Wednesday, February 27, 2013
Meetings That Make a Difference
I have written and spoken about the importance of contributions made by cross-functional groups in business. The reason I believe in meetings with participants from across the organization is because the best new ideas and solutions to old problems come from discussions that provide input from the widest array of viewpoints. Limiting solutions to one or two individuals simply limits the ability to have optimal solutions.
As the English philosopher Theodore Zeldin said; “Conversation is a meeting of minds with different memories and habits. When minds meet, they don’t just exchange facts: they transform them, reshape them, draw different implications from them, engage in new trains of thought. Conversation doesn’t just reshuffle the cards: it creates new cards.”
In most organizations pulling a group into a meeting means taking those individuals away from other important work. Some participants will question the need for another meeting. I have even worked in organizations where individuals in separate divisions wouldn’t even talk to each other in the hallways much less have a business meeting.
To address the reticence to having meetings and be successful in creating meetings that produce results, it is important to have a compelling reason to meet, to be prepared for the meeting, have an agenda and be focused on a specific objective for the meeting.
In a couple of organizations I had weekly meetings of key managers from across the organization to launch new products or provide weekly reviews of organizational progress. These meetings provided critical input that allowed the organization to adapt in highly competitive environments. Without these groups I am certain we wouldn’t have enjoyed the success that we did.
To avoid pitfalls of unproductive meetings, Wiley’s For Dummies series has a list of eight ways to make meetings more productive.
• Be prepared. Meetings are work, so, just as in any other work activity, the better prepared you are for them, the better the results you can expect.
• Have an agenda. An agenda — a list of the topics to be covered during the course of a meeting — can play a critical role in the success of any meeting.
• Start on time and end on time. in these days of faster and more flexible organizations, everyone always has plenty of work on the to-do list. If you announce the length of the meeting and then stick to it, fewer participants will keep looking at their watches, and more participants will take an active role in your meetings.
• Have fewer (but better) meetings. Call a meeting only when it is absolutely necessary.
• Include, rather than exclude. Meetings are only as good as the ideas that the participants bring forward.
• Maintain the focus. Meetings can easily get off track and stay off track. The result? Meetings do not achieve their goals.
• Capture and assign action items. Immediately after the meeting, summarize the outcome of the meeting, as well as assignments and timelines, and e-mail a copy of this summary to all attendees.
• Get feedback. Every meeting has room for improvement. Be sure to solicit feedback from meeting attendees on how the meeting went right for them — and how it went wrong.
These steps are very helpful and can be the difference between wasting valuable resources of time and expertise and having a productive meeting.
My New Book
I just received an update from my publisher. My book “The Manager’s Guide to Building a Successful Business” is now available in e-book form on Amazon. The print version is out of stock but you can order and it will be shipped when those versions are in stock (probably in one to three weeks).
I cover some of the same topics that are on my blog. For illustration purposes I use systems developed at the companies that I served as an executive. These companies include the Houston Chronicle, San Francisco Chronicle, HEB Grocery Company and the Corpus Christi Caller -Times. For start-ups I use GW LEDS, American Property Data, Huntsville Morning News and a few others where I was a partner and founder.
If you decide to read the book I hope you find it helpful
I will have a book signing at River Oaks Book Store in Houston in the next eight weeks or so. I will post the details as soon as they are available.
If you want to learn more, the Amazon’s link is:
Wednesday, February 20, 2013
Loan Cash to Corporate Operating Units To Improve Cash Flows
In most corporations the cost of money affects the ability to compete successfully. If money has to be borrowed then the financing cost has to included in the cost of operations and ultimately will affect the cost customers have to pay for goods and services. This, of course, impacts the ability to compete in price aggressive markets.
There is always a demand for cash in a corporation and there are many ways it can be used. Every manager will have programs that are deemed important and will be viewed by that manager as being most worthy of being funded.
In the budgeting process cash needs are generally forecast based on projected sales and the expenses required to support those sales. When there is a need for cash beyond normal cash inflows, debt is usually employed to fill the gap.
A particularly vexing challenge is deciding how to maximize cash usage. GWR Research developed a system that allows a manager access to any level of cash he/she believes is needed but charges interest on funds that aren’t used efficiently. The definition of cash efficiency will vary from organization to organization and is expressed in a mathematical formula.
The key to a successful cash management program is to have a base level of cash available to managers for normal operations supplemented by a self-adjusting formula based on efficient cash usage. The base operating level will automatically be increased or decreased based on the managers’ efficient use of cash.
The GWR Research method was first used for a grocery chain that wanted to build a new milk plant in San Antonio, Texas but didn’t want to borrow money. The CEOfelt there was enough cash flow in the 120 stores to free up the money to build a milk plant.
A senior team had been working on developing a cash management system for a couple of years but hadn’t come up with a system that could be implemented successfully. Most of the approaches centered on the frequent harvesting of cash from registers in the stores and sending the cash to the local banks. The corporate office would then collect the cash from the various banks. What made the system impractical was the inability to accurately predict the amount of money each store would request for the next day’s operation. Even if cash were harvested hourly from the stores, the managers might request an amount equal to or greater the next day for store operations. Stores needed cash to buy local inventory and cash customer’s checks. Store managers did not want to disappoint customers or be unable to purchase local inventory items when they were needed and in many cases requested ample amounts of cash to insure they could serve their customers.
