How to Develop an Effective Communication?
We will now examine the major steps in developing a total communication and promotion programme . The marketing communicators must (1) identify the target audience (2) Determine the communication objectives (3) Design the message and (4) manage and coordinate the total marketing communication process .
Identify the Target Audience
A marketing Communicator must start with a clear target audience in mind. The audience may be potential buyers of the company’s products, current users, deciders, or influence. The audience may be individuals, groups, particular publics or the general public. The target audience will critically influence the communicators decision on what is to be said. How it is to be said, when it is to be said, where is to be said and who is to say it.
The communicators should research the audience’s needs, attitudes, preference and other characteristics as a prelude to setting communication objectives. One of the most important things to establish is the audience’s current image of the object.
Image Analysis
A major part of audience is to assess the audience’s current image of the company, its product, and its competitors. People’s attitudes and actions towards an object are highly conditioned by their beliefs about the object. Image is the set of beliefs, ideas and impressions that a person holds of an object.
The most popular tools for this is the semantic differential. It involves the following steps :
• Developing a set of relevant dimensions
• Reducing the set of relevant dimensions
• Administering the instrument to a sample of respondents
• Averaging the results
• Checking on the image variance
The marketers should now develop a picture of the desired image in contrast to the current image. An organization seeking to change its image must have great patience. Images persistence is explained by the fact that once people have a certain image of an object; they tend to be selective perceivers of further data.
Determining the Communication Objectives
Once the target audience and its characteristics are identified, the marketing communication must determine what response is sought. The ultimate response of course, is purchase. But behavior is the end result of a long process of consumer decision marking. The marketing communicator needs to know how to move the target audience from where it now stands to a higher state of readiness to buy. We will work with the “hierarchy – of – effects “models and described the six buyer – readiness states Awareness, Knowledge, liking, Preference, Conviction, and Possible, depending upon the degree of consumer involvement and the degree of brand differences.
Designing the Message
Having defined the desired audience response, the communicators moves to developing an effective message. Ideally the message should get attention, hold interest, arouse desire and obtain action. In practice, few messages take the consumer all the way from awareness through purchase , but the frame work suggest the desirable qualities .
Managing and Coordinating the Marketing Communication Process
The wide range of communication tools and messages available for reaching the target audience makes it imperative that they be coordinated. Other wise the messages might be ill timed in terms of the availability of goods: they may lack consistency: or they might not be cost effective. Left alone, each manager of a communication resource will fight for more budget irrespective of the relative merits of each tools.
Today companies are moving towards the concepts of coordinated marketing communications. This concept calls for :
- Appointing a marketing communication director who has over all responsibility for the company’s persuasive communication efforts
- Working out a philosophy of the role and the extent to which the different promotional tools are to be used.
- Keeping track of all promotional expenditure by product, promotional tools , stage of product life cycle, and observed effect, as a basis for improving further use of these tolls
- Coordinating the promotional activities and their timing when major campaigns takes place
Coordinate marketing communicates, will produce more consistency in the company’s meaning to its buyers and publics. It places a responsibility in someone’s hand, where none existed before to unify the company carries on. It leads to a total marketing communication strategy aimed at showing how the company can help customers solve their problem.
Marketing communication is one of the four elements of the company’s marketing mix. Marketing must know how to use advertising, sales promotion, publicity and personal selling to communicate the product’s existence and value to the target customer.
The communication process itself consists of nine elements: Sender, receiver, encoding, decoding, message, media, response, feedback, and noise. Market must know how to get through to the target audience in the face of the audience’s tendencies toward selective attentions, distortion and recall.
Effective sales promotion tactics must be employed keeping in mind the target audience’s tastes and preferences. Each and every product offered by the company should have its own individuality and it’s own market share. For example: Lets take Hindustan Lever”s products. It produces shampoos and soaps under different brand names. However each and every product and brand in the same segment carries its own value in the market and commands its own market share. This was made possible only by effective sales promotion tactics.
It identified to the customer as to the uniqueness of every brand although they are in the same category(shampoos). The product’s existence should be known and serve as a value added brand to every customer. Effective advertising is important for the product to reach various markets. Advertising catches the attention of the customer, however if its not going to be effective, its not going to serve the designated purpose. Advertising should be smart and should convey the right message so that it reaches the target audience. Understand that advertising should portray the benefits of the products and not only the features. Consumers tastes and preferences keep changing, so should the benefits of the products.
