Posts Tagged ‘complexity’

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Into The Deep: Lighten The Load

November 18, 2010

Do you fully understand the impact the financial crisis has on your company, your division, your teams…your people?  How do you make a conscious effort to sustain your company through the crisis?How often do you lead by financial measures other than budget? The reality of the situation is this – if you are a leader in any capacity, you should be thinking about how the global financial crisis is affecting your domain and what you are going to do to contribute to your own sustainability.

The responsibility to keep the organization (and your livelihood) afloat is not for the CEO and CFO alone. While they are the structural and functional center in the midst of the contracting economic environment, every single leader has an important role to play.  From Customer Service to the Board of Directors, everyone should be actively contributing to the future of the company – in good times and bad. We typically don’t think that way, however, it is critical to understand how the efforts of each and every function must align and coordinate in such a way that the entire fleet is headed in one direction.   If we are to emerge from this crisis better, faster, and stronger…we had better begin to navigate our way more effectively in these turbulent economic seas.

This week, let’s consider a few high level thoughts for keeping your Operations afloat in rough seas:

1) Command Your Crew. People are essentially the engine of production in service and manufacturing and the principle of managing for cash flow remains at the forefront of what you, as the Captain, need to command.  People are the key to your success, and one critical aspect pertains to how you are leveraging your resources. Obviously an idle staff is an unproductive staff –  constantly re-evaluate and staff operations in line with the operational needs. In addition, remember that your crew is made up of humans and times are tough – ensure your people feel they are treated equitably while also ensuring rewards and recognition are available for those who go above and beyond – they don’t have to be cash related…

2) Lower your cash breakeven point ahead of falling revenues – fast. How will you consolidate production and how will your choices affect cash flow and other priorities? Will a software investment  make your system more responsive  and efficient? Is subcontracting a part of the process an option to better managing costs? Whatever you decide, know and understand that any decision you make may have far reaching consequences on the entire system – make sure you consider the full  impact of any changes and get input from all affected parties.

3) Rethink your capital investments. As you continue your quest for cash, it may seem obvious to postpone or cancel capital expenditures. This should be evaluated carefully…remember that depreciation alone will allow you some expenditures without any real cost. While it may be tempting to abandon ship on spending, always keep in mind that what you delay today, may cost you more tomorrow…stringently evaluate every expenditure, carefully weighing both benefits and costs equally. Projects with high strategic value  shouldn’t be delayed.  Most competitors choose cost savings over strategic investments when they come upon turbulent waters –  if you choose investments wisely, the winds will be with you as we emerge from the storm of economic crisis. Knowing where to spend and where to cut is a skill that will test your aptitude for navigation, not only as the Captain of your ship, but also in regards to your capacity to rule the seas in an ocean full of pirates – once the seas have calmed.

4) Manage your product lines. Be merciless in evaluating which product lines with their multitude of versions and extensions should walk the plank. The unnecessary complexity of multiple, complex product lines could sink your ship – weighing it down with additional cash expenditures that will not allow your vessel to stay afloat. Remember the 5:50 rule: 5% of your inventory will derive 50% of your revenue.

5)  Consider Outsourcing – and Insourcing. Lighten your load wherever possible – you will be more flexible to navigate in rough seas. Carefully review operations, focusing on what differentiates you from the competition – that is your bottom-line value. Everything else should be considered fair-game for outsourcing – especially those aspects of the business that may create economies of scale that are not possible in-house. A viable alternative may be insourcing – keeping redundant employees onboard  to reduce or eliminate the current cost of outsourcing. It may be advantageous to drop anchor on outside contractors and let your existing crew take up the load. Weigh your options carefully, and evaluate the impact on your overall cash flow to see where you come out ahead…

6) Manage Inventory. It is critically important that you are aware of the financial implications that inventory brings – both raw materials and finished products are cash traps. Tie yourself tightly to sales and marketing to ensure that cash remains the focus at all times and base your manufacturing processes on  just-in-time, produce-on-demand, or some variance of these practices to ensure that all aspects of inventory at maintained at minimal levels.