It occurred to me that corporate managers shouldn’t be involved in managing the cash at the store level. I gave it some thought and proposed a system that treated money requested by store managers as a loan from the corporate office. We established the loan rate as the same as charged by a bank. Store managers were told they could withdraw as much as they felt they needed without any interest charge as long as the money was efficiently used. Efficient use meant that if all of the money requested above the established target for the store were converted to inventory or checks, there would be no interest charge. Formulas were developed that would adjust the cash withdrawal limit for each store based on efficient use of cash.
Each store’s withdrawal and deposit history was analyzed and was the basis for setting withdrawal targets for the store managers. If a store requested more than the withdrawal target for the store and re-deposited cash, this excess cash was considered inefficiently used and received a penalty or interest charge. These interest or penalty charges were considered part of the store’s operating costs and affected store managers’ annual bonuses.
This approach involved store managers in controlling cash throughout the system and focused on efficient use of cash. The system, once implemented, freed up the cash needed to build the milk plant.
For more information on how to implement this approach to cash management and the development of self-adjusting formulas contact me at firstname.lastname@example.org,
Wednesday, February 13, 2013
I was recently asked to write a blog on Blue Ocean Strategies that was introduced by +W. Chan Kim and +Renee Mauborgne in their book Blue Ocean Strategy.
Everyone should read the book if they are looking for ways to grow their business by creating uncontested market spaces. The book is an excellent read and gives many compelling examples.
If I were to give a summary of the book it would be by using a quote by Wee Willie Keeler, a great baseball hitter in the late 1800s and early 1900s, who said, “I hit ‘em where they ain’t”.
At 5’4” and 140 lbs., Willie was a batting champion and is in the Baseball Hall of Fame.
For businesses, the Blue Ocean Strategy is a study on building a strategy for any business to “hit ‘em where the competitors ain’t”. “Blue Oceans” are areas where there is little competition from rivals. “Red Oceans” are where rivals are congregated, fighting for customers using similar business approaches.
A place to begin a “Blue Ocean” strategy project is with the Strategy Canvas. This canvas depicts how players in an industry set their strategies on multiple strategy dimensions. As you can see in the example below it shows how Southwest Airlines strategy differs from the other airlines. This difference has led to Southwest’s success in an industry full of failures and troubled airlines.
|Blue Ocean Strategy Canvas|
This is an excellent starting point for any company wishing to determine where to move strategically within an industry to find blue ocean waters.
Once a business has determined areas that can be exploited to create a “blue ocean” the book provides a well-constructed approach to developing a “blue ocean” strategy and for dealing with hurdles that will stand in your way.
To augment the “blue ocean” strategy process we would recommend the use of the new product development process discussed in our earlier post. http://gwrresearch.blogspot.com/2012/11/new-product-development-process.html
Thursday, February 7, 2013
Five Steps for Developing a Strong Workforce
Having a capable workforce is critical to building a successful organization. Here are five steps that can improve the workforce building process.
Screening – Assembling the “right” group of individuals for your workforce is important. You can test for competency but being part of a team means that individuals must have personalities that can work together. Assuredly this means that some subjectivity will enter into the screening process. It may also mean that wrong choices will be made and will need correction. The subjectivity and chance for errors can be reduced with the introduction of 10 tips from About.com Human Resources at
Defining job responsibilities – even with the “right” personnel, the workforce can be dysfunctional if each member’s responsibilities are not clearly defined. It is management’s responsibility to understand how each job contributes to the organization’s success and to clearly articulate the requirements of each job.
Defining job success – After each member of the workforce understands the requirements of his/her job it is important that he/she understands what success looks like. This can be presented in terms of meeting specific deadlines, producing specific results in production or sales or levels of customer satisfaction. It is important for individual members of the organization to understand how success in their job relates to the overall success of the organization.
Establishing metrics – Favoritism and improperly set work rules can destroy the morale and ultimately the effectiveness of a good workforce. Setting specific metrics for job performance lets individuals know how their performance will be graded. If developed properly it will eliminate favoritism and improper work rules. The University of California suggests using the following SMART test to determine the quality of performance metrics.
S = Specific: clear and focused to avoid misinterpretation. Should include measurement assumptions and definitions and be easily interpreted.
M = Measurable: can be quantified and compared to other data. It should allow for meaningful statistical analysis. Avoid "yes/no" measures except in limited cases, such as start-up or systems-in-place situations.
A = Attainable: achievable, reasonable, and credible under conditions expected.
R = Realistic: fits into the organization's constraints and is cost-effective.
T = Timely: doable within the time frame given.
Workforce participation in job design – Most individuals spend the majority of their time in the workplace. For the highest level of productivity, members of a workforce should feel that they are part of the organization and can have real input into how jobs are designed. The workplace can be a site for individual growth and learning as well as a place to produce goods and services. If individuals understand what is needed for the organization to succeed, participation in job design can lead to higher productivity for the organization and higher morale with lower turnover for the workforce.
My firm, GWR Research, uses and recommends the above process along with standard of performance system job design and metrics. In every case we have used this approach productivity has increased significantly (up to 100 percent) with high morale and low turn over in the workforce.