abaitua, (October 2012) Management Consultant and partner of Libros de Cabecera He was Vice President of the Athletic Club of Bilbao between 2001 and 2004
About the book
This is a book for and about managers and their fundamental role in a company. The The worl world d of football ootball will il l serve serve as an example. The book is based on my person personal al exper experie ien nce, not not only only from project proj ect work wor k and and in in-com -compan pany y trai raining ing with a wide variety of companies of very different sizes in a range of very different industry sectors in different countries, but also from classroom teaching and tutoring of final projects in EADA business school in Barcelona, Spain, with students of numerous
national ationaliities and and at at differ differen entt level levelss (Master's, MBA, Executive MBA). And as I have noticed in my work that my prac practtical cal exper experiiences ences,, idea i deass and and my my passi passion for the the fie field ld in which ich I work can actually be beneficial to others, I have decided to put some of those experiences and ideas on paper. I have done this in a similar way as I do in my work as a classroom instructor and freelance consultant; by putting things in a wider context and by asking many questions. Obviously, a book of this type should offer the reader something of value. The guiding principles that I have had in mind while writing are the following:
the book should expose a wide view, the big picture, it should be concise and of pract practiical use for man manag ager erss and and executives, it should be easy to understand and common-sense should be a cen central ral concept. concept. An And above all all: it shou shoulld in i nvit vite the reader eader to reflec r eflectt. As sai said, thi this is i s a book for and and abou aboutt manag anager erss and and thei theirr role ol e in com compan panies, es, using the world of football as an example to discuss some of the concepts I believe to be fundamental. Let me just brief bri eflly expl explai ain n w hy I have chosen chosen to use use football, because even though I have always enjoyed following and watching football to a certain modest extent, I wouldn't consider myself an expert, nor
an absolute football freak. However, I cannot deny that since I live in Barcelona, some serious degree of football fever has also touched me and found its place in my own daily life. Besides this, seeing the impact that football has in society in general and people' peopl e'ss behavi behaviou ourr in i n part particula cular, r, I th think it's fair to say that football surely is a phen phenom omen enon on that larg largee nu numbers bers of people people clear cl earlly do rel relate ate to. to. More Moreover over,, most of us also have very clear opinions on the subject. So, when thinking about which form to choose for the book, I came to the conclusion that using some of the commonly known elements of football
coul could provi pr ovide de a sim si mple and and understandable basis for the topics I want to touch upon. In this book, I will use the world of football as sort of a metaphor for what happens in organisations. I say sort of a metaphor, since I wouldn't want ant to to clai cl aim m that th these ese two two wor w orllds are are in fact 100% identical. It would maybe be more more accura accuratte to to say that inst instead ead of a metaphor, I'll be using some analogies betw between footbal ootballl an and busi busin ness. ess. In In any any case, I have found the analogies to be useful for explaining some of the fundamental concepts that I will be talking about.
I am aware of the fact that I'm not the first one to use sports in general or football ootball in part par ticul cular as an exam exampl plee to be appli appl ied to to th the busi busin ness w orld. orl d. On One only has to look at some of the many con conferences ferences and trai tra ining prog progrramm ammes around the world, which are led by successful ex-athletes or sports trainers to know that there are many parallels betw between the tw tw o. How However ever,, most most of these examples turn around concepts like motivation, perseverance or team buil buildin ding g. An And sin si nce my my focus ocus is i s a bit bi t different, I have taken the liberty of using the same setting of sports, but applied in a slightly different way.
The title and scope of the book As said, I have chosen to use the world of football as a vehicle to discuss some concepts which I think are relevant for busi busin ness and and compet competiitiven iveness, ess, from from the perspective perspective an and role rol e th that the MANAGER has in this. In football terms, the final objective of a trainer would be make sure that his team successfully finishes the season, in terms of scoring goals and –of course- winning as many games as possible. Now, the far majority of the trainer's work is actually done before and after the games the team play plays, becau because se obviou obvi ousl sly y the tra train iner er
can't create these beautiful passes nor can he score the goals himself. It's the team that actually has to do this during the games, and the purpose of the trainer is to prepare each game in such a way with the team and all others involved, that the players can then do the job in the best possibl possiblee way w ay in the mom momen entts wh w hen that's asked from them, delivering those erfect passes passes. During the game, the trainer's influence is much more limited, focussing on monitoring the game's progre progress ss an and part par tici icipati pating with advice advice or changes when he thinks the cir ci rcum cumstances stances requi equire it. The analogy with the business world is that obviously the objective of a
busi busin ness is to to consi consist sten enttly score scor e goal goalss and win games, i.e. generate and deliver profitabl profitablee busi busin ness in a sustain sustainabl ablee way w ay,, now and in the future. And just as in football where the trainer isn't the one who creat crea tes passes passe s or scores scores goals, goals, in in busi busin ness the man manag ager er cann cannot do all al l the work by himself, that's precisely why he hires people into his company or team: so that they can be responsible for the execution of the work and the manager can focus on doing what his job-title actually says: managing. And to a large extent, this is done by prepar prepariing his people people in in the best possible possi ble way for them to be successful in creating busi busin ness opport opportunities, ities, wi winning ing new
deals or consistently delivering on the promis promise. e. Then Then duri durin ng execu executtion, on, th the task task of the manager should be to monitor and interject, but only if necessary. This, if the preparation has worked out well, should be significantly less often. So that's what the book will focus on: on the preparation of the "perfect game", in other words everything that's done leading up to the season, the preparation of each game, the practicing of the perf per fect pass. But But prepar preparat atio ion n also also inclu cl udes des post post-game ame eval evalu uation ation and and adjustments to the tactics, which basical basi callly is prepar prepariing for the the nex nextt game, ame, taking into consideration the things that have worked well and not so well
during the last game. Since in the end, the points for the championship are in fact won on the field during the game, I obviously cannot leave this part out and will not do so. But for the aforementioned reasons, the focus will be on the preparation of the perf per fect gam gamee and and of those perfect perfect passes, passes, which is where I think the influence of the trainer, i.e. manager, is greatest. Something similar goes for the long-term view view,, the the char character acteriistics stics that tr true "football dynasties" have and the secrets behi behind th their ei r lon l ong g-term succes success. s. I will il l say something about this at the end of the book, book, because because it i t's an int interestin eresting g aspect aspect we cannot forget about.
I think there's a lot that managers can learn about the way their own companies and teams function, by looking at some of the fundamental aspects we see in a football club and the team on the field out to beat the opponent. Therefore, by using these analogies in the book, I want to invite managers and students in the process process of becomin becoming g manag anager erss to to ref re flect and think about their respective busi busin nesses. esses.
The ce cent ntrral concep concepts ts Clearly one of the central concepts that any company and every manager deals
with dire direct ctlly or indire direct ctlly is cre creat atiing competiti tive ve advantage, advantage, and maintaining competi which for me can be captured in the following three questions: What is my promise to my clients ("what")? What should I be particularly good at to make this promise come true consistently, day-in day-out ("how")? Why do the answers to these two questions form a winning combination, or in other words: why am I different/better at this than my competitors?
The The term er m "compe "compettitive adva advan ntage" age" itsel self already implies that whatever a company does, the results always have to be put into the perspective of what the competition is doing. Therefore we normally speak of the objective to create competitive advantage, hopefully in a sustainable way, i.e. for the long-term. And I think it's important to recognize that achieving competitive advantage is not so much a matter of desperately seeking the magical solution. o, to get to this sustainable competitive advantage is much more a matter of a lot of consistent, hard and dedicated work. But even hard work is not enough, in addition to this it needs to be embedded
in a wider w ider view, view , th the big picture. Call Call it it vision, strategy, road-map or whatever, the important point is that it's there, visible and understood, so that the hard work of all goes in one and the same direction. For me this would then manifest itself in internal alignment betw between indi individu vidual alss and and betw between depa deparrtmen tments, ts, and and coherence of organisational structure, competencies and and decis dec ision ionss taken taken at all levels. evel s. Obviously, with me being a practitioner and teacher in the Operations, Logistics and Supply Chain area, one of my main person personal al concer concern ns is i s to to see how a company's operations fit in with the big strategi strategic pi pictur cture. To wh w hich I woul would li l ike
to add, that I normally tend to use a very wide definition of what operations are. Having said that, the experience from my pract practiice leads l eads me me to to beli bel ieve that that students, middle management as well as executives in many companies seem to frequently struggle with or forget about the big picture of their companies or departments. Many of them focus way too much on details of all kinds. By no means am I saying that we should forget about the details. On the contrary: as any pract practiitioner ioner has su surely rely exper experie ien nced (an ( and d suffered), it is almost always the case that in real life the devil is in these same details, so they certainly can not be ignored.
However, it doesn't make a lot of sense to enter too much into the details without irst understanding understanding or remembering that these ese detail detailss take ake place place within a big bigger context and then making sure that this big pict pic ture is clear cl ear.. On Only then movin oving on to make sure that the details actually fit in in the best possible way and that they brin bri ng us closer cl oser to wh where ere we w e wan w antt to go. go. Although the saying that someone "can't see the forest for the trees" is normally used for situations of desperation and a feeling of being lost, I actually think that it also holds for people who don't necessarily feel lost between the trees, but but sti still fail ail to see the the fore forest st.. So this book has been written as an aid
to those those who are are interes er estted in reflect eflecting on the question of whether besides seeing all of those beautiful (or maybe not so beautiful) trees, they also maintai the view on the forest. The perspective throughout the book is that of the manager , the one responsible for constantly making decisions and ensuring that his people's actions go in the right direction to reach the company's or department's objectives. Although for the purpose of the book, I'd rather stay away from theory, I'd like to refer to some relevant pieces of it, since they might provide a simple point of reference to illustrate my main topics
here. I'd specifically like to mention here the frameworks that have been developed by Michael Porter since the 1980's around competitiveness , alignment and and big picture, such as the value chain and the famous 5- force forcess model of competition in a sector. More about these concepts can be found in Appendix 1. Eventually, a short comment on "competition". Although I'm well aware that it's certainly not true for all companies in all sectors, this book mainly concerns companies that have serious competitive pressures to take into account and therefore have to find ways to fight those competitive
pressu pressure ress by cont continu inuousl ously y improvi improvin ng and/or innovating. Again, in the football analogy, we are not interested in the competition where there is one dominating team that can more or less do whatever it likes without being in danger of letting the championship escape. Instead we take the view of a very competitive league in which there are many potential title candidates.
Objectives of the book In a few words, the objective of the book is to provide provi de some some sim si mple and and easy easy to understand reflections that anyone in an organisation can apply in a
reasonably short timeframe, allowing them quickly to get a good understanding of the big picture of an organisation and the direction it wants to go. Having established this broader vision, we can then evaluate if it's actually fit for getting there in the best possible way, in terms of in intern er nal alignment and and coherence of people, people, in i nfrastru rastruct ctu ure and and process processes. es. After making these reflections, the manager should have a clear view on the status of his company and a good basis for setting priorities and defining concr concrete ete action actions. s. hy a book with reflections instead of solutions?
Instead stead of offer offeriing reflectio eflection ns, why haven't I chosen to offer clear-cut and simple solutions? First Fir st of all al l, let l et me me qu quote ote Pet Peter F. Drucker, in his classic article on Managing for Business Effectiveness: "I do not propose p ropose here a full-blown [theory] if only o nly because because I have none to giv g ivee. Even le l ess d o I inte in ten n d to t o pre p rese sen nt a magic ag ic formula fo rmula,, a "che "checcklist kl ist"" or "proc pro cedure" edu re" whic which h will do the th e job jo b for fo r the th e manager ana ger.. For his h is job is work – – very hard, demanding, demandin g, risk-taking risk-takin g work. And while there is plenty plen ty of labour-saving labo ur-saving machinery achinery around, aroun d, no-one no-on e has yet ye t invented a "work sav sa ving in g" ma mach ine in e, let le t alo a lon ne a "thin "th inkk sav sa ving in g" one on e."
I couldn't agree more, so I will also not offer this full-blown solution toolbox here er e for the sam same reaso eason ns. Better Better than that, is to offer the invitation to reflect upon one's activities and company, i.e. to think . Therefore, the book provides a number of questions to help structure this reflection. And why the emphasis on reflection? Well, I believe that the best basis for designing, and deciding on adequate solu sol utions, ons, is a very ver y clear cl ear understan der standi din ng of the problem. And for me that starts with the big picture. Establishing this from a general vision, as complete as possibl possi blee with w ithin in the avail avai lable able tim timef efra ram me, is in my opinion much more useful than
trying to take a shortcut and going straight to the toolbox, looking for a specific solution. The big picture allows one to put things into perspective and set priori pri oritties. ies. And besides, had I focussed on sol solutions, ons, the book book woul ould mos mostt lik li kely el y never have been concise. For whom?
The book is intended to be of practical use for General Managers, Management Team members, department heads, as well as students in Masters and (Executive) MBA-programmes, for existing businesses, as well as new
companies in business-planning stage, for industrial, as well as service environments.
Let's play!
The tra trainer iner's 's big picture
As anyone with only the slightest insight into football and a reasonably objective view on things would agree upon, the perf per fect foot footbal balll clu club does not not exi exist, st, ju just as the per perffect ect compan company y also al so probab probablly does not exist, however successful they might be. Some die-hard fans might argue that their clubs come close to the "ideal "ideal"" dur during some some peri per iods in their ei r history, but this of course supposes that such an objective ideal exists, which can
be doubt doubted ed for for man many y reason reasons. s. In any case I believe that based on the analogies from the football world put forward orw ard below, below , any any reader would ould be able to come up with examples of "good" "good" as well w ell as "bad" practice. Also, I think that the presented topics and reflections can be applied both to existing businesses in order to evaluate how well things are going, but at the same time can be relevant for planned strategic changes, like important adjustments in the company's value proposi propos ition or in i ntroduct roduction ion of new product product-m -mar ark ket combin combinat ation ions, s, or even starting up new enterprises. In the following chapters, a number of
aspects of a football trainer's "big pict pic ture" re" wil wi ll be descri described bed in i n more detail, from planning the strategy at the begi beginning of the season season down down to postgame evaluation and next-game prepar preparat ation ion.. The The diag diagra ram m below below will serve as a vehicle to explain the relevant busi busin ness concepts. concepts.
ote: the reader familiar with basic notions of quality management systems might recognize the k ey elemen elements ts of Deming's Deming's Qual Qua lity ity Cycle in the above ab ove image: ag e: Pl Plan – Do – Check Chec k – Act. Act. This This is is not no t a coinci c oinciden dence, ce, since I believe believe it is one on e of o f the basi ba sicc rinciples rinciples of manag an agem ement, ent, strategy strategy and a nd execut execu tion. on .
Prepare Prepare th thee sea season son
Pre-seas Pre- season on prepar preparat ation ion in footbal ootballl consists of many different elements. In this section, the following elements will be dealt deal t with: ith: 1. The The game plan: pl an: defining defining the the objectives and the ways to achieve them 2. How to beat beat the the com competiti petition on:: competencies & processes 3. Completing the team: having the
"right" mix of resources 4. On and around the field: creating the "right" environment Although there is obviously certain logic in the above sequence, it is good to bear in mind that it is not a path which only goes into one direction. In many instances the path is iterative and we might need to take a step back and reconsider before continuing with the next step. For instance, the case of reconsidering the strategy could start with analysing the core competencies that currently distinguish the company from the competition, to have a clear
understanding of the company's strengths. Or, to give another example, if completing the team is for some reason not feasible at this moment in time, then it might be perfect common sense to reconsider part of the game plan or redefine the tactical scheme.