Whether you are in a manufacturing, retail, or a service environment the above points will apply – what will change is the lens from which you are viewing them. Just the same, they should all be considered and evaluated as to how they can be applied on your ship – otherwise, you may find yourself thrown overboard in stormy, shark infested seas, treading water and hoping for a rescue that may not arrive in time.

Please engage the discussion and let us know how you keep operations afloat in rough seas. Please feel free to contact me at  Sheri.Mackey@LuminosityGlobal.com or by visiting our website at www.LuminosityGlobal.com. Check back next week for the next post on Leadership Across Boundaries and Borders.

Posted in alignment, Cash Management, Financial, Global, Into The Deep Series, Leadership, Lighten The Load, Lighten The Load, Planning, Strategy, Value Creation | Tagged , , , , , , , , , , | 1 Comment »

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Into The Deep: Turbulent Times

November 5, 2010

As a business leader today, you have the unprecedented challenge not only of surviving, but accelerating through, the worldwide economic downturn. Credit is scarce, sales forecasts are depressing, unemployment is rampant, and the morale of remaining employees is sinking fast. To make matters worse, we are adrift at sea in a squall of epic proportions and no one seems to have a compass to navigate out of the eye of the storm. When we do eventually emerge, we have no idea where we will land or what the conditions will be. What we do know, is that this is a time of turbulent change worldwide – and with turbulent change comes both opportunity and risk. As people look to you for strength and guidance, you can be sure that you will be tested like never before. How you manage the ongoing crisis will have an enormous impact on your employees and your organization.

As the Captain of your ship, will you be the leader who seeks opportunity in chaos? Will you see the changes coming before others, put up the sails, and move faster than the competition? Will you ensure every business function, in every region, is aligned and coordinated so that everyone is in the same lifeboat, rowing in the same direction? Will you engage risk as a critical component of opportunity? Are you willing to rethink your strategy, so that you are financially agile and able to engage the opportunities the markets offer in times such as these? Or…not?

In recent times, the importance of holding cash has often been overlooked. However, as we struggle to stay afloat in rough seas, the best opportunities often reveal themselves when credit is tight and access to capital is limited. Cash allows access to hidden treasure – providing a mechanism to take advantage of market downturns when other investors are cash poor. The more cash is accessible, the better a company is able to gain access to capital and investment markets with a lower rate of borrowing for capital expenditures, acquisitions, or share repurchase.

Throughout the world, businesses are being forced to re-think how to operate in an environment where cash, once again, is king.  The ability to adapt to the changing tides remains a crucial competitive advantage – and for the foreseeable future, that competitive advantage is most accessible to those aggressively managing cash as a critical metric. Given today’s technology, there is no excuse for any leadership team not knowing the corporate cash position, across the organization, every day.

As you attempt to keep your eyes on the horizon, revenue growth is not the benchmark it once was. Now, every leader with financial responsibility must consider cash flow implications as part of the decision making process. That doesn’t mean savagely cutting all costs and hiding below decks until the storm has passed –  good investments should be made, however any cash expenditures should be carefully scrutinized and evaluated from three internal perspectives:  earnings from operations, working capital, and the sale of assets.  Sales should be weighed not so much by margin, but instead by how much inventory and receivables will be tied up and for how long. Projects previously evaluated on ROI, must now also be judged in terms of how much cash they consume vs. how much they can generate – and how soon they will actually bring in a return.

