Corps Business

Basic Business Cents

Our editor enjoys a play-on-words. The title of this column, Basic Business Cents, was her creation. I proposed Basic Business and she added Cents as a double intendre. Another play-on-words appears in the title of a book by David H. Freedman, Corps Business, The 30 Management Principles of the U.S. Marines. It should come as no surprise that these principles have relevance to business.

One of these principles is to organize according to the rules of three. It says in times of stress, people can efficiently handle exactly three key responsibilities. To follow that thinking, the principles that apply to business can be organized into three groups, Focus on the Essence, Organize Around Tasks, and Challenge Your Thinking. We should be able to remember these three guiding groups rather than thirty principles.

Focus on the essence means to break down complex situations into simple terms. In this way, employees will be able to act quickly to respond to changing situations. It is better to have a few options that can be easily adapted to changing situations than to try to make specific plans for every contingency. It is also better to decide quickly on an imperfect solution than to wait for a perfect plan that may be too late. The ability to react quickly and effectively in chaotic environments usually trumps other competencies.

Organize around tasks reminds us to determine the size and make-up of groups within the organization depending on the needs of each specific situation. The lowest levels of personnel accomplish most of the organization’s critical tasks, so anything to help them become more effective will pay dividends. What is also required is flexibility, the ability and willingness to reinvent the groups as situations change. Cross training will enhance the ability to be flexible and adjust to new tasks. Focusing on developing organizational talents creates opportunities while focusing on products and services invites obsolescence. Distribute competence; educate and train people at all levels so that they will not face situations on the job more daunting than they faced in training. When they are aligned with the vision, mission, and objectives of the organization, let them make decisions in real time without your micro-management.

Constantly challenge your thinking. Demand to be questioned by your employees. They should feel free to openly disagree until it is time to carry out the final decision. It is wise to get as many opinions as possible and often insights for improvement can come from people in seemingly unrelated fields. Another good way to challenge our thinking is to experiment obsessively. Even the most successful organizations will eventually stop winning if it doesn’t explore radically new approaches and technology.

So you thought running your business had nothing to do with running a military force like the U.S. Marines? Think again. Even the word strategy originated with the military and has a military meaning:

• a plan of action or policy designed to achieve a major or overall aim

• the art of planning and directing overall military operations and movements in a war or battle.

We can learn from many sources and continued learning is essential to our growth and success. Oorah!

Positive Thinking Leads to Positive Results

Basic Business Cents

It is funny how life works; we tend to get what we expect.

Two books that I recommend for every person in business, or not in business, are written by Norman Vincent Peale-The Power of Positive Thinking and Enthusiasm Makes the Difference.

Peale says you do not need to be defeated by anything; you can have peace of mind, improved health, and increasing flow of energy by keeping a positive frame of mind. Do not allow negative thoughts to dominate.

Tony Schwartz in Harvard Business Review advocates practicing realistic optimism. He says that doesn’t mean putting a happy face on every situation, which is blind optimism but it means intentionally telling the most hopeful and empowering story in any given situation, without distorting the facts. He suggests when facing a problem or something we worry about, we calmly write down the best possible outcome of the situation and focus our attention to making that happen. He says, “Emotions are contagious, how we feel profoundly influences how we make others feel, and how effective we are at whatever we do.”

Early in my career, I was in sales and noted an interesting phenomenon. When I received an important order, whether it be big, particularly difficult, or unexpected, something was different. I would immediately make contact on key pending contracts or proposals and chances were good I would close several other orders that same day. There must have been something different in my aura, my self-confidence, my attitude, likeability, or something emanating from me. I don’t know what it was; I just know my chances were greatly enhanced because I was in a positive frame of mind.

A series of sports books, e.g., Inner Tennis, have been published teaching you to visualize the results you hope to achieve. For example, when you are playing golf, think about your drive going long and far down the middle of the fairway. Your chances of that resulting are improved. If on the other hand, you think about that out-of-bounds on the left, guess what happens. If you are playing tennis, visualize your serve going hard into the far corner where it cannot be returned and it is more likely to happen. I can’t explain it, but it seems to work. Again, our brain has more power than we understand.