1. The game plan: defining the objectives and the ways to achi achieve eve them One of the most important people in a football team is the trainer, normally accompanied by some assistants and working closely together with the
technical director. Together, this group is respon responsi sibl blee for ach achie ievi vin ng the desi desire red d results with the team. It's possible, in some clubs even probable, that the presi presiden dentt of the clu cl ub wil willl def de fine ine th the overall strategy, including not only the what , but also the how. In other cases, these decisions will be at the discretion of the technical staff. In any case, pre-season planning would include such decisions as "are we going to compete for all possible competitions or do we focus on one or more specific ones?", "what final position in the ranking do we want to achieve?", "what will our our play playiing phi philosoph osophy or play playiing style be?", "how can we draw the
maximum number of fans to our games and what do we think they expect?", etc. In fact, all very similar to "normal" busi busin ness plan plann ning ing decisi deci sion ons. s. In order to have a good starting point for all reflections that will follow in the book, book, I think it's worthw orthwhile brief bri eflly returning to the questions raised before in the introduction when talking about competitive advantage. Answering these three ques questtions ons qui quickl ckly and and on a fair ai rly high level at this stage should give a good poin poi nt of referen eference before divi divin ng into mor moree detail detail later on: on:
The starting point:
What is the basis of your competitive position, where does your competitive advantage come from?
Detai Detailled ques questtions: ons: What is the promise towards your clients ("what")? What are you particularly good at to fulfill the promise consistently, day-in day-out ("how")? Why do the answers to the previ previou ouss question questionss form a
winning combination, or in other words: why are yo different/better than your competitors? Also in the football world, one of the objectives would be to satisfy the club's customers. In terms of the customer perspective, perspective, we w e mi might want ant to distinguish two different views here. First there's the internal customer , which could for example be the presi presiden dentt, look looking for a profitabl profitablee (or (or at at least financially healthy football club) or for purely personal satisfaction or to generate a good international image of the club. Secondly, there's the external customer , in this case the fans, who
coul could be int interested erested in in titles, itles, a specific specific play playing ing sty style or the the max maxiimum number of stars on the field. The expectations that the trainer, his staf and the team build towards these two types of customers (call it "the promis promise"), e"), are are the equiva equivale len nt of what in busi busin ness cont context ext we call call the value roposition. Without going into too much detail on potential definitions of the term itself, I would like to highlight that normally the value proposition of a company includes, apart from the specific specific product product and/or and/or servi ser vice ce that that is offered, concepts like cost, quality, flexibility, and/or innovation, but always from the perspective of differentiation,
i.e. relative to the competition, meaning lower cost, higher quality, innovation leader, etc. The value proposition, to my mind, explains the mix of (unique) selling points, which make a customer choose to buy from you and not from our our com compet petitor. or. Again, since value proposition is above all a marketing concept, connected to related subjects such as product-market combi ombin nations, ations, mark ar ket se segmentation tation,, posit posi tioni ioning, prici pri cin ng, etc., etc., I' I'm not goin oing to elabor el aborate ate on it her here, e, excep exceptt for for underlining that the value proposition should be clearly defined, especially to members of your own organisation. And by clear clear I mean clear cl ear enou enoug gh that oth others ers
in the organisation find sufficient basis to work on their own part of ultimately delivering on the promise. Which brings us to the first reflection:
Reflection: To what extent do you consider your "promise" to the customers clear cle arly ly form f ormu ulate late d?
Questions that can help with the reflection:
Which words do you think would come to the mind of your customers when they hear your bran brand nam name? e? To what extent could people in your company who do not work in the marketing & sales area tell you what your value proposition proposition is? is ? To what extent do you think that the way your value propositio is formulated provides a good basis basi s for developi devel opin ng e.g. e.g. the operations strategy, the HRstrategy, etc.? Are there sufficient points of connection to link these partial strategies?
Please Plea se n o te: f o r the con co n ven ve n ience ien ce o f the rea re a d er a complete overview of all reflections and sup su p p o rting q u estion es tionss a s p rese re sen n ted thro thr o u g h o u t the book can be found f ound in Appendix Appendix 2)
2. How to beat the competition: competencies & processes After the objectives for the season have been defi defined and and it has has becom becomee clear cl ear what the targets are and which playing style will be used, it's time to define how to make it all happen. What is going to be the team's "secret" for beating the competition? And how can we make
sure that we have the organisation and tools to get there? Of course, in the end the final perf per forman ormance ce in i n which the gam games es wil w illl be be won or lost will be on the field. This is where ere passe passess sh s houl ould be perf perfect, wher wheree each each play player er shou shoulld do do wh w hat is expec expectted of them, and where we should score more goals than the opponent. But a trainer and his technical staff could of course also have the vision that a large part part of the gam games es wil w illl alr already eady be won w on before before the gam game, e, by put putting ing resou resourc rces es and tools to analysing competitors' play playing ing sty styles, les, tactical tactical patt pattern erns and and key key play players ers in i n order order to adapt the tactics tactics to every game's opponent. Or it could be
decided that part of the game will be won by having players physically prepar prepared ed in in the best best possibl possi blee way w ay,, facilitated by a staff of physicians and state-of-the-art equipment suited preci precisel sely y for the the ty type of prepar preparat ation ion that the trainer has in mind. We talk here about the mix of skills required to make the strategy work, from technical skills of the players on the field to the analytical or the medical skills of the supporting staff. And each of these skills can be one of the keys to the final success, depending on the route the trainer and his technical staff have set out to get there. Every trainer will have to decide which
mix of skills he needs and wants to apply in order to be successful with the team and consequently where the priori pri oritties ies wi w ill be put put and and in which ich resources there needs to be invested, either in time and/or money. In business terms, we talk here about competencies; these are the skills of the organisation and the people within it which make the difference between the company and its competitors. And this difference can be made in many ways.
Examples
Take for example a producer of fast
moving consumer goods like Unilever. One could argue that they differentiate themselves by having superior marketing skills for iden dentifyi tifying new new prod pr odu uct-m ct-mark ar ket combinations and best-in-class bran brandin ding. But But at the sam same ti time, th this is supported by great R&D in order to be able abl e to to mat match ch market-pull and and technology-push in the best possible way. In addition, the company puts extensive efforts into aligning their supply and demand, bringing the commercial and operational sides of the company together, supported by the appropriate level of information systems, and so on.
Or Toyota, who decide to compete o shorter time-to-market than anyone else, by having teams which can more rapidly convert market information into new designs. And by having a bett better pricepri ce-qu qual aliity rat ratio than the competition, by having superior manufacturing performance in terms o product productivi ivitty and and qual quality ity,, not not by necessarily have state-of-the-art manufacturing equipment, but by establishing a quality-oriented culture from top to bottom, focussing on continuous improvement of processes. Or, why not, take the restaurant around the corner which encourages return visits by having good quality
food, but also by having the competencies in-house to frequently change the menu or the ambience in the dining area or, to offer the flexibility to adapt to specific diets, and and all al l this at a very fair air price. pri ce. Or the company which, thinking from ong-tte rm pe rspe spe ct ctiive , decides a longdecides to to have superior skills in recruitment and extensive internal traineeships, career-development programmes, intern er nal academ academiies, es, et etc, all al l with the objective of capturing young talent and carefully guiding and training these staff to become future managers (in football terms, we can see this in the youth-training-systems of e.g. Ajax
and FC Barcelona's La Masía which consistently deliver new generations of talented players fully prepared in the club's dominant playing style and culture).
In the end, a difference can be made in many ways, the question of course is to be clear cl ear about about where ere a compan company y want ants to differentiate and how it actually makes it happen. And of course, there are many different competencies, and part part of them might be sim si milar lar for a poten potenttial ial com compet petitor. itor. The The im important portant thing ing is to understand that it's the mix or combination of competencies chosen to outperform the competition, which in the
end is what we're after. A good first step to get a clear view on the required competencies is to create a competency map, an overview of all organisational and individual skills required for delivering the value proposi propos ition and and differ differen enttiati ating from the competition.
Reflection: To what extent have you identified your critical competencies?
Questions that can help with the reflection: To what extent do you feel that you have a complete view on the competencies you and your organisation need in order to consistently fulfil the value proposition proposition?? In general, how do you want to distinguish yourself and your organisation from the competition? What does your value chain look like and i which areas are you different from (or: better than) the rest? What does your organisatio
need to do really well, i.e. which competencies are critical in order to differentiate from the competition and to capture and satisfy customers in a sustainable way, i.e. in the long term (resulting in lower costs and/or better quality and/or more flexibility and/or inn innovati ovative power pow er)? )? To what extent do you think that these critical competencies are currently well-developed and receiving the required management attention? To what extent do these critical competencies distinguish your
company from the competition at presen presentt? After defining the particular approach for how to beat the competition, by identifying the particular competencies at the heart of the differentiation, the trainer should go one level deeper in order to understand what's needed to get everything in place. In business terms we are talking here about the design of the business process processes, es, wh w hich ich form the core cor e of the critical competencies. On the one hand, prim pri mary ary process processes es can can be dist di stiinguish ished, referring to what happens on the field during the game. On the other hand there
are are the suppor supportting proce process sses es,, referr r eferriing to everything which is done around the field and in the offices to prepare everything in the best possible way before before the gam gamee tak takes es place. pl ace. This This woul ould also include the more strategic activities as discussed in this chapter on making a game plan and planning recruitment, to more tactical and operational activities such as preparing training sessions and materials or maintaining the field and stadium in perfect shape. Although in the end all activities and process process matt atter, er, and and non nonee can be lef leftt out out, especially when setting up a new structure, management time is normally limited. And in order to use this limited
time well, it makes sense to be really clear on which activities and processes are critical to the business so that attention and resources can be focussed there. In order to set priorities, a first step is to build a global map of activities and processes, such as the one in the image below, from a real life example in an order management and customer service environment.
On the basis of such a global mapping, an evaluation can be made about which of these processes are most critical for the company from the perspective of delivering the value proposition, the promis promisee it i t makes akes to th the mar mark ket. et. These These cri critical cal proce process sses es shou shoulld then then be at th the heart of management attention.
Reflection: To what extent have you ide ntifie d your your critical critical pr process oce ssee s and to what extent do you think thee se processe th oce ssess are are we ll prepared to support your value proposition?
Questions that can help with the reflection: To what extent do you feel that you have a complete vision o your business processes (global
process process map)? ap) ? In the light of your value proposition proposition,, to what ext extent ent do you feel you have clear which o the processes in the global process process map are are the most critical ones for the success o the company? To what extent do you feel that these processes in their current design are well-suited to support the value proposition? To what extent do you feel that these processes can be improved, for instance in terms of reducing their complexity (how many departments are
involved in each of these critical processes and can this number be reduced, how many steps are there within each o these critical processes and ca this number be reduced, etc.)? To what extent do you feel that these critical processes receive the adequate amount o management attention and resources?
3. Completing the team: having the "right" mix of resources
Once the strategic path and the playing style have been defined, the next logical step would be to have the "right" players on board in order to make it happen. Players who have the technical skills required for their positions, obviously, but but who also also fit fit in w ith the play playiing sty style we want to display, who have the attitude we would like to see, etc. Obviously, there are clearly many different playing styles, from the Italiansch school cat catenacc enacciio way w ay of play playing based based on great defence and capacity for quick counters to the other extreme of the Dut Dutchch-sch school styl style of total total football ootbal l which is of a more risk-taking and offensive nature. Is the dominant pattern
going to be 4-4-2, 4-3-3, or the more defensive 5-4-1? Each playing style has consequences for the mix of type of play players ers we w e shou shoulld look look for. Depending on our choice, we then need to look for mid-fielders and/or liberos. These are the players responsible for con consisten si stenttly crea cr eatting oppor opporttunities from which goals can be scored. In business terminology, this would be marketing & sales. But we also need a good keeper, defences & forwards: the players responsible first for build-up and then for making sure the goals get scored consistently. This would be supply and operations.
So we are planning the team for the new season, we know what our promise to the president and to the fans is, our value proposi propos ition is clear cl ear,, we w e kn know where ere we we want to go, how we want to get there and which playing style we want to show on the field. But since we normally don't start from scratch, before entering the market for new players it is of course important to understand the present status of the team, which players for whatever reason would want to or have to leave, which changes in playing style or system we foresee and consequently which potent potential pur purchas chases es woul ould be needed.
In business this happens in a very similar way and I believe it's useful to reflect upon the following:
Reflection: On the basis of your value proposition and your critical comp compe te ten ncie cie s, to t o what what e xten xte nt do you believe that your current staff can really contribute to the delivery of your value proposition?
Questions that can help with the
reflection: To what extent have you identified the critical positions in your organisation, in the light of your value proposition? To what extent do you feel that all key positions are staffed wit people peopl e best prepar prepared ed for the job? To what extent have you got a back-u back-up p plan plan in place place for these key positions? Which important gaps do yo see in terms of completeness o the team?
From this reflection we then understand the need for recruitment. But before going into that subject, I would like to make an important comment. After identifying potential gaps, we talk here about the "ideal" wish list, which of course could for many reasons be far off from the real possibilities a club or team has to invest in new players (or other resources, for that matter). This could be because because of lack of money oney,, eit ei ther cash cash or via external financing, or because of remaining amortisation of earlier investments which prevents new purc purch hases ases at th this mom momen entt. Similarly in business, I think it's important to be aware of such
limitations. And maybe not so much looking just at (lack of) financial flexi exibil bility, becau because se norm ormall al ly one one will find out very quickly if there's room to spend money or invest or not. But if that's indeed the situation, then it makes a lot of sense to take one step back and look internally to see if the newly defined strategy is still feasible, espe especi cial allly when consi consider deriing movin ovi ng into new strategic areas, changing value proposi propos ition, ion, product product mix or geog geogra raph phy y or similar drastic changes. There are plenty of examples in practice where companies had found the "perfect" balance between their value proposi propos ition, ion, product product-m -mar ark ket
combinations and their operations and supply chain to make it all happen, but when they tried to use the same operations for going into new areas or product products, s, fou foun nd out out the har hard d way w ay that their operations were simply not prepar prepared ed and and fit fit for for the the new new sit si tuati ation, on, because because of lack of flex lexibili ibi litty, lack lack of experience with the appropriate technologies or the new geography, etc. And in the worst cases, even their current successful and well-balanced busi busin ness w as jeopar j eopardi dised sed by tryi rying to do two very different things at the same time. So, make sure to evaluate the consequences of such strategic changes for the org organi anisat sation, on, espe especi cial allly when
money or other resources are scarce and the current organisation will have to support support both both stra strattegi egies in paralle paral lell (old (ol d & new). Identifying a new market opportunity is one thing, but being able to support it with the existing operations could be quite another. But back to the recruitment. In football, there is of course the whole post- and pre-s pre-season eason show show w e see every ever y year with lots of speculation about which players are supposedly going to move where, which I believe is mainly of entertainment value for the general publi public. c. However, However, the the recr recru uitment ent activity around football teams seems to be a very ver y well ell-devel -developed oped and and
specialised function, from the scouts that big clu clubs have have all al l over over the the worl w orld, d, to to th the technical director who is actively involved in spotting talented players who would fit in well in the team and the play playing ing syst system em.. How different from many other companies this is, especially many midand large-sized ones in which recruitment for most functions is almost exclusively positioned within a more gener eneral aliist HR depar departtment ent or out outsou sourced ced to generalist external companies. The department manager looking for additional staff will in many cases have to run the recruitment by HR, delivering his requ requir irem emen entts via vi a a job descr descriiptio ption n
and a profile of the "ideal" candidate and then leaving it up to others to do a pre-s pre-sel election ection while sti sticki cking to a standardised set of rules. Not to mention that in many cases your "recruitment case" would of course enter last in line, and for an HR employee it's probably difficult to assess the real urgency (aren't they all urgent?). A similar thing could happen when tur turning to a gener eneral aliist rec r ecrruitmen tmentt company, which for many (higher) management jobs is the case. In my own exper experie ien nce, espec especia iall lly y for more specific specific obs with a certain degree of specia speciali lisation sation or with a cert cer tain ain techn echnical ical component, the people doing the first
screening many times give me the impression that instead of basing decisions on the quality of the answers of the candidate, they base them mainly on the extent to which the candidate is interested in the particular job, or on very similar jobs that might already appear in the CV of the same candidate. Looking at the quality of questions that some of these people sometimes ask during first contacts and their intent to use sector- or job-specific terminology, supposedly taken from the original job profile, profile, give givess me me th the im impressi pression on that they are maybe not the ones in the best posit posi tion to real really ly judge dge th the candi candidat dates es they have on the telephone or in front of them.
