Huwebes, Disyembre 23, 2010

Complexity: A Silent Killer by Jolito Ortizo Padilla

GA Consultancy and Services is  now in the Middle East Countries

Complexity extracts a heavy toll on a business. It often grows undetected, sapping strength and vitality and, without treatment , it could be fatal. Business failures are often attributed to losses caused by changing markets, increased competition , or lowered efficiency. Although these factors can be killers in their own right, complexity is often the true cause death. It causes businesses to sell unprofitable products that are manufactured at a loss to that customers they can't afford to do business with.

Complexity is defined as performing an excessive number of low-value activities. These types of activities have a disproportionate cost to value relationship that are responsible for a significant portion of a company's overhead, but generate little profit.

If four or more of the following warning signals are true for your company. then you may well be suffering from this problem:
  - Operating income as a percentage of sales has declined
  - Sales of high volume products are under increasing pressure from competitors
  - The break-even point for the company is increasing
  - Customers are complaining about delivery performance
  - Product quality levels do not meet company or industry standards
  - Salaried workforce levels have increased at a greater rate than production employees
  - Inventory as a percentage of sales is growing
  - Low -volume items represent an increasing percentage of sales
  - Employee morale and enthusiasm are not what they used to be

Table1: Example of Pareto Analysis of medium sized manufacturer
 Top 25% of customers                    78of total sales
 Top 25% of product                        83% of totals sales
 Top 25@ of pars stocked                89% of inventory
 Top 25% of suppliers                       91% of total purchase
 Top 25% of manufactured parts       78% of total labor

To illustrate this definition, Table 1 shows a Pareto Analysis of a medium sized manufacturing firm with annual sale of $25m.

A traditional organizational  performance analysis is likely to focus on these high volume areas, with two probable results. First , immediate improvements would result from the focused attention on these areas. Second long term improvements would fall far short of original projections.

The reason these types of efforts often yield such frustrating results can be better understood by further examination of the balance of the organization's activity profile

Table 2- Example data for the lower 50% of the medium sized manufacturer's activities.

                                                  Top 25%      Lower 50%
Customer as % of total sales          78%            4.5%
Products as % of total sales           83%            3.8%
Parts stocked as % of inventory     89%            4.0%
Suppliers as % of purchases          91%             1.1%
Manufactured parts as % of labor  78%             3.5%

Table 2 shows the comparable data for the lower 50%  of these activities. This data demonstrates that whereas the top 25% of customers were responsible for 78% of sales, the lower 50% accounted for only 4.5% of sales. While the value added within any category is concentrated on a limited number of items that have little value. Because of the value added within the any category is concentrated on a limited number of items, significant activity is required to support those items that have little value. Because of the relationship between these areas, the cumulative effect on the overhead structure of the organization is substantial.

The repeated occurence of these results leads to the rule 50/5. This rule says that 50% of a company customers, products, suppliers, and manufactured parts will account for less than 5% of the organization's value added. The presence of these low- value activities within an organization is one of the driving forces of operational inefficiencies and excess cost.

Standard Cost Systems
There are two predominant cause of complexity within an organization : standard cost systems and performance measurement and reward systems.

There are two symptoms of standard cost systems: standard costs for low- volume items are too low and standard costs for high- volume items are overstated. This is because overhead is applied to individual parts without any regard to the actual or proposed volume of the item.

The typical standard cost for an item has individual elements for labor, material and overhead. These are expressed as standard per piece  or standard per hundred pieces. The first step in setting standard costs is to determine the material and labor portions of costs. These can be readily identified and assigned to each item.

However, overhead cannot be specifically assigned to each individual part. It is simply impossible to accurately allocate costs such as salaries , depreciation , telecommunications or training to specific part numbers. As a result, most businesses develop an overall overhead rate  then apply this rate to the standard direct labor. Since the calculated overhead rate is applied to standard cost will be the same at any volume level. This is a major flaw in standard systems.

The cost distortion in a typical standard cost system is substantial. While each company has its own unique characteristics, it is not unusual for high volume items to have the costs that are 7-10% lower than the calculated standard cost. Conversely, the standard cost on lower volume items is often understated by 300-800%

Performance measurement and reard systemsPerformance measurement and reward systems are a second cause of complexity. Most management yardsticks to measure this still continue to rely on standard cost data. As a result , these systems encourage the continued growth in the number of low volume items and jeopardise the viability of high volume parts.

The increase in the number of parts manufactured is universally decried by top management. Managers try to limit the number of parts added to a system , due to costs. However, despite these good intentions new items continue to flood into organization, therefore increasing complexity. Let's look at some examples of why this happen.

Cost Reduction Program
Decreasing profits are often the impetus for a major cost reduction programme. Engineers are given a target for bringing the standard cost down to an acceptable level.
For example, assume that a cost reduction target has been established for vehicle model 215, the smallest version in a total line of six models that has annual sale of 400 per year.