Follow these eight steps to develop an effective corporate communications plan:
1. Define your goals and desired results.
• What is your strategic purpose with regard to corporate communications?
• What's the tie-in to your organization's business plan?
2. Conduct an audit to determine and evaluate your current communications materials and initiatives. You must determine
• What communications initiatives each department is using
• What each initiative is designed to achieve
• Each initiative's effectiveness
3. Define your overall communications objectives. Such as reinforcing
• Customer service
• Customer loyalty
• Increased sales
• Employee morale and teamwork
• Improved employee retention and recruitment
• Media relations
• A positive corporate image and reputation
• Crisis control
4. Determine which audiences you want to influence. Such as
• Current and prospective customers
• Suppliers
• Current and prospective employees
• Federal, state and local legislators
• Wall Street
• The media.
5. Decide which tools you can use -- and afford -- to achieve your goals and get your points across. Such tools can include:
• Print publications
• Online communications
• Manuals
• Meeting and conference materials
• Media and public relations materials
• Marketing and sales materials
• Legal and legislative documents
• Employee and customer newsletters
• Corporate identity materials -- logos, print and packaging,
• Quarterly and annual reports
• Signage
• Presentations
• Website content
• Blogs
• Internet initiatives
6. Estimate the cost of each initiative, then establish a budget.
7. Establish your timetable.
8. Include methods in your plan to periodically measure and evaluate results, then, at year's end, evaluate the program's overall results.
A written communications plan is as much a defense against chaos, confusion and wasted energy as it is a business priority.
Once in place, your plan will establish priorities, fend off last-minute and inappropriate demands and bring a semblance of order to a hectic job.
Saturday, December 26, 2009
Tuesday, November 3, 2009
Writing a Thesis
In some ways, writing a thesis is no different than writing other academic papers, and much of the advice that appears elsewhere in this site will be relevant to the thesis writer. Still, as any thesis writer will tell you, there are some important differences between writing a thesis and writing a course paper. Moreover, because we feel that the best advice comes from those who've actually "been there," the advice we offer here is gleaned from Dartmouth students involved in the thesis-writing process.
Sizing Up Your Topic
Most thesis writers caution that topics are almost always initially too big and try to include too much. Some tips to remember:
Make your topic broad enough to address an important issue, yet narrow enough to address that issue thoroughly in the time allotted. You will want, in six months' time, to feel as if you know just about everything about your topic.
Understand the limitations of your particular situation. For instance, if your project requires lab work, know how much you can reasonably expect to accomplish in the time you have.
Understand that your topic will only seem bigger once you get into your research. If your topic is interesting and rich, new issues and new ideas will always emerge, so, focus your ideas tightly as soon as you are able. If you can't summarize your argument in a single paragraph, your topic is too big.
Think about pertinent classes you have taken or may want to consider taking while you are working on your thesis. Theses are very time-consuming, so you may appreciate being able to tie it into your other academic work (both because of the light your research may shed on your other classes and because of the light your classes may shed on your research).
Creating a Timetable
Most students agree that you should begin your preliminary reading during the summer before your senior year, and that you should count on reading right up until the time you finish your thesis. You obviously will want to get a good sense of the context for your thesis early on, but know that you will continue to find pertinent material throughout the entire time you are working on your thesis.
Most students reported doing the majority of their focused reading and research during their senior fall. As to how many hours you might budget for this research: one science student estimated that he put in as many as 25 hours a week.
If you are writing a thesis that depends on physical research and analysis, thoroughly discuss your timetable with your advisor. Things you may not consider, like equipment availability, may be out of your control and may dictate your timetable.
As to the actual writing of the thesis: while most thesis writers were writing as they read (at least to take notes or to write short summaries of existing scholarship), they found that they did the majority of their writing during the winter term. Spring term is best reserved for editing and touching-up - things that take much longer for a thesis than they do for a regular research paper.
Reading Strategies
It's important to understand and accept that you are not going to know exactly what you are looking for in the beginning.
Initially, you should read to explore. As you read, you will find that certain aspects of your topic interest you more than others, and that certain approaches offer more opportunities for new scholarly work.