Peale talks about achieving health and happiness with positive thinking and enthusiasm. I am not a doctor but I believe we do not fully understand the power of our brain in improving health and healing. I do know that when we maintain a spirit of positive thinking and enthusiasm, we are happier people. And, we increase the happiness of people around us. Who likes to be around a “gloomy Gus”? Like measles and mumps, positive thinking and enthusiasm is contagious. Your life should be full of joy and satisfaction and not in the downward spiral of negative thinking.

Peale says positive thinking and enthusiasm will step up energy and vitality. It drives energy for constructive personal and social living. Nature fulfills our expectations.

Life is more fun and rewarding if we approach it with a positive outlook and enthusiasm.

Maslow’s Hierarchy of Needs

Basic Business Cents

In our last column, we wrote about Stephen Covey’s five needs that are fundamental to human fulfillment. They are, “to live, to love, to learn, and to leave a legacy.” They might ring a bell with some of you who vaguely remember once studying a pyramid representing Maslow’s Hierarchy of Needs. It was sectioned into five layers with the more basic needs at the bottom.

Self-actualization Esteem Love & belonging Safety Physiological

Abraham Maslow in his paper of 1943 presented the results of his research describing the growth in humans. Maslow’s theory suggests that the most basic level of needs must be met before the individual will strongly desire the higher level of needs.

Physiological needs are literally the requirements for human survival. Air, water, and food are requirements without which we cannot survive. Clothing and shelter are necessary to protect us from the elements. Until these needs are answered, humans or other animals have little interest in anything else. Unfortunately, we have people in our society with these needs.

When physical needs are met, people then turn to the next level and safety needs take precedence and dominate behavior. These needs include personal security, financial security, health and well-being, and protection against unforeseen events. In the workplace it would include adequate salary, job security, savings program, retirement and other benefits, and health insurance.

After physiological and safety needs are fulfilled, the third layer of human needs are social and involve feelings of belongingness such as friendship, intimacy, and family. Humans need to feel a sense of belonging and acceptance. This may come from the workplace, social organizations, religious organizations, gangs, partners, sports, or family. We need to love and be loved. Businesses play to this need with loyalty cards, advance notice of sales, advisory boards, and “insider clubs”.

The esteem need pertains to the basic need we have to feel we are contributing to the greater good and are worthwhile. We have a need to be proud of our selves and what we do. A complication on the satisfaction of this need is that low self-esteem, depression, inferiority complex, and other similar maladies must be corrected internally before respect from outsiders will help.

The need for self-actualization is the understanding of what we can be and realizing that we have achieved it; to be everything we are capable of being. This varies from person to person as some might have as their aim to be the very best parent or spouse. Others dream to excel in athletics, art, inventions, writing, etc. What does it take to fulfill our lives? I once visited a small grocery in a tiny rural town. The owner of the store was obviously very bright, outgoing, and eager to talk to this stranger when he discovered that I was a student at the state university. He shared that he had also been a student at the university years before when his father passed away and he had to quit school and return home to run the family store. One could see after all these years that he was still wondering what life might have had in store for him had he been able to finish school. It still pained him to think about it. For others, a dream of running such a store, interacting with friends and neighbors on a daily basis, and having their other basic needs satisfied might be very fulfilling. We are all different.

What does all this mean to us in our business? Marketing courses teach Maslow’s hierarchy of needs as one of the first theories as a basis for consumers’ motives for action. By understanding the needs of target customers, we can position our products and services to a ready market. We also need to understand the needs of our employees and where they are on the pyramid of needs to enable them to be more proficient at satisfying customers’ needs.

A useful adage for us to follow might be, “He who best understands the needs of his/her customers and employees, and supplies solutions at a fair price, will best satisfy his/her own needs.”

Self-Discipline

A couple of weeks ago, I attended a training session on social networking. Like many such sessions, you walk away saying to yourself, I already knew that. But,......you are also reminded that you do not practice what you know. That applies to me, I was reminded that you should post on your blog page at least weekly. To remedy my laxness, I added to my calendar to post every Monday. We will see if I have the self-discipline to follow through.

