Journal of the Institute of Management Services ManagementAchieving excellence through people and productivity Services

Facing the challenge with performance support

Winter 2012 Volume 56 Number 4 ISSN: 0 307 6768 CONTACTS

Autumn 2012 Volume 56 No 3

ISSN 0 307 6768

Management Services 27 Castle Street, Canterbury, Kent CT1 2PX

Editorial Telephone +44 (0)1795 542429 The Institute of Management Services is the primary body in the UK Facsimile +44 (0)1795 535469 concerned with the promotion, practice and development of the range Email [email protected] Editorial deadline for the Winter 2012 issue is 7th of methodologies and techniques for the improvement of productivity November. Publication date is 11th December and quality, known collectively as ‘Management Services’. This embraces the disciplines of industrial engineering, work study, organisation and Advertising methods, systems analysis, and a wide range of management information Rob Aspin and control techniques as illustrated in our Body of Knowledge. Telephone +44 (0)1795 542413 Fax +44 (0)1795 535469 The Institute acts as the qualifying body for the Management Services Email [email protected] profession in the UK, focusing developments in practice and knowledge Media Committee and acting as a forum for information exchange. This in turn enables our David Blanchflower, Julian Cutler, Mel Armstrong members who work under a variety of job titles across the whole of the UK economy, to make a more effective contribution to the well-being of Editor their own organisation and to the nation’s economy as a whole. Rachel Kelly In addition to creating and upholding professional standards for the Designer Kate Hayward practice of management services through the adoption of a code of ethics and the provision of a system of qualifying examinations, the Institute Published by of Management Services collaborates with national and international The Deeson Group Ltd on behalf of professional bodies in similar fields. The Institute of Management Services The Institute is a member of, or represented on, a number of other Printed by bodies including the World Confederation of Productivity Science, the Bishops Printers European Federation of Productivity Services, and the European Institute of Industrial Engineers.

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In this issue of Management Services… Cover Story In an overview of the London Global Convention 2012, Professor Colin Coulson-Thomas describes how performance support approaches, tools and techniques can address governance and sustainability challenges.

Institute news 4 Food for thought? 26 Why recent figures on the food Applying lean manufacturing in a and drink industry make interesting developing economy 11 reading… A case example by John Heap Selling yourself magically 28 Celebrating a legacy 14 Persuasion strategies for personal and Dr Andrew Muir reports on the launch organisational change. By Philip E of the Adam Smith Global Foundation Atkinson The hidden cost of sick leave 17 The folly of stretch goals 34 Employees in the UK can save up By Daniel Markovitz holiday entitlement whilst on sick 14 leave, explains Madeleine Thomson Understanding and reducing leadership waste 36 Book reviews 19 Efficient working that focuses on Who’s who in the IMS 20 effective processes is key to waste Introducing Malcolm Towle elimination, says Mike Keen Improving productivity with clean Facing the challenge 40 language 22 Professor Colin Coulson-Thomas gives Lynne Cooper presents an approach an overview of the London Global that is transforming business Convention 2012 organisations Auditing strategic business management 44 Why and how? By Mike Sweeney and 26 Bob Lillis Management Services 4 Winter 2012 Chairman’s Column Institute News

A day in the life pleasing to see such a healthy Richard Taylor (Scott Grant) and number of specific items of attendance, including our Eugene Chinal (Harry Mitchell note: first female member in a very College) – which I found both l The Institute has been invited long time, as well as two of encouraging and reassuring. My to host a joint conference the Institute’s main education thanks for that, gentlemen. with Cranfield University on In this column, I thought I providers. continuous improvement and would outline a day in the life The meeting went well Council meeting 6Sigma. Discussions are taking of the Institute Chairman. Not a and there was a general The AGM concluded at place with Dr Bob Lillis at typical day, granted, but Friday endorsement of the direction 11.15am, and was immediately Cranfield on the exact format 19 October – the date of the in which the Institute is going. followed by a meeting of for the event. I shall keep you Institute’s AGM. There were no Council members Council (details of the new advised of progress. On Thursday 18 October, up for re-election and I had only Council are listed on the l JAFCON ( a management at 7pm, I met with Institute one resignation to announce, opposite page). Before giving consultancy in Bahrain) have Treasurer, David Blanchflower. that of Harry Downes. This a short briefing, I would like to recently appointed a new We discussed a range of gave me an opportunity to thank my colleagues on Council business development director financial issues, including record my thanks to Harry for for re-electing me as Chairman. whose principal remit is to several specific items relating his contribution to the Institute I shall endeavour to justify their review opportunities in the to the Institute’s investments and to formally welcome his faith in me to take the Institute training field. They have and strategic initiatives. Our replacement, Malcolm Towle. forward. indicated that this new director meeting lasted a couple of The Institute’s Annual Report One of my first duties will be in touch with the hours, concluding just before and Accounts were accepted – as Chairman, a particularly Institute to explore possible 9pm. thanks to David Blanchflower pleasant one, was to formally areas of cooperation. (Myself The next day at 9am, for all his hard work. Having welcome Malcolm Towle to and David Blanchflower met I met with the Institute’s been Treasurer myself for a Council. Malcolm is currently with the managing director administration manager, number of years, I appreciate Chairman of the East Midlands and a senior consultant of Lynette Gill, to go through the amount of work that needs Region Board (see page 20) and JAFCON some time ago.) It will a number of domestic/ to be done to keep the Institute I’m sure his skills and experience be interesting to see how this operational issues and to sign on an even keel financially. Well will add significant value to develops. off several documents for our done David. the management team. I look l A new membership database auditors and Company House. There were, of course, many forward to working with him has been set up at Brooke We also prepared for the AGM, comments and suggestions over the next few years. House to replace the old the Council of Management made during the meeting, There was a packed agenda one, which was becoming meeting and a meeting of the but all were constructive and for this first Council meeting too problematic and costly to regional Chairs. helpful. Indeed, there were a and in addition to the normal maintain. The new database is At 10.30am, I chaired my first number of suggestions made items of finance, education, operating well but there are AGM of the Institute. It was by our education providers – membership, there were a some items of data which will Management Services Institute News Winter 2012 5

need updating. Consequently, Chairmen to engage them received, I can say with some was a very busy, but productive Lynette Gill our admin manager, in discussions on the current conviction that the meeting and certainly rewarding day. may get in touch. and future operation of the was mutually beneficial and However, thankfully not every As I mentioned, it was a fairly Institute. I also wanted to I have asked each Chair to day in the life of the Institute congested Council agenda explore how members at region explore, with their respective Chairman is the same! which stimulated considerable level could perhaps contribute Boards, how they can assist the Finally, as we are coming up Institute News discussion and debate and it to the Institute at a higher level. Institute at a higher level and to the festive period, can I take was almost 1.30pm before the The meeting was very support our overall strategy. this opportunity to wish you meeting concluded. constructive and helpful and I My thanks to Harry Hogg, Ray and your family a very happy was impressed by the general Martin, John Hopkinson and Christmas and a prosperous and Future operation enthusiasm and commitment to Malcolm Towle. The meeting productive New Year. Following lunch, I hosted a what we are trying to achieve. was concluded just after 4pm. Dr Andrew Muir meeting with the regional From the feedback I’ve All in all, Friday 19 October Institute’s Council of Management Stakeholder For the references to Chairman’s was keen to recognise and Michael Howitt and Dr celebrate success and had agreed Management John McManus’ article on notes - to initiate a silver medal for Stakeholder Management: Student of the Year. This to be article: An instrument for decision On page 14 of the journal, there is presented along with the current making (Autumn 2012 issue), an article on Adam Smith, author certificate and monitory award. References please email editorial@ of The Wealth of Nations and As a continuation of that msjournal.org.uk. father of modern economics. There theme, I can now advise that available are two particular points about Council have agreed to present Adam Smith I would like to make: Past Chairmen of the Institute a) From an ‘efficiency with medals, as a small memento practitioner’s’ perspective, for their period as Chairman and perhaps the most notable feature in recognition of the contribution Election of new of Adam Smith’s thinking, which they have made to the Institute. differed from economic thought These will be presented at an Council Officers for prior to his book’s publication in appropriate event sometime next 1766, is the statement of natural ye a r. liberty. He believed that, ‘man’s self the ensuing year interest, is God’s providence’ and held the view, that if government abstained from interfering with free competition, industrial problems would work themselves out and the ‘practical maximum of efficiency’ would be reached. He applied the same philosophy to international relations and concluded from this, his argument for free trade. b) In 1751 Adam Smith was appointed professor of ‘logic’ at Glasgow University. I think most would agree that ‘logic and common sense’ appear to be in fairly short supply today. Perhaps if such positions were re- established, we could all learn that life can become less complex and, President – Lord Thurso the quality of that life, better as a consequence. Alas, I doubt it will Chairman – Dr Andrew Muir ever happen! Deputy Chairman – Julian Cutler Recognition and celebration Company Secretary – Dr John Lucey In the summer edition of the Treasurer – David Blanchflower journal I advised that the Management Services 6 Winter 2012 Regional News Regional News North West members

Graham Bloomfield / visit Vauxhall Motors Shutterstock.com

On 12 September, members of the North West Region visited Vauxhall Motors at Ellesmere Port in Cheshire. On arrival, we were given a history of the company, including its philosophy of manufacture and the importance of the four Ms – manpower, machines, materials and methods. Our first port of call was the body shop which has 348 employees. Two North West handed production along the track lines enabled parts to be fitted on both sides of the unit and workload balancing was evident throughout Concorde the manufacturing procedures. The plant used lean manufacturing techniques with a flow line production of 44 units per hour observed, although the throughput speed technical tour could be substantially increased or decreased if required. The general assembly shop, with its 748 employees, included some A chance to see an icon of flight engineering impressive features. Practically every vehicle in sequence was different history in type, model or colour, displaying a computerised planning system and Saturday 18 May 2013, The Runway Visitor Park, manpower knowledge of exceptional capability! Altrincham WA15 8XQ The human element was also utilised, for example, at the wheel fitting The only Concorde in the world with a flight deck station five wheel nuts were preloaded into an hand held jig and loose technical tour. A low price of £15 each (subject to a fitted to the wheel studs, prior to a machine screw fit. minimum group of persons). Free parking is included. The objective of lean manufacture is to produce on a ‘just in time’ Meet at the Concorde reception at 2.45pm for 3pm basis and to minimise the time line from start to finish. The suppliers’ start. From 11am onwards, visitors may enter the fully computing systems are linked with Vauxhall’s to enable a ‘real time‘ stock restored BEA Hawker Siddeley TRIDENT 3B (plus other level requirement, giving space saving benefits as well as keeping down aircraft to view). the cost of materials in stock. This promises to be an extra special visit, especially Because Vauxhall only build vehicles to order, and by agreement, any for enthusiasts. Please give your full name well before down time is paid for but must be reimbursed by extra working time, for the date which will be entered onto your personalised example Saturday mornings, during periods of greater demand. certificate to commemorate your visit. An excellent tour of the manfacturing complex was concluded with a To confirm your place, contact Len Price on 01204 question and answer session in the in-house training room. 840672 or email your full details to harry.hogg@ Harry Hogg blueyonder.co.uk Management Services Regional News Winter 2012 7

Eastern Region seeks feedback

In mid September, the IMS North West regional board members and their partners met for their annual lunch at The Owls in Standish near Wigan Packed programme for East Midlands

The regional Chairs attended a meeting at IMS HQ to discuss the current and future operation of the Institute and to Region explore the possibility of involving the regions and regional board members at a higher level. Despite the normal lull of activities during the summer holiday Media and marketing, education and development and season, events have been continuing apace in the East Midlands membership and recruitment were discussed. Region. In the spirit of widening the consultation progress, I would In keeping with a now well established tradition, members welcome members’ views on these topics, or any others you turned out for a summer barbecue which, this year, was think we should be addressing. Please contact me if you generously hosted by Paula Halford at her home in Leicestershire. would like more information. The social gathering followed a region board meeting which I am also trying to locate a copy of the Institute’s Certificate saw an in depth discussion of current IMS strategies. The board is Distance Learning Package (circa 1987). If you can help, eager to progress a number of its ideas and these will be taken please contact me via imseasternregion.co.uk or on 020 8366 forward to the next meeting. 2445. The East Midlands now has two board members who sit on Ray Martin, Chair Eastern Region the IMS Council of Management. Malcolm Towle, our Chairman, will chair the Membership and Recruitment Sub Group. Our region has always been proactive in welcoming new members so Malcolm will have several strategies at his elbow, including that of connecting the IMS more closely to major companies that use management services techniques in their operations. Some Notice of the liaison procedures used by the region to maintain contact It is with great sadness that I have to report the deaths of with members may also be helpful for other parts of the IMS two eminent colleagues. structure. Lord Chilver, who served as President of the Institute from John Lucey, our Council delegate for many years, has been 1991 to 2000, died at the age of 85, on 8 July 2012. appointed once again as company secretary to the Institute. Tony Parry, past Chairman of the Institute (1995 to 1999), John has made many sage contributions over the years and his died at the age of 69, on 19 November 2012. presence and experience will be valued at all levels. Comprehensive reports on the life and career of both, will A further board meeting on 24 November saw proposed feature in the next edition of Management Services. activities finalised. Keep an eye out for our future programme of Dr Andrew Muir, chairman events and do come and join us! John Davies Management Services 8 Winter 2012 Regional News

Season’s Greetings! The IMS wishes its members and their families a Happy Christmas and a prosperous London 2012 – New Year! An alternative view