One area the engineer will explore is the common parts used on all models. A bracket used on all models has a standard cost of $3 and an annual production of 20,000 pieces. The engineer may determine that using a smaller brackets won't damage the model's functional integrity so a proposed design change is submitted for a part that uses 10% less material. Table 3 illustrates the result:

Table 3: Example of proposed costs for new design:

                                            Current part      New part
Standard material                      $1.80           $1.62
Standard direct labor                  0.12              0.12
Standard overhead (900%)         1.08             1.08
Total Standard cost                   $3.00           $2.82

The engineer has achieved a 6% cost reduction , gets a gold star and moves on to the next opportunity area. In the meantime , a new low volume part has joined the ranks of the manufacturing population , bringing with it new tooling , service parts and inventory.

Product requests from the marketplace
Another major source of added complexity is the addition of market-driven products. Assume that a sales representative has a request from a specific dealer for a special metric version of model 215. The estimated volume would be 100 per year, which would represent a 25% increase in existing small vehicle sales. In addition , the dealer will pay a 5% premium if the model is made available.

A sugnificant element of the decision process will be the determining cost of this new version. The likely analysis would report the new standard cost to be about the same as the existing model and because of the higher projected selling price , it would have a better gross margin than its higher volume counterpart. However, a huge number of new low volume parts would be added to the system.

Pricing
Gross margin is a key element in pricing decisions. Standard cost is an integral part of this equation and  impacts on items at both ends of the volume spectrum. then high volume parts are overpriced , competitors are invited into the market. When low-volume parts are underpriced, even though manager might still claim they are the most profitable part of the business, often a much higher profitability could be achieved. While margins of 75% and 100% are not uncommon, these perceptions of profitability would change dramatically if the cost portion of the equation for low volume items was increased by 500%.

Purchasing quotes
The procurement function is driven by an equally destructive measurement and reward system. Despite rhetoric to the contrary, unit price continues to be the key measurement for purchasing success. Buyers seek new sources of supply , looking for an adequate product at a lower price.

When a new quote is received the predominant yardstick is how this price compares with current cost. Seldom does the savings analysis require quantifying the indirect costs of adding a new supplier such as supplier visits and qualification, engineering approvals , specification maintenance , inspection procedures , inventory segregation and storage.

The Answer
There are three significant steps that can be taken to mitigate the effect of complexity. These actions are a framework for achieving structural change that represents a commitment to a new manufacturing strategy.

Step 1: Eliminate
The first priority should be to eliminate as many low- value related cut off point such as "X hours of production per year," or "$X direct labor per year."Require a volume estimate for every new item being added to the product line and use this cut-off to evaluate current production. an action programme for elimination will include a combination of these five elements.
    - Dropping options and products from the line
    - Pricing
    - Running all time requirement
    - Revising obsolescence policy
   - Outsourcing parts/and or products
World class manufacturing is a worth -while goal , but it must be kept in perspective. Can anyone really afford to look world class manufacturing methods on an item of less than 8 hours per year?

There is a common misconception that eliminating items will stunt company growth . In most cases , the opposite is true.By reducing overhead and structure and focusing on truly significant products, organizations can take full advantage of their competitive edge. The usual result is more a volume and greater profitability. An additional benefit is a sizable increase in manufacturing capacity without a major investment in equipment.

Make a commitment to an aggressive supplier-consolidation programme. Establishing a goal to reduce your supplier base by 50% a year for the next three years is not an unreasonable objective. Use the leverage offered by increased volume as a basis for developing real supplier alliances . Use the additional time and human resources to undertake formal quality improvements and cost reduction programme.

Step 2:  Develop volume adjusted standard cost
Swimming against the tide is never easy. Even though everyone intutively accepts the current standard costs are inaccurate, the numbers are ingrained with every system. Many of the actions outlined in step 1 will appear to be bad decisions if measured against current data. For this reason and to stop further complexity in the future , a volume-adjusted standard cost should be considered.

The challenge should be to develop better costs for use in management decisions, not perfect sosts. Complexity reduction will not be enhanced by adding a cadre of accountants whose mission in life is accurately assigning telephone expense to 8,000 part numbers to get a specific overhead cost. Better costs , obtained easily and quickly , will result in better decisions.

Using this premise , this method could be used to volume-adjust existing standard costs:
 1. Stratify your existing manufactured items and assign a group designation to each item-for example , the groups could be by quartile or by tenths.
 2. Develop a volume factor for each group.
 3. Use the standard cost value calculated by your current system and multiply it by the volume factor.
 4. Require a volume estimate on all new parts , so they can be assigned to their proper group and costed accordingly.
The volume factor is determined by conducting a true cost study of two to four of the highest volume parts. While current systems cannot accurately charge individual parts with every specific element of overhead , there is significant amount of data available at department level.

Using this data , the high volume parts can be charged their fair share of the department totals. For example .if the highest volume part is responsible for 80% of a department's direct labor it should be charged 80% of the department's fixed costs.