In terms of recruitment my view is that the purpose of these processes is to minimise the following two risks: the risk of hiring the "wrong" candidate and the risk of denying the "perfect" candidate. This risk minimisation becomes becomes of cours coursee a dif di fferen erentt story if we already start the process off in the wrong way. Since it would be outside the scope of this book, I don't want to go into detail about the advantages and disadvantages of centralisation versus decentralisation of recruitment or the advantages and disadvantages of using external recruitment services, but given the importance of having the "right" people
on board and the complexity of finding these, especially for the more specific specialist functions, I think it would be fair to reflect upon the following:
Reflection: To what extent are the candidates for my key specialist functions recruited by people with a deep functional understanding about the job itself and the role it has within the big picture?
Please Plea se n o te: when wh en I talk ta lk a b o u t k ey spec sp ecialist ialist fu f u n ction ctio n s, this cou co u ld a lso includ inc ludee h igher igh er-lev -level el management functions of areas for which pra p ractica cticall exp e xper erien ience ce in som so me very ve ry spec sp ecif ific ic sub su b j ects ec ts is a b ig a d van va n tage. tag e.
Question to help with this reflection: To what extent is job-specific knowledge and/or experience presen presentt at the vari various ous cri critical ical stages of the search and select selection ion process?
4. On and around the field: creating the "right" environment
Obviously, just having the "right" play players ers on the payrol payroll, l, doesn doesn''t guaran aranttee any success. Maybe as important as having them on board, is it to create the environment in which they can prepare themselves in the best possible way. On the one hand we then talk about very tangible things like, sufficient fields to train on, a good quality of the grass on the fields in order to reduce the risk of injuries, the avai availabil abi lity of suf sufficien ci entt ball balls and and oth other trai raining ing mater ateriials, als, sufficient equipment of the appropriate type in the gym, etc. On the other hand, we then talk about more intangible things, like: is the phy physical si cal envi environ ronm ment ent gener enerat atin ing g the
"ambi "ambien ence ce"" in i n w hich th the play player ers, s, trainers and supporting staff feel comfortable, do they consider the play player' er's hom homee real reallly like ike hom homee wi w ith TVTVsets, billiards, games and the like. To what extent does the stadium or training site make them feel protected from the outside world (fans, press)? In the end, both the tangible and intang angible ble aspe aspects cts ment entioned oned above above have ave their roots in the physical environment. In a business context we would talk about the office building, the arch archiitect ectural aspec aspectts inside si de the bui buildin ding, ergonomics, as well as machinery, IT and and telec telecom omm municatio cation ns infras frastructu tructurre, the canteen, etc.
ow I'm not saying that every office should have its own authentic Italian espresso-bar, gym or large living roomstyle lounge as some companies in fact do. It should be within what can be reasonably expected in terms of costs and purpose, of course. And I even could agree to some extent with those who say that scarcity (of means or faci acilities) es) makes akes peopl people in i nvent ventive, but but I think one shouldn't push it too far: we would want to challenge our staff and not frustrate them. What we really look for here is to have everything from strategy down to execution to be as coherent as possible, and in my opinion facilities are in fact part of this, so I think it does make sense to do the
following reflection:
Reflection: To what extent do you think your operations infrastructure (offices, technology & systems) create the environment which is fit for enabling your people in the best possible way to comply with the promises you make to your clients?
Questions to help with this reflection:
To what extent do you consider that the physical design & infrastructure of the office actually supports the work that needs to be done in it (number of desks, amount of background noise from outside or colleagues, number of meeting rooms with adequate telecomfacilities, number of "project war-rooms" with large whiteboards and sufficient mark ar kers, er s, network etwor k speed, speed, etc.)? To what extent do you think that the way your offices or manufacturing plant look, reflects your value propositio
(for example, if you promise high quality products or a very high degree of efficiency to your clients, do your facilities look clean, well-organised. If yo offer a lot of creativity and a bit of "craziness", does your office also look a bit crazy)? To what extent do you have a clear view on whether people are happy with the environment in which they work? What have you done recently to help create the appropriate working climate (listened to staff complaints and/or suggestions, finally modernised
the canteen, placed some plants …)? And, did it work? Why not?
The next step So now we have the team complete and our stadium and surrounding facilities look exactly the way we think they should look. All set, then let's start prepar prepariing the fir first st gam game! e!
Prepa Preparre a game
As I suppose to be well-known, training in football is KEY. Of course, many of us tend to think that those too young, too rich football players have an easy life, working just a few hours some days a week and then for another 90+ minutes or so in the weekend. But if you see a really good team playing a really good game, it isn't that hard to imagine that there really would have to be a lot of disc disciipli plined and and har hard d wor w ork k behi behind the the scenes in order to make it all run like clockwork.
This would be in particular, training on consistency and reliability in the execution of the tactical schemes, watching individual players and letting them learn from their "mistakes", or helping them to adjust on details, letting play players ers exper experim imen entt with new thing ings and and come up with ideas. And do that again, and again, and again and again, until patt pattern erns and and rout routines ines becom bec omee li like second nature and ultimately the "perfect pass" pass" becomes becomes the the norm norm and and ideal ideally ly the team can do the job on its own during the game. In the next sections, we will distinguish the following elements of game prepar preparat ation ion::
1. Playing style and ambition level: expl explai ain ning objective obj ectivess 2. Showing the way: leadership and walking the talk 3. Train ai ning for the per perfect ect pass pass:: establ establiishing shing ali al ignment 4. Training on technique: skills & competencies 5. Training for consistency: reliable quality 6. Train ai ning for new patt pattern erns: innovation ovation
trick tri ckss
and
1. Playing style and ambiti mbition on level: l evel: ex e xplainin lain ing g objectives Before starting to work on the individual play players' ers' ski skills ll s and and th the requ requiired red standar standard d routines, the trainer would normally spend a quite significant amount of time explaining where he wants to go, how he thinks the team can get there, how every play player fits in and and wh w hat he hi himself sel f will do to make sure it will actually happen. All of this obviously based on the plan laid out during the pre-season prepar preparat ation ion.. He will be transmitting strategy and his
action plan, he will explain the vision behi behind it and and create create a sense sense of team team-spirit as well as belonging, feeling part of a bigger whole with a clear mission. In a football team, this transmission of strategy, vision as well as values is clea cl earrly a task ask of th the train ai ner, er , al althou thoug gh obviously his assistants, the technical director and even the president of the club should transmit the same message. In any case, the power of the message depends both on the messenger as well as on the way how it is delivered, in this I would like to stress the importance of the personal touch that the trainer brings to the table. How is this done in companies? Well,
many companies might have gone through the motions of defining a vision, creating a mission statement and putting their values on paper, but unfortunately, in many cases that's where it stays, on paper. paper . Wh Wheth ether stuck stuck on a wal w alll or bull bullet etiin board, board, publ publis ish hed on the in intran ranet or on page 2 of the annual report, it's still only paper. It seems that in (too) many occasions in practice these things are not taken very seriously, at least not by the ones ones that that they shou shoulld be aim ai med at: the employees. It strikes me when visiting companies, that in so few instances people actually seem to take pride pri de in i n their eir mis missi sion on stat statem emen entts or values. More frequently, they will say things like "ah, yeah, that's what we're
supposed supposed to be like", ike", "well "we ll,, it it's more more or less the same as any company" or similar comments. But if that's the case, then why bother investing such amounts of resources to define all of it? Or if in fact it's considered to be useful, why not make sure that these tools "come alive" somehow? In the end, vision, mission statement and values are tools which should serve a company to take it in the direction it wants to go, otherwise to me it seems a waste of time and money (and if we can't even convince our own staff of th the mes messa sag ges, es, it i t is even even less ess likely el y that we will convince customers with them). Maybe, just as the trainer in the
football team does, the manager in the company should bring in some personal touch in order to bring the message closer to the work floor. So, independent of whether you use vision & mission statements or other ways to transmit your vision, strategy and approach, I think it's fair to ask the following question:
Reflection: To what extent do you think your strategy, value proposition and critical competencies are clear to all of your staff and to what
extent do you think they understand that they themselves are also a vital part of getting there?
Questions to help do the reflections: To what extent do you have your strategy and value propositio publ publis ish hed expl explic iciitly? ly? To what extent do you think that your people are able to relate these strategic statements to the pract practic ical al issues ssues of their eir daily daily work?
To what extent do you think that the strategy is "alive" to your people peopl e (do you feel feel that they they are enthusiastic about it, do they share the vision)? What have you done recently to "spread the word" to your ow people people and and how how eff effective do yo yo think that has been? To what extent do you think your people peopl e underst derstan and d how their eir own activities fit in the big pict pic ture? re?
2. Showing the way:
leadership and walking the talk While I was writing this book, a column written by my EADA colleague Martín Vivancos was published in which he uses the innovative, passionate and at the same time very result-driven approach of former Barça-trainer Pep Guardiola as an example for managers. As ex explai pl ain ned before, before, the the focu ocus of th this book is not so mu much on these part particu icular lar aspects of the trainer's role, so I limit myself to highlighting some of the aspects discussed in the aforementioned article and which I think are spot-on.
Promoting the culture of effort ("I will not blame anyone for play playing a bad game, ame, but but I will il l certainly blame someone for not trying hard enough") Innovation in leading the tea and "walking the talk", using emotions as a key element to provoke provoke passi passion and and cont contagiou agiouss enthusiasm. Allowing the team to " go out there and enjoy! ". Remind the that they are there because in the end what they really love is to play play footbal ootballl. With respect to the last point,
unfortunately there are many working environments in which people who enter in the morning and smiling are the exception rather than the rule ("what's wrong with with you? how come come you're you' re so so happy?"). But I think it makes sense to remember that it's good that people enjoy themselves while they're at work. We all know that for a motivated person, an hour seems like five minutes and for a demotivated person five minutes seem like an hour. For the manager that means: try to make sure that people enjoy themselves at work. At the first company I worked for, the Dutch logistics operat operator or Nedll edlloyd, oyd, thi this was w as even part part of the corporate values: respect people, make money, have fun. Simple, but
effective. And very true. In the same line, and for another inspirational view on topics like vision, passi passion and and leader leadersh shiip, I woul ould lik likee to to invite the reader to watch a TEDTalk by Ben Zander, conductor of the Boston Philharmonic Orchestra (see www.TED.com for the video). Some statements by Ben Zander in his talk, which I think could be food for thought for any manager: "The conductor of an orchestra is the only one who doesn't make a sound" (i.e. (i.e. the manager in many cases isn't part of the action himself)
"[The leader] depends for his power on his his capabil capabi lity to make other people powerful" (i.e. inspire, give trust, create space for others to perfor well) "One of the characteristics of a leader is that he not doubt for one single moment the capacity of the ones he's leading to realise whatever he's dreaming. What would you think have happened if Martin Luther Luther King would have said: sai d: "I HAVE A DREAM,…I'm just not sure if they'll be up to it…""
"How can you know if you're success successfful? ul? My defi def init nition o success success is that it' s not about wealth, fame or power, it's about how many shining eyes have around me. And if I don't have shining eyes around me, I have to ask myself a question. And And the questi quest ion is: " Who am being, that my player's player' s eyes are are not not shining?" shining?" "
Some might now argue that football and classical music are of course not at all compar comparabl ablee with busi busin ness, ess, but but whi while for many aspects that might be true, in terms of leadership I'm not so sure that they're that different. In the end we talk about
people people and and how how to lead lead people. peopl e. It It's tru truee that you should lead artists and topathletes maybe in a different way than office or factory workers, but in the end we talk about very similar tools and conce concept ptss at wor work k.
Examples
I suppose that most people would know about the impact that a leader like Steve Jobs had on the people working at Apple (even when he was no longer actively involved in the day day-to-da o-day y busi busin ness) ess).. As ment entioned oned in an article in Business Week:
Googlle peopl peop le are happy hap py because beca use they they "at Goog can spend spen d 20% 2 0% of their ti time on their own wil wild ideas, dea s, at App Applle peop p eoplle are a re passi p assion onate ate because they can spend 120% of their time on Steve Jobs' ideas".
Or an example closer to home from my own experience some years ago in a large logistics operation, dedicated to one single customer and located next to their assembly plant. A very industri dustrial al envi envirronm onment ent to to start start wi with and well over 95% of a total of more than 500 people in the operation could be consi consider dered ed low low-s -sk killed ll ed blu bl ue coll col lar workers. The relationship with the client at that moment was very tense for a large and diverse number of reasons and this surely had an
enormous impact on the atmosphere in the operation itself. In order to reach some sort of breakthrough in the tense situation, both towards the client as well ell as int intern ernall ally, at Corpor Corporat atee Headquar Headquartters ers an import portant ant decisi deci sion on was taken and the site manager was replaced by a new person. And within only a few weeks' time the situation had changed drastically, at least internally. What happ happen ened ed?? Well el l, w herea er eass the previou previouss sit si te man manag ager er was mai main nly fighting the battle from within his own office, and mainly with the door closed, the new one realised that part of the problem might very well be in
the own operation, so he spent at least 2-3 hours a day on the work floor, talking to people, listening and maybe even more important, just being there, showing respect and showing that he felt responsible, walking the talk and, if necessary making tough decisions (interesting detail: the new guy didn't even speak the local language, but sti still he ach achieved to creat createe an impressi pressive ve cre credi dibil bility ity and and I would would say an even impressive cultural change in a very short period of time). Shining eyes in a very tough industrial environment.
Reflection: How many shining eyes do I have around me?
And in the case the answer is "well, not too many, really", then:
Reflection: Who am I being that the eyes of the people around me are not shining?
3. Training for the perfect pass: establishing alignment A key element in any attack on a football field is without a doubt the "pass": the connection between defence and midfi dfield eld or between between midfi dfield el d an and forw orwards. ar ds. Without out a pass, pas s, each each play player er would simply be obliged to cross the whole field with the ball by themselves, which would probably not be very feasible, nor very attractive to watch (maybe with the exception of some great runs like the ones we see from exceptional players like Lionel Messi). I would imagine that almost all readers would have at least one of those perfect
and historic passes in mind, moments of sheer beauty and genius, in some occasions even more beautiful than the goals that might have been scored after (remember that one from Arnold Mühren to Marco van Basten in the Euro cup final in 1988 between Russia and The etherlands? The goal is of course fantastic, probably even one of the most bril bri llian li antt ever, ever , but but look at the 1-t 1- touch ouch pass precedi precedin ng it... Or Or the the one one by Jan Wouters, again to Marco van Basten in the game before against Germany…) But of course, not all passes are perfect, far from it actually and that's where I would like to focus here. Because if a pass is too too lon long g or too short, short, or too too mu much
to the left or right, then most forwards might simply not reach it, chance gone, opportunity missed and back to defence. A great forward might be able to reach a pass which is off off, wh which ich might even lead him to score a nice or even beautiful goal. However, However , if if passes are consistently out of reach, it becomes very unlikely that even the greatest forward can keep the attacks alive and consistently score goals from impossible posit posi tions ions th throug roughout out a wh w hole match atch:: reaching these imperfect passes will simply wear him out sooner with the poten potenttial ial resu r esult lt of lat later on in the gam gamee not even reaching the simple ones anymore or, in extreme cases, having to be repl replaced. aced.
Similarly in business, many passes which were intended to create another opportunity are in fact out of reach. Think of the acceptance of an urgent customer order, which actually does not fit in with the current workload or timings and thus interfering with the actual production planning. Or the tender-response team who after a long selection process and under tremendous pressu pressure re beat th the compet competition ition and and won won a great 3-year contract which just happens to exceed critical elements the current capabilities, realistic cost expectations or standard specifications of the own operating units. In both cases: pass out of reach.