Protect Your Human Investment

Basic Business Cents

Protect Your Human Investment

Many people say your employees are your most valuable asset, but Dr. W. Edwards Deming used to say employees are not an asset that can be bought and sold like a commodity. He would say they are a treasure that must be protected at all costs. After all, you spent considerable time and money attracting and training them, coaching them in how to be successful in your business and sharing your dream.

Turnover of employees is very costly. Harvard Business Review in October 2010 quoted one company as saving nearly $50 million dollars by improving their retention rate from 65% to 85%. A company that I know claimed to save $300,000/month by reducing their turnover rate. These are big numbers for big firms, but you can see the potential savings in improving the retaining employees is huge for any size organization.

There are times when we err by hiring the person for a position for which they are not suited. In that case, we need to admit our mistake and find them a position for which they can be successful, either inside the organization or outside. After all, you made the mistake in hiring and you owe it to them to help them find the right spot.

There is no magic recipe for retaining employees; just a lot of little things. For one, place them in positions where their skills and talent will allow them to succeed. Give them work processes that are simple and effective. Managers should understand that their job is to manage and improve the processes and not micromanage the people. Training needs to be provided to enable the employee to be successful. Remember, worker training worker informally may be like the old child’s game where you whisper something in someone’s ear and they in turn whisper it to the next person. By the time it gets around the room, the message is nowhere near what was started. You need formal, standardized training.

The new employees want to be successful and to get satisfaction in their work. The manager must coach them to help them improve, use positive reinforcement, be a supporter (not a critic), and be a role model. Good management shares the credit for successes with the employees and provides resources needed to do the job.

Enlightened management will share the organization’s vision and strategy and then listen to input from employees. Communication has two parts, sending and receiving. Receiving may be more important.

Dr. Deming has another saying that is appropriate in our work, “Dogs like a pat on the back and people do too.” By helping employees attain pride in their work, we are not only going to have better employees, but they are more likely to stay with the organization long-term.

Introduction to Strategy Management

The last few articles have detailed questions to be addressed in order to develop a sound strategic plan. Perhaps we should pause and look at the context in which we use them.

Throughout history, military leaders have devised strategies to achieve victory over their opponents. Each general’s approach is unique. The great Chinese general, Sun-tzu, said there were 13 principles of war that each general had to know. Napoleon declared that his officers should know 115 rules of generalship. In his treatise, On War, Karl von Clauswitz of Prussia originated the concept of total war. In the United States, a confederate general said there was only one adage of war: Get there first with the most men.

We call these approaches to war strategies. Indeed, the English word “strategy” comes from the ancient Greek word meaning generalship. Strategy is the art and science of conducting a major campaign to achieve an objective, be it military or otherwise. Indeed, some modern sports coaches study ancient military leaders to improve their understanding of how to lead their teams.

As we see, the generals often disagree with each other on what or how many principles should be part of their strategic plan. Most principles of strategy, however, include some common elements, including clarifying the objective, proper deployment of forces on key targets, discipline, security and simplicity of operations.

Dr. W. Edwards Deming also taught that, in business, an organization’s leadership must determine its aim and establish a system for getting all employees involved in the aim. It is management’s job to ensure that there is an organizational strategy as well. Today this means more than clarifying the objective and laying the plans for reaching that objective. It also means executing the strategy.

This is done differently all over the globe. Most North American managers excel at developing strategies, whether in business, government, or other types of organizations. In carrying out the strategy, however, they frequently lag behind our foreign competitors, sometimes leaving our carefully written strategies unexecuted.

Why? The answer probably lies in not having a system of management to deploy our strategies through the organization. The Strategy Management system does that. It communicates the strategies and organizational aim to every employee, and gives them all a part in the execution. It is a modern method for focusing our troops on the important targets.