So assume that you chose to have 10 volume groups. Your volume factor for an item in the top 10% of your parts might be -7%. If your existing cost is $100, then the volume-adjusted standard cost would be $93. At the other end of the scale, the factor for the lowest 10% might be +400%. Thus, an item with an existing cost of $100 would end up with a volume adjusted cost of $400.

Step 3: Revised measurement systems
Better standard costs will mitigate many of the problems noted but they are not a total solution. Many of the organization's current report cards must also be re-evaluated. Engineers cannot be expected to reduce proliferation if the measurement system shows there is no activity cost associated with adding new item. Engineers will not be encouraged to use common parts until the system in place gives credit for this decision.

Salespeople will continue to seek new lo-volume customers as long as the system treats every sales dollar as having equal value. Sales people should receive an equal commission for 20 accounts of $1,000 or one account of $20,000. Purchasing will be encouraged to add new vendors until the measurement systems more accurately reflects the total cost impact of these decisions.

A Golden Opportunity
These are only a few examples. The key points is that people making decisions in functional areas are guided by systems that measure their results. If your systems do not consider activity costs or volume benefits. ccomplexity will thrive.

A comprehensive compelxity reduction programme is a major profit opportunity for any organization. In addition to the direct benefits, time will now be available for people to focus on truly significant items.

Given today's system , it is almost  impossible to measure the impact of complexity creeping into your operation. It is equally impractical to measure the effect of a single item going out of the system. This means that when the cummulative improvements begin  to occur, the employees get credit for the results. People  want to be winners. Given the resources and opportunity, they will succeed.

My World with Nikon Camera:

San Fernando, La Union- My visit at STI-San Fernado-La Union

Japan

My New Investments in La Union


At Los Angeles , California at Son Jol house

Tokyo, Japan. Food prepared by my son Job.. Better than Jollibee.

Kyoto, Japan

As judge of Pole Exercises Contest-Singapore

Pole Exercises Contest-Singapore

Toshiba Christmas Party in Los Angeles, California

Ropongi Perfecture


Japan

Japan

Japan

Japan

Japan.. Aerial view of Tsuchigi

Japan

Japan

Merry Christmas ... at Berkeley 

Sabado, Disyembre 18, 2010

The Legal Compliance of Quality Management System by Jolito Ortizo Padilla



Legal compliance can be tricky area for auditors of management systems. To begin with, most professional training courses recommend focusing on system elements and avoiding decisions on what statutory or regulatory requirements apply to the product or service in question, let alone judging the level of actual compliance achieved.

Even where a direct violation has been identified and agreed with the auditee, the auditor must exercise due caution when writing up a finding. Auditors who identify a serious legal non- conformity may need to consider whether it needs to be reported to the authorities and whether their actions could result in potential liabilities and litigation for themselves , their employer, the client or the auditee. Interpreting the law is highly specialized and determining compliance is fundamentally the responsibility of the auditee or failing that, the competent regulators.

The proliferation of modern laws, regulation and directives can undoubtedly make it difficult to identify what might apply. And whereas environmental, occupational health and safety and social management systems have generally come to grips with assessing legal compliance , quality management systems appear to fall short.

ISO 9001 actually says comparatively little in legal compliance , although the expectation is that organizations should have a defined methodology to identify and apply statutory and regulatory requirements as process inputs. However, ISO 9001 is not explicit about monitoring process outputs to establish compliance. Unlike ISO 14001 and its clones, ISO 9001 does not have a separate clause to put the onus for evaluating compliance status firmly on the auditee organization.

This absence makes it harder for auditors , who generally receive little training in the national legal framework as it relates to quality management , to check the effectiveness of a system in ensuring compliance. The end result is that legal compliance can be dumbed down and even ignored. Except for heavily regulated sectors or products covered by CE marking, it can be difficult to decide which laws apply to the product or services and need to be addressed.

Using a lawyer can be expensive and has not been widely taken up by other certification programs. Also, in contrast to health and safety and environmental law, there is no central point of reference in terms of guidance manuals.

It may may be necessary to take account of other legal requirements that might undrmine the credibility of the quality management system. The ISO 9001 Auditing Practices Group guidance simply states that any deliberate nonconformity to statutory requirements "cannot be ignored".

This brings us to the various protocols for dealing with noncompliance situations. These rules are developed by certification bodies and should be sanctioned by their accreditation service. They are designed to guide the auditor and can affect the outcome of a certification audit. However, they are usually not readily transparent and, as far as organizations undergoing assessment are concerned , may only come to light when an awkward situation arises during an audit.

These protocols can also be controversial. For example, a company could still be awarded an ISO 14001 certificate despite a clear nonconformity to the conditions of its environmental operating permits. The rules allow this on provision that top management was aware of the situation and had endorsed a program , with the agreement of the competent regulatory authority, to attain the required level compliance within a defined period. While there are good reasons for making such allowances , it does contradict the obligatory policy commitment to comply with requirements and in some quarters could even be viewed as devaluing the ISO brand. What if similar protocols were applied to product noncompliance?