Or think of the sales department deciding to change the after-sales service packag packagee for for a cert cer tain ain produ product ct group roup and and launching a communication campaign to inform current customers about it. However, after starting the communication, the IT-consequences for the external call-centre appear to be more far-reaching than expected and to a certain extent even incompatible with the earlier situation: pass out of reach. ow, I'm not by any means trying to pick on the marketing and sales-people for making so many passes which are in fact out of reach. Although from the operational side of the company they're frequently blamed for it, I'm quite sure
that in most cases they're just trying to do the best they can: bringing new opportunities to the company. And also, we all know the examples of the forwards who only move an inch when the passes are in what they consider to be exactly exactly the rig righ ht place, place, or the forwar orw ards ds wh w ho, in i n spit spite of gre great at passes are consistently off-side. Or, for the busi busin ness equiva equivallent ent, don' don't we all al l kn know a "Dr. No" in our operations, who whatever the opportunity is, will always first highlight the problems it will cause, the huge amount of time it will take or the impressive budget he would need to get it done? But in the end, returning to Porter's value
chai chain n, both com commerci er cial al and and oper operation ationss are an integral part of the same set of prim pri mary ary activit activi ties ies of any any compan company y and and should then also act accordingly, moving in the same direction. So, what's needed to achieve this oh so useful and effective alignment? Well ell, ju just lik like the the basi bas ic pri pr inciple ciple of communication says that you need a sender sender an a nd a recei r eceiver ver in order establi establish sh contact, but that we also need to take into consideration some other char characteri acteristics stics of both both before before w e can can actually start talking about real communication, for instance mutual understanding as well as willingness to listen which allows for a meaningful
conversation, a "PERFECT PASS" invol involves ves both both sender sender and and recei r eceiver ver.. For example, a pass could seem perfect in terms of the midfielder creating an opportunity out of the blue and kicking the ball over the exact required distance with an adequate speed etc., but if the forward doesn't know how to handle it or he is just a bit too tired and therefore slow sl ow,, it it doesn' doesn't brin bring us an any close cl oserr to scor scoriing a goal goal.. So, not only do we need to look at the mid-fielder and the forward from a pure purelly posit posi tional onal perspec perspecttive, but but also also at their ei r indivi dividu dual al ski skills and and the the deg degrree to which they match "technically", as well as the shape they're in at a particular
moment (I would like to invite the interested reader look at some of the videos which can be found on YouTube with compi compillations ations of FC Bar Barce cellona' ona'ss Xavi Hernández, arguably one of the best midfiel midfielder derss curr curren enttly arou aroun nd, to to see the impact a perfect pass can have by creating new opportunities, how much visi vision on there ere is i s behi behind a sim si mple ple pas pass, s, that it by no means has to be technically spectacular all the time and also how he "matches" with his team-mates and how they find each other blindly). In fact, there are some very good examples around of how to achieve this "perfect pass", the good alignment, in busi busin ness. ess. Let Let me shar sharee some some of those
here, ere, wh w hich ich will il l hopefu opefully ll y serve ser ve as as an an inspiration. Although the examples are quite different in nature, they have some elements in common: first of all they share the vision that alignment is necessary and secondly that alignment starts by creating mutual understanding betw between the part par ties in i nvolved. volve d.
Examples
Two widely used examples of alignment are ZARA and WorldCo, two almost completely vertically integrated apparel retailers known for what nowadays is called "Fast Fashi Fashion". on". Thes Thesee compan companiies are are able abl e
to deliver new product from design to store in just a few weeks' time wherea ereass the typical pical competitor competitor woul ould be more more likel ikely y to need need som some mon montths to achieve the same. Apart from the required speed and flexibility in their manufacturing setup, which matches their ei r "comm "commerci er cial al prom promiise" se" very very well, these companies are masters of alignment, having established really tigh tight com comm municatio cation ns proc pr oces esse sess betw between in-st -store sales sal es st staff aff, tre tren ndspotter spotters, s, desig desi gners, ers, operat operation ionss people peopl e and logistics personnel. The The dif di fferen er ence ce with other other com compan panies lies to a large extent in the intensity, frequency and speed of these
communication links, besides the fact that these are above all personal contacts and not just data exchanged via systems. On a strategic level, it's about seeing alignment as a crucial element in the light of trying to be as competitive as possible, by which it simply becomes a matter of focus: understanding the importance and then giving it the priority it deserves. Because even in these companies consi consider dered ed to be best be st-i -in n-cl -class, ass, the the communications processes didn't occur just like that, no, it has started with the recognition of the strategic importance of it, followed by the decision to build it up, and then by a lot of hard work to further develop
and improve over time. Other examples, also to a certain extent institutionalised in processes or procedu procedure ress lik l ikee Sales Sales & Oper Operat atiions ons Planning (S&OP) can be found in companies like Procter & Gamble or Coca-Cola. The objective of S&OP prin pri ncipal cipally ly is to establish establi sh a struct structu ured red communication and decision making process process to ali align the supply supply side side of a company (sourcing, manufacturing) with the demand side of the company (sales, distribution), which part par ticu icularl larly y in the worl w orld d of ret retail ail, char charac actteri er ised sed by con continuous ous newew product product int introduct roductiions, ons, prom pr omot otion ions, s, etc. is one of the main keys to success.
Similar to the examples of Zara and WorldCo, S&OP is not a matter of technology and magic tools, even though advanced software might be applied to support the process. S&OP is mainly about people being brought together in order to align their individu dividual al areas areas of respon responsi sibil bility ity in a structured way. Again, the key is understanding the importance of brin bri nging ing the comm commerci ercial al and and th the operational worlds together and giving it the priority it deserves. Another example, from my own pract practiice, in i n this case cas e from from the worl w orld d of logistics services providers, in in part par ticu icular lar the the envi environ ronm ment ent of larg arge
deals with global manufacturers or distributors. I've lived through quite a number of th these ese suppl suppliierer-sel selection ection procedu procedure res, s, on both both sides sides of th the tabl tablee and although these processes by nature are a purely commercial affair, i.e. someone trying to sell their company's services to a potential buy buyer, er, th the cont content ent has a very very high degre degreee of pur purely el y techn echnical cal aspec aspectts. So, to start with, there is the natural "conf "conflict" bet between een the busi busin ness ess development or sales manager who wants everything to look nice and attractive for the potential customer and the logistics engineer who is normally somehow involved in the process process and and wh w ho, by char character, acter, could could
be more more likel ikely y to have have a cle c lear ar eye eye on many any potent potential obst obstacl acles. es. To make it a bit more complex, in many cases there could also be a wide range of operating units involved, namely those who would have to carry out the operations should the contract be won and the deal closed. They have yet another focus, because they in many cases are very concerned with covering their own costs and securing potential profits, as well as with the potentially risky (or let's say "very challenging") promises made by some sales-guy far away. An interesting potential time-bomb, unless it's done well. And there, the
good and the not so good can be easi easilly disti di stin nguished shed when compar compariing them from the perspective of the buy buyer. er. The The ones ones that that are are not not ali aligned are just not as well-prepared and coherent as the ones that are aligned.
So, how do the better ones create the bett better alig al ign nment ent? As a mat mattter of fact it' it's agai again n relative elativelly straig strai ghtforw orw ard ard an and certainly not rocket-science: it's by involving all stakeholders in the process process,, not not just just divid dividin ing g w ork and and throwing it over the fence to the next one. It's just not good enough to bring the engineer along for the final presentation, because because he' he'ss th the onl only one one wh w ho
understands the proposed design and the numbers. If he doesn't understand the selection process as such, the client's objectives in general or the people he will have in front of him in particular, it's less likely the design will be perf per fectly fit for the the cust custom omer er,, or that that he will do a great presentation, from the poin point of view view of convi convin ncin cing the customer. The same goes for the people repr epresen esentting the local ocal oper operating ating units. If they suddenly have to show up at some stage near the end of the process to "defend" an integral part of the solution without understanding the context or the dynamics of the selection process, or the
people peopl e in i n it, it's lik l ikel ely y they will il l sh s how up with the standard, non-customised country presentation. And that, obviously, will in most cases not give the potential customer a very warm feeling, because it's unlikely that in the 10 minutes before the meeting one would be able abl e to to capture capture the dyn dynamic amicss of the process process and and adapt th the story to th the specific setting. And customers can directly see through that, I can assure ou. ou. A more structured approach to the alignment is needed here, by meeting frequently, in person or virtually via teleconferences, videoconferences and/or virtual meeting rooms via
internet. So, once again, the key is in brin bri nging ing people people tog toget eth her, er, creatin creating ga common understanding. Each will still have thei theirr own own specia speciali litties, ies, ex expert pertise and work to do, for sure, but with the alignment there is an important additional dimension: the context of the work ork is now understood derstood by all al l, and and hopefully shared. And that normally makes the work much more effective: the pass will not be too too long long, not not too short, short, but but more likel ikely y be ju just perf perfect. In conclusion, internal alignment betw between people people and/ and/or or depar de parttment ents is is a key element of successful business and as said before alignment normally is not about high-tech stuff or magical tools,
but but in gener eneral al comes comes down dow n to har hard d work work of many people and good and clear communication between them which, as we saw already alr eady,, fir first st of all requir requires es a sender sender an a nd a recei r eceiver ver in order establi establish sh contact and on top of that also requires a mutual frame of reference as well as willingness to listen. In this respect, I think the following reflection is appropriate:
Reflection: To what extent do you consider your operations and marketing & sales sale s are are as to t o be be we ll-align -alignee d,
over the long-, medium- and short-term?
Ques Questtions ons to help el p with the reflectio eflection n: To what extent are structural communication mechanisms i place place betw between these departments and which of these are based on personal contact rather than emails or orders placed placed in i n the syst system em?? To what extent do you consider that structured, personalised alignment is in place with longterm perspective (e.g. 12-36
month horizon changes in value proposition proposition,, new product product-market combinations, etc.), medium-term horizon (e.g. 3-18 month new product introductions, promotional campaigns etc.) and short-ter horizon (e.g. 0-4 mont priori pri orittisation of specif speci fic orders orders)) in which joint solutions are developed or mutual agreement is achieved and where the "technical" fit between the promi promises in the mark arket and and operational capabilities are secured? To what extent are different
levels of the organisatio involved in these communications? Would you consider the focus of communication between the people peopl e of the differ differen entt departments to be problemoriented or solution-oriented? To what extent do you consider that people show the appropriate willingness to listen? When was the last time yo asked Marketing & Sales managers about what they think of Operations and Supply
Chain? And the other way around? To what extent did the answers make you feel comf comfort ortable? abl e? Reall Really? I'd like to make a small side-step here into the subject of incentives. Take the example of the forward who has a poten potenttial ial big bi g bonu bonus based based on the nu number of goals he scores during the season. As a consequence, he might on some occasions decide to go for the goal himself whereas maybe one of his teammates is in a much better position to score. So the individual financial incentive might introduce at some points a certain degree of "selfishness" in the play player' er's behavi behaviou our. r. For that is in the end end
what incentives are: tools to influence people' peopl e'ss behavi behaviou our, r, obviou obviousl sly y intended ended for them to go in what is considered the "right" direction. However, frequently poten potenttial ial in i nterf erferen erence ce with w ith the objectives objectives of others is not tracked. Similarly in business, in most organisations it is not very difficult to spot potential conflicts caused by almost "opposing" targets posed upon the different departments or department manag anager ers. s. For instance, stance, "total "total sal sales in Euros" as a target for the Sales Director could go directly against the Operations Director's target for "efficiency increase". The famous "end-of-themonth" or "end-of-the-quarter" effect is
a clear example of what happens in many organisations. Now, many companies have already acknowledged this phenomenon and have introduced certain global company-wide targets valid for each manager to go together with their ei r indivi dividu dual al objectiv obj ectives es into the the bonu bonus sch schemes. emes. And And in in itself itself it can be a good idea in order to try to establish a cert cer tain ain sense sense of global lobal respon responsi sibi bili litty beyon beyond d th the own ow n indivi individu dual al circ circle le of activities. However, I think that the application of these global targets only makes sense if at the same time there is some kind of plat pla tform for coll collabor aborat atio ion n where ere people peopl e feel part of where the "whole" is going,
and where they can actually exercise their ei r respon esponsi sibi billity. The The global targ ar gets should in fact provoke collaboration, or at least invite for collaboration to take place. place. Of cours coursee you you can make ake "bott "bottomomline profit" into a global target appearing in each individual manager's bonus scheme, hoping that the individual will then find ways of how to contribute from their own position. But if in reality they feel the objective to be very abstract in the sense of being very far away from their ei r real area ar ea of inf influence ence becau because se they don't have any place where they can go to define plans together with others who poten potenttiall ially y could could com comee up up with w ith "conflicting" actions even though with the same objective in mind, then the
target as such will probably in the end lose what it was introduced for: the power power of influen luenci cin ng people' people'ss behavi behaviou our r to make them go into the "right" direction. In my opinion, the aforementioned concept of Sales & Operations Planning (S&OP) provides a very useful framework to provoke such collaboration, with common global targets being part of it.
Reflection: To what extent do you consider that the bonus schemes in your
company stimulate collaboration or improve alignment?
Ques Questtions ons to help el p with the reflectio eflection n: To what extent are targets in the bonu bonus schem schemes es in your our compan company y individual or global? To what extent do you think that some of the individual targets promot promotee interests erests which ich are are opposed to targets of another individual? How do you believe that these potential conflicts manifest themselves in your company or ultimately in your
company's results? To what extent do you believe that the managers in your company consider the global targets in their bonus scheme to be rel related ated to their eir own own area area o influence? To what extent do you consider that managers would be encouraged by their targets to seek collaboration with their peers peer s in order order to coordi coordin nate ate betw between them? em? Talking about subjects like S&OP, collaboration, coordination and incentives, a business simulation that I
use in class with students and with Executives in In-Company training also comes to mind. The simulation is called The Fresh Connection and basically the objective is to turn a company back into profitabi profitabillity via coordin coordinat ated ed decisi deci sion onss betw between the 4 Vic Vicee-Pres Preside iden nts in i n the game: Sales, Operations, Purchasing and Supply Chain. Every time I do this with groups it is fascinating to see how easily part par ticipa icipan nts assu assum me key key concepts concepts lik li ke strategy, alignment, key performance indicators and incentives and how easily they forget these same concepts in the next round of play. The good thing of the game is of course that people, by living the experience, capture the enormous complexity of the situation and
understand in a much better way that in learning how to collaborate, you have to go step by step. One last comment on the sometimes (often?) difficult relationship between the commercial and operational sides of a company. I happen to think that a cer certain ai n deg degree of "hea "heallthy" tensi tension on betw between the comm commerci ercial al side side and and th the operational side of a company is actually very good. Instead of a very light or more severe form of adversity, the ideal would be to have a mutual stimulation or challenge. But that, in my experience, is not so much a matter of inst instiitutional ionalis ised ed process processes es or organisational structures, but much more
a matter of attitude, for example achieved by having people on board who, without forgetting about their own ob and expertise are open and respectful enough to also listen to the "other side". People who think in the best int interest erest of the wh w hole inst instead ead of fir first st looking at their individual interest, in other words team players over prima best fit fi t over best skilled skil led . Look donnas, best over best at the football world, which as we all know is full of examples of teams without prima donnas achieving great success as well as teams full of prima donnas not achieving anything. Which, in the end, has a lot to do with staff profiles profiles (re ( recr cru uitmen itmentt), at attitudes and and team-spirit. And these, as we have seen
before before,, are are in i n the end end th the respon responsi sibi bili litty of the trainer, i.e. the manager.
4. Training on technique: skil ki l ls & competenci competencies es Apart from the aforementioned training on passes, or connecting with the other play players, ers, ther theree mi might also also be a need need for some some pl player ayerss to train trai n indivi dividu dual allly in certain areas of improvement, either to get physically stronger or to work on receiving long passes, or even to become become more more versatil versatilee by train rainiing in different positions in the team. Similarly, in a business context, there
normally exists a training plan of some kind for the people in the different areas in the company. I don't want to go into too much detail here on the pros and cons of on-the-job training, job-rotation or in-company training versus external courses, but I do want to highlight that sim si milar lar to other other topics opics discu di scusse ssed d so far, ar, it is important for the manager to make sure that training adds value, especially in the case of functional or technical training (as opposed to sending people to training for more motivational reasons). From what I see around me in my pract practiice, I man many y times imes get get the feel feelin ing g that the benefits a company gets out of
cert cer tain ai n train ai ning is fair ai rly limited. I wouldn't say that it's only about spending the training budget for the sake of spending it or in order to keep the labour unions or the worker's council quiet, but I'm quite convinced that training events could be used in much more productive ways.
Reflection: To what extent do you think that the training your people have had has been beneficial for the company?
Ques Questtions ons to help el p with the reflectio eflection n: To what extent is there a clear relation between the courses people peopl e follow oll ow and and the fulfilm il ment ent of their part in delivering the company's value proposition? To what extent is training followed up by the manager of a person person who has att attended ended a course, in order to define specific actions in which the obtained knowledge, experience or skills can be directly applied?