As leaders navigate their way through turbulent environments and confront the inability to secure capital due to increased credit restrictions, those who shift from a focus on the income statement to the balance sheet and cash reserves will triumph – coming out of the economic downturn much stronger, and more competitive, that ever before.  While top and bottom-line growth are important, the necessary condition to fuel growth is the availability of cash. As we are all well aware, even profitable companies can find themselves submerged in rough seas if they are not aggressively managing their cash. Although a critical success factor in its own right, profit is an accounting principle – bills and employees are paid with cash, not profit. With the ongoing financial crisis, companies that want to survive the storm had better hold onto cash as if were a life preserver, and declare credit dead weight. Those who ignore the need to refocus and neglect their cash flows may find themselves in Davy Jones Locker – as permanent residents!

How has your company changed the way it manages the financials in turbulent times?

Please engage the discussion and let us know how you stay afloat in rough seas. Please feel free to contact me at  Sheri.Mackey@LuminosityGlobal.com or by visiting our website at www.LuminosityGlobal.com. Check back next week for the next post on Leadership Across Boundaries and Borders.

Posted in Cash Management, Financial, Global, Into The Deep Series, Planning, Potential, Resources, Strategic Planning, Turbulent Times, Value Creation | Tagged , , , , , , , , , | Leave a Comment »

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Mind The Gap: Cross-Cultural Interactions

September 23, 2010

Last week we began by discussing how “Mind The Gap”  is used as a warning by transit systems worldwide – just as “Mind The Gap” can also be used as a cautionary statement that could be critical to alerting leaders of  oncoming chasms that may derail the organization on its journey toward excellence. One aspect of organizational life that has great potential for derailment is  cross-cultural interactions – functional and interpersonal. In any cross-cultural interaction, customary evaluations and interpretations are more likely to be off-base, because there is less shared meaning and experience to draw on. People think differently, have different concepts of time, space, work, etc. –  if we are not careful to appreciate and value the contributions and knowledge that may be different from our own, we may never reach our destination!

In this era of globalization, many companies are expanding into multiple countries and cultures. However, no company should take a “one size fits all” approach to business management  and leadership styles. Because we are aware that many aspects of organizational behavior – such as teams, leadership, and conflict – vary by culture, it is important to understand that it is virtually impossible to fully understand all aspects, of all cultures, for any diverse group of people in our complex environments. At the same time, as a global leader, it is also absolutely critical to know and understand what you can do to ensure everyone feels validated, acknowledged, understood and valued.

Instead of focusing on individual cultures, it can be beneficial to focus on some key cultural orientations. Everyone has specific orientations, or ways of perceiving the world around them, primarily derived from our cultural background and the way we were raised.  These orientations, or world-views, combine to determine who we are and how we see the world around us. From that basis, we can observe several critical differentiators that specifically affect the way people view the world and the assumptions that are placed on interpretations in communication. Here are some orientations that are extremely helpful in working across multiple cultures simultaneously:

1.  Time Management:

A)  Scarce vs. Plentiful – Does an individual see time as scarce or plentiful?

B)  Monochronic/Polychronic – Does a person focus on one task at a time or do they concentrate simultaneously on multiple tasks?

2.    Identity & Purpose:

A)  Individual/Collectivist – Does someone emphasize individual attributes and accomplishments or focus on their affiliation or belonging to a group?

3.   Organization:

A)  Hierarchy/Equality – Does an individual  believe organizations need to be stratified for healthy functioning or that all people are equal and just happen to fill different roles?

B)  Universalist/Particularist – Does a person believe that common processes should be adopted for consistency and economies in scale or  favor tailoring to specific circumstances, decentralization, and custom solutions?

C)  Competitive/Collaborative – Does someone promote progress through competition or through  mutual support, sharing of best practices, and solidarity?

4.    Communications:

A)  High/Low Context – Does a person rely on implicit communication and appreciate the meaning of gestures, voice, and context or do they rely on explicit communication, preferring clear       instruction?

B)  Direct/Indirect – Does an individual favor clear and to the point communications or prefer not to address tough subjects directly?

C)  Affective/Neutral – Does someone display emotion and warmth when communicating or favor conciseness, precision, and detachment when communicating?

