Archive for the ‘Fundementals’ Category

Resource Allocation IS Strategy

In business, we have vision statements, mission statements, strategic plans, strategic initiatives, and operating plans. And every day there are there are countless decisions to make. But, in the end, it all comes down to one thing – how we allocate our resources.  Whether it’s hiring people, training them, buying capital, or funding projects, all strategic decisions come back to resource allocation.  Said more strongly, resource allocation is strategy.

Take a look back at last year.  Where did you allocate your capital dollars?  Which teams got it and which did not?  Your capital allocation defined your priorities.  The most important businesses got more capital.  More to the point – the allocated capital defined their importance. Which projects were fully staffed and fully budgeted? Those that were resourced more heavily were more important to your strategy, which is why they were resourced that way. Which businesses hired people and which did not?  The hiring occurred where it fulfilled the strategy. Which teams received most of the training budget?  Those teams were strategically important.  Prioritization in the form of resource allocation.

Repeat the process for this year’s operating plan.  Where is the capital allocated?  Where is the hiring allocated?  Where are the projects fully staffed and budgeted?  Regardless of the mission statements, this year’s strategy is defined by where the resources are allocated.  Full stop.

Repeat the process for your forward-looking strategic plans.  Where are the resources allocated?  Which teams get more?  Which get fewer?  Answer these questions and you’ll have an operational definition of your company’s forward-looking strategy.

To know if the new strategy is different from the old one, look at the budgets.  Do they show a change in resource allocation?  Will old projects stop so new ones can start? Do the new projects serve new customers and new value propositions?  Same old projects, same old customers, same old value propositions, same old strategy.

To determine if there’s a new strategy, look for changes in capital allocation.  If the same teams are allocated more of the same capital, it’s likely the strategy is also the same. Will one team get more capital while the others get less?  Well, it’s likely a new strategy is starting to take shape.

Look for a change in hiring.  Fewer hires like last year and more of a new flavor probably indicate a change in strategy.  And if people flow from one team to another, that’s the same as one team getting new hires and the other team losing them.  That type of change in resource allocation is an indicator of a strategic change.

If the resource allocation differs from the strategic plan, believe the resource allocation. And if the resource allocation is the same as last year, so is the strategy.  And if there is talk of changing resource allocation but no actual change, then there is no change in strategy.

Image credit – Scouse Smurf

Some Ifs and Thens To Get You Through Your Day

If you didn’t get what you wanted, why not try wanting what you got?

If the timing isn’t right, what can you change so it is right?

If it could get you in trouble, might you be on to something?

If it’s impossible, don’t bother.

If it’s easy, let someone else do it.

If there’s no possibility of bad things, there’s no possibility of magic.

If you need trust but have not yet secured it, declare failure and do something else.

If there is no progress, don’t push.  Move the blocking agent out of the way.

If you don’t know where the cost is, you can’t design it out.

If the timing isn’t right, why didn’t you do it sooner?

If the project went flawlessly, you didn’t try to do anything meaningful.

If you know some people won’t like it, isn’t that reason enough to do it?

If it’s almost impossible, give it a go.

If it’s easy, teach someone else to do it.

If you don’t know where the waste is, you can’t get rid of it.

If you don’t need trust, it’s the perfect time to build it.

If you try the hardest thing first and it doesn’t work, at least you avoid wasting time on the easy stuff.

If you don’t know the number of parts in your product, you have too many.

If the product came out perfectly, you took too long.

If you don’t give it a go, how can you know it’s impossible?

If trust is in short supply, supply it.

If it’s easy, do something else.

If forgiveness is so much better than permission, why do we like to do things under the radar?

If bad things didn’t happen, try harder next time.

Image credit — Gabriel Caparó

How flexible are your processes and how do you know?

What would happen if the factory had to support demand that increased one percent per week? Without incremental investment, how many weeks could they meet the ever-increasing demand?  That number is a measure of the system’s flexibility.  More weeks, more flexibility.  And the element of the manufacturing system that gives out first is the constraint.  So, now you know how much demand you can support before there’s a problem and you know what the problem will be.  And if you know the lead time to implement the improvement needed to support the increased demand, in a reverse-scheduling way, you know when to implement the improvement so it comes online when you need it.

What would happen if the factory had to support demand that increased one percent in a week?  How about two percent in a week, five percent, or ten percent?  Without incremental investment, what percentage increase could they support in a single week?  More percent increase, more flexibility.  And the element of the manufacturing system that gives out first is the constraint.  So, now you know how much increased demand you can support in a single week and you know the gating item that will block further increases.  You know now where to clip the increased demand and push the extra demand into the next week.  And you know the investment it would take to support a larger increase in a single week.