Eastern Region (ER) held a board meeting at These are the primary questions that need Eldon House, London, on the day that the city to be answered in order to establish a well was awarded the Olympic Games 2012. determined sequence: London had beaten off the challenge l Purpose – for which; from Paris and the streets were buzzing with l Place – at which; expectation – the British population had l Sequence – in which (all these activities are something to look forward to. undertaken); On my future journeys into London, I was l Person – by whom; encouraged to see the Olympic site develop l Means – by which. from a vast waste dump into the amazing The aim is then to eliminate, combine, finished product. rearrange or simplify those activities.Eliminate The stadium, which I was lucky enough unecessary parts of the job, combine wherever to visit during the Games, was met with possible or rearrange the sequence for more worldwide aclaim – a fine example of British effective results – simplify the operation. workmanship at its best. But how was it Fortunately, the Olympic Delivery Authority achieved so successfully? had almost four years to implement and test its I relate it to my working environment and plan. The ‘critical analysis’ is a very tedious but my professional body, the IMS. How would we necessary process and, in this day and age, it approach the problem? would be assisted by the use of computers. Looking at the ‘big’ picture, a small town was I feel very fortunate to have enjoyed the needed to house all the athletes and backup benefits of this superb facility – it was a staff, as well as a 90,000 seated stadium, a wonderful experience that will stay with me velodrome, adequate pedestrian walkways forever. All Institute members should feel a allowing hundreds of thousands of visitors to sense of pride at the success of the planning move around safely, toilets, cafes and many and development of the Olympic complex, more attractions and facilities. using the systematic and analytical approach to Where does one start? With five honest problem solving. working men, they taught me all I knew, their I am very proud of my five honest working names are WHAT, WHO, HOW, WHY, WHEN – men. critical path analysis. Harry Downes

Scottish Region The Scottish Region celebrated the launch of the Adam Smith Global Foundation in Kirkcaldy, on 7/8 August, 2012 (see page 14 for a full write up of the event). Management Services Productivity News Winter 2012 9 Indonesia must Ireland is among improve infrastructure top 10 EU countries to continue economic for innovation, says growth competitiveness report

The European Commission has recently released its 2012 Competitiveness Report which indicates that Ireland is among the top 10 EU countries for ‘innovation’, and has a highly skilled workforce, Jakarta remains the largest city in the world without a metro and many technologically advanced firms. It indicates that Ireland shows rising productivity in manufacturing but on the negative side access to The progress made by the Indonesian economy over the last decade is funding for SMEs in Ireland has deteriorated to nothing short of remarkable, transitioning from an incredibly poor country second worst in the EU. to one of the stars of the emerging investment world. The new industrial performance scoreboard In the past three years the Indonesian economy has more than tripled. contained in the report looks at the member However, in the wake of slowing global growth and a concomitant states’ industrial performance in five key areas: decrease in demand for commodities, investors are starting to take a closer manufacturing productivity, export performance, look at the fundamentals of the Indonesian economy. innovation and sustainability, the business Simply, Indonesia needs to improve its infrastructure and productivity if environment and infrastructure, and finance and the country hopes to continue its enviable growth rate. Infrastructure in investment. the archipelago is sorely lacking – Jakarta remains the largest city in the Based on the results of these indicators the world without a metro and the city’s traffic problems belie the necessity of ‘consistent performers’, whose industries are public transit solutions. Other segments of the economy are hampered by dominated by technologically advanced firms the lack of adequate infrastructure from aviation to freight transport as and whose workforces are highly skilled. This airports, roads, and ports are insufficient. group includes: Germany, Denmark, Finland, Sweden, Austria, Ireland, the Netherlands, the UK, Belgium and France. The report can be viewed at http://ec.europa. eu/enterprise/policies/industrial-competitiveness/ competitiveness-analysis/european- competitiveness-report/files/ecr2012_full_en.pdf. Productivity affected by Traffic in Europe is increasing, according to the latest ‘congestion index’ by traffic congestion navigation producer TomTom. It was found that Istanbul has the worst traffic congestion of the 58 cities looked at in the survey. Traffic congestion results in a number of issues relating to lost productivity – transporting goods becomes harder and deliveries are made late, congestion creates extra fuel costs and of course, environmental costs. Management Services 10 Winter 2012 Productivity News Employee confidence in UK leaders at ‘rock bottom’ A recent study by Orion Partners based engagement, high performance and on a poll of 2000 UK workers, revealed a overall success. damning employee assessment of today’s Twenty-four per cent of employees business leaders and their leadership indicated the leader of their current style. organisation was entirely ‘brain-fried’. It found that employee confidence in Totally brain-fried leaders are over- UK leaders appears to be at rock-bottom. stressed, poor communicators, and lack Just 4.8% of UK workers believe that empathy with their employees. their leaders were leading in an entirely Jan Hills, the partner responsible for ‘brain-friendly’ manner. Neuroscience talent and leadership at Orion, stated research, applied by Orion to leadership “In this tough economic climate, leaders 24% of employees indicated the leader of their current development, reveals brain-friendly need to maximise the productivity of organisation was ‘brain-fried’ leadership is critical in driving workforce their employees. Commission assesses changing nature of work in the UK

In early 2012, the Recruitment & Employment absenteeism, improve morale and productivity Confederation convened the Flexible Work and help them attract and keep top talent. Commission, bringing together employers, The report indicates that managers and recruiters, think tanks and academics to assess leaders play a pivotal role in unlocking the the changing nature of work in the UK. potential of a diverse range of work flexibility The Commission, chaired by David Frost CBE, options. It is known from recently published former Director General of the British Chambers research that public sector managers are more of Commerce, has spent the past nine months likely to have access to flexible working options speaking to employers across the UK about their than their private sector counterparts (81% views on, and approach to, flexibility. compared to 62%) and they see this as a highly The report suggests that adopting less valued benefit. traditional workplace structures could help The report can be viewed at www.rec. organisations in both the public uk.com/_uploads/documents/rec-flexible-work- and private sectors reduce commission-report.pdf. Singapore needs to improve productivity

Trade and Industry Minister hiring and firing workers. of State Teo Ser Luck said Mr Teo stated “We need to Singapore’s productivity decline restructure our economy to is reflective of the slowing move up the productivity chain; economy. Speaking in Parliament companies need to also review Mr Teo said that as business their reliance on manpower; activites slow, companies tend and workers need to upgrade not to adjust their workforce themselves continuously to take immediately due to the cost of on higher value-­added jobs.” Management Services Lean Manufacturing Winter 2012 11 Applying lean manufacturing in a developing economy A case example by John Heap.

Over the last couple of years social impact and this is the Institute of Productivity why much of our work is has been involved in a project in developing countries) managed by UNIDO (the so we were particularly United Nations Industrial keen to play a part in Development Organisation) addressing productivity and to help improve aspects of performance improvement in Pakistan’s industry. ways which would improve The project has a number the competitiveness of of strands (such as ensuring Pakistan’s industry but would compliance to international also have a direct, positive standards) but we have been impact on the communities involved with two main areas. involved in the sectors under The first is the creation of discussion. (This approach is ‘trade corridors’ – mechanisms covered in our recent book for building trust between Measuring & Improving Social, potential Pakistani exporters Environmental & Economic and potential importers in Productivity: Getting It Done identified target markets. by Mike Dillon and John Part of this process involves Heap.) building the capacity and competitiveness of specific Assessment and industrial sectors... and so feasibility we have also been involved The UNIDO team suggested in capacity-building and that the application of lean performance improvement in manufacturing would be these sectors. beneficial and we undertook This article describes the an initial assessment and approach we have taken... and feasibility study with a view the reasons for adopting that to creating a project to apply approach. ‘lean’. When we first looked at the There has been overall ‘problem’ it was clear enough coverage of that some sectors of industry lean manufacturing in were quite a way behind their Management Services journal Many of the firms we were international competitors... for me not to have to explain in terms of technology, what it is! However it is worth likely to be involved with were manufacturing systems and just reminding ourselves that practices, and – often – in it is based on the ‘principles’ ‘unsophisticated’... and a very employment practices (and of: heath and safety practice). l Creating flow; long way from being lean. The Institute has a particular l Eliminating waste; focus on ‘social productivity’ l Continuous improvement; (using productivity to create l Involving everyone. Management Services 12 Winter 2012

Lean then uses a particular Phase one of the project approach and a whole was to measure the current ‘toolbox’ of techniques and (baseline) position – partly so tools. When we carried out we ourselves understood the our initial assessment, we nature of the ‘problem’ we became concerned that faced... and partly so we could applying ‘lean’ might be subsequently demonstrate a lengthy and expensive to the funders of this project business. Many of the firms we (the European Union) the were likely to be involved with improvements we had made. were ‘unsophisticated’... and The Institute worked with a very long way from being a ‘national expert’ and with lean. members of the NPC to As a result we thought measure the performance of ‘lean manufacturing’ might the sector (against its major be a step too far at this international competitors) and stage. We therefore ‘applied to measure the performance lean thinking to lean of individual firms in manufacturing’ and proposed the sector (so we could to UNIDO that we adopt a identify different levels of ‘lesser’ form of lean which we performance and so they could termed ‘Lean Lite’. see how they compared to We felt that (applying the the sector average and to the When we Pareto principle) we could ‘best in class’ within Pakistan. get most of the benefits (and We measured a whole range carried out certainly a number of ‘quick of performance factors but wins’ by using a sub-set of concentrated on an overall our initial lean techniques, though still measure of OEE as a kind of based on the same principles. ‘summary measure’ which has assessment, The project we were the added advantage of being involved with was going to relatively widely understood we became last for three years overall but and widely used. (This exercise obviously we wanted to create also allowed us to identify concerned some momentum and internal those company owners/ capacity so that improvement managers who we felt were that applying could – and would – continue most receptive to change.) after the project had finished We also carried out a ‘lean’ might and we had left. ‘stakeholder analysis’ to We thus decided to identify those individuals and be a lengthy work with the National groups who were affected by Productivity Centre (NPC) the project and who could and expensive of Pakistan (which we had influence its success. For helped establish a couple example, there are a number business. of years earlier) and ensure of government agencies that we built their ability to responsible for different apply the principles of lean aspects of support for industry manufacturing on an ongoing (training, SME support, etc). To basis. leave any of these out of our discussions and plans would The process be at the very least extremely I will now take you through rude but perhaps damaging to the process we followed in the project. one particular sector – the manufacture of electric Delivering the curriculum fans. Fan manufacturing is Phase two of the project concentrated in Gujrat and was to identify a group of this concentration makes individuals representing it relatively easy to visit a the key stakeholders (and number of firms in a relatively especially the NPC) who would short time. be trained in ‘Lean Lite’ and Management Services Winter 2012 13 then undertake improvement views on what they did and maintaining the improved studies in selected firms. what they thought. Each team health and safety practice The Institute then designed of facilitators worked with contained within the and built a ‘curriculum’ for one group from the work recommendations; Lean Lite and prepared force for two days (while l Identify which of the training materials. In March half the workplace operated improvements are more 2012 we went to Pakistan to the factory) and then with widely applicable across the deliver this programme. We another group for another fan manufacturing sector so had designed the curriculum two days (while their first that the entire sector benefits; to be ‘light’ but hopefully group went back to work). l Discuss with UNIDO and rigorous and we delivered The delegates were the NPC how we can use our it in three days of intensive then given some time to trained delegates in other workshop activity based prepare presentations to sectors. around a set of relatively give to the owner (and his The approach seems to have brief presentations and lots of senior colleagues) - and been successful... we will know exercises. However the key to to representatives of the when we have re-measured... success was that immediately workforce. They had been and we have created real after this three day course, briefed to make sure that improvement with a relatively the delegates were taken to findings and recommendations small investment. Gujrat to start to ‘practice were from the groups – and We think we have what we had preached’. not from them as individuals. engineered a situation where We had decided to work in The result was that we have: one particular firm so that the the owner received 27 Lite process, high impact! delegates could work in teams improvement suggestions, and so we could monitor some capable of immediate and support them easily. We implementation, some of About the author had previously briefed the which needed some planning John Heap is a member owner of this factory and – before a change could be of Council at the in return for the advice he made and a smaller number Institute of Management would get on his production that needed some significant Services, President of the processes – he had agreed investment. World Confederation to involve his workforce in After the presentations, of Productivity Science, President of the European team-based improvement a ceremony was held and I Association of National activity, facilitated by our presented each member of the Productivity Centres, Co- newly-trained delegates. I workforce with a certificate to editor of the International briefed the workforce (via an recognise their participation Journal of Productivity interpreter since most of them and contribution. & Performance spoke only Urdu) and did so in The owner was very pleased Management, Managing two groups so that production and, in fact, had implemented Director of the Institute of could be maintained. three of the suggestions Productivity, a member of They were then put into before we left that day! the Advisory Board at the Institute for Consultancy groups and two or three of We also discussed with the and Productivity Research, the delegates were assigned owner how the gains from India and a director of to each of the groups. (The the improved manufacturing Juice e-Learning. delegates had also been process might be shared with briefed on their role as the workforce. LinkedIn profile: www. linkedin.com/in/johnheap. ‘facilitators’ rather than The next phase is for the Twitter: @johnheapleeds ‘experts’.) national expert to visit the Each group was then firm in three months time asked to look at the overall to repeat the measurement process and then narrow exercise and quantify the down to specific activities gains made. I will follow up and workstations looking at with a visit to: flow, waste and workplace l Discuss implementation organisation. issues with the owner so that we can learn lessons as the Improvement suggestions approach is rolled out more The workers were extremely widely; keen to get involved – no-one l Check that he is sharing had previously asked for their some of the gains and Management Services 14 Winter 2012 Adam Smith Celebrating a legacy Dr Andrew Muir reports on a two day symposium to launch the Adam Smith Global Foundation.