To maintain trust and confidence in ISO certification , the conformity assessment community needs a more rubost and transparent approach to legal compliance. Proper alignment between ISO 9001 and ISO 14001 in terms of the evaluation compliance would be a major step forward . There is also need to be clearer guidelines and greater openness about additional hidden rules or protocols.Perhaps more to the point , the ISO 19011 auditing standard needs to catch up with the latest version of ISO 9001 and beef up a competency requirements for auditors , especially in regard to checking legal compliance issues.

Thank you "The Chartered Quality Institute" for being part of the team.. My great appreciations........

Biyernes, Disyembre 17, 2010

Your Career Questions Answered by Jolito Ortizo Padilla.. A letter sent by my former Marketing student - University of Perpetual Help-Rizal

The Problem: " How can I create the time and space that will allow staff to focus on innovation?"



Thanks for reading my book " Strategic Management -Building Competitive Advantage through Samsung Galaxy e-book. Homer is my former student at the University of Perpetual Help -Rizal and working at Al Rashed Group- Kuwait..

The Answer:
Innovations begins with a thought. Employee engagement is critical for generating new ideas and a multitude of experience is critical for thinking outside the box. They must be transformed into solutions and marketed. The success of innovative solution is manifested by its reuse or reproducibility.

As an organizational leader, you must communicate the need for sustained profitable growth , recognize innovations for inspiring others and incentives for learning to facilitate active minds. Today, innovations in research and development departments alone are not sufficient . In a global economy an organization must pursue process, product, service, function and business model innovations requiring everyone's involvement. Each employee must be asked to spend time daily to think of new opportunities to support business objectives. Thinking is hard and required concentration and reflection in an environment without distractions.

My recommendation is that each employee is given an idea book and asked to allocate 30 minutes everyday to reflect and think new ideas. I define creativity as combining two or more things uniquely , so if someone is having difficulty then thinking of crazy and funny things leads to manage creative ideas. Within this understanding , one can generate a tonne of ideas daily.

Once the idea flow begins , an organization must strive to achieve excellence in idea management. Success of innovation initiative begins with excellence in idea management.

What Jolito Ortizo Padilla say about....... TALENT.



No one word demonstrated the shift in corporations' attention in the mid-1900s from processes to people more vividly than the single word" talent". Spurred on by a book called The War for Talent, written by three McKinsey consultants in the late 1900s, the word became common in management speak: We need to cultivate talent"; " Where are we going to find the talent essential to our future success?"

Talent is a subset of what used to be called human resources
- the people who work in organizations. It is , essentially, those individuals among that group who have the potential to add most value.

Behind the word lies the idea that more and more corporate value is going to be created through knowledge and by so-called "knowledge workers". Manual labor is worth less; knowledge (and the right use of it) is worth more. And the people with such knowledge are (so the theory goes) in short supply.

One CEO was reported saying that not only did he have enough talent to carry out the company's strategy. but he did not even have "the talent needed in HR to hire the missing managers".Moreover, the situation is likely to stay that way (and may even get worse) for some time to come.

This has significantly shifted the balance of power in the recruitment process. Companies used to be relaxed about finding enough qualified people to run their operations. What they could not find they would train , was the usual attitude. That might take some time, but in a world where people sought jobs for life (and the pensions that went with them) time was in the company's favor.

But talent is not patient, and it is certainly not faithful. Many companies found themselves training employees only for them to move on and sell their acquired skills to their rivals. So now companies look for talent that is ready-made. In their eagerness to please this talent, companies have gone to considerable lengths to appear especially attractive.

Miyerkules, Disyembre 15, 2010

The Earth Equation by Jolito Ortizo Padilla


All around us we are bombarded with messages telling us that we need to change, that the the earth is warming up. The messages are insistent and shrill but diverse, incoherent and all about our symptoms rather than the addiction we suffer: the hugely ineffective use of the resources that our one planet provides.

Clearly the earth as a system is dynamic and complex. Any attempt to describe it quantitatively and accurately is unlikely to lead to any clearer picture of useful action. What we need is a mind model, something that is powerful and evocative enough to provoke the right questions of societies, communities and organizations. Such a conceptual or mind model is the earth equation.

We are told that we are enjoying a "three planet lifestyle"- a lifestyle that consumes so many resources that we need three planets in order to cope. This tells us that what we are doing is not a sustainable state of affairs , but it is not clear what we need to do.

We have in fact only one planet. If we look at consumption as an equation, the left hand side of the equation in a resource -constrained environment is always fixed at one. The right hand side of the equation is made up of population (P), its consumption of goods and services (C) and the factor that balances the equation -the resource intensity (I).

So at our starting point we have I=P x C x I, or I=I x Ix I. As we move forward from this point , the one planet remains the same, which means that the right hand product always needs to equal one. The only way this can happen in a resourced constrained environment is if the resource intensity is never allowed to be more than I divided by PC. In round terms, on predicted growth scenarios, we will need to reduce resource intensity by a factor of between ten and 100 by the year 2050.

