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Chapter 11

HOW TO MAKE A COMPETITIVE ENTERPRISE?

 

by josavere

The document written on the basis of the book Less is further of Jasón Jennings.

A few times he encounters the opportunity to find a so practical manual and based in company’s real experiences but I eat efficient worldly:

1. Ryanair - European Airline
2. Jantech – Manufacturer (E.E.U.U.)
3. Ware House – Whorehouse of discounts (New Zealand and Australia).
4. Nucor – Little Steelworks (Half West E.E.U.U.).
5. Ikea – Shop of furniture (Sweden and Denmark).
6. World Saving – Financial Institution (E.E.U.U).
7. Yellow Freigh – Terrestrial Transport Company (E.E.U.U.).

After much reading on the subject of leadership, I found all of a practical treatise in the book less he is Further of Jasón Jennings. I have wanted to summarize it to make his study easy and to contribute the management development.

Jasón Jennings says than in highly productive companies, culture is the system and a series of systems they compose the culture.

The culture has a base in:

  • A set of deeply seated moral values.
  • A sequence of work efficiently organized and systematized.
  • An environment in which the work is done in accordance with better practices identified by the men in charge to do it.
  • A joint desire to eliminate the waste and to reach a level lifted of productivity.
  • A competitive environment, which each one of related proceedings serves as starting, point for the continuous improvement in.

We must turn essential functions into systems and to accomplish them time after time with the single-minded purpose to eliminate the waste and to improve every day.

In his first chapter, he refers to an only great objective that he suit his purposes like unifying force and he presents a great discovery: In productive companies the great objective is the strategy and it becomes culture; Tactics to achieve it are all the rest.

All workpeople must know that great objective, clearing and small change; bending my efforts to get it. The big leaders impede that the effort of productivity with any fashionable strategy with management's last theory or be distracted.

All team must center the attention; concentration is the road to be able to act rapidly and thus to improve the efficiency in all the levels and as a result logic,generating value in terms of cash flow, maximum financial indicator.

For it, Jennings recommends six tactics:

1. Enjoying the objective, performing on wholes in the same directive.

2. Selling the objective (orientated process to generate culture).

3. Discovering the people arranged to change and making a bet on them.

4. Seeing a few off. The people that are willing to achieve the great objective are the more important resource. We love it and we appraised.

5. Quitting whatever he distract the attention of the great objective, because we must concentrate on his achievement.

6. Demonstrating that the commitment is long-term. The outstanding people do not get connected to a great long-term objective if not they assure his future to him. While the team's bulk is occupied of the day-to-day routine, the heads think about the future.

The standard ISO 9000 version 2000 he stresses the customer's satisfaction and the continuous improvement. The customer's level of satisfaction is calculated with a very severe index, the level's product out of courtesy (deliveries on time) and the percentage out of courtesy in bulk, according to the following formula:

ISC = Nº of given orders in time

Programmed orders
x Given amount

Asked for amount

Which must get into print monthly for the company's all the possible roads in order that number of collective handling and thermometer of the principal action of improvement be turned.

 

 

1. TACTICS

a. The truth: "it is not possible to construct a productive company which confidence not be one of principal challenges in and that confidence where he does not exist can not be in to the truth". The people submit to the leadership of other providing that they get that he tells the truth always.

b. The frankness: "The lack of frankness gives space inevitably to pieces of gossip and the rumors, which spread out like a forest fire in autumn".

c. The numbers:

  • "The productive companies drive openly all the numbers and they enroll all of the important".

  • " The one and only modus operandi a productive company is when everybody the world the owner thinks as it were".

  • " The people need to feel at ease with oneself every day and they get it through triumph".

d. The communication: it must be open. "Tactical plans as a mere formality successfully the great objective they do not come of ivory tower; Closer people are operations that they plan better tactics".

The workpeople must trust completely his compensation; the suppliers and customer must know that we have everything the right to a margin of profit.

e. The criticism:

  • "The productive companies criticize the processes, no people".

  • "The work that generates an obvious value must be appreciated above all".

Independently of style related to management, all the stock comes to point themselves in measurable terms. Universally one talks of the chessboard of command, the earnings statement, the balance sheet and very specially of the cash flow, which generate themselves by means of a job in team, each one contributing his own and being implacable judge with that he not do his job because he is acting in violation of the maximum directive.

The leaders of the organization will have the ineludible responsibility to get engaged with this plan and becoming apostles in his natural circles to create a culture out of courtesy, continuous improvement and immediate action in between a pleasant environment that it allow him to the people to work HAPPY.

 


2. DESTROYING BUREAUCRACY AND SIMPLIFYING

For it he recommends eight steps namely:

1. When he decide making a change, do it with celerity and decision (shoot).

2. Get the correct people's support, that is, the ones that takes communion with the great objective and is willing to take possession of him with enthusiasm. The people that they oppose the great objective they must be fired.

3. Destroying the empires and constructing Inter-Functional equipments. The company must modify the mind his particular dominions in order that they act in terms of the general objective protect whose.

