Monday, February 25, 2013

Integrity

Excellent companies have integrity.  Integrity comes down from the top.  The leader has to have it and expect it from everyone on the team.  An individual who is known to possess integrity is said to carry weight with people in general; thus the pound sign is regarded as a symbol for integrity and honesty.  People with integrity can be trusted. 

You can’t just go through the motions.  That isn’t integrity.  A concern about customers can’t be satisfied with self-serving surveys or frequent flyer programs.  Common Courtesy, treating customers as The Force, caring has to be real, deep-seated, and sincere.  People resent a lack of integrity.  They know when you are just going through the motions.

Every person at a cash register will ask you, “Did you find everything you wanted?”  Very few really care about your answer.  Almost none of them will take action in response to a negative answer.  The most common answer by the cashier is “After you have checked out, you can go to our customer service desk to tell them.”  In short, they have been trained to go through the motions. They have not been freed and authorized to solve your problem as a customer.

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A beautiful Nashville lawyer, an inheritance at risk, a devastating storm and wine to kill for—The Claret Murders, a new Mark Rollins adventure.

Wednesday, February 20, 2013

Structured Planning

Structured Planning:While planning is a continuous and dynamic process, that doesn’t mean it lacks structure.  It has to have a starting point; and then it is dynamically adjusted and communicated as conditions change, assumptions are adjusted, and temporary targets are replaced with new ones, etc.  The Structured Planning icon above conveys that one cannot develop operational plans or budgets without having a strategic view that those operational plans and budgets support.  Structure is a critical part of the planning process, and the one I have followed over the years involves nine main areas to be addressed—and continuously readdressed—by the planning team in the order listed.

Nature of your enterprise (business, division, group, etc.):  What it is and how it operates today:
History of the business (outline of important events); Organization, key management, committees; Billing methods and collection methods; Products, services, expense recovery method; Description of the market; Recruitment; Marketing, networking, referral practices, sales methods; Client intake methods and standards; Competition and market share; Quality control and client satisfaction.

Historical performance: Five-year financials which benchmark comparisons of key performance indicators such as days of inventory, days to collect bills, margin percentage, customer satisfaction—the key success drivers for your particular business, department or activity.

Environment in which you operate:
Economic conditions; Labor force; Technology; Governmental issues; Nature of market and competition.

Opportunities/Capabilities (SWOT):
Our strengths; Our weaknesses; Threats; Our best opportunities such as: new products to existing clients-same products to new markets-new products to new markets-performance improvements.

Assumptions:
Economic; Labor force; Technology; Governmental impacts;Nature of market.

Objectives—Mission/Strategic Thrust:
Mission, goal and/or objective; Main things required to achieve objective; The main opportunities and the risks and/or weaknesses that require action; Strategies for achieving those main things; Tactics or programs to implement or support strategies.

Policies/Procedures (changes or new ones needed):
Existing policies requiring change, New policies needed.
Strategies/Programs Summary:
Main things for success of each strategy; Tactics (programs) to implement strategies; Key indicators (measurements) of achievements.

Priorities and Schedules:
Programs; New processes; New assets or resources; Measurement capability.

Organization and Delegation: Organization Chart; Who is responsible for what? Job or position descriptions.

Once the overall strategic plan is developed, each major department or group should go through the same planning process, and that planning process becomes input into the firm-wide plan.  Which comes first the chicken or the egg--the strategic plan or the operational plan, the enterprise-wide plan or the segment plans, etc.?  The answer is each is shaped by the other over time.  Since planning occurs continually, it is impossible to tell.
 
Planning is a discovery process.  Sometimes it is a discovery of the obvious and sometimes it breaks new ground.  The one thing you can count on is that we are far more likely to get there if we know where we are going and how we are supposed to get there.  I refer to that as I65 North.  I65 North is a reminder that the business is a journey and that leadership’s job is to get all of the firm’s people traveling in the same direction.  Planning gets the team playing from the same playbook.  It prepares the team for the future, equipping it to capitalize on its opportunities. 

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Mysteries by Tom Collins include Mark Rollins’ New Career, Mark Rollins and the Rainmaker, Mark Rollins and the Puppeteer and the newest, The Claret Murders.   For signed copies go to http://store.markrollinsadventures.com. Print and ebook editions are available from Amazon, Barnes & Noble and other online bookstores. The ebook edition for the iPad is available through Apple iTunes' iBookstore.

Saturday, February 16, 2013

Measurement Improves Performance


 Measurement improves performance, and successively higher standards or goals result in successively higher achievement.  It is the idea so frequently evidenced in athletics by the announcement, “It’s a new record!”  Excellent companies use goals, and excellent companies keep raising those goals.
 
The most important set of measurements to develop are the organization’s KPIs (Key Performance Indicators).  These are the top line metrics that must be achieved for the enterprise (or supporting unit, division, plant, department, group, etc.) to meet its objectives.  KPIs can be both financial and qualitative, but should be highly correlated with the top priorities of the firm and the firm’s business model as developed during strategic Planning. Furthermore, if there are more than ten KPIs you probably have too many.  That goes for the KPI at the enterprise level or the KPIs for any of its supporting components.
 
My son was part of the Colgate-Palmolive finance team from 1992 to 1997.  He reports that they managed their entire worldwide operation with 10 Key Performance Indicators.  The first thing every business unit’s general manager would review when presenting to the CEO would be their results against those 10 KPIs.  The rest of the meeting was spent explaining how they achieved their goals or why they did not meet them.  It’s hard to believe a huge Fortune 500 company could manage a global operation using 10 measurements of success, but it’s true—and it was VERY effective.  Colgate is one of the most reliable businesses when it comes to consistency and predictability of revenue and earnings growth, and their KPI system is a key element of success in this regard.