Genichi Taguchi inspirationally made the observation and processes without loss were of perfect quality and, conversely , that less than perfect quality created a loss to society. In terms of this article, that loss results in an increased resource intensity.

We have thought of over the last 20 years or so that we can treat losses in processes and systems as separate. We have looked at quality as a function within an organization , focused on the customer, rather than that which maximizes the value added to society that results from the creation , use and disposal of products and services. Losses in processes and systems can be environmental, social or economic and are best minimized by seeing the goal of resource intensity reduction as a journey of integrated , continual , quality improvement.

These are the drivers of virtuous circle that using an organization's stakeholders and their combined knowledge and skills, will enable process learning. This will then drive the process in the direction of sustainability. As the process becomes more sustainable , the losses are by definition minimized , reducing the need for appraisal costs and eliminating the costs and risks of internal and most importantly , external failures.

The message is clear: we have to change, but how? Our symptoms are plain for all to see but our addiction, the ineffective deployment of resources to create, use and dispose of the products and services we consume, remain untreated. Our task is simple, if not easy to accomplish, and can be reduced to key questions:
- Is our business model relevant to such future?
- Does our leadership and management enable the liberation of the creativity
required to continually reduce the resource intensity of the goods and
services we produce , consume and dispose of?

This will need the most massive effort of quality improvement the world has yet seen. The earth equation is immutable , it drives our futures whether we choose to ignore it or not, and e have no option but to enter the future, either by design or negligence.

Martes, Disyembre 14, 2010

Challenges of Effective Governance: Suggestions to the Local Government of Duenas (LGD) -My Hometown:


The National Economic Development Administration (NEDA) released their annual report dated December 5, 2010 about the life improvement of those people living in towns and cities in the province of Iloilo. Read as: " The town of Duenas has not improved the per capita income base of the people for the last three decades". Meaning the life situations of those people living in my hometown, Duenas has not improved for the last thirty years.

This article sets out deliberately provocative on how to establish effective governance in the hope of kick starting a long overdue discussion on why the Local Government of Duenas (LGD) find it so difficult to establish good governance.

Whether an initiatives sets out to counter slump agricultural productivity, lack of budget for road and bridges infrastructure or alleviate hunger and poverty effective program and project management is essential. But this too often results in "governance in name only", or "GINO". And the cost of continuing to live with GINO is much too high.

We need to be careful how to define governance. I am going to stick my neck out by claiming that it is much more advantageous to define governance as "steering" rather than "controlling." The advantage of keeping this distinction and not conflating governance with control , is that we can discuss what constitute good governance in concise terms and not become sidetracked by what constitute good control. Once you have good governance in place, good control will automatically follow.

In the book , Managing Successful Government Program states that authority and responsibility for the delivery of programs should be invested in a senior responsible leader, the mayor. This was an attempt to move away from council of committee or councilors , where it was difficult to establish accountability for decisions. Despite this government wide aspiration , attempting to establish who is accountable for major decisions is still notoriously difficult.

MSP goes on to suggest that the senior responsible leader (mayor) and its council of committee (councilor) is elected by the people, and are responsible for the decisions, defining the direction of the town and ensuring alignment to the strategic direction. MSP assumes that the council of committee exists, is in agreement and is willing or able to function coherently.

To assume that the people is cohesive and coherent and that the senior responsible leader is an effective part and accountable to it, without acknowledging the challenges inherent in this or providing suggestions how they can be overcome , undermines effective governance. Unless we face up to the existence of this problematic relationship, we will continue to live with GINO(Governance in name only).

Ineffective governance encourages the leader to attempt to contain the symptoms rather than correct the causes of the problems. One example is, when reporting is poor , the leader often imposes a new report layout rather than redesigning the processes that produced the inadequate report in the first place. Symptom containment of causal correction is all around us.

Establishing effective governance is the key to unlocking the drive, courage and creativity necessary to work on causal correction and make our LGD effective and capable of delivering successful programs and projects.

Designing how effective governance should work is a challenge and successful designs rare. But it can be done. However, even when designed well , the individual and collective behavior of council of committee can still undermine its effectiveness. We now need a more mature and informed debate about the obstacles at the different level including the people , so we can abandon GINO once and for all.

The number of LGD who have actually encountered the challenge of working with people to establish effective governance is very small. Unfortunately , there are many more who without such experience often simplistically talk about how it should be done. To counter this distraction , we need to improve our understanding of the challenges faced by the individual and people , then spend time on exploring effective solutions.

I am interested in hearing from anyone of making governance work in my hometown Duenas. It's time to leave GINO behind.. at least in Duenas..

As to quote: " It is the strongest of the species that survives, not the most intelligent . It is the one that is the most adaptable to change". Duenas surival and prosperity depend on effective actions that are creative and adaptive. Being able to adjust to the environment and to the world depends on an accurate evaluation of the changes going around us". -jolito ortizo padilla..