5. Training for consistency: reli el i abl abl e qual qual i ty Training in defence and build-up of a new attack, training in execution of tactical schemes and passing to create new goal opportunities, from the sides, or right through the middle, training in "reading" and receiving passes and on the finishing touch, training to find each other "blindly", making sure that the connections between defence and midfield and from there to the forwards are really fluid and fast and suited for all kinds of different situations, depending on the opponent, the type of field or even the w eat eather. er .
In the end, it's really about practicing the play playing ing-sy -systems, stems, the the patter pattern ns, creatin cr eating g the routines, so that at the moment when it's needed during the game, everyone knows exactly what to do without hesitation and mistakes. And the difference in preparation between teams will quickly become evident, from the "all-balls–forward-and-let-the-attackerdo-something-brilliant" type of approach to the teams which at various moments during a game seem to simply but effectively switch to another "mode", adapting perfectly to the changed circumstances. So if it' it's -at - at least least part partiall ally- about about creating routine, in the positive sense of
the wor w ord, d, so without out th the possi possible ble association with boredom coming into play play, th then what can we lear learn n from this for business? How do we create good routine? Obviously, in business we can't rehearse 5 days a week for a few hours as a prepar preparat ation ion for the the 90+ min minu utes of perf per forman ormance ce on Satu Saturday rday or Sun Sunday evening, but there are certainly some other things we can do to make sure everything is in place and everyone knows what to do when it's needed; the ones giving the passes as well as the ones receiving them. On the very operational level, if we talk about securing established routines, one
thing that comes to mind quickly both in manufacturing context, as well as for office or service environments, is first o all process design as was discussed in the previous chapter and which also links clearly to the aforementioned issues of alignment and communication. Process design is then normally foll ollowed ow ed by some some sort sor t of qual qualiity procedu procedure res, s, proces processs descr description iptions, s, ISO ISO certifications and the like. I would like to make a few comments on these. First of all, that in this case I'm not referring to quality procedures with a legal requirement as a basis, which in some industri dustries es are ar e sim si mply ply a fact of lif li fe, such such as in the healthcare sector. I'm more concerned with the quality systems that
many companies have in place for reason easonss of qual qualiity assu assurrance ance,, i.e. i .e. for making sure that what works well once, can actually be maintained and repeated time and again with the same quality. When asked whether quality procedures and certificates are a means or an objective, most likely any manager will tell you that, yes indeed, these clearly are a means and not an objective in itself. Because obtaining the certificate ust for having the certificate will at best enable the company to enter certain biddin bidding g process processes es or pass cert cer tain ain cli client ent audits, but will in the end most likely not change much in the real operations, if it's not surrounded by a vision and culture
with a clear quality focus. Moreover, at best, it will il l then then be a bril br illi lian anttly documented archive, maybe even done by motiva otivatted qual quality ity-de -depar parttment ent staff staff or possibl possi bly y even a tra train inee, ee, but but it's unlikel ikely y that the impact will be significant. Sounds familiar? Indeed, so far no surprise, but to me the above almost seems seems lik l ikee a series seri es of politically political ly correct corr ect statements on quality, meant more to impress the listener than to really do anything. Because if we all agree so much on the fact that the quality systems as such are not the objective, but that they should actually help us getting somewhere we want to go, then why in so many companies is the quality system
still not much more than the not so enviable task of some people, keeping others from their work when they have to ask detailed questions about what they do, how they do it and how they archive everything. And some time later, these same people come back with yet another binder binder full of text ext and and flo flow wchar chartts, destined for a dusty future (unless someone very attentively hides it in a drawer somewhere). What a pity and what a waste of time and money. Even though football teams, as far as I know, don't have process descriptions other than the drawings of the trainer on the board, nor do they have ISO certificates, I do think for example that
well ell-docu -document ented process process descri descript ptiions ons certainly make sense too, and I quote from an email from a team member in a recent project in a call-centre service environment: "[Qua Quality li ty doc doc uments, ments , like like stand tandard oper operaating ti ng pro proccedures] re s] are useful se ful for: fo r:
Ensuring a commo understanding of processes (e.g. when discussing wit other departments). Establishing a basis for process process improvem provement ent (e.g (e.g.. i there are important deviations in one country organisatio compared to the "standard"
process process,, these docum document ents could be used as a basis for an impr improve ovem ment ent proj projec ectt). Giving a better picture of the activities related to transport, etc. to other stakeholders, e.g. […]". Refreshing knowledge for current agents, if needed. In other words, the quality documents instead of being archived are being actively used as tools for training, common understanding and process improvement. And additionally, if the quality ty champion champion preparing the internal quali documents has these purposes clearly in
mind when doing his work, he would also be in a better position to define the "right" level of detail in them which is somewhere between too high level and too extensive and detailed. Because then not only are typical factors like "completeness" or "correctness", which are maybe more aimed at the auditors that come by for certification purposes, taken into consideration. No, all of a sudden "practical usability by own staff" or "user "user-fri -frien endli dlin ness" ess" also al so become become critical factors for the document, which for sure sure will be of gre great at value value in in stim stimulatin ating thei theirr intern ternal use. se.
Reflection:
To what extent does your quality management system support your business and as such justify the efforts put into creating and maintaining it?
Ques Questtions ons to help el p with the reflectio eflection n: To what extent do you find direct links between your quality management system and your our valu val ue propos proposiition? on? To what degree do you think that the people involved in the quality management syste spend their time mainly o
generating documents? And to what degree on making sure that these documents are being used effectively? To what extent do you see departmental managers really interested and/or actively involved in the development, usage and/or maintenance of the quality management system? Why not? One One shor shortt wor word d abou aboutt audi auditts. Recen Rece ntly, when I was visiting a supplier to the automotive industry with a group of students, one of them asked the General Manager of this company how frequently they audited their suppliers. The
company was working to a great extent according to what could be considered the Toyota principles of management as formulated in the Toyota Production System (TPS), which by many is considered to be the example of best pract practiice in i n manu anufacturi acturin ng and and qual quality ity management. Apparently that had raised the impression that part of this way of working would be doing many supplier audits, in order to secure consistent supply of a high quality and not risking the low-inventory just-in-time phil philosoph osophy y. The answer was surprisingly simple and of delightful common-sense: "We don' do n'tt really do suppl su pplier ier audits. au dits. Of Of
course our se we we scree screen n them thorou tho roughly ghly befor b eforee they can can enter en ter into business bu siness with with us at all, but from that moment moment onwards we work work so closely together togethe r on a daily basis ba sis that doing specific specific and extensive audits would be a complet ompletee waste waste of o f time time and an d effort. effo rt. We'd e'd rather ra ther focus focus on o n making sure the daily d aily busines bus inesss with with them th em works works well, by foll fo llo o wing wing up u p an a n d so s olvin lv ing g qu q u a lity li ty o r delivery issues on the spot when when they occ occur (and (and not by b y just shouting at them the m and pushing p ushing the problem prob lem back back in their fie fi eld! ld !), an d if i f ne n ecessa ss ary with some so me impro improvement vement proje p rojecct launc lau nched hed.. In para p arallel llel there ther e is anothe an otherr platform platfo rm where her e we we can can discuss discuss the medium- and long-term long -term future futur e."
And And even even wi without out suppl suppliier audi auditts, this part par ticu icular compan company y is one one of the most most quality-oriented companies I have ever
seen: it's in the very veins of all staff, ou feel it when you walk around, you can smell it in the air. But for them, doing audits for the sake of doing audits is just not part of their vision, and I think they're right.
6. Training for new tricks and patterns: innovation In order to continuously make good progre progress ss an and chal challe len nge play pl ayer erss to keep keep developing new tricks and patterns, an important element in the work of any trainer is that during training he creates space for experimentation and play:
innovation and continuous improvement. Although any player will be playing wit a ball all the time, every day, just for the fun of it, in the end it's the trainer who deci decides to dedi dedica catte time time to th this in in a more structured way and for the benefit of the team, not just for the fun of the individual player, and embedding it in the global vision or linking it to the already existing patterns or the other play players. ers. For the people who might have the idea that innovation is something exclusively related to science, R&D or product development and that continuous improvement is something for the quality department and certainly not for the
people people on the work w ork floor for wh w hom it would only be an undesired interruption for being productive, let me share the following story, as explained to me during another recent company visit. " Fir First st of all a ll,, in the th e compan compa n y we all a ll ha h ave completely clear why we have hav e implemented implemented our quality qua lity manag managem ement ent philosophy philosop hy and approa app roacch to contin continuou uouss impro improvement: vement: we we are a manufac anu facturin turing g company company of o f industrial produc produ cts, located located in Spain, S pain, but pa p art o f a mult mu ltin ina a tio ti o na l co co n g lomer lo mera a te with simila si milarr pro p rod d u ctio ti on sit s itees all a ll ov o ver th the world wor ld.. This means that th at if we can cannot not demonstrate demonstra te that tha t we we con continuo tinuously usly cha challeng llengee our ou r own own pro p roccesse ss es an a nd ult u ltima imate tely ly,, co st an a nd qu q u a lity li ty levels, leve ls, whic which h is at the th e sam sa me time by the way also what our custom customers ers are looking for, we are giving g iving the top-manag top-managem ement ent at
Global loba l Head Head Quarters uar ters the th e perfec pe rfectt exc ex cuse of taking produc produ ction to another an other plac p lacee somewhe so mewhere re else ls e or o r we giv g ivee th t he custo cus tomer merss a go g oo d re r e ason so n to t o chan cha ng e to t o an a n othe th er sup su pp lie li er. When we started starte d with with the new n ew quality qu ality approac appro ach h approxim ap proximately ately 10 years ago, a go, it it was a revolution in our ou r way way of o f working working and looking lo oking at a t things, but because because everyone understood and agreed on the reasons reason s behind behin d the chang change, e, we have hav e managed ana ged to do it. By By the th e way, we' we're re not no t done yet even eve n after 10 1 0 years, yea rs, in fact fact we we all believe belie ve that we neve n everr will will be, it's it's a continuous ontinuo us effort, e ffort, we can can only go on and keep looking for more more improvements. improvements. Sometimes Sometimes you yo u won wonder der where on earth ear th we we will find new impro improvements vements after a fter so much uch scratchi scra tchin n g at a t the th e su s u rfa rf a ces alr a lree ad y do d one
over the th e past years. y ears. But But every year, year and again, again , we manag managee to improve yet another anoth er bit. And the key k ey is in the people. peo ple. Ev Eve ryo ry o ne is i s sti s timul mula a ted te d an a n d chall cha lleen ge d to to come ome up with new ideas and a nd people peop le really respond resp ond.. By the way, this is not no t becau because se of fin fi n a ncial ia l inc in cen tiv ti ve s, wh wh ich in fac fa ct we do d o n't use, but simply simply bec b ecause ause they feel the sha sh ared re d re r espo sp o n sib si bilit il ityy fo f or th the fu f u ture tu re of the th e pla p lan nt. An An d be b esid si d es do d o ing in g th t h eir da d a ily il y jo j o b in i n th the best bes t possible pos sible way, this is how h ow they can each each cont contribu ribute te to that th at objec ob jective. tive. And And they th ey fee fe e l pro p rou ud . Ba sed se d on o n in i nitia it iati tivve s fro fr o m o u r pe p eo ple in the th e fa f a ctory to ry,, lin li n e mana man a ge ment men t and/or and /or suppor sup porting ting staff sta ff (w (we aim at 3-5 improve improvem ment ideas idea s per employee employee per ye y e ar), we usu us u a lly ll y org o rga a nise is e so s o mewhere mewhe re between between 80 and 100 multi-disciplinary ulti-disciplinary impro improvement vement work worksho shops ps per year. yea r." "
I think the example shows that first of all, continuous improvement or innovation are not always about big step changes, but also about small incremental innovations in tools, process processes es or inf informat ormation ion flows. low s. Furthermore it shows that it's a subject that requires involvement at all levels, from the boss at the top right down to the factory floor and which is certainly not limited to the Quality Department. And last but not least, it works just better if the vision is shared by all, which, once agai again n, is i s easi easier er to ach achieve ieve if i f it' it's coh coher eren entt with the strategy and value proposition. And if it's led by a trainer who spreads the word and walks the talk.
Even though I find it one of the key areas of importance when thinking about the competitiveness of companies I will not dedicate much more space to this subject here, since there are many books dedicated to the subjects of innovation and continuous improvement and written by people people mu much bett better posit posi tioned oned to to do so than I am. I can especially recommend the articles and books written on the subject by my EADAcolleague Franc Ponti (such as the article "the 7 strategies of creativity", or his latest book "If it works, change it!"). What interests me from the perspective of my book is mainly how to make sure that innovation and continuous improvement fit in with or can be made
coherent with competitive strategy or the value proposition, for instance in the way that the company in the aforementioned example did. So I'll just finish this section here with the following reflection:
Reflection: To what extent do you stimulate new initiatives, innovation and continuous improvement throughout the whole organisation as part of your overall strategy?
Ques Questtions ons to help el p with the reflectio eflection n: To what extent are innovation and continuous improvement actively pursued in the company? To what extent can you say that everyone in the organisatio feels part of the responsibility for improving continuously (where did the majority of ideas come from and who followed up on them)? To what extent are you happy with the quantity and quality o improvement ideas that have been gener enerat ated ed duri durin ng the last last
year? To what extent have these improvement ideas brought yo any closer to reaching the company objectives? Why not?
The next step So, finally, we have put in a lot of effort in preparing ourselves for the game, the objectives are clear and so are the patt pattern erns and and rout routines ines that that we have have pract practiiced so so ext extensi ensivel vely y in our our train trai ning ing sessions and on top of this, we even have some new tricks up our sleeves.
We feel really confident now, so let the game begin!
Game-time!
The far majority of the trainer's work is actually done before and after the games the team plays, because obviously the train ai ner can can't create create thes thesee beau beautiful passe passess nor can he score the goals himself. It's the team that actually has to do this during the games, and the purpose of the trainer is to prepare each game in such a way with the team and all others involved, that the players can then do the ob in the best possible way during the game. During the game, the trainer's influence is much more limited,
focussing on monitoring the game's progre progress ss an and cont contribu ri butting ing with advice advice or changes when he thinks the cir ci rcum cumstances stances requi equire it. Of course, if perfect preparation existed and if the trainer had reached precisely that level of perfection, the "perfect game" would have come to be the norm and the team should be able to do the job completely on their own during the game. The trainer would then have reached the status of "doing without doing", meaning that yes, he's physically there, somehow present, totally in control, but without the need to part par ticipa icipatte, sin si nce the the play pl ayer erss wil w illl be so well ell-prepar -pr epared ed for a vari variety ety of sit si tuati ations ons
that they will have become autonomous, as a group in this case (please also see the appendix on "Doing without doing"). He can then take a step back, sit down and simply enjoy the play of his team. However, just by looking at some current-day trainers at work during games, from the more expressive ones like Guardiola, Mourinho and Van Gaal to seemingly calm trainers like Wenger, Ferguson or European and World Cham Champi pion on Spa Spaiin's train ai ner Vicen cente del del Bosque, Bosque, it becomes becomes obviou obvi ouss that it's very ver y unlikely in most football games that a trainer can just sit at the bench and watch a game of his team without doing anything.
Even if their nerves allowed for this, and even if the game was going "well", then still it's likely that there would be some moments when things are not running smoothly enough, when players get injured, when patterns need to be adapted or when players need to be changed in order to recover for next game. In other words, the trainer has to be th there ere with w ith full at attent ention all all the the tim timee and ready to get involved whenever he feels this necessary, but without disturbing the dynamics and the momentum of the parts which actually are doing very well. And to a certain extent respecting the personalities of the individual players, not demotivating them even if they might be replaced at a
certain stage during the game. Equally in business, however good the prepar preparat ation ion has been been,, un unforeseen oreseen thing ings might, and probably will, happen. The manager needs to be ready to adjust the course whenever he sees that his people need this type of support or when they clearly demonstrate incapacity of doing it on their own. In business we could refer to this as management-byexception: letting things run more or less autonomously under responsibility or our our peopl people, until eit ei ther the expl expliicit ci t facts or the more implicit signals indicate that something is not working well. We talk here then mainly about reading
the signals and about management styles and leadership. About the soft skills of management, like coaching, leading, transmitting vision, giving advice, influenci encin ng behav behaviiour our, resol esolvi vin ng team eam conflicts, etc. And all this, taking into consideration that the manager normally deals with a wide w ide variet vari ety y of people with poten potenttiall ially y very very differ differen entt char characters, acters, so so that each person in a way has their own "user manual". I would like to leave this topic here with the following reflection on one part par ticu icular aspect aspect of leader leadersh ship ip in general and managers in particular that I see a lot around me: the manager who wants to score all goals and win all
games by himself.