I spent a good portion of my career working with law firms.  For them, KPIs included such metrics as leverage, effective rate, productivity, realization, days to bill and collect, client intake, closed cases, etc.  Whatever the nature of a business or organization, its success depends on certain main things and those main things should be the subject of your KPIs.
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It's Nashville...with a devastating flood, abeautiful lawyer, a deadly secret, and wine to kill for--The Claret Murders, the latest Mark Rollins mystery adventure.

Monday, February 11, 2013

Eyes Forward


You are not going to get where you want to go looking in the rearview mirror.  Excellent managers keep their Eyes Forward.  They want to know how they are doing, not how they did.  The traditional tool for gaining that knowledge has been MBWA, Management by Wandering Around.  Wandering Around meant you were in touch with your business as of that real point in time.  You were experiencing, up close and in person, the Event Horizon.

Event Horizon is a boundary in space/time beyond which events cannot be observed.  It is real time.  It is how things are right then!  Except for personal experiences from MBWA, every other piece of information available to that traditional manager was looking backward.  The manager in the late 1900s suffered from information overload, but all of it was out of date.  For centuries management was been at a disadvantage because their information systems only told them about events occurring well in the past.  It was all about events that had already occurred.  By the time it got to the manager, it was too late to take any action that would change or improve outcomes of events and transactions reported upon.

 
Times have changed.  Management by Wandering Around has taken on an entirely new meaning.  Now we can “wander around” through technology and social media.  Excellence companies are hungry consumers of technology that will put them closer to the Event Horizon.  They use social media, blogs, websites, and cloud-based tools to have real time contact with customers.  They track, in real time, customer Internet reviews and comments about the company's products and services as well as the products and services of competitors.  Using technology and wireless communication facilities, excellence companies can and do operate at, and sometimes just over the edge of, the Event Horizon.  Technology, including trend analysis, forecasting, real time tracking systems, and social media monitoring, can show us what will occur if we fail to take action now to alter the future.  Information guides an organization to its targeted goals provided that information is timely, relevant, accurate, comprehensive, and navigable.  And today’s Executive Support Systems (ESS) do just that.  They gather, analyze, and summarize the key internal and external information.  They provide the modern executive with aircraft cockpit-like command and control—with instruments showing the status of all key metrics necessary to “keep the plane in the air” and accomplishing its mission.  Excellent companies keep their Eyes Forward and never go second class when it comes to technology that puts them at the Event Horizon.
 
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Mysteries by Tom Collins include Mark Rollins’ New Career, Mark Rollins and the Rainmaker, Mark Rollins and the Puppeteer and the newest, The Claret Murders.   For signed copies go to http://store.markrollinsadventures.com. Print and ebook editions are available from Amazon, Barnes & Noble and other online bookstores. The ebook edition for the iPad is available through Apple iTunes' iBookstore.
 

Tuesday, February 5, 2013

Luck Favors the Prepared


 

Change (especially uncertain change) is the stuff of opportunities—provided you have developed a way of thinking that prepares the firm to take advantage of whatever the future brings.  The French scientist Louis Pasteur said it in one short sentence: “Chance favors only the prepared mind.”  If Pasteur had been English, the quote would have been, “Luck favors the prepared mind.”
 
When consulting with a midsize law firm a few years ago, I suggested that the partners adopt the practice of meeting monthly for a half-day session where they did nothing but think about things that could happen and then thinking about how they could happen differently.  The mission would be to identify strategies that would allow the firm to benefit rather than suffer from these events.
 
Suppose, for example, that a member of the law firm is arrested for unsavory activities unrelated to the law firm.  What steps should the firm take?  Suppose a major local corporation with significant legal needs loses its general counsel unexpectedly.  How could the law firm respond in a way to take advantage of the situation?  Suppose a single-payer health system is adopted by the U.S. government.  What problems and opportunities occur if Mexico nationalizes American businesses? How would the firm respond to another Enron?  What happens if outside investors are allowed to own U.S. law firms?  Suppose a major client of the law firm contemplates moving its headquarters to a state where your firm doesn’t currently practice?  How should your firm respond to a news release that a major U.S. corporation is relocating its headquarters to your area? What if events similar to those that destroyed Arthur Anderson occur with respect to a U.S. mega law firm?
 
Could the firm have anticipated the events involving Big Tobacco, the rise of the overnight letter business, the advent of Amazon.com, or the wave of refinancing sparked by falling interest rates?  Could the firm have been better positioned to take advantage of Sarbanes-Oxley?  Is the firm prepared for the next Katrina? Does the fact that 3.6 million Americans will turn 65 in 2012 open opportunities for your firm?  Can the firm take advantage of a major changing of the guard in corporate America?
 
If the firm follows my suggestion, that “thinking outside of the box” exercise is likely to become the firm’s vehicle for rapid response to real-life events which will position the firm to capitalize rather than suffer from uncertain future events.  Chance, Luck, Opportunities—whatever you call it—it can best benefit those who are prepared.  Practice prepares a business team to take advantage of events that surprise others. 
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Mysteries by Tom Collins include Mark Rollins’ New Career, Mark Rollins and the Rainmaker, Mark Rollins and the Puppeteer and the newest, The Claret Murders.   For signed copies go to http://store.markrollinsadventures.com. Print and ebook editions are available from Amazon, Barnes & Noble and other online bookstores. The ebook edition for the iPad is available through Apple iTunes' iBookstore.