Lunes, Disyembre 13, 2010

Your Career Questions Answered by Jolito Ortizo Padilla : From my former student in KSA


A letter from the former HRM student in KSA working in a Customer Service Department
of Zain Telecom -KSA


Thank you for reading my book "Human Resource Management in Action at
Samsung Galaxy e-book


Situation: " I carry out continuing professional development, but how can I develop myself more personally?"

Personal development has a greater scope than continuing professional development because it involves everything that you do as an individual. It is sometimes summarized as " becoming the person that you really want to be".

To effectively do this you first need to take stock of where you are personally and decide what is needed to bridge the gap to the "ideal" you. This involves an honest assessment of strengths and weaknesses , particularly in areas such as:
- Dealing with people
- Personal Ethics
- Personal competencies

As well as taking the opportunity to ask those whose judgment and honesty you trust, you can look back over your own performance in recent months. Ask how well you have worked with others in meeting these objectives , including the balance between how you are performing both at work and at home. There is no point in hiding faults or failings at this stage- this is your potential assessment after all.

The next stage obviously depends on what you discover during your self assessment, but typical areas you might choose to work on are issues such as:
- Reliability- do you over promise and under-deliver on tasks?
- Team working- do you support colleagues in their work or are you single-minded
in achieving individual objectives rather than team goals?
- Communication- how well do you pass information to others and how good are you
at picking up verbal and non-verbal communications?
- Planning - are you often surprised by events and then think that you could have
anticipated things?

Wherever you identify an area to improve , you need to consider next how to go about improving. Areas can be considered are:
- Time Management - we need periodically to establish our priorities and manage
time available to deliver the desired results.
- Assertiveness -it is often easier to say "yes" when we want to say "no", but
this additional bits of work often prevent us from doing what is important.
- Communication - we can all improve at this and spend time testing how well we
communicate in the various media we use, considering both giving and receiving.

Whatever you decide to do in order to develop yourself , there are always learning techniques or methods that can help you gain an understanding of your own competencies , help you improve your personal and professional life and grow as a person.

My Regards and Goodluck.

Biyernes, Disyembre 10, 2010

The New Easy Way to Adopt Innovation by Jolito Ortizo Padilla


Innovation is not a capital investment, it is an investment in your people.



Many people think that innovation is about creating a clever new gadget. The gadget is just something that enables us to do something in a new way. Successful innovation occurs when that new way is easy to adopt-people do not change their behaviors easily.

There is a classic story of the ketchup bottle. For years we had joked about the entire contents of the bottle suddenly emptying over a plate of food as people violently shook the reluctant contents. Heinz thought it would really help its customers if the bottle had the opening at the base so that the contents were always next to the opening. It even reversed the direction of the label so people could intuitively stand the bottle on its head. Three years after its introduction , however , 70% of customers ere still standing the bottle on its base with the label upside down. We do not change our behavior easily.

Organizations in the not -for- profit sector have many opportunities to innovate. As Plato said: "Necessity is the mother of all invention". The challenge is finding new ways of doing things that are easy to the user. If you see the challenges that humanitarian agencies have in overcoming corruption and waste when they provide third-world disaster relief, if you look at the frustration and wasteful waiting time in hospitals and if you think of the pain when the vital package was "lost in the post", the need for innovation is screaming at us. The solution may come from new technology or from stepping out of the box and seeing how a problem is solved in totally different sector.

Fred Smith, founder of FedEx, saw the bar coding being used in warehouses as the solution in his traceability problem. Forward thinking hospitals are seeing the just in time techniques of manufacturing as the way to overcome their queuing problems. We are bound to ask: what manufactuting techniques might be adapted to overcome the corruption and ineffeciency in disaster relief? I got angry when hospitals require their patients to be "patient". I get excited when I speak with physicians who ,when they hear about quality management , say " We need your help." They see the need to make the life of their patients less painful in all senses of the world.

A major international airport that I recently visited has initiated an innovation strategy and appointed a general manager of innovation. The management sees just one of its opportunities to beat the competition as making navigation through the airport easier for their client. Every organization has competition- those who innovate will beat the competition.

A decade ago my mother has been treated by two hospitals in the last five years that are only ten mile apart. The first ironically has "hope" in its title and will not direct my phone call if I call after a certain period of time. The second has "heart" as part of its title and is appropriately populated dedicated team of physicians and staff who recognize that solutions come from the collective knowledge of patients , physicians , staffs, and family.

Innovative solutions will come from your collective knowledge . Innovation is not a capital investment , it is an investment in your people . Your customers or clients and your staff are a great source of knowledge. However . don't ask them what new service they require; ask them what they are having difficulty getting done.

A customer satisfaction survey is a great tool for doing this, but if you are measuring customer satisfaction you are engaged in a feel-good experience that is a waste of time. If you are measuring customer dissatisfaction you are collecting the fuel for your innovation process. Follow three steps to innovate: first, know your customers' pain: second, step out of the box to see how others solved your problem in a different context: third, implement a solution that is easy to use.

