Wednesday, January 28, 2015

The 360 Degree Performance Evaluation

360 Feedback is Critical for Objective Evaluations
Managing human resource capital is now mission critical. One of the most effective tools for managing human resources is the 360-degree evaluation process. Traditionally, an employee is evaluated from a sole source (1 degree), namely the immediate supervisor or manager. However, employees interact with numerous sources: Co-workers, customers, Managers outside the employees department, vendors, contractors, and others. The 360- degree evaluation process relies on these multiple sources, providing a more balanced and objective approach to measuring employee performance. This leads to higher productivity, better customer service, and enhanced organizational performance.

Saturday, January 17, 2015

Why Games Belong in the Workplace

Games elevate productivity and innovation
Suppose the world had a workforce that was highly skilled at solving some of the most challenging problems. This workforce is motivated, hard working and highly collaborative with others. And to make matters even better, this workforce is not driven by traditional rewards such as money, but more by the thrill of accomplishing something great. Such a workforce exists and it is estimated to be 500 million strong and growing rapidly. It's the workforce of gamers. People who play games are perhaps the most untapped resource on the planet. 

The Challenge of Becoming Customer Focused

Real Customer Focus is Difficult
If customers drive business success, then becoming customer focus is mission critical. Trying to stay customer focus is considerably difficult. Here are some of the many challenges you will have to confront if you expect to be customer focused:

The Financial Argument for Great Design

Financially oriented people, such as myself, often focus too much on the numbers. If we can increase the bottom line by cutting cost, we jump all over it. This can lead to some big problems for growing the business. A good example of this is when a business spends money on design.

Wednesday, January 14, 2015

The Smart Organization - Part 2 of 2

Ten key concepts for High EI
Part 1 of this article set forth the argument that “emotional intelligence” (EI) is the key to creating a smart organization. Since EI enhances individual performance, it also leads to increased organizational performance. In Part 2 of this article, I will outline some specific actions that every organization can take for transforming the company through emotional intelligence.

The Smart Organization - Part 1 of 2

Successful people and companies have high EQ's
Building a "smart" organization is a function of what many HR (Human Resource) professionals call Emotional Intelligence or EI. Unfortunately, many traditional managers think that a smart organization is full of highly educated people with high IQ's. In his book, Emotional Intelligence: Why It Can Matter More Than IQ , Daniel Goleman describes how Emotional Intelligence or EQ - Emotional Quotient is a much stronger indicator of organizational performance than IQ (Intelligence Quotient).

Creating Value through Ethical Behavior

Ethical Behavior equates to More Value
There is a growing body of knowledge to indicate that organizations that act in a socially responsible manner, following high ethical standards will in the long-run outlast and outperform companies that pursue profits at all costs. This connection between value and ethics has been around for a long-time, but several studies have confirmed it:

Creating Value through Information

What makes information valuable?
When you attempt to create value, you have to make a choice between alternatives and this requires reliance on information. Understanding how to create “quality” information is paramount to decision making. One way to improve the quality of information is to make sure there is a strong flow of external sources – looking at market trends, surveying the customers, pursuing new technologies, and of course, competitive intelligence. These external sources provide the “reality checks” we need to remove internal bias, common to so many organizations.

Creating Value through Innovation

Innovation: Critical Driver of Value
Peter Drucker, the father of modern management once declared that the one core competency every organization must have is the ability to innovate. One of the reasons innovation is so critically important is because of change. With change, you are forced to innovate and you can elect to be reactive, forcing yourself to innovate (change what you are doing) or you can be pro-active, purposely seeking to innovate so as to control the changes forced upon you. As you might expect, the latter, the deliberate pursuit of innovation is the “value added” option.

Lessons from the Entrepreneur - Part 3 of 3

What makes an entrepreneurial culture
It should go without saying that we now function in a world of intense competition. Additionally, those who invest in companies are becoming less and less confident in management's ability to create value. As a result, financial markets are becoming increasingly volatile. We also need to consider things like shorter product life cycles. Because of these factors and many more, it is absolutely imperative for every organization to build an entrepreneurial culture. This article will summarize some key components within the entrepreneurial culture.

Lessons from the Entrepreneur - Part 2 of 3

Seven key characteristics of an Entrepreneur
In our first lesson, we described a few basic concepts that entrepreneurs follow in managing a business. We will now expand on how entrepreneurs create value by looking at some characteristics of entrepreneurs. One common characteristic behind almost every entrepreneur is a strong commitment to a set of skills. Invariably you will find that entrepreneurs are extremely highly skilled in their chosen profession and as a result, they can attract customers based on this high level of expertise. Entrepreneurs are able to exploit this expertise and build a business around what they are good at.

