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Posts Tagged ‘management’

Daniel Pink on Motivation

January 28th, 2011 Comments off

I recently read Daniel Pink’s book, A Whole New Mind, in which he contends that right-brain thinking and those capable of it will rule the world.  Tasks like typical accounting work are increasingly being outsourced or replaced entirely by computers.  I thoroughly enjoyed the book and have even contemplated taking a drawing class of all things to strengthen my right-brain skills.  It was with this mindset that I stumbled upon a TED talk by Pink where he discusses motivation and incentives.  These are areas where companies have failed miserably of late — many contend that the recent economic collapse was really a failure of incentives (read The Big Short for a good summary of these kinds of things or watch the 60 Minutes interview with the books’ author).  Pink reveals that typical carrot/stick rewards system work only in very narrow circumstances and are not applicable to knowledge workers.  In fact, performance drops when higher rewards are offered.

This is fact-based analysis but are businesses getting the message?  Some are…like Best Buy where ROWE (Results-Only Work Environment) has been embraced and the idea of measuring performance by the length of time someone has their butt in their chair is seen as laughable.  Or Google where 20% Time is a tactic to make engineers more engaged but also to allow creativity to flourish that will result in new products. But how many other firms have gone this route?  How many will fail because they don’t recognize the shortcomings (or don’t recognize them soon enough) of their own beliefs about management and incentives.

Bill George: Corporate Responsibilty Extends Beyond Profits

January 24th, 2011 Comments off

Bill George, former chair and CEO of Medtronic and current Harvard Professor, is one of the nation’s most outspoken leaders when it comes to the role corporations play in society.  I discovered his recent opinion piece in the Star Tribune when I read a rebuttal by Howard Root to it in today’s newspaper. 

Bill George:

A short-term focus on shareholder gains has substantially increased the velocity of stock market trading. In the past 25 years, holding periods for stocks have fallen from eight years to six months. CEOs focusing on meeting the demands of short-term investors have led to the destruction of many once-great companies, including General Motors, Sears and Enron. This culminated in the 2008 global financial meltdown, when over-leveraged financial institutions collapsed as they tried to maximize short-term value.

Howard Root:

 But George conveniently inserts the words “short-term” into Friedman’s philosophy. Contrary to George’s assertion, to maximize profits does not mean to focus only on today and ignore long-term growth. To maximize profits also does not mean to make poorly designed products (as GM did) or to fail to adapt to the popularity of the big-box retail concept (as Sears did). Friedman did not advocate short-term thinking, but rather that a corporation’s only constituency, both on a short-term and a long-term basis, is the shareholder, and that management’s favorite societal causes are irrelevant to its business goals.

I think both authors make excellent points througout their pieces and I think in an odd way (for writing and having seemingly opposite viewpoints) they can both be considered “right” when it comes to this argument.  Root conveniently uses extreme examples just as George conveniently leaves out pieces of what MIlton Friedman believed. 

Read both and draw your own conclusions.  Regardless of how any of us feel, I think this idea of corporate social responsibility is one that will grow in the coming years.  I’m not sure whether it is important if it grows because business are pursuing profits (i.e. giving customers what they want) or if it grows because they feel a responsibility to society.  Drawing from Kant and Machiavelli, the ends may justify the means. 

Bill George:

Howard Root

Dashboards: Business Intelligence At A Glance

December 2nd, 2010 Comments off

I once had a top executive tell me that each morning he needed to have all the information needed to run his business on a 3″ x 5″ index card.  That index card was a form of a “dashboard” providing summary data in a snapshot format for senior management to use in decision-making.  Technology imporovements have made it possible to build more complex dashboards complete with real-time functionality.   It is still necessary, however, to make choices about what to include on them for the sake of not overwhelming the decision makers with things that are not relevant. 

In business, dashboards are emerging as the new face of Business Intelligence. Dashboards let us consolidate information about the health of our business, our department, our branch or more, in a graphical format that is concise and easy to read. They also come in different colors and shapes, with names like Performance dashboard, Executive dashboard, Balanced Scorecard, KPI metric summary or Corporate dashboard. The goal? To showcase the facts in a way that empowers the user to make more intelligent decisions based on better information.

The CPA Technology Adivisor has a nice primer on dashboards at this link: Dashboards: Business Intelligence At A Glance — NEWS – The CPA Technology Advisor.

Fiat plays double or quits with Chrysler

November 28th, 2010 Comments off

Photo credit Familie Gevaerts on Flickr

Auto makers tend to get more focus in strategic management accounting discussions than participants in any other industry.  They also seem to take paths that have led before to failure so it is kind of like watching a slow-motion train wreck at times.  Fiat’s flirting, engagement, and soon-to-be full-fledged marriage to Chrysler could be another disaster in the making…or it could be pure genius as two borderline competitors join forces to latch onto economies of scale currently enjoyed by bigger players.

Returning to a country from which Fiat was driven out by poor quality—Americans used to quip that its name stood for “Fix It Again, Tony”—is a big risk. But the reward is to get back into one of the world’s largest markets and gain the scale that will promote Fiat from a smallish European firm (albeit with a successful business in South America) to the ranks of global carmakers. Its home market in Italy is too small, and its operations there too uncompetitive, to provide the basis for long-term survival. Merging with Chrysler will mean sharing development costs and technology, but will also mean having to turn around an ailing firm with competitiveness problems of its own. In sum, Fiat is playing double or quits.

The Economist has a nice summary of the current position of Fiat and some of the risks involved in the near-term.  With Fiat’s plans to open dealerships (inside existing Chrysler dealers) to sell the Fiat 500 next year, this will be interesting to watch in the next year or two and I’m sure the executives at former Chrysler suitor, Daimler, are scratching their heads (or perhaps laughing).

Read more at the Economist:

Carmakers: Fiat plays double or quits with Chrysler | The Economist.

What is “Management” in the 21st Century?

August 27th, 2010 Comments off

50 years ago, management meant a top-down, dictatorial structure.  Today, things are more collaborative with participation in strategy formulation and execution not only at the top of the pyramid but in the middle and low levels as well.  Where will things be 50 years from now?  The Wall Street Journal offers some interesting thoughts about where we have been and where we are headed.

The new model will have to instill in workers the kind of drive and creativity and innovative spirit more commonly found among entrepreneurs. It will have to push power and decision-making down the organization as much as possible, rather than leave it concentrated at the top. Traditional bureaucratic structures will have to be replaced with something more like ad-hoc teams of peers, who come together to tackle individual projects, and then disband. SAS Institute Inc., the privately held software company in North Carolina that invests heavily in both research and development and in generous employee benefits, ranging from free on-site health care and elder care support to massages, is often cited as one company that could be paving the way. The company has nurtured a reputation as both a source of innovative products and a great place to work.

The End of Management — Corporate bureaucracy is becoming obsolete; Why managers should act like venture capitalists. Alan Murray. Wall Street Journal. (Eastern edition). New York, N.Y.: Aug 21, 2010. pg. W.3