D)  Formal/Informal – Does a person observe strict protocols and rituals or familiarity and spontaneity?

5.   Modes of Thinking

A)  Analytical/Systemic – Does an individual separate the whole into its constituent parts or assemble the parts into a cohesive whole, focusing on the whole systems and it’s connections?

Although we have covered only a limited number of orientations, an understanding and use of cultural orientations communicates a sensitivity that will facilitate faster, more effective, results in a fraction of the time than a “one size fits all” approach can ever hope to achieve. If we can use orientations to better understand our own perceptions, as well as help us to understand the complex network of cultures surrounding us, we can then begin to leverage cultural orientations as a communication tool for discovering creative solutions to problems – increasing the human potential of everyone involved, from every culture, and achieving success on a journey toward high performance and fulfillment that will far exceed everyone’s expectations.

How can you leverage cultural orientations to discover new options, shift perspectives, and leverage differing worldviews as you move between and amongst different geographical locations and cultures?

Please engage the discussion and let us know how you mind the gaps in your organization. Please feel free to contact me at  Sheri.Mackey@LuminosityGlobal.com or by visiting our website at www.LuminosityGlobal.com. Check back next week for the next installment of Leadership Across Boundaries and Borders.

Posted in Communication, Cross-cultural, Cross-cultural Interactions, Global Leadership, Mind The Gap Series, Resources, Value Creation | Tagged , , , , , , , , , , , , , , , , | 2 Comments »

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Mind The Gap: Organization Culture

September 17, 2010

The phrase “Mind The Gap” was introduced in 1969 by the London Underground to warn passengers of the gap that exists between the train door and the station platform.  Today, it is used as a warning by transit systems worldwide. Just as it is important for passengers to “Mind The Gap” to prevent injury, it is equally important for organizations to “Mind The Gap” so they do not fall into the traps that will keep them from moving forward – organizational culture in a global organization is extremely complex and fraught with many potential chasms. It is very interesting that people think differently, have different concepts of time, space, work, etc. – however, if we are not careful to appreciate and value the contributions and knowledge that people bring, it is easy fall onto the tracks dead center of an oncoming train! This will cause waning business results, the degradation of important relationships, the sacrifice of your own success, and ultimately – almost certain death! Because globalization continues to gather momentum, the interactions between people from differing geographies and cultures is frequent, and intensifies the complexities of organizational culture. The more borders a company crosses, the greater the potential for misunderstanding and conflict amongst stakeholders, but also inherent is the potential for unimaginable reward. To succeed across both boundaries & borders, it is essential to break through the barriers of organizational culture and rigid patterns of thinking.

Today’s leaders are increasingly susceptible to a vicious cycle: repeatedly riding the bullet train of quick fixes. Consider the worst-case scenario in which this dangerous cycle gradually undermines an organization’s capacity to transform itself and remain competitive – after all, yesterdays solutions are often today’s challenges. Transforming an organization means fundamentally changing how all employees in an organization perceive, think, and behave—so that they can satisfy the diverse needs of disparate stakeholders. Because we operate in a constantly shifting global economy, renewing and transforming the organization remains at the forefront of senior leaders minds – without renewal and transformation a company can not sustain market share and market growth. Yet this incredibly complex problem is often addressed as if it were quite simple. Otherwise, why would senior leaders continually subject their organizations to quick-fix approaches that rarely, if ever, result in long-term survival and success?