Even if you are doing scientific experimentation, you need to be flexible in the beginning and willing to modify the initial question you're trying to answer. As one science major told us, "I had specific questions to answer when I started. As I got further, those questions were refined and others evolved."
When it comes to secondary sources, pay attention to the footnotes. This strategy will help you to contextualize your ideas. It will also tip you off to marginal issues in the field that have not been overly explored.
Writing as You Research
Perhaps the most useful tip we can give you is to write all through the research process. As you read, take notes. Write summaries or short reactions to everything you read. It's also a good idea to keep a journal. Not only will you find that you can cut and paste some of these notes and summaries into your final project, but you'll also find that you've kept track of where your information came from. If you have a good sense of what sources provided you with what information, you can save yourself a lot of time.
In short, don't view the research process as entirely separate from the writing process. Whether you are writing in the Humanities, Social Sciences, or Sciences, you should begin drafting perhaps even before you finish your preliminary research. Granted, much will have to be changed down the road, but the writing process itself will help you to answer some of your questions and figure out where you need to do more research. One student notes that "Most ideas won't coalesce just by reading without writing." Writing throughout the research process keeps your thought process active and records your responses to new ideas as you're having them.
Taming "The Beast"
Before they begin to research and to write, many students think of a thesis as just a really big paper. It is indeed usually much larger in size than anything you will have tackled before. But while the sheer bulk of the project is overwhelming, the nature of the thesis is actually more complex than a matter of size. As one student put it, "There is absolutely no comparison at all between even a 30 page research paper and 'The Beast.' It's just not in any way comparable."
There are few "tricks" to tame the "thesis beast," but what students recommend over and over is starting early and having a structured work plan. Breaking your thesis up into smaller components of things "to do" and things "to say" is the easiest way to make the project more manageable. Your "to do" plan is your list of tasks: meetings with professors, due dates, books you need to read, articles you need to find, and so on. Your "to say" plan is your list of argumentative goals for your thesis - what your points are and how you plan to make them.
If your "to say" plan starts to look unwieldy, think of each chapter of your thesis as a course paper with its own discreet argument. But give yourself enough time in the drafting process to make sure that your chapters are connected by good, strong transition paragraphs, and that each chapter contributes clearly and coherently to your larger argument.
Remember to work closely with your advisor at every step of the process. You can also make an appointment at the RWIT, to talk through your ideas at any point.
Writing Your Thesis Sentence
Like all papers, your senior thesis needs to have a strong thesis sentence. Look at our advice on Developing Your Ideas and Finding a Thesis for good, basic information. Also make sure that your thesis:
Is a complete, declarative, beautifully written sentence. Don't express your thesis as a question, and don't merely state your topic.
Is an arguable point. If your thesis sentence doesn't have controversy attached to it, then your thesis project will not be very interesting.
Is well focused - not too big, and not too small.
Is relevant to your research.
Points to what's original, interesting, or unusual about your particular argument or research. The reader should want to read your work.
Considering Structure
When considering a structure for your thesis, be sure to outline, outline, outline. As you do your reading, you'll begin to see relationships between ideas. Note those connections as you go, and attempt your first outline as soon as you think you begin to glimpse even the vaguest form for your paper. Of course these outlines will change as your thinking evolves - but each outline you create will be helpful in keeping track of the evolution of your ideas, and in determining the shape of the argument you eventually settle on.
As we've said earlier, once you have your outline you may find it easier to think in terms of chapters rather than in terms of the thesis as a whole. You may even find that chapters are good units to try to research, write and edit one at a time. However, we will remind you again that it is important that you leave significant time in the writing process to synthesize these smaller units into a unified and coherent document.
Questions to Guide You in the Revision Process
Most students who we talked to recommended at least two full drafts of your thesis, as well as numerous complex revisions of problem spots and individual chapters. Here we provide a number of questions you might ask yourself as you revise, to ensure that your revision process is thorough and effective:
Do your argument and purpose remain clear throughout the paper?
Is your tone appropriate?
Are you considerate to your reader? Appreciative of her level of knowledge/familiarity with your topic?
Have you given your reader a sense of the current views on your topic so that he has a context in which to consider your argument?
Does your paper's introduction clearly introduce your idea? Explain its significance? Provide background information? Attract the interest of your audience? Provide a clear plan for the paper? Present your thesis clearly?
Does the body of your paper cover your major points in a logical order?
Is each of your major points supported by the appropriate amount of evidence and analysis?