The inaugural dinner to Adam Smith, author of launch the Adam Smith Global The Wealth of Nations and Foundation was held at the father of modern economics Adam Smith College, Kirkcaldy, (1723-1790). on 7 August. The dinner, part of a series said. “He never left his roots of events held over two days, that were so important in his was an imaginative affair with life. He understood that the almost 200 guests enjoying an wealth of nations lay not in 18th century inspired five- land but trade and realised course banquet complete with that the people of Kirkcaldy hog roast. could do and make things Smith himself was brought others couldn’t – and vice back to life by celebrated actor, and philanthropic principles versa. He also understood Denis Alexander, who was together for the benefit of moral obligation. He was supported by historical figures all,” she said. brought up in a town where including philosopher David “Prevention of poverty is the church helped the poor, Hume and the national bard one of the key platforms of where education was provided Robert Burns. the Foundation and we are – but where there was also Entertainment was provided concentrating on the areas civic society. He wrote about by Sheena Wellington, one of of education, the arts, sport, our own interdependence, Scotland’s greatest traditional heritage, culture, science and about how people could play singers, who played the role of music to deliver opportunities a part in society locally – they Lady Nairn; and a programme we believe will bring real depended on each other and of music, that Smith may well and lasting benefits to the worked with each other. have enjoyed, was performed community.” “It is 222 years since Adam by the Rose Street Quartet. Guests at the dinner included Smith died, and in 11 years CEO of the Foundation, organiser of the academic we will celebrate the 300th Marilyn Livingston, welcomed symposium, Fonna Forman, anniversary of his birth – and guests. “We have many associated professor of political what he has to say in 2012 eminent academics and science at the University of remains as relevant as ever.” Smith aficionados with us this California and editor of the The dinner was a resounding evening,” she said. “They have Adam Smith Review. Professor success and a fitting way come from different parts of Forman spoke about “a huge to launch the Foundation. the world to take part in the revival of interest” in Smith’s Everyone was impressed by “There is a need colloquium on Smith’s life in work and pledged the support the excellence of the food, the town, discuss his influence of the International Adam the palatability of the wine to rebalance abroad over the centuries and Smith Society “to Kirkcaldy and and the performance of the support the efforts that are the Foundation as it celebrates actors and musicians. A huge the world and underway to commemorate his Smith’s legacy.” vote of thanks must go to the legacy.” The Rt Hon Gordon Brown organisers and, of course, the this will be the Marilyn explained that the MP and Chancellor of the staff and students of the Adam purpose of the Foundation Adam Smith College, told Smith College for making challenge for is to celebrate the life and guests that Smith remained the dinner such a memorable work of Adam Smith. “We hugely relevant today, occasion. the generations want to harness the spirit and highlighting his views that The intention is for the enterprise that he was able to people are interdependent dinner become an annual to come.” demonstrate all those years locally and globally. “We event and based on this year’s ago by bringing public, private owe him a huge debt,” he evidence, there will certainly Management Services Adam Smith Winter 2012 15

“Adam Smith is a central figure in Celebrating a legacy modern economics and his views that people were interdependent, locally and globally, is as relevant today, if not more so, than it was in his day.”

presentation was ‘A turbulent He said that an ageing world.’ He praised the work population is another of Gordon Brown, both in significant factor which terms of the solutions he had has major implications for advanced to resolve the global dependence and support, and financial crisis, and in raising also for government policy the profile of Adam Smith. and pensions. “There are also “Adam Smith is very much major shifts in the strength of a central figure in modern economics from the West to economics and his views that BRIC (Brazil, Russia, India and people were interdependent, China) countries, especially locally and globally, is as Asia. ‘Economic weight’ is relevant today, if not more so, moving to different countries.” than it was in his day,” he said. Other significant issues he “The world is shrinking with flagged up included: the advancement in technology l Africa – a high population, and global communications but low GDP (Gross Domestic which is leading to a global Product) per head of that alignment and a removal of population; natural identity. However, l The Arab world – increased be no shortage of those organisation, to make it a force there is a need to rebalance democracy and all the wishing to attend. for poverty alleviation.” the world and this will be the implications this brings; Sir James, who made his challenge for the generations l Muslim population – size and The Adam Smith lecture presentation via video link, to come.” economic force; Another highlight of the follows a number of other He continued: “Population l Youth unemployment – a symposium was the annual eminent speakers to deliver the growth, especially significant factor throughout Adam Smith lecture, delivered Adam Smith Lecture, including divergence between the the world; by Sir James Wolfensohn KBE Sir Mervyn King, governor of OECD (Organisation for l Global alignment – removal AO, former President of the the Bank of England, Alan Economic Co-operation and of natural identity due to the World Bank Group (1995-2005). Greenspan, former Chairman Development) countries and rapid changes in technology Gordon Brown introduced Sir of the Federal Reserve and third world countries needs to and global communications. James as “The most successful Kofi Annan, former Secretary be addressed. This should lead Sir James concluded by president of the World Bank General of the United to a redistribution of income saying that “Today is a in its 65 year history, who had Nations.” and change the way we view turbulent world with a pace completely transformed the The title of Sir James’s the world.” of change that signifies a Management Services 16 Winter 2012 Adam Smith complete new way of how we professor at Heriot Watt need to look at the world and University – underlined Smith’s prepare for the future.” global reputation and just Sir James’s lecture was how that reputation can both interesting and thought bring significant benefits and provoking but perhaps the investment to his home town. most impressionable thing Smith spent a decade writing about him, apart from five editions of The Wealth of his academic and career Nations. Modern technology accomplishments, is his cut the production process unquestionable passion for down to a mere three weeks helping the world’s poor. and work is already under way on the second volume. IMS national chairman Dr Andrew Publication of new edition The Kirkcaldy edition, Muir pictured with of Smith’s seminal work launched by local businessman his old friend and Past Principal of the ‘The Wealth of Nations’ The Bob Carruthers, was a direct Adam Smith College, Kirkcaldy Edition. spin-off from a recent town Derek Huckle, prior Adam Smith returned to centre summit hosted by the to attending the lecture. Kirkcaldy to write his book – leader of Fife Council, Alex widely regarded as one of the Rowley and Gordon Brown MP. five most important books ever Bob, one of around 100 written – but actually buying a businessmen who attended copy of The Wealth of Nations a workshop, which saw has not been easy. Until now, ideas exchanged and that is! networks created, realised Adam Smith’s The Wealth of that technology makes it so Nations, which has influenced much easier and relatively governments and shaped inexpensive to be a publisher modern economics, is back locally. No longer did you need in print. First published in to be in a big city. Hence the 1776, the same year as the publication, of the Kirkcaldy Declaration of Independence edition, of The Wealth of The Rt Hon Gordon in America – and many would Nations. Brown MP and Chancellor of the argue that it is the more I would like to congratulate Adam Smith College, important of the two – An all those involved in the with IMS national chairman Dr Andrew Inquiry into the Nature and creation of the Adam Smith Muir, prior to Cause of the Wealth of Nations Global Foundation and wish attending the dinner. – to give it its full title – has them well for the future. a unique Kirkcaldy edition, However, perhaps the final was inspired to write it after launched to coincide with the comment on this historic event watching the trade that came unveiling of the Adam Smith should be left to Gordon into the town from the sea. Global Foundation. Brown, who said: “I believe “We were perhaps in danger The first copies were that the Foundation holds the of forgetting some of our available for the start of the key to a bright future for the history, but now, through the first Smith symposium in town. Its about reasserting Foundation, people will see the town which included an ourselves and our history. how important Adam Smith address by Fonna Forman, We were the centre for great was, not only to the town editor of the Adam Smith events in the 18th century and where he was born, but to the Review, and assistant professor we can be again in the future. world, which continues to be of political science at the “Academic interest will influenced by his writings.” University of California. bring renowned speakers to Further information can The fact that Professor the town to find out more of be accessed via the Adam Forman was in Kirkcaldy – Adam Smith’s heritage and Smith College website www. along with other eminent how he came to write his adamsmith.ac.uk/news. Smith aficionados including major books in Kirkcaldy.” Nobel Prize Winner in “Although Smith went economics, Vernon L Smith; to Glasgow and Edinburgh Iain McLean, professor of and travelled the continent, politics at Oxford University; it was in Kirkcaldy he wrote and Gavin Kennedy emeritus The Wealth of Nations. He Management Services Sick leave Winter 2012 17 The hidden cost of sick leave The festive break may be good news for employees, but is the holiday pain about to begin for those employing individuals on long term sick leave?

“Employees in the UK can now save up holiday leave entitlement accruing to them whilst on sick leave.”

Thanks to European law, just reading the news can particularly when the employer the administrative employees in the UK can be stressful at a time when employee is known to be burden of an investigation now save up holiday leave few have confidence in depressed or anxious about if the employee disputes entitlement accruing to them their job security. Money money worries. Another cost that the travel amounted to whilst on sick leave and take it troubles at home place is the hiring of temps to cover holiday. when they are well enough to domestic relationships under sick leave. If the funds are not return to work. They can also pressure. Anxiety and tensions there it is common for work Medical opinion claim to carry over this holiday heightened outside work colleagues to be asked to Where the illness qualifies leave to the following holiday can disable the ability to take on the additional burden as a ‘disability’ under the year for a reasonable time concentrate and cope with of covering for their fellow Equality Act 2010, the thought, following European the normal demands of the worker and this can in turn employer is normally obliged cases, to be about three workplace. Once an individual cause colleagues to be stressed to obtain a medical opinion months. If the employee’s is diagnosed with depression, or unhappy about workload. from an advisor to identify employment terminates the employer is legally obliged There is also an issue of what reasonable adjustments during sick leave, they will be both under employment and trust. Employees on long term the employer should be entitled to payment in lieu of health and safety law to take sick leave may neglect to considering making, to holiday. steps to reduce normal work apply for holiday leave if they support that person so that So, if an employee has been pressures and to offer support. are taking holiday whilst off they can continue or return on sick leave for a year and sick, perhaps taking the view to work. For many employers has a holiday allowance of six A financial and moral that a trip abroad is therapy this will mean referring the weeks per year, when they burden for their illness and not really employee to an independent return to work the following Employers carry a financial holiday. If it comes to the occupational health specialist year, they may be entitled to and moral burden. If full pay is attention of the employer that at a cost of around £500. This 12 weeks holiday leave. continued for a time after an the employee has gone to can be problematic as the One of the major causes employee goes on sick leave, Spain for a fortnight and not specialist is unlikely to meet of sick leave is stress. Stress it is often a difficult decision applied for holiday, this can with the employer but will triggers are on the rise and to curtail that arrangement, affect trust and also cause the meet with the employee. This Management Services 18 Winter 2012 Sick leave means it is not uncommon for advice on business grounds. holiday allowance under the wish to avoid legal disputes the specialist to hear, and be This can lead to unpleasant contract? with employees about the persuaded by, the employee’s and unhelpful disputes If the employer operates interpretation of the conflict perspective on their health between the specialist and a bonus scheme, is the between UK and European and ability to work, without the employer, which can entitlement to bonus law. Instead it is more properly understanding the undermine the relationship of moderated if the employee pragmatic to communicate employer’s. trust with the employee. is on sick leave for a lengthy clearly with employees about Employers should make it period of time? the economic pressures that a priority to communicate Recession-proof policies Are employers engaging the employer is experiencing, with the specialist, in advance The current economic in home visits? These are what the employer can and of the patient review, to troubles mean employers valuable to monitor the cannot afford to do if an ensure that the specialist should be looking to make progress of the employee and employee goes on sick leave has a clear understanding their contractual terms and to signal to the employee and to maintain a regular of the requirements of the employment policies as that they are of value so and candid dialogue with the employee’s role, the nature of recession-proof as possible. that a relationship of trust employee during sick leave. the work environment and the Policies that may have been is maintained, conducive to This must be done whilst constraints upon the employer sustainable in boom times may honest discussions about the ensuring that employment to modify these features. be impracticable now. employee’s recovery and the contracts and policies are For example, if the If the employer pays over likelihood of returning to able to withstand the current employee is a sales executive and above statutory sick leave, work within a reasonable vagaries of European law and on sick leave for depression, can they afford to do this and, time taking into account the enable the employer to make exacerbated by stress and if so, have they retained the needs of the business. The decisions that are fair both to the employer must increase ability to stop such payments? employer should also consult the employee and the stability the employee’s sales targets Does the sick pay policy set regularly with their employees of the employer’s business. by 15% or the business goes out how any discretion is covering for sick colleagues to under, it may not be feasible exercised and, once exercised, ensure that they are not over for the employer to hold the circumstances in which burdened. the employee’s job open or the discretion to pay sick pay to enable the employee to will be reviewed and stopped Clear communication return on reduced targets and on what notice to the The UK government is or hours. If the specialist employee? concerned about the way in does not know the financial Does the employer restrict which the European Court of pressures on the business they the ability to carry over Justice has interpreted the may advise a reduction of the holiday from one year to holiday entitlement of those sales executive’s targets to the other and, for those on on sick leave, and there is a reduce stress. The employer, sick leave, is the ability to conflict between the Working upon receipt of the specialist’s carry over restricted to the Time Directive and the UK’s advice to reduce targets, minimum holiday allowance Working Time Regulations. will be on the back foot, permitted under statute, This is currently under review. explaining why they reject the rather than any enhanced Most employers though will

About the author

Madeleine Thomson is Head of Employment Law at Hamlins LLP and acts predominantly for employers. Her clients span a wide range of sectors including construction, manufacturing, retail, insurance, travel, education and professional services. Email: mthomson@ hamlins.co.uk. T: 0207 355 6000. Website: www. hamlins.co.uk Management Services Book reviews Winter 2012 19 Book reviews

Title Title Management The in 10 Words Five-Minute Coach Author Sir Terry Leahy Author (s) Lynne Cooper Publisher and Mariette Random House Castellino Business Publisher Publication Crown House date Pub Ltd 7 June 2012 Publication ISBN date 1847940897 30 May 2012 ISBN 978-184590800

Management in 10 Words In his 14 years as CEO of Tesco, Sir Terry Leahy not only turned the company into the largest supermarket chain in the UK but also transformed it into a global enterprise. This success The Five Minute Coach has resulted in Sir Terry now being recognised as one of the Lynne Cooper and Mariette Castellino have written a world’s most admired business leaders, widely admired for his straightforward ‘how to’ guide that provides the reader with clear drive, flair and no-nonsense approach. and practical instruction for using Clean Language in a business In Management in 10 Words he draws on his experience coaching context. The book is full of practical examples and session and expertise to pinpoint the 10 vital attributes that make transcripts set in the office life. successful managers and underlie great organisations. He It is written in an easy to read style that enables the reader to tackles the challenges that every manager faces, in a series of quickly learn this innovative tool for improving performance. It insights that are personal, provocative, and down to earth. will assist managers and supervisors in learning how to apply this He explains: why initial failure often leads to ultimate success; approach to coaching, improving job performance and satisfaction why profits stem from a company’s values, not its day-to-day for manager and team member alike while increasing productivity business; why competition should always be welcomed; why in the workplace. simplicity leads to innovation; and why trust is the bedrock of See page 22 for Lynne Cooper’s article on Clean Language. effective leadership. The result is an inspiring, thoughtful and supremely practical guide that will prove invaluable to all managers in The Age of Productivity all types of organisation. Author: Inter-American Development Bank This informative book looks at how the low productivity in Latin America and the Caribbean is preventing the region from catching up with the developed world. Title The authors look beyond the traditional macro explanations The Age of Productivity and dig all the way down to the industry and firm level to Author (s) uncover the causes. Inter-American Development The book examines productivity growth by focusing on the Bank extreme heterogeneity of sectors and firms, emphasising the Publisher importance of policies that allow firms to thrive and expand. The Palgrave Macmillan book zeros in on the critical services sectors, particularly those, Publication date such as transportation and retail, with important repercussions 13 April 2010 on the rest of the economy. It challenges the argument that the ISBN region is condemned to stagnation and examines a number of 0230623522 policy levers that can transform its economies. Management Services 20 Winter 2012 Who’s who Who’s who in the IMS As part of a series profiling its Council of Management, the IMS is pleased to introduce new recruit Malcolm Towle.