Lessons from the Entrepreneur - Part 1 of 3

Three grounding principles
One of the best ways to create higher values is to simply think like an entrepreneur. If we can think like an entrepreneur, we can find numerous ways of changing how we manage and create wealth within an organization. Over the next three articles, I will summarize several concepts that I believe are paramount to creating higher values. All of these concepts come from thinking like an entrepreneur. Lesson 1 (which follows) will introduce some basic concepts. Lesson 2 will explore characteristics of the entrepreneur and Lesson 3 will outline the entrepreneurial culture.

Comprehending the IT Challenge

Desperate systems represent huge cost
For too long, finance has misunderstood and failed to comprehend the true costs and resources required for many IT (information technology) projects. Issues such as migration and integration are simply pushed off to the IT Department to handle. The two functions (finance and IT) struggle against one another. Additionally, finance does not define its role in relation to IT and vice versa; i.e. there needs to be a marriage of strategies. Likewise, some IT projects continue unabated with no supporting value analysis, leading to unacceptable ROI's (Return on Investment). According to Gardner Group, 51% of all IT projects go over-budget by more than 200%.

Creating Creativity - Part 2 of 2

Framework = Eight Creative Talents
One of the great misconceptions surrounding creativity has to do with new ideas. Most forms of creativity are not about new ideas. In reality, there are all types of creative talents that contribute to results. Creativity exists everywhere at all levels. The key is to understand these variations and know how to tap into them for creating value. Therefore, creativity is more about the full range of outcomes, not that one big idea. This broader approach to creativity is much more sustainable than the traditional and narrow approach of seeking some breakthrough idea.

Creating Creativity - Part 1 of 2

How to Create Creativity
All people and all organizations possess creative talent. However, the world we live in can actually constrain creativity. This can range from organizational boundaries that limit our freedom to learn and grow to a society that tells us what to wear, what to eat, and what to look like. The real world of creativity has few boundaries, placing a high value on the spirit of new ideas. This invariably requires a large influx of mistakes and failures. Contrast this to the “non-creative” world where success is placed in a huge spotlight and the notion of failure is greeted with great displeasure.

Learning to Think

The most important skill of all - being able to think
It has been said that everyone must possess three transferable skills – the ability to speak, the ability to write, and the ability to think. The most elusive of these three is probably the ability to think. Unfortunately, many organizations prevent people from thinking. For example, a lack of consistent standards throughout the entire organization may contribute to wide variations in results, making it difficult for people to make the right decisions. Many companies are plagued with compliance type thinking; i.e. people “go along” with decisions to avoid retribution, not challenging the bad decisions that are about to be launched. Instead, we need a simple and consistent framework for decision-making that allows everyone to think the way they need to think.

To Blink or Not Blink

Initial Impressions can be Powerful
In the last few years, there has been an infusion of psychological thinking into the business community. One such example comes from the psychologist Mihaly Csikszentmihalyi in his book, Flow: The Psychology of Optimal Experience. Csikszentmihalyi studied the most creative people and pioneered the concept of flow, how people get into the highest levels of productivity and creativity – recovering a sense of harmony, getting around the chaos, and controlling one's own experiences to obtain real happiness.

The Death of EBITDA

IC drives value and not EBITDA
Increasingly deal value is driven by Intellectual Capital. Intellectual Capital includes a wide range of intangibles: Talented Workforce, Ability to Innovate, Leadership, Loyal Customers, or Brand Recognition. These intellectual assets are flipping the traditional EBITDA model on its head. This is evident by acquisitions driven by intellectual capital (IC). Take for example a valuation of $ 10 Billion assigned to SnapShot which has no sales revenues. How can this company be valued at $ 10 Billion with no EBITDA? SnapShot is a social application now used by 9% of all Smart Phone owners. These types of examples are becoming common place. Take for example the acquisitions of highly innovative companies such as FlipKart, Dropbox, Square and WhatsApp. All of these deals were IC driven and not guided by EBITDA.

Tuesday, January 13, 2015

Welcome to the World of Complex Adaptive Systems

Every business is a system of parts
More and more, business is a function of increased specialization. We see this in the form of outsourcing. We also are witnessing how technology is used to respond instantly to the distribution of products. For example, Wal-Mart now requires its top 100 vendors to use smart tags to track inventory items. These smart tags, referred to as Radio Frequency Identification or RFID relies on satellites to pickup the movement of inventory items anywhere anytime. Eventually, we will see this technology at the consumer level, shopping carts displaying your items and amount due as you drop them into the cart.
So what's behind this trend? Many leading experts have characterized it as Complex Adaptive Systems – the next evolution beyond the so-called learning organization. Most businesses are bogged down in major planning activities – things like formal strategic planning sessions.