These two scenarios can be used to assess and quantify a process of any type.  For example, to understand the flexibility of the new product development process, load it (virtually) with more projects to see where it breaks.  Make a note of what it would take to increase the system’s flexibility and ask yourself if that’s a good investment.  If it is, make that investment.  If it isn’t, don’t.

This simple testing method is especially useful when the investment needed to increase flexibility has a long lead time or is expensive.  If your testing says the system can support five percent more demand before it breaks and you know that demand will hit the system in ten weeks, I hope the lead time to implement the needed improvement is less than ten weeks.  If not, you won’t be able to meet the increased demand.  And I hope the money to make the improvement is already budgeted because a budgeting cycle is certainly longer than ten weeks and you can’t buy what you need if the money isn’t in the budget.

The first question to ask yourself is what is the minimum flexibility of the system that will trigger the next investment to improve throughput and increase flexibility? And the follow-on question: What is needed to improve throughput? What is the lead time for that solution? How much will it cost? Is the money budgeted? And do we have the resources (people) that can implement the improvement when it’s time?

When the cost of not meeting demand is high, the value of this testing process is high. When the lead times for the improvements are long, this testing process has a lot of value because it gives you time to put the improvements in place.

Continuous improvement of process utilization is also a continuous reduction of process flexibility.  This simple testing approach can help identify when process flexibility is becoming dangerously low and give you the much-needed time to put improvements in place before it’s too late.

Image credit — Tambako The Jaguar

Two Sides of the Same Coin

Praise is powerful, but not when you don’t give it.

People learn from mistakes, but not when they don’t make them.

Wonderful solutions are wonderful, but not if there are no problems.

Novelty is good, but not if you do what you did last time.

Disagreement creates deeper understanding, but not if there’s 100% agreement.

Consensus is safe, but not when it’s time for original thought.

Progress is made through decisions, but not if you don’t make them.

It’s skillful to constrain the design space, but not if it doesn’t contain the solution.

Trust is powerful, but not before you build it.

 

A mantra: Praise people in public.

If you want people to learn, let them make mistakes.

Wonderful problems breed wonderful solutions.

If you want novelty, do new things.

There can be too little disagreement.

Consensus can be dangerous.

When it’s decision time, make one.

Make the design space as small as it can be, but no smaller.

Build trust before you need it.

Image credit – Ralf St.

Projects, Products, People, and Problems

With projects, there is no partial credit.  They’re done or they’re not.

Solve the toughest problems first.  When do you want to learn the problem is not solvable?

Sometimes slower is faster.

Problems aren’t problems until you realize you have them.  Before that, they’re problematic.

If you can’t put it on one page, you don’t understand it. Or, it’s complex.

Take small bites.  And if that doesn’t work, take smaller bites.

To get more projects done, do fewer of them.

Say no.

Stop starting and start finishing.

Effectiveness over efficiency. It’s no good to do the wrong thing efficiently.

Function first, no exceptions. It doesn’t matter if it’s cheaper to build if it doesn’t work.

No sizzle, no sale.

And customers are the ones who decide if the sizzle is sufficient.

Solve a customer’s problem before solving your own.

Design it, break it, and fix it until you run out of time.  Then launch it.

Make the old one better than the new one.

Test the old one to set the goal. Test the new one the same way to make sure it’s better.

Obsolete your best work before someone else does.

People grow when you create the conditions for their growth.

If you tell people what to do and how to do it, you’ll get to eat your lunch by yourself every day.

Give people the tools, time, training, and a teacher.  And get out of the way.

If you’ve done it before, teach someone else to do it.

Done right, mentoring is good for the mentor, the mentee, and the bottom line.

When in doubt, help people.

Trust is all-powerful.

Whatever business you’re in, you’re in the people business.

Image credit — Hartwig HKD

Working In Domains of High Uncertainty

X: When will you be done with the project?

Me: This work has never been done before, so I don’t know.

 

X: But the Leadership Team just asked me when the project will be done. So, what should I say?

Me: Since nothing has changed since the last time you asked me, I still don’t know. Tell them I don’t know.

 

X: They won’t like that answer.

Me: They may not like the answer, but it’s the truth.  And I like telling the truth.

 

X: Well, what are the steps you’ll take to complete the project?

Me: All I can tell you is what we’re trying to learn right now.