Biyernes, Disyembre 3, 2010

My Management Research2010 that Keeps in the Loop: Conflict at Work, Talent Management, Highly Innovative Products, Advertising and ROI..


I have summarized hereunder my management research for the year 2010. The concept of my research is within the loop of Human Resource Management and Marketing..

Conflict at Work:
My recent research found conflicts at work costs businesses huge sums every year. Workplace conflict is nothing new, but the impact of recession has increased incidents of conflict at work, particularly at managerial level. Job cuts and downsizing are forcing senior staff to work more closely together than normal, causing rifts and clashes.

The research concludes that conflict management should be vital component in any effective leadership programme; but companies often overlook it as a business priority , and thus managers are ill- equipped to handle conflict. Conflict can arise from misunderstanding;from personality clash;lack of cooperation within a team;or even competition between managers for resources.

The research emphasizes that the best way to nip potential conflict in the bud is before it escalates. To do this , learn to see things from the other people's perspectives. Here are some tips for conflict management:
- Think before you act
- Impact and intention are not the same thing
- Turn the situation around
- Learn and be curious about what can be done differently
- Communicate honestly
- Be emphathetic
- Stay calm

On Talent Management:
My new research explores generational differences employers use when recruiting people to sustain businesses' performance. Employers should not give people trendy generation labels (e.g. X or Y, etc): factors such as age or gender are far more important.

But some generational differences carry weight. The research highlights that organizations should:
- Offer more inclusive approaches to flexible working- younger generations are
less likely than older generations to consider flexible working:
- Women and older people have an interest in flexible working as an alternative
to retirement.
- Give clear commitment to diversity: younger generations are more likely
to actively seek work for employers who attach importance to diversity , and
maybe be put off working for those that don't; and
- Enable the development of communication skills; younger generations to be familiar
and comfortable with using new information and communication technology.

The business case for diversity is well made: but employers must develop good practice to attract a diverse workforce. Focusing on people as individuals and delivering fairness for everyone is vitally important to become an employer of choice and thus attract the best talent. This research shows the labelling people is not the best way forward; employers need to stay alert to employee evolving expectations.

On Highly Innovative Products:
My recent research reveals some unexpected results'

Several categories of new technological products are tested on consumers; four field studies revealed:
- Novelty may create advertising buzz, but when it comes to parting with
money, consumers prefer the familiar over the really new- especially if the
new product requires a behavior change.
- People were twice as likely to state intention to buy familiar as to buy really
new products , regardless of any cost difference. But the likelihood that those
buyers will follow through on their stated intention to buy increases for the
familiar but decreases for really new products.

People are actually reluctant to purchase things that are very new and which require a change in their familiar lifestyle habits . This could explain the failure of marketing for innovative products. My research shows that companies planning to market products should try to minimize the extent to which these products as "really new". They also need to consider the effects of "preannouncing" really new product. The results show that there is a decreasing likelihood that buyers will follow through on purchase intentions of this type of product; the buzz may fail to generate any lasting impact on real purchases.


On Advertising and ROI
My research revealed that many marketers believe that customer relationship management (CRM) delivers the best return on investment (ROI). Conversely , the research also showed that marketers believe advertising delivers the worst ROI.

Significant numbers of people in marketing think the best ROI is delivered by CRM activities. This is particularly true among those working in financial services, other services firms, and those in the technology and telecoms sectors.

Public relations rated second highest in delivering good ROI. Advertising , excluding online, is most widely seen as delivering the least value for money, and thus the worst ROI. Those working for technology and telecom companies also rated advertising poor value. Sponsorship was also considered as delivering poor ROI. Altogether, it seems that businesses should concentrate on CRM to win and retain customers in these difficult times, rather than pour scarce resources into advertising type activities which give poor return.

Huwebes, Disyembre 2, 2010

Learn to Radiate Energy by Jolito Ortizo Padilla - an excerpts from my book " Emotional Intelligence-Putting Things in Proper Perspectives"




"Rather than focusing on the past, the challenge is to be receptive to change and open new ways of working"

"Turn to colleagues you trust- and who you trust-and ask them for advice and insight into your tasks"

"Do not be afraid to leave a job where cooperation is limited in order to move to a new company where cooperation flourishes"

In times of recession and job uncertainty , it is essential that everyone prove their worth to their employer. Whether we like it or not, it is survival of the brightest. Team members that can match earning potential with creativity, and who also work well in a team, are those who will survive job cuts.

Recessions leads to an overriding focus on a company's finance function. Budgets are inevitably cut in the more creative areas such as innovation, research and development, and marketing. However, this does not mean we should spend our time counting costs, this renewed focus on operations leaves the door open for the adoption of new innovation practice and the learning of new habits and skills. These pressures and fissures within the organization-while difficult at time-can , over time , yield fresh ideas, engaging experiments and interesting adaptations.

Rather than focusing on the past and asking what we did wrong or could have done differently, the challenge is to be receptive to change and open new ways of working. This will require us to question fundamental assumptions about the way we work and how businesses are run. We have the opportunity to change hoW we Work -for the better. For organizations, this means fostering teamwork and knowledge sharing. For the individual, this means broadening our knowledge and skill base, and unlocking new ways of cooperating With colleagues , and within our networks.