When Malcolm Towle was with them led to a lengthy his major initiative in a asked to join the IMS Council stay, and a career that spans scampi factory in Annan, of Management recently the commercial sector, the he was asked to take up it seemed a natural next NHS and local government. production management in step to his longstanding the factory for a year before involvement in efficiency Rising to the challenge returning to head office and productivity. Malcolm Comprehensive initial where he coordinated a has been a member of the work study training was major restructuring which Institute and its predecessor provided through the now delivered a 20% saving on bodies stretching back to the legendary five week basic HQ costs. early 1970s. When he first course at Imperial Group’s Malcolm was then joined it was the Institute suave Chewton Place tempted to a group of Work Study Practitioners residential training centre, management role within but soon grew to become the brainchild of former the fish division, running the Institute of Work Study Institute Chairman Harold seven independent trading Organisation and Methods Williams. Harold became units. Shortly after this he and, later, the IMS that we an inspirational mentor for took up the role of Company know and love. many years and supported Industrial Engineering Malcolm was newly Malcolm’s application to Manager within the United graduated from Leicester join the Institute and later Biscuits Frozen Food Division. University when a family to take up Fellowship. member in work study at The diverse activities of Increasing involvement the Co-operative Wholesale Imperial provided wide As Malcolm’s career Society encouraged him to experience and challenge progressed so did his apply for a management and Malcolm rose to lead involvement with the traineeship with frozen food efficiency teams across the Institute. He remembers giant Ross Foods, part of the production, logistics and with great affection taking Imperial Group. Although marketing environments. He on the job of PR officer the advertised post was became the company lead for the North Lincolnshire in sleepy Henley In Arden for incentive schemes and branch of the IMS, and “As Malcolm’s near to Malcolm’s home in productivity negotiations. he subsequently rotated Solihull, Ross head office This was supported through all other posts on career decided they needed his through many training the Board before eventually talents further north and courses including Ashridge becoming Chairman. progressed, persuaded him to move Management College. This meant representing to sunny Grimsby to join a In the 1980s Ross Young’s the branch on the East so did his newly established central was formed through Midlands Board, which led work study team. the combination of two to a number of periods as involvement When Malcolm accepted, sister companies. Malcolm Chairman, a post which the plan was to complete worked at the heart of this Malcolm still holds today. with the two years and move on, but merger across a variety of This was also the time rapid promotions and the facilities but particularly of specialist groups within Institute.” material benefits that came in Scotland. As a result of the Institute and Malcolm Management Services Who’s who Winter 2012 21

“Following a short spell in management consultancy, Malcolm moved to the NHS at the time when new hospital Trusts were being set up.”

joined the Food Industry director within a large time, however, Malcolm has a Master’s Degree in Law at Specialist Group, again acute Trust and successfully a wide range of interests. He Salford to add to his MBA. becoming Chairman. At about led a major accreditation has directed some amateur As a Council member, the same time he joined programme. theatre work in the Royal Malcolm intends to ensure the IMS Membership Affairs More recently Malcolm has Albert Hall and he founded that membership is seen more Committee under Ron Whitley set up and managed a risk and runs a quiz league in than simply an income stream and was a member for some and insurance function within Grimsby. He recently stood and that quality is seen as years. Malcolm was appointed local government. Work down after 14 years as Chair an important dimension. He to the Fellowship upgrade on business continuity and of Governors at a secondary will also work to ensure that panel, on which he still sits. emergency planning led to a school and enjoyed a spell as recruitment opportunities, Following a short spell in Beacon Award and Malcolm chair of a canoe club. He is a particularly within growing management consultancy now chairs a Risk Assessment keen traveller, visiting Hawaii, global economies, are Malcolm moved to the NHS at Working Group for the Local China, South Africa, Australia, identified and addressed. the time when new hospital Resilience Forum. This makes Russia and recently Alaska. If you have specific views Trusts were being set up. him part of the government’s As a fell walker he has stood on membership within the He took on responsibilities regional resilience group. atop Sca Fell Pike, Snowdon Institute which you would like for medical litigation and and Ben Nevis, and he enjoys to share, please send them governance as well as safety Outside interests motorcycling and caravanning. to Malcolm via head office at and risk management. He You would imagine that On top of all this Malcolm has [email protected]. progressed to associate all this leaves limited spare just started the second year of co.uk. Management Services 22 Winter 2012 Clean Language Improving productivity with Clean Language

Lynne Cooper presents an approach that is transforming thinking and behaviour in business organisations.

Faced with the rapidly devised by therapist David Developing metaphorical shifting sands created by the Grove as an innovative and representations of people’s precarious economic situation, hugely effective approach for thinking for faster, more globalisation and dynamic working with individuals in effective communication, change in technology and psychotherapeutic settings. improved team collaboration communications, improving So successful was it in and the development of productivity in the workplace creating transformed thinking shared vision. Achieved has rarely been more and behaviour that it has through Clean approaches important, and some argue subsequently been embraced such as Symbolic Modelling has never been tougher. and adapted for use in many and Metaphors@Work. The development of new different settings, particularly • Improving productivity and processes, systems, technology business. performance and organisational structures In its simplest form Clean One of the most accessible is an essential and constant Language entails a suite Clean performance activity for organisations of quite specific questions. improvement frameworks striving for success. Realising They are designed to ensure is the Five-Minute Coach, productivity gains in full that as the questioner you designed for managers however, depends on the have the minimal amount of squeezed between the organisation’s people influence as possible on the pressures from above, for functioning effectively. The person you question. You do improved productivity with workforce must be flexible, not ask questions that are of reducing resources, and below, people must actively engage particular interest to you or from staff looking for to them “Clean in new ways of working, and introduce your own opinion, for solutions to problems. the individual’s contribution experience or prejudice. This is Language is must be maximised. the meaning of clean. Instead The Five-Minute Coach This is the challenge you ask the defined question The Five-Minute Coach is a increasingly for businesses and other about specific words and very simple collection of Clean organisations alike, more phrases that you hear said – Language questions which being used often than not addressed someone’s language. can be used to run a short with training interventions Within organisations, formal coaching session, or to improve designed to change behaviour, Clean Language is applied just employed in everyday with mixed results. Over the to enhance a broad range of conversations in as little as awareness past decade however, a new different processes, including: five minutes. It drives people ground-breaking approach to • Gathering excellent quality to take ownership – to devise and thinking, change has quietly penetrated information solutions, to innovate and organisations. Clean Language For research, user requirement to make decisions - and it change is increasingly being used scoping, project planning, helps managers to relinquish to improve awareness and investigating and just about responsibility. behaviours thinking, change behaviours any context in which good A key part of its success is and transform performance. information is essential, basic its simplicity in guiding people and transform Clean Language questions are to move from ‘problem Transforming thinking very powerful. thinking’ towards an outcome performance. “ Clean Language was originally • Improving team working orientation. The problem Management Services Clean Language Winter 2012 23 Improving productivity with Clean Language

“It drives people to take ownership – to devise solutions, to innovate and to make decisions – and it helps managers to relinquish responsibility. “

with problem thinking is Creating an outcome required. Individuals ask with the outcome question that it generates solutions, emphasis is maybe easier themselves when they start to and continues through a short which at times can become than it sounds. It starts with a feel stuck. series of other, quick-to-learn the next problems. As Albert simple, yet powerful question: This quite subtle shift in and easy-to-use questions Einstein said, “We can’t solve “What would you like to have emphasis has a significant leading to an action plan and problems by using the same happen?” impact on attitude, thinking an individual motivated to kind of thinking we used It works across the and behaviour. It generates implement it. Managers use when we created them.” With organisation. Leaders ask creativity and innovation, it when they want to make a a Clean approach different team members who are encourages proactivity difference fast, and find that thinking is first created from dealing with problems. and puts responsibility for it: an outcome perspective, based Colleagues ask colleagues who improvement with the right • Engages staff – people feel on identifying what is wanted complain. Staff ask managers individuals. involved as they are facilitated instead of the problem. to get clarification on what’s The Five-Minute Coach starts to make a contribution; Management Services 24 Winter 2012 Clean Language

• Empowers individuals – to increase flexibility, think people take ownership differently and achieve more. The Five-Minute Coach – Extracts of issues and make A coaching culture emerges – improvements; a culture that moves people l Identifying an outcome • Stimulates innovation – new, from reactivity to proactivity. creative ideas emerge; Managers create the space What would you like to have happen? • Develops people – to get a strategic perspective Example contributing, innovating and and make a difference. Staff ‘What would you like to have happen?’ taking ownership are all skills build skills, experience and ‘I want to deliver the management reports on time.’ that become better developed job satisfaction. Productivity in the workforce. improves. Customers and l Action planning Creating more productive service users are better served. people is simpler than it might And it all starts with a simple What needs to happen for [outcome]? seem. Those integrating question. Now that you know And is there anything else that needs to happen for Clean Language into their that, what would you like to [outcome]? working practices find it have happen? Repeat until all steps have been identified. creates a change in mindset Example ‘What needs to happen for you to deliver the management reports on time?’ ‘I need to remind the management team of the deadlines.’ ‘And is there anything else that needs to happen for you to deliver the management reports on time?’ ‘I need to block some time out of my diary to do the work.’ And is there anything else that needs to happen for you to deliver the management reports on time?’ ‘I need to get Logistics to reformat the data they provide.’’ Continues...

Productivity results reported by NHS managers “This quite subtle shift using The Five-Minute Coach in emphasis has a “We’ve saved up to 28 bed days a month.” significant impact on “In just over two months there’s been a 10% increase in patients seen. We’ve saved 30 hours’ work per month.” attitude, thinking and “Patient wait has dropped from 26 days to two!” behaviour.” “We’ve increased capacity from 23 to 31 patients per day.”

“I have saved six weeks of man time, thereby allowing for strategic development.” About the author Lynne Cooper is Managing Partner of Change Perspectives, an organisation specialising in sustainable behavioural change Resources for performance improvement. One of the pioneers of the l Cooper L and Castellino M, The Five-Minute Coach: Improve application of Clean Language in organisations, Lynne is the performance – rapidly, Crown House Publishing, 2012. co-creator of the Five-Minute Coach to integrate coaching into l Sullivan W and Rees J, Clean Language: Revealing day-to-day communications to facilitate generative change. Metaphors and Opening Minds, Crown House Publishing, Lynne has worked in and with organisations for over 30 years. 2012. Lynne is an Accredited Coach, a team coach and an l Lawley J and Tompkins P, Metaphors in Mind: Accredited Coaching Supervisor. She sits on the UK Council Transformation through Symbolic Modelling, The Developing of the Association for Coaching as Head of Standards and Company Press, 2000. Accreditation. Lynne is the author of NLP for Business and l Cooper L, Business NLP for Dummies, Wiley, 2008. co-author of The Five-Minute Coach: Improving performance – rapidly. Change Perspectives offers performance improvement solutions through coaching, leadership development, team alignment and training. Lynne can be contacted through www.changeperspectives.co.uk.

Management Services 26 Winter 2012 Productivity Food for thought? There are many statistics on the size of specific markets, depending on who has created them and for what reason, but recent figures on the food and drink industry make interesting reading.

It is reported that the food • Respond with more agility Unnecessary investment and drink manufacturing to packaging changes and A major food manufacturer “The food industry in the UK generates a configurations; needed accurate data to turnover of almost £77 billion • Minimise transport costs. assess whether they could and drink and that over £12 billion worth And all to ensure products derive sufficient benefit from of food and non-alcoholic get in front of the consumer – an investment of £850,000 sector has drinks are exported annually. on time. to install a new conveyor Exports of these products system. A number of variations been the most to non-EU markets grew The heart of the matter to the packaging had been by 7.2% in the first half of Manufacturers of all sizes introduced to respond resilient and 2012. This sector is the largest always want to identify to different retail spaces within the UK manufacturing and remove any wasted or available in supermarkets, stable of all industry, accounting for 16% unnecessary effort, delays, filling stations etc. The need of the total and employs up to decisions, processes, costs, to increase capacity and manufacturing 400,000 people. paperwork. At the heart of throughput to meet demand These are sizeable figures it all is process improvement had resulted in their engineers industries to swallow but production using accurate time data. constantly increasing the in this sector has been the Accurate time data can help speed of the conveyor system, throughout the most resilient and stable of to provide the answer to most thereby putting undue all manufacturing industries things productivity related. pressure on the bearings recession” throughout the recession You only have to look at and rollers in the switching with the industry consistently the number of promotional mechanism. producing at levels over 10% offers in any supermarket Taking into account new higher than the manufacturing in response to consumer calculations on the capacity average. (Sources available.) demand. But have you ever of the conveyor and new Businesses in the food and stopped to consider what specialist input to identify drink manufacturing have are the implications of these the best utilisation of the always been conscious of offers on the industry? current equipment, specialist their levels of productivity. Manufacturers can only productivity analysis came Now, more than ever, there respond to the creation of into its own. Using accurate is constant focus on costs these offers by becoming and consistent time measures by improving performance, increasingly effective and and models, together with productivity and processes, that means keeping their other industrial engineering using industrial engineering processes and equipment techniques they were able to expertise and applying lean flowing. The ‘two for one’ prove there was no need for principles. offer creates more product further investment and the Their reasons for involving volume, so more product to conveyor could be slowed to productivity specialists are create, to package, to pick, ease engineering stresses. many and varied and include to transport, to handle, to the need to display. • Minimise changeover times Productivity and process and bottlenecks; improvement initiatives, lean • React to fluctuating demand principles, SMED, industrial with shorter response times; engineering techniques are • Increase throughput with all called upon more and accurate manning levels; more to address the needs of • Create better flow and the food and drink market. balance; Here are some examples. Management Services Productivity Winter 2012 27

Production methods variation of line speed to cope time data and a better A food processing and with equipment sensitivity. To batch monitoring procedure packaging plant saw an 18% accommodate regular changes highlighted the problem areas. reduction in labour costs by in the types of product, Actions and decisions impacted implementing recommended bottle, or cap, much quicker on charge costs, increasing Food for thought? improvements to their changeovers were effected – minimum batch sizes and in batch production methods. and significant material costs two very significant cases, Opportunities to reduce waste, saved by slightly moderating reducing customer charges for address material shortages filling volumes still within some large batches. The result and create better product flow acceptable tolerances. – a more competitive offering were also identified. and increased business for the Variances manufacturer. Product variations An increasingly large range of Food and drink “Have you ever There were problems at plant and packaging variants manufacturers are increasingly a bottling plant with line with smaller batch sizes was turning to specialists in stopped to capacity and how to cope causing significant labour structuring and applying time with the increased variation variances. The overall picture standards because this very consider the of caps and labels as well as was clearly adverse, but there specialist expertise can make bottle size, type and contents. was inadequate information a huge improvement to how implications of Specialist investigation for targets and costs for each lean and streamlined their identified an array of causes specific product, so it wasn’t business actually is. And that promotional of downtime and the need evident which products were is at the heart of this and every to more closely specify the causing the variance. Building business sector. offers on the industry?” Management Services 28 Winter 2012 Persuasion strategies Selling yourself magically: Persuasion strategies for personal and organisational change

By Philip E Atkinson.