Some common systemic barriers, or “gaps”, that are pervasive in organizations today (although not all-inclusive by any means):

  • Mistrust within & across functions, geographies, and cultures
  • Withholding of information & expertise
  • Unwillingness to change old habits & traditional practices
  • Defensive communication, finger pointing, and demeaning behavior
  • Reluctance to express true opinions and disagreements in group meetings
  • Little or no cooperation and teamwork across boundaries & borders
  • Strategic goals not deployed into clear tasks and objectives — making priorities vague and confusing, and accountability near impossible
  • Overlapping and virtual boundaries are treated as separate fiefdoms, empires, and silos
  • Reward systems ignore group performance, teamwork, and contributions to process improvement

If these systemic barriers are ingrained throughout an organization, what is the likelihood that employees from different functions, geographies, and cultures will effectively collaborate with one another in cross-functional teams to move the organization forward? I dare say – not very likely! Simply having heard about the quality program in the company newsletter, having received a mission statement on a calendar card/poster/coffee mug, or having learned some new skill in a half-day workshop are not enough to create significant improvements. And when these efforts fail—as they do about seventy-five percent of the time, leaders gravitate from one quick fix approach to another – searching for the promise of an even greater improvement. Since  the first change didn’t succeed, let’s now try another, better change! And the cycle continues…still with little success.

Transforming the way in which all employees perceive, think, and behave requires fundamental change in a variety of interrelated systems and processes throughout the organization—which is quite distinct from hoping to transform an organization by relying on a quick-fix approach. Implementing an ongoing series of singular approaches is also quite likely to fail (1) if the sequence does not address the order of operations, focusing on the change itself vs. what and how things must change  (2) if the interrelationships among these various approaches are ignored and (3) if the human component is neglected. In sharp contrast, a holistic program that addresses culture, skill acquisition, team alignment, strategy, and rewards will provide an integrated sequence of activities and cross-boundary teams that remove systemic barriers to success before proceeding to improving business processes, learning processes, and ego-defining processes. In reality, leaders often go about the order of operations backwards – trying to change processes before addressing the order, interrelationships, and human elements of change. Implementing a holistic program is no small challenge, but it does allow one to “Mind The Gap” and position the organization for unimaginable success.

What are you doing to “Mind The Gap” and ensure sustainable change in your organization?

I would love for you to engage the discussion and let us know how you mind the gaps in your organization. Please feel free to contact me at  Sheri.Mackey@LuminosityGlobal.com or by visiting our website at www.LuminosityGlobal.com. Check back next week for the next installment of Leadership Across Boundaries and Borders.

Posted in Communication, Culture, Global Leadership, Leadership, Mind The Gap Series, Organizational Culture, Potential, Resources, Value Creation | Tagged , , , , , , | Leave a Comment »

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Leadership Lessons From Haiti

September 8, 2010

A few weeks ago my husband and I led a missions team to Haiti. As I was observing (and serving) in the poorest country in the western hemisphere,  I began to think about how there are some leadership lessons inherent in the environment in Haiti that most of us could stand to think about more often. You may think to yourself, “what can I learn from a country that has 90% unemployment and a 70% illiteracy rate?” These statistics are correct… and there are some important reminders (lessons) that impact how we interact with people as leaders and how far people are willing to go to serve you. Here are just a few of the things that come to mind:

  1. Understand, you can’t possibly understand…

Living and visiting third world countries on a regular basis throughout most of my life, I am more aware than most of cultural diversity and the impact it has within a single culture, much less a wider application. In Haiti, I was reminded that because I live within my own paradigms, I can never fully understand the plight of those outside of them. Despite seeing poverty in its most extreme, I have never been that poor….despite witnessing oppression at its worst, I have never really been oppressed…No matter how much, as global leaders we would like to think we understand, chances are we are just not equipped to comprehend the complexity and diversity that resides within our global organizations.  The myriad of cultural challenges our diverse global communities present, only serves to remind us that while we can certainly learn and understand general orientations and respect and value others worldviews, we can not fully understand individual people by observing from a physical or psychological level.  The diversity and complexity of those individuals is shaped not only by their culture, but by their life experiences and  the dozens of values, thousands of attitudes and tens of thousands of beliefs that continually evolve throughout a lifetime. As global leaders, where we can be effective is through active listening, understanding that there is more than one “best way”,  and having the capacity to facilitate the blending of the best of all cultural elements to make the whole more than the sum of the parts.