Reflection: To what extent do you think your managers actually manage?
Questions that can help with the reflection: To what extent do you think your managers focus on getting their departments and their people forward?
To what extent do you think that your managers give their people room for making autonomous decisions instead of simply telling them what to do? To what extent do you think that your managers intervene wit their eir people' peopl e'ss act action ions, s, corr correctin ecting g them, instead of preparing the to do a better job?
The next step End of the game, let's analyse what went well and not so well and where we can and and shou shoulld improve prove!!
Analyse nalyse game ame and and adjust the tactics
One could argue that once a game has been won, on, every ever yone one over time wi w ill forget about how it was actually won, so therefore it doesn't actually matter if it was beautiful or ugly, if we stuck to our phil philosoph osophy y and and sty style or not, ot, or if i f we actually kept all of the spectators happy or if half of them left the stadium before the end of the game. Obviously, you don't don't see all all of these aspect aspectss lat l ater er on when you are looking at the "Trophy
With The Big Ears" in the club's museum. And probably you don't care either. And it might actually be true that for very special occasions such as a Champions League-final at the end of the season you don't care about how you wi and there is a decision to go all-out and win however you can and whatever the consequences after the game. However, for the majority of the other games, for instance the ones within the regular competition, where that one game is one of many which in the end all together count for winning the league, it is likely that the final result, win or loss, is at least not telling the whole story. So, the
indicator of "games won" in the ranking only shows a part of reality and relevant other aspects will have to be taken into consi consider derat atiion as well ell to be able able to tak takee corrective action when preparation for the next game starts. That's why the trainer and staff normally would also look at other statistics, such as ball possession, number of passes and number of shots on target, fouls committed and yellow and red cards received, injuries and if so in which posit posi tions ions and and indi individu vidual al play player er's 's statistics, such as minutes played, etc. Again, all of these indicators taken together tell the trainer how things have gone, way beyond the final score and
give him valuable input for the following training sessions, in which the next game will il l be prepared. prepared. For exam example, ple, indicators of effectiveness (shots on target, possession, passes) will signal the execution of the tactical plan defined before before the gam gamee and and in indicat dicators ors of staf staff f (injuries, cards received, minutes play played) sig signal poten potenttial chan chang ges in i n the team that will have to be made for next game. Similarly, in a company it would also be fair to ask for more than just "did we win the contract?", "how much money have we invoiced so far?", or "what's our EBITDA year-to-date?". These are important, for sure, but they only tell part
of the story, and maybe not enough to take effective decisions or remedial action, since they mainly show the final result and not really how it happened. Many readers will now probably say that in their organisation they don't only look at the few aforementioned indicators and that, in fact, a wealth of other data and indicators is available in systems, business data-warehouses or in reports of many different types. Seems fine, good to know that the indicators are there, but that's not really the point, I would argue, because it's not unlikely that it's the same story again of the forest and the trees. More data or more indicators in most cases does not lead
straightforwardly to more insight on what's going on, because we might see many trees but we don't necessarily have a clear cl ear view view of the fore forest st.. The obvious challenge is to find the balan balance. ce. Certainly Certainly it's not not OK to have have a very limited set of indicators which focus only on one aspect of the business (financial in most cases), but having too many indicators carries also a real risk, since one can only handle so many at a time in a sensible way. The trick for the manager would be to have a concise but at the same time complete overview of the main important business aspects. Important for understanding what happened and important for
understanding potential "whys", but also for understanding where we are and what we can expect next. All of this together would then provide the global view view to those those respon esponsi sibl blee for maki aking decisions. How many indicators does one need then? Evidently, no standard answer can be gi given, ven, wh w hich would ould cover all all possibl possi blee sit si tuation ations, s, but but I have seen seen examples of high-level reports containing 8-12 indicators, focussing on different aspects, which I found both simple to understand and at the same time convincing in their completeness. Whether the number of indicators be close cl oserr to 8 or to 12, 12, thi this wou w oulld then then be
the set of Key Performance Indicators (KPI's) for the manager. With fewer it would ould probabl probably y be dif di fficu icult to to displ di splay ay the whole BIG PICTURE, with more it would probably become too difficult to anal analy yse and and interpr er pret et the the most ost rel relevan evant aspects. In this context of KPI's, Kaplan & Norton propose their concept of Balanced Scorecard, distinguishing 4 different categories of indicators that ca big be used used to creat crea te a view vi ew of the big icture. Another important aspect to keep in mind when defining indicators is that they should be SMART: Simple, Measu easurable rable,, Acceptabl Acceptable, e, Reali Real istic stic and and Time-constrained. Like many of the
subjects as discussed so far, this might seem very simple and straightforward and conceptually speaking it actually is. However, in practice it's not always easy. In my experience, there at least two of the SMART-dimensions which almost always appear to be problematic. First of all, the A of Acceptable. This means that an indicator should be expressing something which from the perspective perspective of all invol involved ved shou shoulld be accepted as representative for the perf per forman ormance ce of th the area ar ea or activit activi ty it is introduced for. Since this in many cases has a high degree of subjectivity, agreement is sometimes difficult to reach. Even a seemingly simple logistics
indicator like on-time delivery can cause this type of problem, since it's not always clear when the exact moments of measurement is, which steps of the process process shou should ld (or ( or sh should ould not not)) be included, and what the margins for acceptable deviation should be. But in the end, if there's no agreement on the indicator, it doesn't serve for anything. A second problematic dimension, to a certain extent related to the previous one, normally proves to be the T of Time-constrained. In many cases, the indicators are simply only measured and followed, but no target-value is added with a specific moment in time by which a certain level or improvement should
be reach reached. ed. Somet Sometiimes, the the arg ar gument ent is that nobody knows what the target value should actually be, so that it doesn't make sense to introduce it. Where this might actually be true in the case of implementing something new, reality shows that apparently the implementation period never ends, since even a year after there's still no target val value introduce oduced d and and moni onitored ored.. Sometimes, because of not reaching the A of Acceptable, in many other cases, simply because no-one actually made the step. As with many of the other subjects, I think that in order to make it work, it's something one has to go through, which
is maybe not always easy, but if the underly derlyiing idea idea is i s cl clear as well ell as the reason why it should be done, it should receive receive the prior pr iority ity it deserves (see (see appendices for an overview of the balan balanced ced score sc orecar card d and and SMA SMART indicators). I'm sure that if the manager's set of KPI's is well-chosen, (a large part of) this set can at the same time serve for publi publication cation to th the oth other employ employees ees of the company. Besides keeping them informed, such an overview helps to create a unified and common view on where er e you are ar e and and wh w here er e you' ou're goin oing. As such, it has its own role in communicating the big picture and and
facilitating alignment within within the company. Similar to the points mentioned when discussing the publication of vision, mission statement and values, by publi publish shin ing g KPI' PI's th the im importance portance is i s not not so much on which platform or wall they are visualised, but on helping them "come ali al ive" wi w ith the peopl people. e. Just Just as the football trainer will share his thoughts person personal ally ly with the team team and and th the play player erss after a game, I think it makes sense to not only publish the statistics, but also dedicate some time for explanation or interpretation together with the staff. Otherwise, with the odd exception of the employee fascinated by numbers, for
most staff it might just be considered yet another piece of paper on the bulletin board, board, nex nextt to th the week w eekly ly menu enu of the restaurant. A last comment on the remaining (possi poss ibly bly many any) indicators dicators and and repor r eportts that you might see around in your company. These could of course still be useful, I wouldn't say they're not, but these would be for different people, or in speci special al sit si tuations ations even even for your oursel self, but but then just just in case there ere was w as a need to zoom in on a particular subject, because a higher level indicator showed a value or trend which drew your attention in either positive or negative way. So don't throw them away, just make sure you
(and others) don't drown in them. Remember, the manager is not the busi busin ness anal analy yst and and th the job job of the manager is not to prepare and analyse, but but to int interpre erprett and and syn synthesise esi se and and tak takee decisions. So, just as the trainer uses his set of statistics for determining his next actions:
Reflection: To wh what e xten xte nt do you fe feee l th that at you have a complete overview of how well your business is
performing now and how likely it is that it will continue in the same way and and/or im improve/ ove /de te riorat oratee ?
Ques Questtions ons to help el p with the reflectio eflection n: To what extent do you have a regularly updated view of your financial status, i.e. not only invoicing or profit, but also e.g. cash flow or cost of money tied up in inventory? To what extent do you have a regularly updated view o customer satisfaction, not only based on e.g. e.g. cont contract ractu ually ally
agreed indicators, but opinions "from the field"?
also
To what extent do you have a regularly updated view o internal operations, not only cost & efficiency in manufacturing & distribution, but also the state o affairs in e.g. marketing & sales or R&D or the interfaces betw between depart depar tment ents? To what extent do you have a regularly updated view of how you are preparing yourself for the future, not only o compliance with the planned training hours, but also e.g. i best pract practic ices es are are bein being shar shared ed
or improvement ideas from the work floor are being stimulated actively? To what extent do you feel that your indicators are SMART? To what extent do you feel that the effort spent on preparing indicators is justified by the quality of the insights you get out of them? To what extent do you feel that the effort spent on preparing indicators is justified by its contribution to the creation of a common view under your staff?
And another reflection which I think is also appropriate to make after a game, and which is maybe more difficult to capture in the numbers is: did we stick to our playing style and the patterns we pract practiiced so so mu much duri durin ng our our train trai ning sessions?
Reflection: To what extent do you think you and your people stick to the de fine d str st rate ate gy and and value value proposition in a consistent way?
Ques Questtions ons to help el p with the reflectio eflection n: To what extent does the impression that new customers have about your company coincide with your "official" valu value proposition propos ition?? To what extent do you see "conflicts" in operational details betw between for exam exampl plee operat operation ionss and marketing & sales after new deals have been closed? To what extent do you frequently have urgent or off-spec orders, i.e. which go beyond the "standard" product or service definition?
With the post-game evaluation it will have become clear if any changes are necessary for the next game. These changes could be wide-ranging, from more operational aspects like the corners which didn't really work well so more training is required, to more medium- to long-term aspects like a play player havin aving been inj injured red and and an alternative needs to be found, either from the club's own academy or out on the market. Similarly, in business, corrective actions happen all the time, from very direct operat operatiional onal decisi deci sion onss on procedu procedure ress which do not work well and need to be adjusted or temporary re-allocation of
staff to more medium- to long-term deci decisi sion ons, s, for exam exampl plee abou aboutt lau launchi ching improvement projects of which, given their complexity, the first results would be expected expected in mont onths rat rath her than weeks eeks after kick-off. Especially in the last case, of launching improvement projects, in my experience many companies seem to have far too many projects on their list, it's not unlikely that even at department level there would be more than 20 projects defined, of course all of them perceived to be of the highest priority or maybe already on the list for 3 years. What I think is missing in many of these cases, is a simple mechanism to
priori pri orittise is e proj projects ects by put putting them into a wider perspective. Normally they would all al l be born borne out out of a detected nece necess ssiity, a complaint, continuous mistakes in a process process or the the lik like. e. However, However, norm normal ally ly time and resources are scarce and you sim si mply ply can' can't do it it all, all , so so it i t mak makes es perf per fect sense to try and identify which projects for example have the best relationship betw between requ requiired red eff efforts and and expected expected out outcom come and/ and/or or most ost posi positive impact pact on our value proposition. In fact, a standard project management tool lik li ke the the "proje "project ct char chartter" er" or "project "proj ect data sh sheet eet" alr al ready eady cont contain ai ns space space to formulate all of this, but apparently not many companies use this in a structured
way, so I think it's fair to make the following reflection:
Reflection: On the basis of which criteria do you prioritise and decide to approve an improvement project?
Ques Questtions ons to help el p with the reflectio eflection n: To what extent is the business trigger of each project clear? This would be the "why?" of the
project, proj ect, what woul ould be the consequences if we didn't do anything about the issue? To what extent is the size of the problem probl em clear clear?? To what extent is it clear how the project relates to our value proposition proposition?? To what extent do you have a clear view on the objectives o the project (push for quantification, target values o some kind) and to what extent do you have a clear view on the expected costs and benefits (i possible possi ble quan quanttified in in money oney)? )?
In any case, before giving the green light for any project of certain size, I think it's very useful to ask someone, and in many cases this would probably the person claiming the importance of the project, to specify as a minimum the answers to the above questions, apart from basic info like people required and expected timings. By getting this information on the table for each potential project, the deci decision si on maki aking proce process ss will be much easier, since a much more objective comparison can be made between the different project options which most probably probably compet competee for for the the sam same resources. And in the end, what should drive efforts
and priorities is, once again, the big direction where we want to go: the big icture.
The next step So, with the post-game evaluation and the actions we have identified as priority to work on to improve, we now know what we should focus on in order to get ready for the next game! And in a similar fashion, for the game which comes next, and the one after that, until we reach the end of the season, hopefully having compl complie ied d wi w ith the objectives obj ectives we set set ourselves before we started.
Building a football legacy: long-term view
In order to make the book of practical use for managers at different levels, the major part of the book has its focus on the things that can be done on the short and medium-term, given the character of the reflections presented, which can be directly applied to ongoing business. At the same time, of course, one should not forget the long-term perspective, which maybe is more a question for com compan pany own ow ners er s or CEO' CEO's. In football ootbal l terms, as a friend of mine recently put it, how come that Manchester United is capable to consistently perform on such high levels of quality and with good results? Or look at Real Madrid during cert cer tain ain periods periods in its its history story,, or at
Liverpool or Bayern or Ajax in the 1970's and 1980's for similar stories. And, of course, the recent history of FC Barcelona. In addition to the items mentioned throughout the book, at which these clubs no doubt are very good as well, some other dimensions come into play. First of all, I think it's fair to say that the true football dynasties not only have a clear vision and strategy for the immediate future, but that these are also embedded in a longer term vision about what the club wants to be like, an institution with a clear and constant image, which stands for certain values, such as playing style, constant attention
to educating young players inside the club or being an active player in the local community, an integral part of society, offering entertainment or identity to the people. Or whatever other long term objectives a club might have. Secondly, and I think at least equally important, is achieving continuity and consistency in terms of sticking to the values, not changing the whole club according to the latest trends, but rather bein being fait aithful to itself itsel f and and wh w hat it stan stands ds for. Although I immediately will admit not having done a thorough study on the subject, I think it can be concluded that most of these successful football dynasties also guarantee to a certain
extent their own continuity and consistency in values because of the people people associ associat ated ed to to th the clu cl ub th throug roughout out the years. Think of football icons like Beckenbauer, Cruyff or Sir Alex Ferguson and the strategies and values that Bayern München, Ajax, FC Barcelona and Manchester United stand for and the link to the continuity in these clubs seems pretty clear: the presence and influence of visionary leaders. Of cours course, e, these these people people are are not responsi responsibl blee on their own, in some cases they might not even have any formal responsibility at all, but their importance lies more in the philosophy and vision they stand for
which strongly attracts other people who then want to play an active role in securing its continuity and future. Likewise in business, one can look for instance at the all-time brick-and-mortar icons like General Electric, Toyota, Coca-Cola or rela relattive newcom ew comer er Inditex or digi digital heroes eroes like ike Apple, Apple, Googl Google, Microsoft or Oracle to see a very similar phenomenon taking place. And many other, less successful, companies, where every so many years management changes completely, with every new CEO again trying to establish a new strategy with a new set of values attached to it. Obviously, from the perspective of the
working people who form the company and who in many cases spend a good part part of their eir li l ifeti etime th there, ere, it i t's much more motivating to work in an environment in which they can share the vision and where they see that it provides provi des clear cl ear dire direct ction ion into th the fu future, re, than in an environment in which every three to five years the strategy changes or another re-organisation announced ust depending on the CEO whose turn it is. is .