Do you make clear transitions as you move from point to point?
Does your conclusion follow logically from your introduction and body?
Remember: advisors are crucial to the revising process. Who better to spot the problems in your argument than a scholar in the field? And don't hesitate to ask others to look at your thesis. Not only can your advisor have good advice for you, other professors and other thesis-writers in your department may be very helpful. RWIT can also set you up with a tutor who can advise you throughout the revision process.
The Worst Part About Writing a Thesis
In general, students complain that thesis writing is time consuming and frustrating:
"I'm sure you'll have a moment when you're editing one small part of one chapter and you'll stop and can't even remember what you thesis is, and you'll realize that you're so up to your neck in the grindstone (excuse the mixed metaphor) that you've lost the big picture. It can be real drudgery at times."
"The time. There's not enough of it, and the added burden of classes makes life tough in winter and spring."
"It's hanging over you all senior year. Even if you are right on schedule, the thesis is not like an exam or a paper that is over and done with at the end of the term. Until you turn it in, it's always there waiting for you."
The Best Part About Writing a Thesis
While writing a thesis can be frustrating, it's also a very rewarding experience. First, writing a thesis presents you the challenge and the opportunity of pursuing a an intriguing intellectual question. Second, they allow you to work in close proximity with an advisor. And finally, there's that great feeling of satisfaction when the job is done.
Here are some testimonials:
"The entire project has been amazing - knowing you've accomplished (or will accomplish) such a major project is wonderful, and knowing that these ideas are yours is satisfying. Working with professors has also been a highlight - I've gotten very close to several professors as a result."
"You have a substantial piece of work that's all yours at the end of the process, and you can impress your friends at the presentation. If you stay on top of it and write as you read, your thesis doesn't have to take away from your senior-year experience."
"I'm really glad I wrote a thesis and I'm really proud of it. It's more for you, and maybe your advisors, than anything else. But don't do it unless you really love your topic and are really crazy about the idea."
"I think it's worth it, even if it's a tough experience sometimes. I think I'm a better person for having done it, and I think later on in life when I need to tackle something really big, I'll be ready."
Sizing Up Your Topic
Most thesis writers caution that topics are almost always initially too big and try to include too much. Some tips to remember:
Make your topic broad enough to address an important issue, yet narrow enough to address that issue thoroughly in the time allotted. You will want, in six months' time, to feel as if you know just about everything about your topic.
Understand the limitations of your particular situation. For instance, if your project requires lab work, know how much you can reasonably expect to accomplish in the time you have.
Understand that your topic will only seem bigger once you get into your research. If your topic is interesting and rich, new issues and new ideas will always emerge, so, focus your ideas tightly as soon as you are able. If you can't summarize your argument in a single paragraph, your topic is too big.
Think about pertinent classes you have taken or may want to consider taking while you are working on your thesis. Theses are very time-consuming, so you may appreciate being able to tie it into your other academic work (both because of the light your research may shed on your other classes and because of the light your classes may shed on your research).
Creating a Timetable
Most students agree that you should begin your preliminary reading during the summer before your senior year, and that you should count on reading right up until the time you finish your thesis. You obviously will want to get a good sense of the context for your thesis early on, but know that you will continue to find pertinent material throughout the entire time you are working on your thesis.
Most students reported doing the majority of their focused reading and research during their senior fall. As to how many hours you might budget for this research: one science student estimated that he put in as many as 25 hours a week.
If you are writing a thesis that depends on physical research and analysis, thoroughly discuss your timetable with your advisor. Things you may not consider, like equipment availability, may be out of your control and may dictate your timetable.
As to the actual writing of the thesis: while most thesis writers were writing as they read (at least to take notes or to write short summaries of existing scholarship), they found that they did the majority of their writing during the winter term. Spring term is best reserved for editing and touching-up - things that take much longer for a thesis than they do for a regular research paper.
Reading Strategies
It's important to understand and accept that you are not going to know exactly what you are looking for in the beginning.
Initially, you should read to explore. As you read, you will find that certain aspects of your topic interest you more than others, and that certain approaches offer more opportunities for new scholarly work.
Even if you are doing scientific experimentation, you need to be flexible in the beginning and willing to modify the initial question you're trying to answer. As one science major told us, "I had specific questions to answer when I started. As I got further, those questions were refined and others evolved."