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Posted in Communication, Cross-cultural, Development, Education, Global, Leadership, Leadership Lessons From Haiti, Leadership Lessons: Haiti, Lessons From Abroad Series, Potential, Resources, Team Building, Value Creation | Tagged , , , , , , , , , , | 6 Comments »

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Global Leaders: Set Up To Fail?

July 29, 2010

DDI’s Global 2009 Leadership Study  indicated that 37 percent of leaders filling global leadership roles fail.  These leaders failed to achieve their global objectives and, most commonly, left the company – unsuccessful. ”Clearly, something is wrong worldwide with leadership development…”, reports DDI in its 2009 Global Leadership Forecast. But what is being done about this epidemic problem?  I repeatedly hear people willing to state the problem, but very few who actually propose and facilitate solutions.

After 20+ years of working in global business, and several more coaching global executives, I am repeatedly asked what is needed to facilitate success in global environments. I can tell you that it is not fancy terms or academic theories that move executives forward – but it is the ability to take reality-based theories, put them into layman’s terms, and apply them into real-world scenarios – while simultaneously  incorporating some less obvious skills that are not necessarily taught in business school.

I can provide you with the basic components I use to evaluate the likelihood of leadership success in the global marketplace, as well as the competencies I seek to further develop/position executives for global success. It is by no means a formal, definitive “global leadership” list of competencies, as the challenges are always very complex and involve a mix of both hard and soft skill development, but it is a methodology to leverage when evaluating global executives or  partnering with them to further individual or group development. The reality is that I am a practitioner, not a scientist – and I promote and teach what I know through real-world experience.

For each of the next three weeks, I will cover one of the three core components that I know from experience are essential to global leadership success (Intellectual, Psychological, and Social)  - followed by a discussion specifically on those more covert competencies that are critial to global leadership success.

This week we will look at the first component: Intellectual Acumen and it’s corresponding subsets:

  1. Intellectual Acumen: Understanding how the business works on a global scale / having the functional and market competencies to succeed.
  • Business management capability: Is there a capacity for strategic decision-making, functional expertise, efficient resource allocation, effective time management, problem-solving ability, ease in managing complexities, and ability to stay flexible? Can the executive adapt his/her leadership style to a variety of situations?
  • Global business knowledge: does the executive know how the business/industry works worldwide? How global customers behave across various geographies? How competition targets global clients? How strategic risk varies by geography? Is the executive mindful of diverse business protocols and legalities across areas of responsibility on a global basis / how it effects the overall business?
  • Cognitive complexity: does the executive have the ability to relate diverse scenarios with many moving parts without becoming overwhelmed? Is s/he aware of corporate/proprietary competencies that include navigation of internal culture, institutional business protocols, and proprietary skills that affect the global business?

It is rarely a simple matter to assess the right competencies for a global leader, and is very situational.  From my experience, intellectual acumen is the basic starting point for global leadership success. Although a significant portion of intellectual acumen is gained through education and organizational experience, if the basic competencies are not present, and incredibly strong, the leader has failed before s/he ever begins. If these elements are present, but need development or refinement, more than “traditional training” methods are required. These are longer term, organizational integration issues, which if not incorporated through sustained, continual, coaching and reinforcement, will ensure that the failure rate of global executives will continue to soar – a key contributor to global organizations inability to achieve their potential. I have seen it time and again…

How would you rate your global intellectual acumen? If it is not where you need it to be, what are you going to do about it?

You can contact me at Sheri.Mackey@LuminosityGlobal.com or by visiting our website at www.LuminosityGlobal.com. Check back next week for the next installation  of Leadership Across Boundaries & Borders. 59DCENEFB9N7

Posted in Are Global Leaders Set Up To Fail?, Cross-cultural, Development, Education, Global, Global Leader Series, International, Leadership, Potential, Value Creation | Tagged , , , , , , , , , , , , , | 2 Comments »

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