Work is how we increasingly define ourselves as people; it's what we spend the majority of our lives engaged in. Each one of us deserves to live a fulfilling work life. To do this, we need to work on creating a great environment for ourselves , and for our colleagues. In this ever-changing world, we must stay ahead and be the first port of call for new opportunities. we can do this by radiating positive energy that fosters a great working experience , that excites and ignites others through our own inspiration, and delivers superior value thorugh our work.

Too often we think to be invaluable means being first into the office and last out, working on our days off and taking on every task asked of us. That just isn't the case anymore. Thanks to technology and cheap outsourced labor, there is always someone who will do the task faster, quicker and cheaper.

Our research has shown that the majority of people spend less than 20 % of their working lives feeling energised, engaged and innovative. To stay ahead , you have to work with energy , more enthusiasm and most important of all, more innovation. It is this combination that will bring you long term success in this technology -enabled world.

The best way to protect yourself from cheaper competition in the job market is to provide the human characteristics that are invaluable to an organization: a creative mindset, inspiration and teamwork. Following years of research ,what I discovered is that people who are energized have mastered three distinct areas of their life:
- They have built deeply trusting and cooperative relationships with others
(a cooperative mindset)
- They have extended their networks beyond the obvious to encompass the unsual
(jumping across worlds);and
- They are on an inner quest that ignites their own energy and that of others
(igniting latent energy)

Supporting people in organization to create fulfilling work and innovative performance has been my overriding mission for 20 years. Together we have been able to provide tools for companies to develop supporting teams that buzz with energy and work together to create value for the bottom line. However, we cannot guarantee that a company will provide this fertile working atmosphere for us. We have to learn how to motivate ourselves , our colleagues , and our business community to build the environment we need to radiate. By enhancing our working patterns and our relationships with others , we can go some way toward creating a favorable working environment, whether in a bricks and mortar office or in cyberspace.

The under -30's generation has discovered the power of e-based social networks and how purposeful relationships can be created with limited , if any, face to face interaction. Even more traditional companies have proved that home working (when done properly) can be more productive than office work -again proving that cooperative relationships and a creative environment are key to allowing indviduals to radiate.

There are a number of ways that you can bring innovation and flair to your working life. Turn to colleagues you trust- and who trust you-and ask them for advice and insight into your tasks. The power of networking was proved by Barack Obama's election campaign, which used social networking tools to build grass roots activism and fundraising. As well as helping you build a cooperative mindset, online networking tools are the easiest way to facilitate the jumping across boundaries that I refer to, and to consult people outside your normal networks and with different mindsets.

When you reach out to your wider network , you will come across people whose experiences and views differ significantly from your own. Opening yourself up to these new ideas will dramatically increase your ability to "Radiate" and to innovate in your work. The further you "jump across worlds" to communicate with people from vastly different profiles, the fresher your perceptions will be.

How do you implement this principle on a daily basis? People who are good at jumping across worlds place a high value on their network , and know precisely what their network is doing for them.They make sure that when innovation is important , they have access to people who are different and can bring fresh perspectives and insights.

When you become a well versed in cooperation and jumping across worlds, you create what I call latent energy; you have generated within yourself and in your immediate community and the potential to become really energized. But in order to maximize the potential within you (and by association, your organization) , you need to able to ignite the latent energy, to create real innovation.

Three actions support the principle of igniting latent enrgy. First, ask questions that sparks energy, to engross and interest others', as well as your own , curiosity. Second, create visions that compel . These are visions of the future that you and your colleagues can buy into, that encourage others to imagine the future, and to become excited about being involved in that future. Third, cooperate with others to craft meaningful and exciting work.

These relationships improve the working environment for all concerned, and support the principle of cooperation. Once you have developed habits and skills of cooperation , you need to become adept at listening to others and engaging in good conversations with others. Finally , you need to be proactive in ensuring that where and with whom you work is conducive to you being able to radiate. Do not be afraid to leave a job where cooperation is limited in order to move to a new company where cooperation flourishes.

The ability to radiate has never been more important than it is today. A strong foundation to your network will become essential, since you will depend on them more and will not have the benefit of face to face interaction. Cost cutting measures and a freeze on travel budgets are likely to lead to the emergence of flexible virtual teams, which cannot possibly function efficiently if they do not consist of individuals that radiate.

A CONVERSATION MATRIX
Analytical Rationality

Disciplined Debate
Creative Dialogue

Judgment Compromise
Inspiration sensemaking

Dehydrated Talk
Intimate Exchange

Ritual Fulfillment
Subjugation
Trust Building
Empathy

EMOTIONAL AUTHENTICITY


The Conversation Matrix was conceptualized when I was in the Middle East,where continuous quality improvements, creativity and innovations during the staff meeting were not being carried out due to nonsense talking by some of the staff members.