“Imagine the confidence this will give you to take charge, present proposals and ideas and how it can change the way you transact and build business and your career, create positive and lasting relationships and be secure in yourself and radiate an inner warmth and self assurance in your ability to master influence in your life in any context.” Management Services Persuasion strategies Winter 2012 29

Fundamentally, our ability to intelligence that is coming influence strategies’ enables successfully manage change to be valued highly in most one to better read the and achieve results in business organisations. audience and anticipate their is dependent upon our ability It is obvious that most of reactions. By understanding to influence people. We can us in business achieve results the typical objections that all benefit from learning through interacting with arise, it is possible to shape to influence, persuade, others. Applying our social presentations to appeal to all negotiate, train and sell to skills enables us to win others parties. others in a variety of contexts over to our viewpoint. If • Anticipate ‘counter from direct selling to clients we want to become more arguments’ to any to coaching, team building, effective in whatever we do, presentation, whether it be appraising, motivating and we can learn a great deal by ‘one on one’ or to a team, you leading. looking at the art and science should always be prepared to It is also true to say that of persuasion and this is deal with dissent as much as many of us in business do equally applicable to a variety support of your case. not see ourselves as natural of contexts, from coaching to • Shaping delicate discussions persuaders selling concepts, consulting. and develop creative options ideas, and even ourselves. for all parties. Perhaps we think we do not Building a repertoire of • Having confidence to sell have these gifts, lacking the persuasion strategies is services and oneself. eloquence, the quick wit and vital rapid fire repartee, associated The development of our The beliefs and with the traditional silver ability to influence others behaviours of effective tongued sales stars. Those is a core competence for persuaders traits anyway are associated us all and many of us share I will refer later to a five with the short-term quick the common ambition of stage persuasion process win-lose mentality. Be improving our interpersonal which encapsulates effective confident in knowing that skills. When exposed and ethical influence. Before influencing skills associated to superior ‘persuasion that, it is imperative to with the ‘consultative model’ – paradigms’ and influencing review the attitudes, beliefs developing ‘win-win’ solutions skills, we value them and see and behaviours that are can be learned and developed the benefits that accrue to our the foundation of great very quickly, and applied in a personal effectiveness and we influencers and persuaders. variety of contexts. experience the benefits that evolve from exposure to new 1. Respect your client’s Interpersonal competence tools and techniques: model of the world – valued emotional • Controlling the flow of Our client, customer, business intelligence conversation and constantly partner or associate has their Most of us would not achieve reviewing the focus and the own unique model of the what we do without applying potential outcomes through world, which may not be the these skills. Persuading conversational change same view of the world as others is a core competence techniques. ours. We all have our own for everyone who works • Identifying and dealing unique ID and make-up of in business. It matters not with objections prior to, and who we are, and what is whether we work in finance, during, negotiations, before important to us. With this in marketing, consulting, they arise. mind we use and apply various training, IT, HR, manufacturing • ‘Inoculate’ our proposals ‘behavioural models’ to or any other specialist role from criticism, and safeguard understand what makes other such as quality, risk, audit our position by foreseeing people tick. or governance, what we all potential objections and have in common is the need counter arguments from Rapport building to persuade and influence others. Over the last few years, others. Even those who occupy • Build and support ‘win-win’ various strategies and a purely technical role have solutions when all parties techniques have been to emerge at some stage and share in the success of the perfected to aid the reading win over the hearts and minds partnership in achieving the of others’ preferences. of their colleagues, their positive outcome. Principally, we have focused team and those to whom they • When presenting to large on how they make decisions. report. Being able to influence or small group reviewing Using these models helps gain others is a part of emotional the range of ‘persuasion or rapport with clients, and it’s Management Services 30 Winter 2012 Persuasion strategies

the typical objections the of ‘effect’ and you will give Communicate to people “It’s important other person will have to yourself tons of ‘excuses’ what you want them to your ideas prior to making rather than real reasons why receive – precisely to inoculate your pitch. Resistance is a sign things did not happen in Stop telling people what of lack of rapport with your your favour. Choose to be at you ‘do not’ want them to yourself client. Building rapport is the ‘cause’ and you will find new do or think. “I don’t think second step in our five step ways to get ‘back up’ and you should experience against being persuasion process which will adopt new strategies. any problems with our IT be discussed later. You cannot get that solutions.” “Don’t worry; we’ll negative – personal power coming from always put our customers 3. Be at cause not at ‘effect’. Rather it must come first.” I am thinking “I was not especially effect from the empowering belief worrying until you mentioned We all have the choice to that “I will cause things to it”. if your either be at the ‘cause’ or happen – I will turn this Communication is a very the ‘effect’ of a problem. It around”. important tool, operating persuasion is far more empowering to at both the conscious and be at ‘cause’, which means 4. No failure, only other than conscious levels. strategies that we take responsibility feedback We can train people to use in our mind for everything It really is important to communication at these levels don’t always that has happened – even if it inoculate yourself against to increase the achievement was not our fault! Consider. I being negative – especially of ‘win-win solutions’. You go to plan.” know you, the reader, are not if your persuasion strategies can even use the negative the ‘cause’ of all things that don’t always go to plan. Don’t phrase to reinforce a message go wrong for you, but just confuse excuses with reasons! at the unconscious level. For then relatively easy to work suppose for a second that this It is easy to find ‘excuses’ for instance, “I am not going together enabling them to is true, there are benefits to not getting your own way and to suggest that you will be develop, implement and being at ‘cause’. winning your projects. It is totally pleased with our sustain various changes in It means you will have a easy to list a set of conditions services all the time.” “Further, their business. Because I work different and curious mindset, that reinforce your belief I cannot promise 100% that in partnership with clients, we which creates an empowering that you have no control over all our training will deliver can address any objections; belief that aids you looking circumstances performance improvement inoculate our proposals for new ways to resolve The major point here is that to every member of staff.” before presentation – even problems instead of blaming when things are not going “Needless to say I would to a hostile audience – thus others. well, we often dream up not want to give you the ensuring that resistance to Conversely, if you are, excuses to shut us out from impression that we are the change is at a minimum. at ‘effect’ you may appear the harsh reality of life that leaders in the provision of powerless to act. Your attitude we can all do something to influencing and persuasion 2. Develop your linguistic will be very different. You make things better. Catch packages.” flexibility may not consider that things yourself when you do it. Just suppose your people If your client appears to be have transpired to put you in Ask, “is this a valid reason or could learn these techniques inflexible, take a good look that position and easily blame an excuse that I am using?” – how effective would they in the mirror. Are we tending others. You may even consider Reframe things around you to be in influencing others to attract the behaviour from yourself a victim and those being at ‘cause’. And further, and cementing cast iron others. Ask yourself, why does things are not in your favour. consider this, if you have relationships? The techniques the other person not find To illustrate, let’s say you did teams who support you in are referred to as ‘hypnotic your proposals or suggestions not get what you wanted, the your work, take a careful look language, and are founded appealing? Why is there a promotion, the agreement to at their ‘beliefs’ and ‘limiting on the science of neuro disparity in perceptions? progress a key project with decisions’ about what is going linguistics, using language Have you devoted sufficient your boss, the contract or on in their world. patterns at the conversational time addressing the client’s whatever with your client. If level, which will enable you to model of the world, looking at you are at ‘effect’ you may 5. Hypnotic language understand more about what things from their perspective? focus on excuses rather than patterns motivates your clients and Could you reframe things for reasons. You may think – “I Communication is what is associates, and enables you to them to appeal more to this did not get the work because received, not what is sent. Be build win-win solutions. perspective? someone else was pencilled in careful with your language Currently I am working on You the specialist, for the project’. Or you may and your proposals to others. language patterns developing the change maker, the think ‘My face did not fit’ or Say things the way you want an interactive software salesperson, the master ‘I am too inexperienced... too them to be received. Really e-learning process entitled persuader, must consider the old... too expensive… etc. think consciously about what ‘Persuasion & Negotiation personality ‘make-up’ and Stay in the emotional state you want to happen. Coach’ to equip people in Management Services Persuasion strategies Winter 2012 31

business with the strategies lifetime value for the client. and technologies which Any worthwhile agreement they can use to measurably having high value for the improve their persuasiveness. client, associate or colleague, This is based on our research is secured on partnering (www.influencingstrategies. together to add value. Those com) and practical solutions occupying positions where which enable people from they are in persuasive or any business background, and selling roles, really need to in any context, to learn the consider the best approach for structure, the key processes, mastering some of the skills and core language skills of and strategies that support advanced persuasiveness, ‘establishing rapport’. negotiation and influence. People like people like The five stage persuasion themselves process Be at one with your client Stage 1: Preparation – people like people like This requires doing a themselves. This is particularly significant amount of research true in relationships that into the world of those require some form of barter, with whom we will work. It give or take or commercial requires seeing things from gain. For this reason, the the perspective of others, ‘persuader’ or ‘facilitator’ valuing this perspective, needs to understand the exploring potential objections personality dynamics behind to you proposals, defining potential prospects, clients or and exploring real benefits associates. Many influencers, that your client will accrue facilitators and sales people and generally rehearsing your spend a lot of time ‘objection approach and practising until handling’ with technical you have the confidence and issues related to their product belief to make your approach. or service – thoroughly (For in-depth information neglecting the personality of please see previous articles in their prospect. I suggest that the IMS Journal that deal with this is a critical flaw needing these issues) to be addressed. Starting with a positive This means getting to grips attitude for all parties is the with the personality dynamics foundation for effective of the prospect or purchaser, persuasion, influence and client or colleague. Having selling ideas and products. I worked with psychometrics, believe that, fundamental to we have developed our own the persuasion and influence models based on Jungian process, is the ability to discuss Psychology which we can use options and alternatives conversationally with clients and to listen intently. Great and associates. This enables persuaders are great listeners us to understand the key who listen for opportunities elements of the model of before speaking. the world which our client inhabits. Fundamental to the persuasion Stage 2: Building a relationship and rapport Rapport building and influence process, is building At this stage, we focus on This process is secured words – predicates, keywords the ability to discuss options completely on building and phrases, common and maintaining rapport experiences and associations, and alternatives and to listen throughout the relationship. beliefs and values. A person’s It is a process that generates value system will tell you what intently.” win-win solutions and they value and you can assess Management Services 32 Winter 2012 Persuasion strategies conversationally how to elicit their value system and assess how they prioritise. By doing this, you aid your colleague or client to come to a solution which best fits his values and support his or her beliefs. Body language is also a major element of communication, and as such is a key element of sales training. The persuader or facilitator becomes practised in how this can be used to create a climate of comfort and progress in meeting ‘win- win’ outcomes.