 

X: So all you can tell me is the work you’re doing right now?

Me: Yes.

 

X: It seems like you don’t know what you’re doing.

Me: I know what we’re doing right now.

 

X: But you don’t know what’s next?

Me: How could I?  If this current experiment goes up in smoke, the next thing we’ll do is start a different project.  And if the experiment works, we’ll do the next right thing.

 

X: So the project could end tomorrow?

Me: That’s right.

 

X: Or it could go on for a long time?

Me: That’s right too.

 

X: Are you always like this?

Me: Yes, I am always truthful.

 

X: I don’t like your answers. Maybe we should find someone else to run the project.

Me: That’s up to you.  But if the new person tells you they know when the project will be done, they’re the wrong person to run the project.  Any date they give you will be a guess.  And I would not want to be the one to deliver a date like that to the Leadership Team.

 

X: We planned for the project to be done by the end of the year with incremental revenue starting in the first quarter of next year.

Me: Well, the project work is not bound by the revenue plan.  It’s the other way around.

 

X: So, you don’t care about the profitability of the company?

Me: Of course I care.  That’s why we chose this project – to provide novel customer value and sell more products.

 

X: So the project is intended to deliver new value to our customers?

Me: Yes, that’s how the project was justified.  We started with an important problem that, if solved, would make them more profitable.

 

X: So you’re not just playing around in the lab.

Me: No, we’re trying to solve a customer problem as fast as we can.  It only looks like we’re playing around.

 

X: If it works, would our company be more profitable?

Me: Absolutely.

 

X: Well, how can I help?

Me: Please meet with the Leadership Team and thank them for trusting us with this important project.  And tell them we’re working as fast as we can.

Image credit – Florida Fish and Wildlife

X:  Me:  format stolen from Simon Wardley (@swardley).  Thank you, Simon.

Happier and More Thankful

What could we change to become happier? 

Happiness comes when our reality (how things really are) compares favorably with our expectations. If happiness comes from the comparison between how things are and our expectations, wouldn’t we be happier with any outcome if we change our expectations of the outcome? But how are expectations defined? What makes an expectation an expectation?  Where do our expectations come from?

If we expect to have no control over the outcome, wouldn’t we be happier with any outcome?  Aren’t we the ones who set our expectations? And hasn’t the Universe told us multiple times we don’t have control? If so, what’s in the way of giving up our expectations of control? What’s in the way of letting go?

What could we change to become more thankful?

Thankfulness comes when our reality, what we see or recognize, compares favorably with how we think things should be. If thankfulness comes from the comparison between what is and what should be, what if we changed our shoulds?  Wouldn’t we be more thankful if we lessened our shoulds and reality compared more favorably? But how are shoulds defined?  What makes a should a should? Where do our shoulds come from?

If we can help ourselves believe we don’t have control over how things should be, wouldn’t we be more thankful for how things are? And aren’t we the setters of our shoulds? And hasn’t the Universe often told us our shoulds have no control over it? If so, what’s in the way of giving up the belief that our shoulds have control over anything? What’s in the way of letting go?

Shoulds and expectations are close cousins and both influence our happiness and ability to be thankful.

At this Thanksgiving holiday, may we be aware of our shoulds and enjoy our friends and family as they are. May we be aware of our expectations and enjoy the venue, the food, the weather, and the conversations as they are. May we suspend our natural desire to control things and be happy and thankful for things as they are.

And may we love ourselves as we are.

Happy Thanksgiving.

Mike

 

Image credit — Bennilover

How People Grow

I was invited to an important meeting.  Here’s how it went.

I was invited to an important meeting.  I want you to attend with me.

I was invited to an important meeting with my boss.  Will you join me?

I was invited to an important meeting but I cannot attend.  Will you go in my place?

I was invited to an important meeting but the company will be better served if you attend.

I heard you were invited to the meeting instead of me.  I think that’s great.

Here’s a presentation I put together.  I want to explain it to you.

Here’s a presentation I put together.  What does it say to you?

Here’s a presentation I put together.  What’s missing?

I want you to create a draft of a presentation which we’ll review together.

I want you to create the presentation.  I’ll review it if you want.

I want you to create the presentation and deliver it.

I heard you helped someone create an interesting presentation and it went over well.  I’m happy you did that.

This is the situation and this is what I want you to do.

This is the situation and this is what I think we should do.  What do you think?

This is the situation. What do you think we should do?

This is the situation.  What are you going to do?

What’s the situation?

What’s the situation and what will you do?

What was the situation and what did you do?

