Daily Updates

 Idea 44 - Theories X & Y (and Theory Z) Management's ideas about motivating employees have changed a bit since scientific management first considered how to make workers more efficient. Today, most managers would at least pay lip service to the idea that employees are human beings, with human needs and aspirations, and that you need to recognize this to get the best from them. This may seem obvious today, but as a management precept it owes much to Douglas McGregor and his Theory X and Theory Y. Theory X and Theory Yare a double act - a Mr Nasty and Mr Nice of human resource management - that leave you in no doubt as to which McGregor prefers, even though he insists that the optimal management style should draw from both. McGregor believed that the way a company was managed reflected its managers' view of human nature. His theories look at how satisfying the needs of employees can be used to motivate them, though each makes very dif(erent assumptions about what those needs...

Idea 43 - System thinking Some farmers discovered systems thinking the hard way. With their crops being devoured by insects, they reached for the spray gun and blasted them with pesticide. And it worked - for a time. But then the crop damage returned, worse than ever, and the pesticide that was so successful had no more effect, As it happened, the insect that was eating the crops had also been eating, or competing with, another insect. Now that insect no. 1 was out of the way, insect no. 2 was having a field day. 'Systems thinking' says that things are more complicated than they seem and actions can have unforeseen and unintended consequences.   Systems thinking recognizes that no man - or insect - is an island, and that there is an interconnectedness in social and natural processes that is not always immediately apparent. 'Linear' thinking operates in a straight line. It says that if you do A to B, the result will be C. Systems thinking says that if you do A to B, it m...

Idea 42 - Supply chain management When supply chain managers compare notes, the talk will eventually get round to. 'The perfect order', that’s an order which reached the customer complete, in the right place, undamaged and on time. Like other manifestations of perfection, it is not as common as some companies would like. Lower-than-necessary perfect order rates not only create unhappy customers, but suggest supply chain inefficiencies that are costing the company money. So. Attention to. The supply chain has moved out of warehouses and loading bays and into. Mahogany Row, The supply chain is made up of the physical and information links between suppliers and the company on one side, and the company and its customers on the other. It includes production planning, purchasing, materials handling and, under the subset of 'logistics', transport and storage (warehouses and distribution centers). Though companies used to think of the supply side and the demand (custo...

Idea 41  -  Strategic alliances 'It's partner or perish', declared Xerox CEO Anne Mulcahy. She was announcing yet another in the chain of strategic alliances that her company has built, to powerful effect, over many years, starting with Fuji of Japan in 1960. It may have sounded like roll-of-the-drums hyperbole, but in today's fast-moving markets - and particularly in the high-tech arena where Xerox competes - it was no more than a reasonable observation. Managers and shareholders want their businesses to grow, though not always for the same reasons. Growth comes from building share in existing markets or expanding into new ones, and there is more than one way of doing either. The conventional options have always been either to build growth, or to buy it. Companies can grow organically, the hard, backbreaking way. The (deceptively) easy alternative is go out and acquire a competitor or a business in the chosen new market. The trouble with acquisition is that ...

Idea 40  -  Stakeholders It is the fate of some words to evolve rapidly through enlightening to hot, overused and, finally, very irritating, and 'stakeholder' has become one of them. It is sprinkled over reports and jammed into mission statements, as if use alone were enough to prove concern. Worse, politicians have got hold of it. In their mouths, it seems to refer to the population at large, which makes them sound caring without meaning very much. All this is a pity because its original concept represents a radical shift in the way the corporation views, or should view itself. The stakeholder idea began its march with R. Edward Freeman's 1984 book Strategic Management: A Stakeholders Approach. Freeman held that commercial firms would be much more effectively managed at a strategic level if the concerns of various stakeholders were taken into account. In other words, there would be long-term benefit for shareholders. He said later that the word 'stakeh...

Idea  39 - Six Sigma Martial arts mixes with the Greek alphabet and a US electronics maker in a defects control discipline that has won many thousands of corporate converts - Six Sigma. It was designed to reduce. Defects and shorten cycle times, something it does very effectively, but today its sponsors are promoting it as a fully integrated management system. Six Sigma was developed in the 1980s by electronics and communications firm Motorola. It was part of that company's response to devastating competition from foreign - read 'Japanese' - manufacturers. Sales were taking a hammering and there was a rising tide of complaints from the field sales force about warranty claims. As Motorola tells the story, the senior sales vice president looked the chief executive in the eye and said: 'Our quality stinks.' The two of them agreed on a goal of tenfold quality improvement over the next ten years. The job of making that happen fell to Bill Smith, an enginee...

Idea  38 - Scientific management Is management and art or a science? The debate is not new, nor is it over. In recent times, the 'art' lobby has been making up some lost ground, but it was 19th-century engineer Frederick Winslow Taylor who first cast management as a science. Peter Drucker, the management guru's management guru, says Taylor deserves a place alongside Darwin and Freud in the making of the modern world. Taylor believed that production was subject to universal laws that were independent of human judgment. It was the task of scientific management to uncover these laws, to discover the 'one best way' of doing things. It might be the best way of shoveling coal, of securing a bolt or of ensuring quality control. Taylor is largely forgotten outside business schools these days. When his memory surfaces, it's often for the worst of reasons. He was the first to break work down into small pieces, measure them and put them back together so they opera...

Idea  37 - Project management There are more lawyers, accountants and business school graduates in top management these days, and fewer engineers. The engineer as business manager is in eclipse, along with the shrinking weight of manufacturing in developed economies. Yet there is much that managers can and do learn from the down-and-dirty business of project management, in planning complex projects and forcing them through to conclusion. A project is very different to a process. A process carries out the same function again and again to yield a product or a service. A project is a one- off undertaking, with a clear beginning and end, usually aimed at creating some useful change or adding value - typically to build a new plant or create a new product. The skills needed to complete a project successfully are not those required to manage a process, and so project management has evolved as a discipline of its own. Projects bring together resources such as people, money a...

Idea  36 - Outsourcing In 2003, Procter &: Gamble caused a few jaws to drop by outsourcing its IT functions to Hewlett-Packard, its human resources department to IBM and its facilities management to Jones Lang LaSalle. It reasoned that specialists in each process would be able to beef up efficiency and service. Not only has it not been disappointed, but it has been pleasantly surprised at the scale of the improvement. So far, the exercise has been a classic example of why management reaches for outsourcing. Not all outsourcing fits that description, by any means. Many who have tried it say it is very difficult to pull off, and the failure rate remains high - anything from 40-70%, depending on whom you ask. A series of very visible outsourcing calamities at big companies like Dell and Lehman Brothers (which re-insourced helpdesks) and JP Morgan (which clawed back its IT functions) raised doubts over whether the practice had a future at all. Certain British government ...

Idea  35 - Organizational excellence Many esoteric works on management never make it past the campus gates. Others can influence the way companies are organized and run, though they usually have to filter their way through the consultancy profession first. A limited number of management books deliver an idea that's gripping enough to be read by senior management itself, drinking directly from the source. But only one has single-handedly created a whole new industry - In Search of Excellence, by McKinsey consultants Tom Peters and Robert Waterman. You could say that the book created two new industries: the mass business book industry and the Tom Peters industry. It appeared like a torch of hope to a benighted corporate America that felt it had lost its way in the dark. Battered by competition from the most unlikely source, in markets they had dominated proudly only a few years before, American managers reached for Peters and Waterman like a cartoon man-en-knees-in-desert ...