Stage 3: Identifying needs Here, the traditional approach to influencing is strongly countered by our consultative approach to persuasion and influence. This activity is about the needs and wants of the clients – so keep quiet, and focus all your attention on the “Be at one with your client client. Persuading is about listening – people like people like and refining differences – listening to concerns and themselves.” objections and then dealing realistically with them. If you have done a good job in building rapport, then client or colleague structures understand how you establish actually make that close and this stage of questioning is a and views the model of value. Once you have done finalise things. natural follow on. their world. This helps this they will be comfortable. One of the things I do with build a ‘motivational map’ You have to establish value Review and summary my clients is asking many to see whether people are to get their problem to This article is the third in questions. If you fail to do this, predisposed ‘towards’ a disappear. a series focusing on the you will not be able to link particular value or are ‘away persuasion paradigm and need and value to the service from’ orientated. Stage 5: Enabling the persuasion process. You that you provide in stage 4. agreement – ‘win-win’ – can see that the process can You have to become a great Stage 4: Exploring and closure work in variety of contexts questioner and probe to find options If you have committed 50% of and in a range of industries. your client’s key concerns and Much of this influence and your energies to preparation, We personally have used wants. You will all the time be persuasion process is based establishing rapport and the process for consulting assessing these against his or on conversational questioning asking questions in stages assignments, developing her values and the things that and is not scripted. This means 1, 2 and 3 and an additional learning strategies in make them tick, and when the facilitator, consultant, 45% to establishing value difficult situations, training objections start to surface. sales person; persuader etc and linking to your services a variety of staff in change To ensure that you deal with has to be extremely flexible. in stage 4, then the final skills, coaching, customer the objections, you have to As consultant, facilitator, 5% is about finalising the management, negotiating and create a strong questioning persuader or sales person, agreement in stage 5. Coming consulting, selling professional technique to effectively assess you have to establish value to a ‘win-win’ agreement services and products. The your client’s thoughts on the for your client before you should be a natural conclusion major learning about this process. can progress and reach to consultative influencing, approach is that it is based At this stage, it’s also agreement. but you still have to close the on a flexible interpersonal important to examine key You have to establish agreement. It is surprising model that creates a climate of preferences in how the higher value to assist them to how few people or persuaders consultation leading to deep Management Services Persuasion strategies Winter 2012 33 rapport which is founded if you will be looking for are forced to drop your on research in the applied feedback to see how your own standards for a compromised About the author behavioural sciences, neuro skills are progressing. As you agreement in which you are Philip Atkinson is a linguistics and psychometrics are creating your persuasion, uncomfortable – walk away. consultant specialising as tools for creating rapport influence or selling identity, Be confident that other in strategic, behavioural and managing the process you know what is important business will follow on your and cultural change. He towards ‘win-win’ solutions. to you. As a person of own terms. is a member of various considerable influence, you Some will want to training consortia and Personal integrity as will have formulated values negotiate with you to break has recently focused on an influencer: identity, that work for you. These your boundaries. Stick creating innovative business boundaries and self values, standards and rules with what you believe is simulations through confidence depict who you are and for right. Maintaining realistic Learning Strategies Ltd. Finally, whether you are a what you stand, and should boundaries only adds to your He consults in the UK, professional or management never be compromised. They confidence and your clients Europe and US, has written services adviser, consultant, are your personal boundaries will see that as they transact seven business books and trainer, educationalist, that say who you are – and business with you. So stay published many articles, customer services manager, how you do business – never loyal and decide what profile speaks at conferences and coach, business owner, deny them. Defend your your persuasion or influencing runs workshop sessions for team manager or leader in boundaries, maintain your style will typify. Who you leading companies. Philip any context, you have an integrity. Decide who you are and what you are about can be contacted on +44 (0) important role to influence are and how you will do means that your own personal 0131 346 1276 or visit www. and persuade. You will know business. Your flexibility is position gets stronger and philipatkinson.com that your ability will reflect to help your client, not to you build your own brand, on you as a person and your bend to unreasonable wishes. becoming a master persuader, identity in your role. If you pursue rapport and confident that your expertise Selling and persuasion are establish value for them, rests on an inner core of probably quite challenging, your boundaries will not integrity in how you transact as you may find. It is easier be compromised. If you business.

U.K. Methods-Time Measurement Association (2000) Ltd.

The UK MTM Association advises all interested parties that the next distance learning course for MTM-UAS will commence late January 2013. The course will be conducted in the West Midlands at Tamworth. A total of ten persons are currently scheduled to attend and achieve the next phase of their PMTS education.

There is currently a considerable demand for contract personnel qualified in UAS, both in the UK and throughout Europe. If you are interested in joining this group please contact the UK-MTM Association by email, [email protected], and we will contact you with the details of the next set of training courses. These will be held during 2013 depending on the interest shown, with a minimum of five persons the cost will be £ 450 each.

During 2012 the Association has delivered MTM-1, MTM-2, and UAS training to a new group of five instructors and a further 25 persons in MTM-UAS and MTM-2. This shows that there is still a strong demand to cover the statement ‘IF YOU DON’T KNOW HOW LONG IT TAKES, YOU DON’T KNOW HOW MUCH IT COSTS’. Management Services 34 Winter 2012 Stretch goals The folly of stretch

goalsBy Daniel Markovitz et’s dispense, once and maintained that the and for all, with the strategy of small wins can Lmanagerial absurdity often generate more action known as ‘stretch goals’. and more complete solutions While it’s true that renowned to major problems because it psychologists Edwin Locke and enables people to make slow, Gary Latham described goal steady progress. setting as “the most effective In their book The Progress managerial tool available,” it’s Principle, Teresa Amabile and also true that no less a thinker Steven Kramer build on the than W E Deming insisted same argument and clearly that companies “eliminate demonstrate how even the management by objective.” In smallest, most mundane my opinion, there can be no steps forward – for example, such debate over the lack of achieving clear consensus in a usefulness of stretch goals. meeting – can motivate and inspire workers. Ever wonder Stretch goals can be why people will so often terribly demotivating write down an item they’ve When stretch goals already completed on their seem overwhelming to-do list? It’s so that they and unattainable, they can have the satisfaction of sap employees’ intrinsic immediately crossing it off motivation. The magnitude and experiencing the sense of of the problem causes people progress. to freeze up, and the extrinsic motivator of money crowds A dangerous tendency out the intrinsic motivators of to foster unethical learning and growth. behaviour In his classic article Small In the early 1990s, Sears gave Wins, psychologist Karl Weick a sales quota of $147 per argued that people often hour to its auto repair staff. become overwhelmed and Faced with this target, the discouraged when faced staff overcharged for work with massive and complex and performed unnecessary problems. He advocated repairs. Sears’ Chairman recasting larger problems into at the time, Ed Brennan, smaller, tractable challenges acknowledged that the that produce visible results, stretch goal gave employees a Management Services Stretch goals Winter 2012 35

powerful incentive to deceive could take care of customers Focusing on small customers. faster. In his latest book, Toyota wins in combination Kata, Mike Rother makes an Stretch goals can also important distinction between – tragically – lead to with process a traditional metric-based excessive risk taking outcome (or stretch goal) and Enron rewarded its executives improvement a ‘target condition’. A stretch with large bonuses for goal is most often an outcome meeting specific revenue will drive your metric, and is influenced goals, irrespective of the organisation by so many variables profitability or the riskiness of that systematic, scientific the moves. Although the final forward, without improvement isn’t possible. A book hasn’t been written on ‘target condition’, by contrast, sub-prime mortgages and the the negative describes how we want a ensuing banking crisis, we do process to function – and know that stretch goals played consequences of that description requires that a large role in putting the you understand the current investment banks in serious stretch goals. condition deeply enough to jeopardy. know where to begin your Focusing on small wins, in improvement efforts. combination with process Take the aforementioned improvement, will drive your Sears example: $147 per organisation forward, without hour of revenue per person the negative consequences is an outcome metric that’s of stretch goals. However, influenced by a huge number this approach requires a of factors. Perhaps the service willingness to abandon the staff spent an inordinate ‘ready, fire, aim’ approach to amount of time looking for problem solving. The heavy parts, so it took them twice lifting has to be done at the as long as necessary to do outset – a deep understanding a repair. Or perhaps the of the current condition process of getting customer is a prerequisite for true information and relaying that improvement. This approach to the mechanics took such also requires a subtle – but a long time that mechanics critical – shift in focus from couldn’t work on enough cars improving outcome metrics during the day. Or perhaps to improving the process by Sears’ reputation was only for which those outcomes are simple repairs, and customers achieved. would only bring their cars in for low-priced oil changes. Who knows? Without A stretch goal sufficient knowledge of the current condition, there’s is most often no way to make intelligent progress towards the ultimate an outcome goal of being a profitable contributor towards Sears’ metric, and is About the author growth. influenced by so Dan Markovitz is the However, setting a target President of TimeBack condition with knowledge many variables Management and the of the current state means author of A Factory of solving a problem that will that systematic, One (Productivity Press, inevitably lead towards December 2011). Follow increased revenues. In Sears’ scientific him on his blog at www. case, that might mean timebackmanagement.com changing the layout of the improvement or on Twitter at @timeback. shop and the way parts are isn’t possible. supplied so that mechanics Management Services 36 Winter 2012 Leadership waste Understanding and reducing leadership waste Efficient working that focuses on effective processes is the key to waste elimination, says Mike Keen.

Not a day goes by without of the seven forms of waste, business life presenting most frequently found in an leaders with opportunities operational arena. These are for improvement. Securing typically observable in process productivity improvements, inefficiencies in factories and delivering financial leverage, offices. Such improvement attaining efficiency gains and opportunities are born out achieving objectives: these are of the mentality of ‘this is phrases regularly heard across the way we’ve always done management and leadership it’ or ‘it works and we are teams the world over. They successful, so why change it’… are drawn together by the Many actions in the leadership inescapable fact that waste arena add little value, but are elimination is at the core of deemed to be essential. any kind of improvement. ‘Value’ is a concept that can Becoming more efficient, be applied in a broad sense to eliminating waste and being the leadership of a business. more productive are crucial For example, a leader looks to at the leadership level, when give clear direction, regular it comes to behaviours, feedback and sound guidance, words and action. Waste and in doing so, will add reduction or elimination ‘value’ to the organisation and is not just an operational its teams. However, conversely, buzzword; moreover, it is a leader will be inefficient or an essential leadership trait, even create more inefficiency and a differentiator in the and waste not failing to give “Waste reduction or boardroom. clear direction or sound, Organisations often actionable advice that elimination is not experience leadership empowers teams to develop inefficiency manifesting and perform at a higher level. just an operational itself in the form of unclear Leadership waste can be policies, contradictory strategy defined as ‘anything other buzzword; statements, blurred direction, than the exact amount of internal politicking and time, effort, communication, moreover, it is an power games, and personality information, resource, assets, conflicts. Although these space, and effort that is essential leadership leadership inefficiencies absolutely essential to add exist, organisations are still value to an organisation’. trait, and a successful, despite themselves, Furthermore, any waste as they often find methods of elimination effort has to be differentiator in the coping with, and tolerating, founded in a holistic approach this waste. So, despite to organisational life, and it boardroom.” organisations being successful, has to be based on satisfying they could be so much more the internal customer efficient, if they would only (employees) or external attack the root causes of the customer by producing a high waste. quality organisational culture, Above is a typical summary a highly motivated workforce, Management Services Leadership waste Winter 2012 37

Seven forms of waste

Inventory Defects and rework Over processing

Waiting and searching

Motion and double handling

Over production

Transportation

a clear and consistent message Several days later, more a lot of over processing, and train and coach others with a that align to produce the transportation waste occurs ultimately a poor work place consistent level of knowledge. desired outcomes. when these are taken down, organisation. Smart organisations do not The seven forms of waste disposed of and replaced with waste knowledge; they make (above) can be found in something of equally low Inventory waste it work for them as an asset. the leadership in many value. Sending messages and ‘Knowledge is power’ was organisations, and manifest information in this manner once a maxim from yesteryear, Motion waste themselves in many formats, drives the efficient employee and a dangerous one at this. If Too frequent meetings, with a variety of causes and to distraction. Leadership knowledge is the information meetings with too many consequences... ought to be rising above this inventory that leaders possess, invitees, calling a meeting traditional, non-value-added storing it in one’s head is just to meet up with people… Transportation waste activity and start spending a waste. Sharing valuable these are all examples of Constant email traffic, this wasted time on talking knowledge quickly is vital to wasted effort, motion and much of it unnecessary and with employees to explain the agility of an organisation transportation, if some repetitive, adds t up to waste rationale behind decisions and its employees. Retaining individuals have to travel time and effort in reviewing, and promote swift, consistent information in some outdated to the meeting. This is processing, electronically efficient communication belief that it gives an particularly a problem of filing documents away, only through the layers of the individual a sense of power waste, if it could be avoided, to discover that the same organisation. Transportation is damaging. The forward- by adding more value and documents have physically waste causes ineffective thinking organisation and its getting straight to the heart distributed to employees operations, whether factory leaders add value when they of the problem is, so as to and posted on notice boards. or office-based, and can drive are able to authentically teach, observe it first hand, rather Management Services 38 Winter 2012 Leadership waste

“Embrace your inefficiencies and your wastes. Without them, you are not being honest about your organisation.”