4. Decentralizing to create enterprising spirit. To bring near decisions to the clients and drawing them womb from the house.

5. To flatten the organization to answer to the clients sooner and to the company members. The productive company’s bosses answer pat the clients and workpeople.

6. Creating fervor among rows. Being visible example and to demonstrate the ranks that an interest has and very large. He must be made to crosswise of proceedings in order that the personnel see with his of one's own eyes his leader’s acting.

7. Creating and reinforcing a culture of tall performance. Utilizing the recognition and staff promotions.

8. Seeing all of the decisions from the point of view if they help the customer and they leave money. Failing that, he is bureaucracy and it must be eliminated.

The author is specially strong in the case of executives and managers who do not serve, that is to say, the incapable ones to help the organization to reach the objectives.

He opposes emphatically mass layoffs. The productive companies regard his personnel as the more valuable assets and if a layoff is in need of this itself type is because the company has not driven itself well.

If he keeps on and he foments the good employed guy’s development, evaluating all constantly and getting rid of who they have not shown good performance, it will not be need to do mass layoffs.

Besides with that classroom of layoffs companies:

  • Valuable knowledge loses if not there is transference of institutional memory.
  • The workpeople that remain lose motivation and go into a status of anxiety and pessimism. Save yourself who.
  • It proves to be costly to dismiss workpeople and after going back to enter into a contract.
  • The mass layoffs do not generate productivity neither hold it.

From they’re the importance of personnel's selection; He tries to know if the person inserts within culture, but also if they are people's classroom that they have of respecting the moral values and inserting the company.

He recommends contracting out for the aspects that are not vital in business, when they are generic and they do not represent competitive advantage.

Employees and executives must be versatile, that implies great knowledge of the organization.

The indoor work if and when they give a detailed report agrees on especial cases based in results.

All entrepreneurial decision must respond to a question that they call murderer:

As is he the entrepreneurial logic to do this?

For it the executives must leave the ego, surpassing the need to defend previous decisions and being capable to abandon the policies of the past that they be obsolete. Besides, the company's all personnel must have the ability to get comfortable to the system.

They must identify some motors of productivity and beginning to measure in quantities and no in weights. Using indicators that they invite the action and that they drive with property in administrative levels and operation of the organization quickly in order that they not turn history. The ones that right now he knows with the indicators of steps must confirm the annual accounts.

For the better a process a system must exist. Brent Hendrix, the engineer of the General Motor defines it like:

"A job whose sequence of activities has gotten organized of efficient manner and than a team's member obey time after time".

The objective is to eliminate the waste and to reach an elevated level of productivity thus; it gets constituted in the continuous improvement's starting point.

In a system:

  • All workpeople do the processes of the same manner all the times.
  • Previously, has identified him the best modus operandi the process.
  • Any one must accomplish the task without introducing variation itself.
  • The way that the task comes true he becomes the starting point for the continuous improvement.

The systems must be applicable in the company's all the areas. The management must prepare to confront the resistance to them, because some will do all that be within reach to rein in them, other ones believe that they rank above them and do not desire others that they measure his productivity.

Confidence and respect are required in order to implement a system.

The continuous improvement is based on common sense. They decide the things on the basis of the merit of alternatives and no on the basis of the existent hierarchy.

It consists of seven steps namely:

1. The leaders must participate. Going, seeing, getting involved.

2. There is agreement to close to objectives (identified in motors with indicators).

3. To know it is precise as he is the true product or service. Driving tangible to it.

4. One must begin to elaborate an existent process's map.

5. The people that accomplish the work must get involved with the new process.

6. The improved process is established immediately.

7. The continuous improvement becomes the company peculiarity.

He refers to the systems of remuneration like company’s grand unknowns. Unless they engage in company culture, and be easy to understand, they generate confusion and dissatisfaction. The interdependence exists at companies; if they cause conflicts for individual remuneration he can fall in a dysfunctional environment.

"When the people is at ease in his work, he does not worry about his remuneration, but when this displeases, worry for money to foreground dried".

"The remuneration for productivity helps somebody identifies who if and whom they do not fit in culture", because they permit:

  • Discarding the people that they do not fit well.
  • Organizing groups about.
  • Fomenting the team spirit.
  • Reinforcing constantly the culture.
  • Rewarding economically hard and intelligent work.

"When people have appropriate tools, they work as a team, they have his performance's exact records and they feel worthy from being able to deal with his own financial destination, the productivity it attains unsuspected heights".

Quote Nucor's case, where all the personnel's remuneration is based on the performance. "The weekly check of the hardworking Bile Smith in Nucor's plant depends so that Bile and his team had produced the previous week. Frankness and the precision of numbers per hour, per day and per week are crucial in the company where, once the executive director was included, he wins of to sane with productivity".

As of the present moment with the Internet, the same information is available for whole the world because technology has made the democratization of knowledge possible. Competitive advantage this in capability to execute. The productivity depends on activity related to management; the midways to achieve it are to the reach of wholes; Technology for if lonely, he does not guarantee it and we do not have to be a slave to the latter development. The more important, he is to maintain the entire group marching to the same rhythm.