From the stadium's press room: epilogue
(from fr om our special reporter)
When looking back at the football seasons 2010-2012 in some of the European competitions as well as the UEFA Champions League, I hope that the reader will agree with me that at the highest level we have seen some impressive champions and perf per forman ormances ces.. Star Startting ing with the exam exampl plee of FC Barcelona, probably one of the best team teamss of this peri period. But But let' et's not not forget the equally impressive seasons of, for example, Bayern München, Real Madrid, Manchester United, and the two teams from Milan, all winning their national leagues, their national Cup
finals, as well as constantly reaching the final rounds of the Champions League. And however different their styles and approaches, from the Barça's tiki-taka style, to the feared counterattack of Real Madrid ("la pegada"), it seems clear to me that they have something important in common: a very clear vision on what they want to achieve and how they want to do it i t, a very very visi visibl blee and and in i nspira spi rattional ional leader to give the example and walk the talk and on top of this well-balanced teams with players who can complement each other, who share the same vision, who as a team fit very well to the defined playing style and who are willing to give it their utmost in order to
make it all happen. And no doubt, all of this supported by a large number of anonymous people in the clubs believing in the vision and willing to take on the challenge. And let's not forget: we have perf ect passes passes. seen a lot of perfect
ig picture, alignment and coherence ow, the challenge is yours as well, to reach something similar in your companies. It's a difficult task for sure, requiring a lot of thinking and a lot of hard work. The good thing maybe is that it's not any different for your
competitors; they have to think and work ust as hard as you. Or maybe even harder. And they probably will. I would like to finish where I started, with another quote from Johan Cruyff: "I don' don 't really re ally care if my my oppo o pponen nentt score scoress 0, 1 or 5 goals g oals,, I just have ha ve to make sure su re I score scor e on o n e more mor e."
Good luck with the preparation of your next season. I wish you a lot of "perfect passes" passes" and and a good good posit posi tion in the fi final ranking!
lella ella (Barcel (Barcelona, ona, Spain) Spain),, December December
2012
Appendices
Appendix 1: Porter's value cha chain in
Competitiveness, big picture, alignment, coherence Although for the purpose of the book, I'd rather stay away from theory, I'd like to refer to som somee pi pieces eces of of it, si since they provide provi de a sim si mple point point of ref referen erence ce to illustrate my main topics here. Below diagram shows the value chain as
devel developed by Michael chael Port Porter in the 1980's:
Says Says Port Por ter: er: "The value chain disaggrega disaggregates tes a firm f irm into its it s strat st rategi egical callly rel re levant acti act ivit vi ties in in order to understand underst and the behaviour behaviour of costs and potential sources of differentiation. A firm gains competi competiti tive ve advantage advantage by perform perf orming ing these strategically important important acti activiti vities es
more cheaply cheaply or better bett er than its it s competitors". Furthermore, "although value acti activiti vities es are the buil building ding blocks blocks of competi competiti tive ve advantage, advantage, the value chain is not a collection of independent activities activit ies but a system of of interdepende interdependent nt activiti activi ties. es. […] […] is a recognition recogniti on of the im i mportance of linkages ".
From Porter's concept of the Value Chain, I'd like to highlight the following two elements: First of all, Porter talks about the objective of performing strategically import portant ant acti activit vities cheap cheaper er and/ and/or or bett better than the compet competiition. ion. In In oth other words, Porter says that one has to
understand that for improving the competitiveness of a company, a difference can be made in any one or more of the strategically important activi activities. es. Competitive Competitiven ness ess is then something which is the consequence of, or related to the operational capabilities of the company, is something which is percei perceived ved by their eir cu customer stomers, s, and and ultimately is something which is at the heart of a company's profits. The implication of this is that each of the activities in the Value Chain can be used to create a competitive advantage and that a view on the big picture is required to put everything into perspective. The analogy in football would be the
individual qualities that each player on the field or the supporting staff might have and the role each of them can ultimately play in winning games. And at the same time you can't understand the functioning of the whole well unless you have a view on all components involved. Secondly, Porter stresses the fact that activi activities are are interdepe er depen ndent dent and and not not isolated. As a consequence, anyone who achieves a good alignment of of these activities would either create optimisation or improved coordination betw between areas. areas. This This would ould man maniifest itself for instance in a set of high-quality and smart business processes across
different areas, leading in the end to chea cheaper per and/ and/or or better better perf per form ormance. ance. And at the same time, given the interdependency of all areas, one would have to make sure that action or initiatives in one area would have to be coherent with with actions and initiatives in another. In football terms, here we talk about the quality of the passes on the field, about the ball moving between the play players ers and and ultim ultimat atel ely y, about about the nu number of assists, which actually have goals scored from them. Furthermore, we then talk about the extent to which the people involved in the preparation of the team are supporting the players in their work, enabling them to be as effective as
possibl possi blee and and reach reachiing in the end end th the overall team objectives. So the main focus of the book is on competitiveness , the big picture, alignment and and coherence between the elements of an organisation. In the book I'll talk mainly about some of the linkages that I consider to be critical, based based on my own own exper experie ien nce and and pract practiice. Alth Althoug ough I will il l cer certtain ainly not forget the supporting activities, the main focus will be on the linkages within what Porter calls the "primary activities", which are those "activities involved in the physical creation of the t he roduct roduct and its sale and transfer to the t he buyer, as well as after-sales
assistance".
Given the integrated view necessary to see the big picture and to evaluate alignment and coherence, I cannot avoid entering into some organisational and managerial territories which are not necessarily of my primary expertise. Just the same as in my project work or classroom case-method teaching, I will certainly not step away when this happens, but I will seek the challenge to explore the interrelationships with other areas and the border-lines between them. Two more comments on Porter. First of all, whereas the Value Chain as such looks mainly inward into the company to
determine in which areas or elements the ori origins of competitive competitive advan advantage age resi reside, de, there is another dimension to competitiveness which has also been elaborated extensively by the same Porter: the context of industry sectors or even countries. When looking at this, he takes a more outward view of competitive pressures to which a company is exposed. His famous 5forces model provides a framework for describing these competitive pressures (competitor rivalry, product substitutes, suppliers, customers, new entrants). And to finish the theoretical part, the original concept of the Value Chain was maybe intended for organisations
involved in the production and/or distri distribu buttion of phy physical si cal goods. oods. Howeve How ever r I would argue that the framework to a large extent would also be valid for organisations which "produce" services rather than physical goods. Certainly, the concepts and reflections that I present in the book can in my opinion be applied in both both.
Appendix 2: 2: All refl re flec ecti tions ons tog together ether
In this appendix, the reader will find an easy-to-use overview of all reflections and supporting questions as presented throughout the book. With this overview, a quick insight can be established of how well-prepared your company is.
Preparing the season
1. The game plan: defining the obje object ctiives ve s and and th thee ways to t o achi achie ve them The starting point, as point of reference for all al l follo ollow wing ing ref reflect lectiions: ons: What is the basis of your competitive position, where does your competitive advantage come from?
Detai Detailled ques questtions: ons: What is the promise towards your clients ("what")? What are you particularly good at to fulfil the promise consistently, day-in day-out
("how")? Why do the answers to the previ previou ouss question questionss form a winning combination, in other words: why are yo different/better than your competitors? Reflection: To what extent do you consider your "promise" to the customers clearly formulated?
Questions that can help with the reflection: Which words do you think would come to the mind of your customers when they hear your
bran brand-nam d-name? e? To what extent could people in your company who do not work in the marketing & sales area tell you what your value proposition proposition is? is ? To what extent do you think that the way your value propositio is formulated provides a good basis basi s for developi devel opin ng e.g. e.g. the operations strategy, the HRstrategy, etc.? Are there sufficient connection points i the value proposition to link these partial strategies?
2. How to beat the competition: critical competencies and processes Reflection: To what extent have you identified your critical competencies?
Questions that can help with the reflection: To what extent do you feel that you have a complete view on the competencies you and your organisation need in order to consistently fulfil the value proposition proposition?? In general, how do you want to distinguish yourself and your organisation from the
competition? What does your organisatio need to do really well, i.e. which competencies are critical in order to differentiate from the competition and to capture and satisfy customers in a sustainable way, i.e. on the long term (resulting in lower costs and/or better quality and/or more flexibility and/or innovation power)? To what extent do you think that these critical competencies i the current situation are currently well-developed and receiving the required
management attention? To what extent do these critical competencies distinguish your company from the competition at presen presentt? Reflection: To what extent have you identified your critical processes and to what extent do you think they are well prepared to support your value proposition?
Questions that can help with the reflection: To what extent do you feel that you have a clear and complete view on your business
process processes es (I mean, ean, clear clear and and complete in your mind, the quality-binder with flowcharts in your drawer is less important here)? In the light of your value proposition proposition,, which do you think are the more critical processes for the company's success, i other words, which ones are more important for creating and maintaining competitive advantage (resulting in lower costs and/or better quality and/or more flexibility and/or innovation)?
To what extent do you think that these critical processes in their current design are welldeveloped to fulfil the promise to the client? To what extent do you think that they could be further improved, for example by redu reduci cin ng comple complex xity (e.g (e.g.. how many departments are involved in each of them and can this number potentially be reduced, how many steps are there in each process and ca this number potentially be redu reduced, ced, etc.) etc.)?? To what extent do you think these processes receive the
required management attentio and and resou resourc rces? es? 3. Completing the team: having the "right" mix of resources Reflection: On the basis of your value proposition and your critical competencies, to what extent do you believe that your current staff can really contribute to the delivery of your value proposition?
Questions that can help with the reflection: To what identified
extent have you the key critical
posit posi tions ons in your our organ organiisation, sation, in the light of your value proposition proposition?? To what extent do you feel that all key positions are staffed wit people peopl e best prepar prepared ed for the job? To what extent have you got a back-u back-up p plan plan in place place for these key positions? Which important gaps do yo see in terms of completeness o the team? Reflection: To what extent are the candidates for my key specialist
functions recruited by people with a deep functional understanding about the job itself and the role it has within the big picture? lease note: when I talk about key specialist unct un ctiions, on s, this this could co uld al a lso include higher-level higher-level management functions of areas for which practical experi expe rience ence in some some very specific subj sub j ects is is a big advantage.
Question that can help with the reflection: To what extent are job-specific knowledge and/or experience presen presentt at the vari various ous stag stages es o the search and selectio process process??
4. On and around the field: creating the "right" environment Reflection: To what extent do you think your operations infrastructure (offices, technology & systems) create the environment which is fit for enabling your people in the best possible way to comply with the promises you make to your clients?
Questions that can help with the reflection: To what extent do you consider that the physical design & infrastructure of the office actually supports the work that
needs to be done in it (number of desks, amount of background noise from outside or colleagues, number of meeting rooms with adequate telecomfacilities, number of "project war-rooms" with large whiteboards and sufficient mark ar kers, er s, network etwor k speed, speed, etc.)? To what extent do you think that the way your offices or manufacturing plant look, reflects your value propositio (for example, if you promise high quality products or a very high degree of efficiency to your clients, do your facilities look
clean, well-organised. If yo offer a lot of creativity and a bit of "craziness", does your office also look a bit crazy)? To what extent do you have a clear view on whether people are happy with the environment in which they work? What have you done recently to help create the appropriate working climate (listened to staff complaints and/or suggestions, finally modernised the canteen, placed some plants …)? And, did it work? Why not?
Preparing a game 1. Playing style and ambition level: explaining objectives Reflection: To what extent do you think your strategy and value proposition are clear to all of your staff and to what extent do you think they understand that they themselves are also a vital part of getting there?
Questions that can help with the reflection: To what extent do you have your strategy and value propositio publ publis ish hed expl explic iciitly? ly?
To what extent do you think that your people are able to relate these strategic statements to the pract practic ical al issues ssues of their eir daily daily work? To what extent do you think that the strategy is "alive" to your people peopl e (do you feel feel that they they are enthusiastic about it, do they share the vision)? What have you done recently to "spread the word" to your ow people people and and how how eff effective do yo yo think that has been? Are you sure? How do yo know?
To what extent do you think your people peopl e underst derstan and d how their eir own activities fit in the big pict pic ture? re? 2. Showing the way: leadership and walking the talk Reflection: How many shining eyes do I have around me?
And in the case the answer is "well, not too many, really", then: Reflection: Who am I being that the e yes ye s of th thee pe opl ople arou aroun nd me are are not shining?
3. Training for the perfect pass: establishing alignment Reflection: To what extent do you consider your operations and marketing & sales areas to be wellaligned, over the long-, medium- and short-term?
Questions that can help with the reflection: To what extent are structural communication mechanisms i place place betw between these departments and which ones o these are based on personal contact rather than emails or
orders placed in the system? To what extent do you consider that structured, personalised alignment is in place with long term perspective (e.g. 12-36 month horizon changes in value proposition proposition,, new product product-market combinations, etc.), medium-term horizon (e.g. 3-18 month new product introductions, promotional campaigns etc.) and short-ter horizon (e.g. 0-4 months priori pri orittisation of specif speci fic orders orders)) in which joint solutions are developed or mutual agreement is achieved and where the
"technical" fit between the promi promises in the mark arket and and operational capabilities are secured? To what extent are different levels of the organisatio involved in these communications? Would you consider the focus of communication between the people peopl e of the differ differen entt departments to be problemoriented or solution-oriented? To what extent do you consider that people show the appropriate willingness to
listen? When was the last time yo asked Marketing & Sales managers about what they think of Operations and Supply Chain? And the other way around? To what extent did the answers make you feel comf comfort ortable? abl e? Reall Really? Reflection: To what extent do you consider that the bonus schemes in your companies stimulate collaboration or improve alignment?
Questions that can help with the reflection:
To what extent are targets in the bonu bonus schem schemes es in your our compan company y individual or global? To what extent do you think that some of the individual targets promot promotee interests erests which ich are are opposed to targets of another individual? How do you believe that these potential conflicts manifest themselves in your company or ultimately in your company's results? To what extent do you believe that the managers in your company consider the global targets in their bonus scheme to be rel related ated to their eir own own area area o
influence? To what extent do you consider that managers would be encouraged by their targets to seek collaboration with their peers peer s in order order to coordi coordin nate ate betw between them? em? 4. Training for technique: skills and competencies Reflection: To what extent do you think that the training your people have had has been beneficial for the company?
Questions that can help with the
reflection: To what extent is there a clear relation between the courses people peopl e follow oll ow and and the fulfilm il ment ent of their part in delivering the company's value proposition? To what extent is training followed up by the manager of a person person who has att attended ended a course, in order to define specific actions in which the obtained knowledge, experience or skills can be directly applied? 5. Training for consistency: reliable
quality Reflection: To what extent does your quality management system support your business and as such justify the efforts put into creating and maintaining it?
Questions that can help with the reflection: To what extent do you find direct links between your quality management system and your our valu val ue propos proposiition? on? To what degree do you think that the people involved in the quality management syste
spend their time mainly o generating documents? And to what degree on making sure that these documents are being used effectively? To what extent do you see departmental managers really interested and/or actively involved in the development, usage and/or maintenance of the quality management system? Why not? 6. Training for new tricks and patterns: innovation Reflection: To what extent do you
stimulate new initiatives, innovation and continuous improvement throughout the whole organisation as part of your overall strategy?
Questions that can help with the reflection: To what extent are innovation and continuous improvement actively pursued in the company? To what extent can you say that everyone in the organisatio feels part of the responsibility for improving continuously (where did the majority of ideas
come from and who followed up on them)? To what extent are you happy with the number of improvement ideas that have been generated during the last year? To what extent have these improvement ideas brought yo any closer to reaching the company objectives? Why not?
Game-time! Reflection: To what extent do you think your managers actually manage?
Questions that can help with the reflection: To what extent do you think your managers focus on getting their departments and their people forward? To what extent do you think that your managers give their people room for making autonomous decisions instead of simply telling them what to do? To what extent do you think that your managers intervene wit their eir people' peopl e'ss act action ions, s, corr correctin ecting g them, instead of preparing the to do a better job?