I heard you helped someone with their situation.  That made me smile.

Image credit — Bastian_Schmidt

There is nothing wrong with having problems.

When you are stuck, often the problems you can describe are not the problems that are in the way.

The problems you solved last time make it more difficult to see new problems this time.

The problems you know of are not the problem.

When you have no problems, you have big problems.

When you have no problem, there is no way to justify additional resources.

When you have no problem, you better finish on time.

When you’re stuck on a problem, make it worse and solve it by doing the opposite.

Problems are not bad, even though bringing them to everyone’s attention may be bad for your career.

And if talking about problems is bad for your career, you are working at the wrong company.

Until you can explain the problem in plain language, you do not understand it.

And when you do not understand a problem, you can’t solve it.

Solutions start with a problem.

Two questions to ask: Where is the problem and when does it occur?

Problems are solved with microscopes and not telescopes. Get close to the problem.

Your problem is not new.  Someone has solved it in a different application, context, or product.

There are at least three ways to solve a problem: before it occurs, while it occurs, or after it occurs,

Sometimes solving a difficult problem requires the generation of an easily solvable problem. So be it.

Problems are more powerful than opportunities.  Call them by their name.

Because without problems, there can be no solutions.

Image credit – Andy Morffew

The People Part of the Business

Whatever business you’re in, you’re in the people business.

Scan your organization for single-point failure modes, where if one person leaves the wheels would fall off.  For the single-point failure mode, move a new person into the role and have the replaced person teach their replacement how to do the job.  Transfer the knowledge before the knowledge walks out the door.

Scan your organization for people who you think can grow into a role at least two levels above their existing level.  Move them up one level now, sooner than they and the organization think they’re ready.  And support them with a trio of senior leaders.  Error on the side of moving up too few people and providing too many supporting resources.

Scan your organization for people who exert tight control on their team and horde all the sizzle for themselves.  Help these people work for a different company. Don’t wait. Do it now or your best young talent will suffocate and leave the company.

Scan your organization for people who are in positions that don’t fit them and move them to a position that does.  They will blossom and others will see it, which will make it safer and easier for others to move to positions that fit them.  Soon enough, almost everyone will have something that fits them.  And remember, sometimes the position that fits them is with another company.

Scan your organization for the people who work in the background to make things happen. You know who I’m talking about.  They’re the people who create the conditions for the right decisions to emerge, who find the young talent and develop them through the normal course of work, who know how to move the right resources to the important projects without the formal authority to do so, who bring the bad news to the powerful so the worthy but struggling projects get additional attention and the unworthy projects get stopped in their tracks, who bring new practices to new situations but do it through others, who provide air cover so the most talented people can do the work everyone else is afraid to try, who overtly use their judgment so others can learn how to use theirs, and who do the right work the right way even when it comes at their own expense.  Leave these people alone.

When you take care of the people part of the business, all the other parts will take care of themselves.

Image credit – are you my rik?

What To Do When It Matters

If you see something that matters, say something.

If you say something and nothing happens, you have a choice – bring it up again, do something, or let it go.

Bring it up again when you think your idea was not understood. And if it’s still not understood after the second try, bring it up a third time.  After three unsuccessful tries, stop bringing it up.

Now your choice is to do something or let it go.

Do something to help people see your idea differently.  If it’s a product or technology, build a prototype and show people.  This makes the concept more real and facilitates discussion that leads to new understanding and perspectives.  If it’s a new value proposition, create a one-page sales tool that defines the new value from the customers’ perspective and show it to several customers.  Make videos of the customers’ reactions and show them to people that matter. The videos let others experience the customers’ reactions first-hand and first-hand customer feedback makes a difference. If is a new solution to a problem, make a prototype of the solution and show it to people that have the problem.  People with problems react well to solutions that solve them.

When people see you invest time to make a prototype or show a concept to customers, they take you and your concept more seriously.

If there’s no real traction after several rounds of doing something, let it go. Letting it go releases you from the idea and enables you to move on to something better.  Letting it go allows you to move on.  Don’t confuse letting it go with doing nothing.  Letting it go is an action that is done overtly.

The number of times to bring things up is up to you.  The number of prototypes to build is up to you.  And the sequence is up to you.  Sometimes it’s right to forgo prototypes and customer visits altogether and simply let it go.

But don’t worry.  Because it matters to you, you’ll figure out the best way to move it forward.  Follow your instincts and don’t look back.

Image credit – Peter Addor

Mike Shipulski Mike Shipulski
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