The Strategy Management System has four main elements-Prepare, Research, Plan, and Manage. The preparation element consists of top management making the decision to use this system and parceling out the responsibility for research on the twenty-one items to be reviewed. It should be noted that this system is not size dependent; it has been used with as many as 435 participants in the planning event to as small as a single person.

With the assignments handed out to the planning team, they begin to survey, meet, talk and research data to find out answers to the questions presented in their assignments.

They bring their findings to the planning event in a five to ten minute presentation. Other individuals whose input is respected are invited to the planning event, such as key employees, customers, suppliers, Board members, community leaders, etc. They are given a pad of sticky notes and a marking pen to write down any issues that come to mind during the presentations. At the conclusion of the presentations, the sticky notes are randomly placed on a wall and participants are asked to group them by like subjects. After the number of distinct groups is reduced to a number between three and twelve, the groups are named in the form of a verb and noun and these become the strategic actions with all the notes under them as back up for what must be addressed.

The actions are then prioritized according to primarily causes as opposed to effects of the others. They are tested to see if they are both necessary and sufficient to achieve the aim of the organization and a leader identified to be responsible to achieve each strategic action.

The aim, values, mission, and strategic actions are then summarized on a one-page document, sometimes called a strategy map and distributed to all employees. The Japanese have a saying that it takes more than one of the senses to communicate so this plan must not only be provided to each employee but must also be explained orally by management.

The last element of Strategy Management is to manage the system to make sure results are obtained. The leader of each strategic action typically reports monthly to the rest of the management team on the progress they have made, roadblocks encountered, and plans going forward.

This system has been proven to work with any size or type of organization to focus all employees on achieving the aim of the organization and obtaining the desired results.

Using SWOT Analysis for Strategic Planning

Many strategic planning processes use as a basis an exploration of strengths, weaknesses, opportunities, and threats. As important as these subjects are, they are still only four of the twenty-one areas that must be researched to develop a solid plan that will be achieved. This article will share some questions to be addressed in these four important areas.

Strengths are defined as the organization’s competencies, capabilities, and any other resources it can leverage to fulfill the needs of customers. It is a list of advantages the organization has over its competitors; resources it has to fulfill the needs of customers or to contribute to society; unique characteristics that appeal to customers; and perceived benefits of this organization to customers. Questions to investigate and understand why are:

1. What do you do best?

2. What are perhaps some untapped resources?

3. What do customers think you are best at?

4. What part of your operation would your competitors most like to emulate?

5. What part of your organization do you most fear to lose?

6. Where can you be most successful? (area, industry, application, etc.)

7. Do the customers really care about each of your strengths?

Weaknesses are defined as vulnerable characteristics that the competition might exploit and reasons, real or perceived, for customers not to avail themselves of your organization’s products or services. Two questions to research, analyze, and understand why are:

1. What are your organization’s most critical vulnerabilities in the eyes of your customers?

2. What are your organization’s most critical vulnerabilities in the eyes of your competitors?

Opportunities are defined as significant areas for your organization to exploit its strengths and opportunities through new markets and product or service offerings. Research on the major opportunities for the organization in the next three to five years should be conducted and presented with the rationale that the opportunities are real, you can be successful, and the results will justify the effort. Questions to be considered in this area are:

1. Where are the unmet needs?

2. Where are the growth areas in the market?

3. What are the significant market needs?

4. What positive impact could the economy have?

5. Where are you technically superior?

Threats are defined as areas of vulnerability in the marketplace, encompassing the economy and environment trends, legislation, competitive actions, possible market obsolescence or change. The theme of this research and presentation is on the major threats that face your organization in the next three to five years. Questions to investigate and understand why are:

1. In what areas of markets and products are you in the declining phase?

2. What negative impact could the economy have?

3. What negative impact could the government have?

4. What environment factors could have a negative impact?

5. What customer factors/changes could have a negative impact?

6. Where are you technically inferior?

7. What are your limitations? Why?

Research and discussion of strengths, weaknesses, opportunities, and threats will reveal areas to be shored up or strengthened and other areas to be exploited in your planning activity. By knowing yourselves and of what you are capable, you are in a better position to move forward.