Post-game evaluation and adjustments to tactics Reflection: To what extent do you feel that you have a complete overview of how well your business is performing now and how likely it is that it will continue in the same way and/or improve/deteriorate?
Questions that can help with the reflection: To what extent do you have a regularly updated view of your financial status, i.e. not only invoicing or profit, but also e.g. cash flow or cost of money tied
up in inventories? To what extent do you have a regularly updated view o customer satisfaction, not only based on e.g. e.g. cont contract ractu ually ally agreed indicators, but also opinions "from the field"? To what extent do you have a regularly updated view o internal operations, not only cost & efficiency in manufacturing & distribution, but also the state o affairs in e.g. marketing & sales or R&D or the interfaces betw between depart depar tment ents? To what extent do you have a
regularly updated view of how you are preparing yourself for the future, not only o compliance with the planned training hours, but also e.g. i best pract practic ices es are are bein being shar shared ed or improvement ideas from the work floor are being stimulated actively? To what extent do you feel that your indicators are SMART? To what extent do you feel that the effort spent on preparing indicators is justified by the quality of the insights you get out of them?
Reflection: To what extent do you think you and your people stick to the defined strategy and value proposition in a consistent way?
Questions that can help with the reflection: To what extent does the impression that new customers have about your company coincide with your "official" valu value proposition propos ition?? To what extent do you see "conflicts" in operational details betw between for exam exampl plee operat operation ionss and marketing & sales after new
deals have been closed? To what extent do you frequently have urgent or off-spec orders, i.e. which go beyond the "standard" product or service definition? Reflection: On the basis of which criteria do you prioritise and decide to approve an improvement project?
Questions that can help with the reflection: To what extent is the business trigger of each project clear? This would be the "why?" of the project, proj ect, what woul ould be the
consequences if we didn't do anything about the issue? To what extent is the size of the problem probl em clear clear?? To what extent is it clear how the project relates to our value proposition proposition?? To what extent do you have a clear view on the objectives o the project (push for quantification, target values o some kind) and to what extent do you have a clear view on the expected costs and benefits (i possible possi ble quan quanttified in in money oney)? )?
Appendix 3: 3: Recommended reading and viewing
My personal sources of inspiration, most of them clearly related to the topics of this book: My favourite TEDtalks (can be viewed at: www.TED.com), for example: Ken Robinson, wrong ideas
on
our about
education Ben Zander, on passion and leadership, classical music and shining eyes Itay Talgam, on orchestra conductors and leadership styles Alain de Botton, ambition and success
o
Richard St. John, on the fact that success isn't a 1way street Hans Rosling, visualisation
on
data
Rory Sutherland, o strategy not only being about big things Taylor Mali, a beautiful poem on "what "what teacher eacherss make" Simon Sinek, about why people peopl e buy buy somet someth hing (products, ideas, visions, …) Nig Nigel el Marsh arsh,, about about w orkorklife balance Malcolm Gladwell, about spaghetti-sauce and posit posi tioni ioning
Seth Godin, about purple cows and things which are "broken" GOLDRATT, Eliyahu and Jeff COX, "The goal", the original busi busin ness novel on bott bottleneck eneck thinking, a great confirmatio that operations can be exciting JOHNSON, Spencer, "Who moved my cheese?", Change is always and everywhere, Panta Rhei for the 21st century FINE, Charles, "Clockspeed", on the temporary nature o competitive advantage and "indu "industri strial al fruitflies" es"
DRUCKER, Peter F., e.g. "Classic Drucker", great visio and above all, a lot of commo sense FRIEDMAN, Thomas, "The world is flat". Despite all the criticism about being nonscien sci enttific, biase bi ased d and and based based only only on interviews with friends, still for me one of the more interesting books o Globalisation 101, especially when followed by the reading of: of: STIGLITZ, Joseph: "Making globalisation work", make ones vision on globalisation more
complete My other recommended titles (can all be Google oogled d easi easily ly): ): Operations content
&
SCM-related
SIMCHI-LEVI, David, "Operations Rules; delivering customer value through flexible operations" CHRISTOPHER, Martin, "Logistics and Supply Chain Management" BLANCHARD,
David,
"Supply chain management, best practices" practices " EMMETT, Stuart & Vivek SOOD, "Green Supply Chains" DOUGHERTY, John & Christopher GRAY, "Sales & Operations Planning" FISHER, Marshall & Ananth RAMAN, "The new science of retailing" SLONE, Reuben, DITTMAN, J. Paul and John T. MENTZER, "The new supply chain agenda"
For service environments NO NORMA RMANN, Richar Richard, d, "Service management" SCHMITT, Bernd H., "Customer Experience Management" For the interested
more
technically
SILVER, Edward A., PETERSON, Rein and David F. PYKE, "Inventory management and Production Planning and Scheduling"
SIMCHI-LEVI, David, KAMINSKY, Philip and Edith SIMCHI-LEVI, "Designing and managing the supply chain" KAPLAN, Robert S, and David NORTON, "The execution premium"
Appendix 4: Sales & Operrations Ope tions Plann Planning ing
(From the web-site of T.F. Wallace, author of various textbooks on S&OP, www.tfwallace.com).
What is S&OP Sales & Operations Planning (S&OP) is a set of decision-making processes to balan balance ce deman demand d and and suppl supply y, to to int integra egratte financi ancial al plan pl ann ning and and oper operation ational
plan planning ing, and and to to lin link k high level level strateg strategic ic plan plans wi w ith day-to-day day-to-day operat operation ions. s.
Why Do Companies Use S&OP? Many companies have difficulty in establishing valid game plans for sales, product productiion, on, procu proc urem rement ent, and and in invent ventory levels -- and then tying them to day-today scheduling and execution. As a result, performance suffers: customer servic ser vicee is is poor, poor , produ product ctiion and and procu proc urem rement ent are are in ineff efficien cientt, in invent ventories ori es are too high or too low, or all of the above. Sales & Operations Planning has
emerged as an essential management tool in this age of rapid change, increasingly demanding customers, and supply chains that extend half a world away. It's rightfully been called "top management's handle on the business."
What is Executive S&OP? Executive S&OP is top management's part part of the overal over alll set set of Sales Sales & Operat Operations ons Plan Planning proce process sses es.. It' It's a tool that enables the top management team to establish in advance the desired levels of customer service, inventory investment, and customer order backlogs — and and th then manag anagee th the busi busin ness
proact proa ctiively vely to achie achieve ve th those target targets. s. An important point: Executive S&OP, which focuses on aggregate volumes, is essential to gain the maximum benefits from the other parts of Sales & Operations Planning, the ones that addres addr esss the detail detailss (Mast aster Schedu Schedulling, Plant and Supplier Scheduling, Distribution, and other types of detailed plan planning ing and and coordin coor dinat ation ion). ). The results from the monthly Executive S&OP process drive downward to impact directly the day-to-day activities in Sales, Purchasing, Production, and Dist istribu ri buttion - and and also al so drive dr ive upwar pward, d, so that the company's Financial Plans can reflect current realities and future
operat operatiional onal plan plans.
What are the Benefits of Using S&OP? "Hard" benefits -- ones that can be readily measured – include higher customer service, lower finished goods inventories, more stable production rates, fast aster and and mor moree cont controll olled new product product int introduct roductiions, ons, redu r educed ced obsolescence, shorter customer lead times for make-to-order products. "Soft" benefits resulting from Executive S&OP include enhanced teamwork in the executive group and elsewhere,
improv pr oved ed com communicatio cation ns, bett better er decisions and better financial plans with less effort, one set of numbers, in both units and dollars, with which to run the busi busin ness, ess, a ti tight link inkage age between between strategic plans and day-to-day activities, a "window into the future".
What Does it Cost? In contrast to these sizeable benefits, the costs to implement Executive S&OP are small. The primary "costs" in making the process process work are are not not financi ancial al,, but but are are in people's time and energy.
Eight Elementary Errors About S&OP The following is a list of "deal break breaker ers" s" – th thing ings th that can get in the way w ay of successful implementation. To ensure success, you'll need to eliminate these myths in order to get all the key people on the same page. Myth #1: "We don't need S&OP in our department; that's a ‘supply chain thing.'"
eality: Yes, it is a supply chain thing – and a a sales & marketing thing – and a a manufacturing thing – and a a finance thing – and an an R&D thing – and, last but not
least least,, it's a top management thing. thing. S&O S&OP is is a com compan pany y-wid -w ide, e, col colla labora borattive decision-making process, reaching up to the top levels in the business. Myth #2: "We'll never get S&OP to work – we don't have enough teamwork.
eality: You've got it backwards. S&OP doesn't require teamwork before you get started; S&OP engenders teamwork once it's operating properly. It enables people peopl e to to view view the busi busin ness holis olisttical ically ly and thus see the other guys' problems. A company implementing S&OP and not getting improved teamwork means just one thing: they didn't do it right.
Myth yth #3: "W "Wee don' on't ne e d S&OP; S&O P; we're doing Lean Manufacturing."
eality: S&OP and Lean are two very different things. S&OP is a medium-tolong term planning tool that provides visibility into the future, thereby avoiding surprises when demand shifts – up or down. People who know both S&OP and Lean say, "They work best when they work together." Myth #4: "S&OP is too rigid. It won't work for us because our business changes too quickly."
eality: S&OP is all about change. It provides provi des a "win "w indow dow into th the fu future", re", so
that companies can 1) see potential problem probl emss ahead ahead of tim timee 2) take ake corre cor rective ctive action action and and 3) thus preve preven nt poten potenttial ial probl pr oblem emss from from becomin becoming g a real real ones. Myth #5: "W "Wee can't can't use S&OP S&O P because we are don't have any manufacturing. We use contract manufacturers solely."
eality: S&OP doesn't care who owns the factory. Actually, companies heavily outsourced probably need it more, because because they they gener eneral ally ly have less l ess cont control over the supply side of the business. We also see S&OP being used in banks, retail companies, engineering
organizations, and IT. Myth #6: We're a large company. I think we're too big for S&OP.
eality: Are you bigger than Microsoft for example? Or bigger than Procter & Gamble? We see these companies, and a growing number of others, using S&OP very successfully in their operating busi busin nesses. esses. Furth Further er,, in these com c ompan paniies, the results from the operating units' S&OP processes are rolled up, communicated to the corporate CEO, and form a key component of the corporation's earnings calls to Wall Street.
Myth #7: "W "Wee have to get ge t our our forecasts a lot better before we think about S&OP."
eality: Here again you've got it backw backwards. ards. Almost Almost alway alw ays, s, implementing S&OP helps to improve the forecasts. One reason for that is, for the first time, people start to view proce ss rather than a forec orecas astting as a process pain pain in the neck neck.. They They see that it plays plays a vital role in the overall S&OP process and hence they see it as much more important than before. Myth #8: " S&OP is really simple. e 're 're ju just st goin going to get ge t th thee spr spre adsh adshee e ts worki workin ng and and the n we' we 'll
have S&OP."
eality: The spreadsheets, graphs, and the data they contain are necessary, but not the most important elements. Of greater significance are the mindsets of the people who will be using it – all the way up to the president. Implementing S&OP successfully is largely a matter of change management. It is people intensive, and that's where the emphasis needs to be during implementation.
Appendix 5: "Doing "Doing without ithout doing" doing"
Ther Theree is a won w onder derfful TEDTal TEDTalk k by Israeli conductor Itay Talgam in which he discusses different management styles using examples of some of the great conductors of 20th-century musical history to show how different styles of control manifest themselves and what the perspective perspective of th the orch orchestra estra can can be wh w hen confronted with these different styles. Just replace "conductor" by "manager" and the relevance and accuracy of the
talk al k becom becomes es clea cl earr at once. once. The last video he shows during the talk is of Leonard Bernstein conducting the Wiener Philharmoniker in a symphony by Haydn aydn,, and and Bernst Bernstei ein n is condu conduct ctin ing g without moving, arms crossed, simply looking at the orchestra and the individual players. Totally in control, but but withou ithoutt phy physical si cally ly or verba ve rball lly y doin doing anything. Doing without doing. And with a beaut beautiful resu r esult. lt. www.TED.com – Itay Talgam
Appendix 6: Balance Balanced d Score core Card Card
orton & Kaplan in their classic article "The Balanced Scorecard – measures that drive performance" (Harvard Busi Busin ness Review, Review , Jan Jan-Feb 1992), proposed proposed a set set of key perf performan ormance ce li ke the dials in an airplane airplane indicators "like cockpit: it gives manager manager complex complex inform inf ormati ation on at at a glance gl ance". In order to not only have a clear view on the results but also on the "how and why?" behind it, they distinguish indicators in 4
categories: Finance: how do we look to shareholders? Customer: how do customers see us? Internal processes: what must we excel at? Innovation and learning: can we continue to improve and create value?
Appendix 7: SMA SM ART indicators
S = Simple: meaning for instance that the naming of the indicator, as well as the formula to calculate it should be clear and understandable to the users. If not, people peopl e mig migh ht sim simply ply not trust rust the outcome, because they don't have a grip on the underlying concepts. M = Measurable: meaning that it should be possi possible to capture capture the concept concept in a number, a percentage or a value (e.g.
es-no). A = Acceptable: meaning that the audience for which the indicator is intended accepts it as being representative for what it is supposed to measure. R = = Realistic: meaning that the target value should be within reach. If not, it is very likely to only have demotivation as a result, instead of stimulating people to reach the objective. T = Time-constrained: meaning that there should be a deadline of some kind, oth otherwis erw isee people will il l lose int interest erest or they will il l say "we wil w illl reach reach it someday".
Appendix 8: About the author
Ed has worked as an independent freelance consultant since the beginning of 2004, specializing in Business Strategy, Supply Chain and Logistics consulting & training. He is also a lecturer on Operations, Logistics & Supply Chain Management at EADA Busi Busin ness ess School School in Barcel Barcelon ona, a, Spain Spain, which is ranked as one of the world's TOP-100 business schools by prest prestig igio iou us ran rank kings such such as Fin Financi ancial al
Times and Economist. With an M.Sc. degree in business administration from Erasmus University / Rotterdam School of Management and a post-graduate degree in Supply Chain Management from Eindhoven University of Technology in the Netherlands, Ed has extensive international experience in managing a wide diversity of projects. He has a practical background since the mid-1990' id- 1990'ss in i n the log l ogiistic sticss worl w orld, d, having worked in various areas within logistics operator DHL / Danzas Solutions. First as Director Supply Chain Design, supporting large accounts with the redesign of their distribution networks at strategic, multi-national
level. Later as Director of Engineering & Quality in a large operation in Spain and most recently, as International project proj ect man manag ager er carry car ryin ing g out out product productiivity improvem provemen entt projects proj ects in various European countries. As a consultant he works in Distribution etwork Design & carbon footprint, transportation strategy & management, Re-loca Re-l ocattion studi studies es,, Logi ogistics stics outsourcing & tendering, Supply Chain strategy & management, Operations strategy and Operational & productivity improvement. So far, Ed has been actively involved in projects proj ects in industry dustry sect sectors, ors, lik likee Fast
Moving Consumer Goods (FMCG), High-tech & telecom, Electronics & white-g e- goods, oods, Aut Automotiv omotive, e, Stee Steell, Fashion, Pharma, Aerospace, Industrial. His in-company training activities have been in sect sectors such such as Apparel Apparel & sports, Lighting, Motorcycles, Cork, Services to the chemical industry, Engineering, water taps manufacturing, wind-energy and call-centres. He is also certified trainer in the busi busin ness sim si mulat lations ions of Palat Palatine Group Group from New York, USA (Project management) and The Fresh Connection of the Netherlands (value chain). He has developed and run projects and training for clients like Nike, Samsung,
DHL, Bestin Supply Chain, Shell, Alcon, Wyeth, Mölnlycke Healthcare, Vest estas, as, Sell Sel lbyt bytel, el , Volk olkswag sw agen en Gr Group, oup, Volvo, Makro, JohnsonDiversey, Groenewout Consultants & Engineers, Eur Europh ophia Consu Consullting ting and and other others. s. Ed speaks Dutch (native language), English, German, Spanish and a bit of French. More info at www.QuSL.com.