than to fall into the trap of teams don’t have enough train them, support them, them with further training. moving other people away knowledge, skill or training remove obstacles, unblock Leaders need to focus on from the problem into a to make such decisions, stagnation and provide the helping their teams to add meeting room, just to review then those leaders should platform for success, without more value by avoiding a problem that actually focus on training, personal having to check and verify creating unnecessary work. is occurring somewhere development and upskilling, multiple times along the way. Some of the consequences of else in the organisation. in order to eliminate such Consequences of processing overproduction include loss Consequences of motion/ waiting waste. Some further waste include wasted costs, of control, increased mix-ups, movement waste include consequences of waiting and a potential lack of control, mistakes and confusion, and simple waste of valuable time, time waste including people if employees and leaders drift therefore valuable time and further waiting waste, time cost of them doing nothing from an agreed pathway. resources consumed (wasted) spent searching for essential (adding no value), additional building products that are not information, and potentially a delays that lead to overtime to Overproduction waste a priority. lack of management control. conclude what was intended, Leaders need to be practical, higher costs due to inefficiency pragmatic and effective Defect wastes Waiting waste and loss of motivation or low communicators. Sometimes, Sending a formal leadership People rely on other people morale. a comprehensive piece of communication out to completing tasks, in order to work is required that goes teams, and then revising get things done. For example, Over processing waste into a great depth and detail. it, thus blurring the key actions that others are too Micromanagement appears in Sometimes a brief summary elements of the message busy to deal with, or actions many forms in organisations. is sufficient. Communicating provides scope for confusion, that are completed later than Continually checking-up on what is required of misunderstanding and planned will result in further individuals’ work, following- individuals and teams, and misapprehension. This then delays down the line, in the up unnecessarily to see how communicating it effectively has the consequential effect form of unproductive waiting they are progressing, and and clearly is crucial. If an of needing to unravel the time. Knowingly having chasing people before work individual does not need to confusion and reiterate, people wait for responses is is due – these are all a waste produce the highly detailed repeat and revisit the correct leadership waste. If business of leadership time and effort. report, make it clear to them, message. Such an example of leaders are unable to help, Frequently, this results in and avoid overproduction. leadership defect and rework or are too busy, or there leaders being seemingly This is essential to avoiding provides opportunity for are conflicting priorities, unable to devote sufficient overburdening somebody. If a improvement. Leaders can the organisation needs to time to proactively leading detailed report is not required, sometimes ‘rush’ messages to revisit the reasons for these their team, or spending then why waste that person’s the organisation, for fear of delays and then deal with time on future strategy time doing work that is too wanting to be seen to take the waste and its root causes. development. When leaders detailed and doesn’t meet action. Sometimes, going more Organisations frequently stop adding value, and are the need? Leaders have to slowly and meticulously at inadvertently tolerate waste reduced to expediting or take care that they spot the the beginning will mean less in the form of waiting, due to chasing for updates, then signs of overproduction and inefficiency and waste further failing to empower employees over processing waste offer someone more time down the line. Consequences to make their own decisions. appears. Leaders add value at the communication stage of defect waste can include If leaders believe that their to their teams when they of a piece of work, or help wasted costs (for example, Management Services Leadership waste Winter 2012 39 poor hiring decisions leading proactively to promote the to be a credible program, About the author to having to replace people) value of teams and team- processes, people, systems Mike Keen is Supply and continual checking and based problem solving at all and organisation culture Chain Director, Global IEC rechecking of people’s work if levels of the organisation, has to align. Change on Electrical Products, Cooper it is defective. ensuring that diversity the scale required in many Bussmann. Given the damage that of opinion of opinion is organisations cannot be For information, leadership may do to an respected, applauded and managed from the ground- email mike.keen@ organisation, consider this positive reinforced, so as floor; it has to be supported, cooperindustries. summary of leadership to promote a culture of and truly championed from com or visit www. attributes. Each of these inclusivity. the top down. cooperindustries.com. is open to attack from World class waste leadership waste. Reducing • Decision-making elimination begins with and eliminating this is crucial Rapid yet effective decision- leadership and permeates to the success of a Board. making can be a true down throughout the entire accelerator for organisations, organisation. Aligning goals • Managing vision and if done well. Avoid making and objectives to this will help purpose snap decisions, however, based glue the organisation and its Communicate an authentic, on incomplete information. teams together. inspiring vision that the Whilst the potential pitfalls Simplicity and speed. organisation can buy into. are many, there are some Whether leaders focus on Avoid conflicting messages simple guiding principles communication, planning, or or blurred strategies. Ensure that leaders can follow, to execution, they need to be every single employee maximise their likelihood of easy to understand, easy to understands the key messages. successfully understanding, follow, and easy to read. reducing and eliminating ‘Winning from Within’ • Customer focus waste… promotes the idea that most Demonstrate, through action, of the organisations ailments a customer-intimacy centric Consider the following can be solved within the approach to the building of recipe for success existing workforce. Many long-term relationships. Avoid Efficient working that focuses people have improvement paying lip-service to customer on effective processes, rather ideas that are waiting to relationship management than excellent people, is the be utilised. Leaders should and ensure all teams do key to waste elimination at communicate deeply within not miss the opportunity to the leadership level. their teams, to tap into the ‘wow’ customers at every Focus on small incremental ideas and energy that exists. opportunity. improvement steps. If you can Capture improvements, fix leadership waste in one and communicate wins. Do “Leaders add • Priority setting area, copy the process, expand this again with speed and Clarify the most important the blueprint, replicate the simplicity. Demonstrate how value to their aspects of the organisation’s success and you will continue wins in one area can be strategy, and ensure no in the right direction. translated into quantifiable teams when misunderstanding about what Embrace your inefficiencies benefit. Leaders need to is crucial to the success of and your wastes. Without convert good work at lower they train the company. Avoid falling them, you are not being levels in the organisation into the trap of too many honest about your into positive, meaningful and them, support priorities. organisation. Take your inspiring updates. existing leadership strengths, Often there are them, remove • Results and consider your areas of opportunities at multiple Ensure there are enough weakness, to develop your levels with the organisation. obstacles, performance metrics in own recipe for success. In order to model the way place to measure and track Without it, you run the risk of and set a solid example, unblock progress and take care that not plotting the right course. leaders ought to start with all employees are clear about Leadership drives change, themselves and focus on their stagnation and what they will be measured but without an authentic inefficiencies and wastes as on. Avoid the pitfall of focus on an empowered, a leadership group. Often provide the measuring everything just for engaged and motivated these areas of focus will shine the sake of it. workforce, such change will be a light into a huge array of platform for difficult. The supporting pillars improvement opportunities. • Team player of any change are the people. Too often, leadership waste is success.” Work diligently and For waste elimination replicated at lower levels. Management Services 40 Winter 2012 Performance support Facing the challenge

In an overview of the London Global Convention 2012, Professor Colin Coulson- Thomas describes how performance support approaches, tools and techniques can address governance and sustainability challenges.

Delegates attending the Indian governance and a keynote materials and low carbon ways of achieving these goals. Institute of Directors’ London speaker at the event. alternatives. Dr Jeremy Leggett Sustainable strategies require Global Convention from 10- The realities faced by business of Solarcentury sees us engaged new forms of governance 13 October 2012 will not be and political leaders are stark. in natural destruction rather and leadership for remaining under any illusion about the Peter Madden of the Forum than creative destruction. current and competitive and challenges we face. Embracing for the Future referred to the For Adrian Allsop of the UK’s coping with an uncertain both corporate governance need for profound changes to Economic and Social Research future. and sustainability, its planners cope with a threefold increase Council better engagement, Hitherto corporate clearly exhibit the integrated in the population of the planet learning from the experiences governance has been much thinking championed by within a single lifetime. Dr Aled of others and behavioural concerned with board Professor Mervyn King, the Jones, Director of the Global changes are required. As we structures and the formulation chairman of South Africa’s Sustainability Institute, forecast will see in this article there are of codes of practice. Dr Jeremy King Committee on corporate increasing prices for basic foods, practical and cost-effective Pearce reminded delegates Management Services Performance support Winter 2012 41

company was vulnerable to 2000 companies and over “The realities faced by business sudden shocks. Looking into the 500 professional firms. It has future and preparing longer- included working with over and political leaders are stark.” term plans can be problematic 100 boards, reviews of the when one peers into a fog that processes and practices of over conceals multiple, evolving 100 companies, European that successive high profile formulation and jumped on and mutating challenges and Community funded support of corporate collapses have led to change, knowledge and talent opportunities. the owners of 50 businesses, calls for additional regulations. management bandwagons. and evaluations of over 20 Yet such measures cannot Academics and commentators “A decade of stupidity” adoptions of better options. prevent directors from taking have stressed the importance Gwyn Jones, CEO of the Global Accumulated evidence is poor decisions, attempting of looking ahead and there Association of Corporate compelling and consistent. It cover ups and not acting in the has been criticism of ‘short- Sustainability Officers, called suggests many widely adopted best interests of a company termism’. for fresh thinking. After what responses to a changing when they feel they can get By conforming and avoiding he termed a decade of stupidity business environment are away with it. risks many boards have become Professor Mervyn King also general, expensive, time Unprecedented attention an obstacle to change. They called for new ways of thinking consuming and disruptive. to corporate governance has feel that by ‘playing it safe’ for the period 2010 to 2020 More importantly, boards are not prevented a succession they are being responsible. Dr which needed to be a decade overlooking quick, focused of failures and scandals Coral Ingley of AUT University of change. Many boards find and cost effective options that and massive government outlined research results organisational structures, ensure compliance and deliver intervention, bailouts and which emphasise the extent processes and practices are large returns on investment measures such as ‘quantitative to which conformism reigns getting in the way and more and multiple benefits including easing’ have been needed to in boardrooms. Conformance affordable, flexible and higher performance, faster prevent the collapse of financial often comes first. sustainable approaches are responses, lower support costs, and economic systems. ‘Old Some enthusiasts point required. We need better ways increased understanding, governance’ has not worked to surveys that reveal an of helping ‘frontline’ staff to greater engagement and and cannot work so long association between elements cope and enabling customers to reduced stress and risk. as a proportion of directors of corporate governance such help themselves. An option such as continue to make wrong calls, as particular board structures Dr Graham Wilson in his performance support can while some boards take stupid and financial performance. valedictory summary pointed deliver these benefits by decisions and many ‘walking However, establishing cause out that the future looks worse making it easier for people overheads’ in head offices and effect is more difficult. than we would like it to be to excel at difficult and destroy shareholder value. The association may simply and emphasised the need for important jobs by emulating be due to good boards and practical solutions. People the approaches of their more Making board decisions management teams trying to require support when handling successful peers. It can support beneficial get most things right, whether an unprecedented degree mobile activities, relocation and So how could more board a company’s products and of change and minimising outsourcing. Baroness Verma decisions be made beneficial? pricing or observing codes of downside risks, while stressed the importance of ‘Old governance’ has involved practice. approaches advocated should learning from others and seeing command and control systems One could argue corporate be evidence based. what we can do better. and top-down leadership with governance has been a Lt Gen Alhuwalia pointed Dr Coral Ingley asked how its emphasis upon directing, placebo or distraction. Even out that when facing a set of governance can stimulate leading, motivating and its supporters and apologists challenges unprecedented in monitoring. Directors and acknowledge that there are human history, flexibility and boards have been engaged missing elements. These will adaptability will be required “By conforming in formulating strategies and need to address such realities when adjusting to change. So producing annual or multi-year as uncertainty, insecurity and how should corporate boards and avoiding plans. a lack of business confidence respond? Will traditional Much effort has been in key markets, while many approaches come good, or risks many devoted to restructuring ‘traditional’ approaches have should they try more promising organisations and multiple proved inflexible and costly. methods? boards have corporate initiatives to address Priorities can also change various challenges. Some during their implementation. Performance support become an boards have sought to change Lord Giddens expressed My own search for alternative corporate cultures while the view that “the world is approaches has involved obstacle to others engage in talent wars. out of control.” He could not issue surveys of some 2000 Business schools have also put recall a time when the future organisations and critical change.” a high priority on strategy was so uncertain and every success factor surveys of over Management Services 42 Winter 2012 Performance support

“Performance support makes it easier for people to excel at difficult and important jobs by emulating the approaches of their more successful peers.”

creativity when people are so reports that identify critical as mobile phones and tablets increase revenues and reduce preoccupied with compliance success factors for important performance support can costs while at the same time and conformism. With built-in corporate activities such as enable sustainable behaviour enabling quicker and bespoke controls performance support winning new business, building and choices across global responses to individual can enable people to innovate customer relationships, pricing, communities. customer requirements. and develop bespoke responses purchasing and creating One can reduce cost and Performance tools can and ensure compliance with and exploiting know-how. waste by making people aware also support collaboration legal, regulatory and corporate Knowledge of what top of better alternatives. Typically across supply chains. Cisco requirements. Users can be performing directors, their only 30-40% of corporate has used them to engage freed from dependency upon teams and key work groups do computer storage space is channel partners and increase particular locations. When differently in these areas can be used. Cisco Systems provided their understanding, while customers are enabled to captured and shared. its global sales force with B&Q has employed the help themselves unnecessary Jessica Fries, Director of performance support to make approach to make it easier for activities can wither away. the Prince’s Accounting people aware of the benefits of suppliers to meet its quality ‘New governance’ includes for Sustainability Project, storage networking. In addition requirements, including such missing elements and highlighted the extent to to reduced demand for rare sustainability considerations. focuses on the behaviours which we are living beyond resources, sales achieved by the Fostering collaboration across of directors and boards. the capacity of the planet. first few users to be interviewed organisations is important, ‘Bottom-up’ ‘new leadership’ The focus on implementation generated a return of 38 times especially, as Rachel Huxley, embraces helping and and providing better support the project cost within six CEO of Peterborough supporting. There is more in ‘new governance’ and months. Environment City Trust emphasis upon implementing ‘new leadership’ is relevant to Christopher Gleadle pointed out, for addressing strategy, building learning into sustainability. They can make pointed out the importance the sustainability challenges of ways of working and quick it easier for people to behave of profitability and sales and cities. adaptation. Affordable, flexible in a sustainable way and avoid that each day sales meetings Appropriate support can and sustainable 24/7 support damaging and unsustainable and calls result in millions of enable more responsible enables customers, staff and activities. conversations. With appropriate purchasing decisions. Dr business partners to excel at support all such interactions Ola Ullsten, the Convention critical activities. Convention study visit could be an opportunity to Chairman, reminded delegates Importantly, the benefits The 2012 London Global increase understanding of the it was the fiftieth anniversary of ‘new governance’ can be Convention study visit was to consequences of consumption of Rachel Carson’s book experienced within a few the University of Greenwich decisions and help people to Silent Spring. The death of months and independently of main campus at the Old Royal make less damaging and more song birds was the accidental existing people, cultures, sectors Naval College. Professor sustainable choices. consequence of pesticide use. and systems. With mankind Charles Kao an alumnus of the Increasingly relationships Nomix used a support tool running out of time the ability University won the Nobel Prize with employees, customers to make people aware of of performance support to for Physics for the discovery and other stakeholders need the environmental damage quickly change behaviours that led to the breakthrough to be mutually beneficial if and health risks of spraying. enables more rapid responses to in fibre optic technology which they are to last. Companies in One recipient bought the evolving circumstances. allows global communication various sectors have used sales company as a result of finding Investigations I have led have via the internet. Using support tools to engage and its explanation of the Nomix resulted in over 20 published affordable technology such communicate with prospects, alternative so compelling. Management Services Performance support Winter 2012 43