As to motivation, define the expression like doing than a person I acted of determined manner.

"When the competition is canalized to the inside of an organization toward a goal or external objective, it is possible to create a cooperative culture highly productive. The danger occurs when internal wars within the organization produce, well then the competition becomes self-destructive, the organization themselves he becomes dysfunctional and finally the system it collapses when people begin to retain the information ".

The external objective must be discussed openly; the followers can question the leaders and directors provided that they do it of a respectful manner and layouts of truthful information. The motivation must not be borne in contests, promotions and rewards. She must be authentic and for it, the successful companies use three formulate:

a. Create a safe atmosphere and protected:

  • Printing felt work, taking care of well-being and the happiness of the people, permitting him that he may enjoy it.

  • Converting to the workpeople in interested parts and delivering them responsibilities. The sense comes from the selfishness of each employee in his work.

  • Permitting that they make mistakes and making of them all university to learn to not to repeat them.

  • Imposing the teamwork.

  • Fomenting the diversity, with originating people of a tall range of sources of draft.

b. Looking for an external enemy opposing view whom fighting in order that it be used as integration like mechanism.

c. Clearing the road, in order that the group acts.

A wise leader and fortress he initiates a culture and after that that culture be grander, more worthy and more important than any person gives strength itself to achieve, included he himself.

Finish off with the eleven characteristics of the leader of a productive company namely:

a. Attention to details not to live extinguishing fires: he must not blur out with the micro steps checking a great deal of information and numerical analysis’s.

b. Moral strong fiber: confidence in something that it is built day by day during all the life; He implies abiding by his promises; value and honesty.

c. Simplicity: from the clothing that they wear even the decoration of his offices that lead up to the houses which they live in, the vehicles; models become of virtue and modesty; the ostentation does not fit in philosophy in her neither in the their style.

d. Competitiveness: define clearly a model of competitiveness and infect it to his organizations.

e. Long-term focus and they share it with employees, the suppliers and clients: They prepare to stand the crises.

f. Disdain for I waste it: "the productivity and success do not stem from not spending money, but the art to know like spending it. They set an example of frugality and austerity and they instill them at his companies".

g. Workout in leadership: the leaders see themselves to themselves like maestro. They show enthusiasm to share the moral values and you dream them up with whom they surround themselves.

h. Humility: they consider human beings like everybody else and they do not enrapture themselves in themselves.

i. I refuse bureaucracy: all that not add value is waste and it is the leader’s responsibility to eliminate it.

j. Belief in the other ones: solid belief the fact is that people will do the right thing if they treat them well.

k. Confidence: "they begin confiding in his people. Almost always they are repaid with the same coin and rarely they end up disappointed".

 

3. BOARDS OF DIRECTORS

Summary document Portafolio Marzo12/07

Boards of Directors constitute a collegiate body to help to that the company be successful and generate value, backing up with his experience and knowledge, no management. They are responsible for the strategic company long-term vision, in addition to have great legal liability.

As a mere formality efficiently his commitment, they owe:

1. Establishing the strategy, to approve her and doing him tracking.

2. Verifying that all members of the organization understand his moral values and behave in concordance with them.

3. Safeguarding ethics, the transparency and the order; indicating the right thing and the incorrect.

4. Demanding an adequate internal control system.

5. Watching the risk management.

6. Acquiring a compromise with professionalism and transparency in the preparation of been financiers and with a no financial credible information.

7. Labeling the company's principal executives and establishing the processes of succession.

8. Driving the crises and situations that they surpass the administration and affect the fulfillment of objectives.

His members must be Persian with opinion and independence that they understand as he is the business, his dynamics, the panorama and threats. Being Persian guided to the quest of results that they generate value; With financial basic and capable knowledge to communicate what they think about clearly, speaking a plain language unless no one of members take it like personnel in order that talent and experience give the consequences that is expected in benefit of the organization.

They must not be booked up with suppliers, competitors, and groups of shareholders neither with administration in order that they may express his opinions without fears of a classroom.

It is important that they belong to various disciplines and with entrepreneurial experience, company knowledge and the sector. Besides with great ethical sense, demanding, rigorous and those they enforce the mandates.

In Colombia, usually the monthly meetings make of four to five hours with material previously supplied by administration for his study; twelve previous hours must use work that he takes care of himself in. It is been thought that 70 % of the time in chores of planning and 30 % in themes of the past must get busy.

According to the law 964/05 the member of meeting cannot have neither having had links cheap to run, relatives neither another type of dependence in relation to administration neither the company controls.

They must have an attractive remuneration that he generates commitment and reflect the so significant role and the legal liability (civilians, district attorneys and prisons). An equivalent compensation is accepted to the hours that the debit, (including the ones belonging to preparation) for the value demands hour of the company president.

It is recommended avoiding concentration of information in the management because can generate partial communication to the meeting that would slant her decisions for the asymmetry that he may show up. Equally, committee’s conformation specialized with participation of some member of meeting for specific themes.

 

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