Clear advantages in the ability of sufferers to governance and sustainability As well as benefiting companies self-care and manage their own rules and requirements. and the environment, condition. Such an example Other convention speakers performance support offers suggests a huge potential highlighted the benefits of clear advantages for individuals, for helping people to adopt better information and the whether employees or healthier and more sustainable advantages of integrated customers. For example, it can lifestyles. accounting. Will this be reduce stress and satisfaction Paul Moxey of ACCA enough? What additional by making it easier for pointed out that human action should boards take with people to undertake difficult beings are not machines. the resources at their disposal? activities and increase their Hence ‘new governance’ and Directors should consider understanding, confidence and ‘new leadership’ look beyond ‘new governance’ and ‘new competence. structures at behaviours. leadership’. While Lord Giddens Manoj Sonawala, General Professor Mervyn King and warned delegates to “run a About the author Manager and Company Peter Madden stressed the mile” from books advocating Professor Colin Coulson- Secretary of Tata Services, extent to which the planet’s single solutions, the evidence Thomas, author of Winning called for governance to be population is set to increase. examined suggests wider Companies; Winning People principle based rather than If it is to accommodate them adoption of performance and the theme paper for rule based and capable of behaviours must change. Better support could contribute to the London Convention, has being understood by every support can make it easier for sustainability. It can address undertaken a five year study employee. Complexity need no people to adopt sustainable the complexities many people of how best to transform longer be a barrier. The use of behaviours and discourage or face, cut across silos and bring corporate performance. clear explanations, animations prevent unsustainable ones. together what is needed to An experienced adviser, and graphics in performance Baroness Verma called for address an issue or take a NED and board chairman support can help people to business leaders to challenge decision. he has helped over 100 comprehend quite intricate corporate processes and the Overall the London Global companies to improve areas. status quo. She emphasised Convention 2012 from the director, board and/or Lord Desai and Geoffrey the importance of people in opening business meet at the corporate performance, and van Orden MEP stressed the organisations. Like Sushma Royal Overseas League, through spoken at over 200 national, importance of changes that Berlia, President of the Apeejay the sessions at Lords cricket international and corporate have a clear and tangible Stya and Svan Group, she ground to the study visit to events in over 40 countries. impact on people’s lives. Mutual stressed the need to bring the University of Greenwich A part-time academic at benefits such as those offered together social, economic and Maritime Greenwich the University of Greenwich by better performance support and environmental issues. UNESCO World Heritage Site and an adjunct professor can help to rebuild trust and By presenting relevant represented an opportunity for at Manipal University the credibility of business and considerations as, when and business leaders to network, he has held professorial government. Vindi Banga, wherever the need for action share their experiences, learn appointments in Europe, Senior Partner of Clayton or a decision arises, practical from leading authorities and North and South America, Dubilier and Rice, pointed out performance support can give discuss challenges faced by the Middle East, India that these have been eroded. people the integrated help they their boards. Participation in and China. He can be Uma Shanker, Secretary of require. such IOD India events shows contacted via www. the Government of India’s Challenges also present a commitment to continuing coulson-thomas.com. His Ministry of Power, reminded opportunities for the professional development latest books and reports delegates of the importance of entrepreneurial to develop which is a hallmark of the can be obtained from www. the state sector. Employees and practical solutions. The competent corporate director. policypublications.com. their managers in the public potential in renewable energy services also face sustainability was explained by Najmal Hasan and affordability challenges. In of the University of Greenwich my report Transforming Public to delegates visiting the Services, I set out an affordable Maritime Greenwich UNESCO route to high performance World Heritage Site. Duncan “Better support can make it public organisations for those Hames MP had pointed out that charged with their governance. a half of large scale investment easier for people to adopt In many countries there in the UK in the years ahead is a particular problem with would be energy related. sustainable behaviours healthcare as people live longer Dr Wim Vanderkerckhove with long-term conditions. of the University of and discourage or prevent Evaluation of early adopters Greenwich pointed out of a Psoriasis support tool has that whistleblowing could unsustainable ones.” found a significant increase be applied to breaches of Management Services 44 Winter 2012 Auditing

Auditing strategic business management: why and how?

By Mike Sweeney and Bob Lillis.

A number of high profile UK (Swink et al., 2005). However, equally clear that it is not so or an organisational-capability companies have reported little has been reported on well managed. If, however, based view of how to deliver exceptional business how such an alignment can be the alignment of these two competitive customer value. performance successes of late; measured for its management. variables could be audited The well-established view an example is Jaguar Land To perform such an analysis and reported upon in a of competitive strategy, which Rover. Such achievements requires an auditing of two more transparent form, the is the market-based view, is automatically trigger strategic business management resultant information could grounded on an understanding inquisitiveness about how such variables; the first is an facilitate greater involvement of what is happening in the success has been realised, given assessment of the approach to and improvement in the business environment of a firm that it has been accomplished competitiveness being pursued management of this strategic and using this information to in spite of a seemingly by the organisation. The management goal. determine the major threats unending period of global second is an assessment of the In this article, we report an and opportunities that prevail. economic recession. strategic role and contribution audit approach we devised The aims of the strategy It is almost certain that its operations are presently and tested in 21 service formulated are to counter some of the strategic performing. A sustainable organisations whose primary competitive threats and management practices competitive advantage purpose was the development prepare plans for capitalising employed by successful cannot be established without of such a capability. upon any identified demand businesses are practised by complementarity between the growth opportunities. most organisations, albeit not strategic intents of both the Alternative views of The advocates of the so effectively. For example, competitive and operations competitive strategy resource-based view of there is a general consensus strategies of a business. Competitive strategy may be competition suggest that the among both practitioners and In practice such an founded upon a market or a achievement of a sustainable theoreticians, that to achieve assessment would be made business-environment based competitive advantage could business success requires a by judgement and intuition. perspective of how to compete lie within the firm itself. close alignment between Clearly, this strategic business (Porter, 1996). Alternatively, Through the development and how an organisation plans to management task is performed it could be grounded upon a continuous improvement of compete and the competitive extremely well in some resource-based (Prahalad and capabilities that are difficult capabilities of its operations businesses but, in others, it is Hamel, 1990; Teece et al., 1997) to replicate and that deliver Management Services Auditing Winter 2012 45

Figure 1. Theoretical profile of a market-based view of competitive strategy to a ‘supportive’ role through to the development of a more proactive, or driving (of Competitive Employee positioning competitive strategy) role. It tacit Market knowledge andconduct Uniqueness of Signalling is this latter role that theorists resource and Development 1 capabilities of unique Strategic equate with ‘world class service capabilities grouping delivery’. We adopted these 4 Internal recognition distinctions in devising our of unique Jockeying of audit approach. capabilities competitive position New How the audits were Skills and technology knowledge scanning carried out investment The audits of the view of Commitment Organisational competitive strategy being learning to HR development adopted and strategic contribution being made from Measurement of innovation the operations of 21 service and learning Generic processes firms were carried out by the operated Skills use of questionnaires and Robustness of acquisition Greater emphasis operations structured interviews. on cost and performance and learning Price a distinct The first questionnaire Business service 2 performance strategic variable (the y-axis questionnaire) 3 was designed to analyse the competitive strategy of each firm. This was accomplished Figure 2. Theoretical profile of a resourced-based view of competitive strategy by soliciting, from the questionnaire respondent Competitive who was highly placed in each Employee Market positioning tacit signalling andconduct firm, the perceived significance Uniqueness of knowledge Strategic resource and Development grouping 1 attributed to a number of capabilities of unique preselected common types of capabilities 4 competitive behaviour. Internal The four major categories recognition Jockeying of of unique competitive of competitive behaviour that capabilities position constituted the foci of the New Skills and competitive strategy audit technology knowledge scanning investment and to which a number of

Commitment to subordinate questions were Organisational HR development learning linked, based on the theories of Porter (1991, 1996) and Teece Measurement of et al., (1992, 1997), were as innovation and learning follows: Generic processes operated • Competitive positioning and Robustness of operations Skills acquisition conduct - market-based; Greater emphasis performance and learning on cost and • Skill acquisition and learning Price a distinct service 2 Business strategic variable – resource-based; performance • Business performance 3 characteristics – market- based; unique customer value(s), an the strategic management formulation and execution • The uniqueness of resources organisation can create and decision that an organisation are well established (Hayes and capabilities – resource- sustain a competitive edge. makes to create and sustain a et al.,1988; Chase and based. Clearly, the strategic intent competitive edge. Hayes 1991). They illustrate Each questionnaire for these two approaches the theoretical stages of respondent was asked to to competitive strategy Alternative strategic roles development of the operations consider 15 ‘observable formulation is different and contribution from function describing the elements’ of these categories of and distinguishable. The operations significant differences and competitive behaviour and to differentiation could be Models depicting the role and characteristics of each stage. give a perceived assessment, on accomplished through an contribution of operations These roles may be summarised a five point scale, of the firm’s analysis of the nature of to competitive strategy as being ‘a journeyman’ role commitment to their practice. Management Services 46 Winter 2012 Auditing

The results were then used range from one to five with a competitive strategy. to prepare a profile of the rating of five positioned on the The follow-up questionnaire competitive strategy of the circumference of the circular (the x-axis questionnaire) responding business. Figures figures. was then designed to 1 and 2 (previous page) show Figure 3 is an example of analyse the strategic role a theoretical profile of a firm the actual profile of one of that the operations function fully committed to a market- the organisations from our of a business was currently based competitive strategy sample of 21 service firms. It fulfilling. In a similar manner (Figure 1) compared with a seems to suggest that the firm to that previously described, resource-based competitive from which the data derives – 15 ‘observable elements’ strategy (Figure 2). The scales Company A – is implementing of the strategic role that of the 15 spokes of each profile a predominantly market-based the operations function can perform were used to Figure 3. The actual competitive strategy adopted by Company A in our sample assess the commitment of Uniqueness of the strategic operations Competitive resource and Employee Market positioning management to investing in capabilities tacit signalling andconduct knowledge each of the 15 operational 4 Strategic Development grouping 1 performance characteristics. of unique capabilities Also, as before, a five-point

Internal scale was the means for recognition Jockeying of reporting the respondent’s of unique competitive capabilities position assessment of the perceived competitive strength of each New Skills and technology knowledge operation’s characteristic. scanning investment Figure 4 shows the results Commitment to Organisational HR development obtained from Company A, learning indicating that its operations are adopting a predominately Measurement of innovation and supportive strategic role. It learning Generic processes also shows where further operated Robustness development of this role could of operations Skills acquisition Greater emphasis performance and learning enhance its contribution to on cost and Price a distinct service 2 corporate competitiveness. Business strategic variable performance 3 Analysing strategic management consistency The points reported on each Figure 4. The Actual Strategic Role of Operations of Company A completed y-axis questionnaire were totalised and a profile of the view of competitive Pay and Use of consultants for operations conditions strategy/policy matters strategy adopted by each firm Equipment and process was plotted, as shown in Figure Similarity of operations technology supplier practices and equipment 3. partnerships to those of competitors The interpretation of the profile of the view taken State of the art operations Process design primarily by each of the businesses a strategic goal determined by R&D not operations participating in this research was as follows; a questionnaire Continuous improvement practices training provided Operations technologies and points count of between 15 equipment selection based upon and 39 (15 is the minimum generic rather than specialized use total that could be gained) and Technological leadership a competitive profile without a sought Operations recognised as a competitive weapon discernible bias towards either of those shown in Figures 1 Competitors attempt to poach operations personnel Operations capabilities and 2, was considered to be aligned with seeking improved operational Formal reporting and business strategy learning practices employed Customer needs effectiveness as its strategy to for operations management Operational trade-offs determine increase its competitiveness recognised in operational priorities performance priorities (Porter, 1996). A profile similar to that Management Services Auditing Winter 2012 47 shown in Figure 1 and a best practice implementation, the competitive positioning Management Review. Fall, questionnaire points count of to one supportive of a market- of the firm can be performed 15-26 between 39 and approximately based strategy or to one that is intuitively. However, as with • Hayes R, Wheelwright S 51 was considered to more proactive in the creation all management challenges, and Clark K (1988). Dynamic suggest firms adopting a and delivery of capabilities visual representations of manufacturing: creating the predominantly market-based that enable the delivery of a abstract concepts such as learning organization, Free view of competitive strategy. A customer service competitive competition and operational Press, New York, USA. questionnaire points count of edge. capabilities can be better • Porter M (1991). Towards a between 51 and approximately Plotting these questionnaire analysed and discussed dynamic theory of strategy. 57, with a profile similar to point counts on a strategic fit through conceptual Strategic Management that shown in Figure 2, was management framework, as management tools, albeit with Journal. 12 (2), 95-117. considered to be a company shown in Figure 5 for the 21 a recognition that these also • Porter M (1996). What is predominately adopting a services that comprised our have their limitations. strategy? Harvard Business resource-based view. If the sample of companies, enables Our purpose was to Review. 76 (6), 61-78. points count is greater than 58, a business to assess the current devise a procedure and the • Prahalad, C., and Hamel, G. this suggests that a business level of the alignment of its management tools required (1990). The core competence may be suffering from strategic competitive and operations to facilitate the constantly of the corporation. Harvard drift. The production of such strategy. In addition, changing relationship between Business Review. 68 (3), 79-93. a profile should therefore the profiles plotted of its competitive and operations • Swink M, Narasimhan R and trigger a need for a more competitive and operations strategies. The use of our x and Kim S-H (2005). Manufacturing detailed examination of its strategies, as illustrated in y-axes questionnaires by senior practices and strategy intended view of competition Figures 3 and 4, provide a management can offer helpful integration: effects on cost for competitive strategy model of what has already insights into what strategic efficiency, flexibility and formulation. been achieved by current moves are realistically available market-based performance. In a similar manner, the strategic management actions to their business given its Decision Sciences. 36 (3), 427- points reported on each and what actions are required current competitive strategy- 457. x-axis questionnaire were to further the competitiveness role of operations relationship. • Teece D, Pisano G and Shuen totalised and a profile of of the business. A (1997). Dynamic capabilities the strategic role of the References and strategic management. organisation’s operations was Conclusion • Chase R and Hayes R (1991). Strategic Management plotted, as shown in Figure 4. The strategic management of Beefing up operations Journal. 18 (7), 509-533. Theoretically, the progressive both the competitiveness of a in service firms. Sloan increase in the point score business and the alignment of reflects the fulfilment of a its operations activities with strategic operations role from a basic one of pure good or

Figure 5. The relationship between the view of competitive strategy taken and the strategic role of the operation in our sample of 21 services 75

70

Strategic Drift ?

60 About the author 57 Mike Sweeney is Emeritus

Resource-based Professor of Operations view 51 Views of 48 Management at Cranfield Competition 45 School of Management, Cranfield University. Dr Bob Market-based 39 view Lillis is Senior Lecturer in

35 Service Operations within the School of Management. Infeasible If you would like to Operational obtain a copy of the x and Effectiveness? 25 y-axes audit questionnaires or merely wish to find out more about achieving

15 30 45 60 75 strategic alignment, please

Journeyman Internally Supportive World Class contact Bob at bob.lillis@ Service Delivery The Strategic Role of Operations cranfield.ac.uk.

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