When it comes to secondary sources, pay attention to the footnotes. This strategy will help you to contextualize your ideas. It will also tip you off to marginal issues in the field that have not been overly explored.
Writing as You Research
Perhaps the most useful tip we can give you is to write all through the research process. As you read, take notes. Write summaries or short reactions to everything you read. It's also a good idea to keep a journal. Not only will you find that you can cut and paste some of these notes and summaries into your final project, but you'll also find that you've kept track of where your information came from. If you have a good sense of what sources provided you with what information, you can save yourself a lot of time.
In short, don't view the research process as entirely separate from the writing process. Whether you are writing in the Humanities, Social Sciences, or Sciences, you should begin drafting perhaps even before you finish your preliminary research. Granted, much will have to be changed down the road, but the writing process itself will help you to answer some of your questions and figure out where you need to do more research. One student notes that "Most ideas won't coalesce just by reading without writing." Writing throughout the research process keeps your thought process active and records your responses to new ideas as you're having them.
Taming "The Beast"
Before they begin to research and to write, many students think of a thesis as just a really big paper. It is indeed usually much larger in size than anything you will have tackled before. But while the sheer bulk of the project is overwhelming, the nature of the thesis is actually more complex than a matter of size. As one student put it, "There is absolutely no comparison at all between even a 30 page research paper and 'The Beast.' It's just not in any way comparable."
There are few "tricks" to tame the "thesis beast," but what students recommend over and over is starting early and having a structured work plan. Breaking your thesis up into smaller components of things "to do" and things "to say" is the easiest way to make the project more manageable. Your "to do" plan is your list of tasks: meetings with professors, due dates, books you need to read, articles you need to find, and so on. Your "to say" plan is your list of argumentative goals for your thesis - what your points are and how you plan to make them.
If your "to say" plan starts to look unwieldy, think of each chapter of your thesis as a course paper with its own discreet argument. But give yourself enough time in the drafting process to make sure that your chapters are connected by good, strong transition paragraphs, and that each chapter contributes clearly and coherently to your larger argument.
Remember to work closely with your advisor at every step of the process. You can also make an appointment at the RWIT, to talk through your ideas at any point.
Writing Your Thesis Sentence
Like all papers, your senior thesis needs to have a strong thesis sentence. Look at our advice on Developing Your Ideas and Finding a Thesis for good, basic information. Also make sure that your thesis:
Is a complete, declarative, beautifully written sentence. Don't express your thesis as a question, and don't merely state your topic.
Is an arguable point. If your thesis sentence doesn't have controversy attached to it, then your thesis project will not be very interesting.
Is well focused - not too big, and not too small.
Is relevant to your research.
Points to what's original, interesting, or unusual about your particular argument or research. The reader should want to read your work.
Considering Structure
When considering a structure for your thesis, be sure to outline, outline, outline. As you do your reading, you'll begin to see relationships between ideas. Note those connections as you go, and attempt your first outline as soon as you think you begin to glimpse even the vaguest form for your paper. Of course these outlines will change as your thinking evolves - but each outline you create will be helpful in keeping track of the evolution of your ideas, and in determining the shape of the argument you eventually settle on.
As we've said earlier, once you have your outline you may find it easier to think in terms of chapters rather than in terms of the thesis as a whole. You may even find that chapters are good units to try to research, write and edit one at a time. However, we will remind you again that it is important that you leave significant time in the writing process to synthesize these smaller units into a unified and coherent document.
Questions to Guide You in the Revision Process
Most students who we talked to recommended at least two full drafts of your thesis, as well as numerous complex revisions of problem spots and individual chapters. Here we provide a number of questions you might ask yourself as you revise, to ensure that your revision process is thorough and effective:
Do your argument and purpose remain clear throughout the paper?
Is your tone appropriate?
Are you considerate to your reader? Appreciative of her level of knowledge/familiarity with your topic?
Have you given your reader a sense of the current views on your topic so that he has a context in which to consider your argument?
Does your paper's introduction clearly introduce your idea? Explain its significance? Provide background information? Attract the interest of your audience? Provide a clear plan for the paper? Present your thesis clearly?
Does the body of your paper cover your major points in a logical order?
Is each of your major points supported by the appropriate amount of evidence and analysis?
Do you make clear transitions as you move from point to point?
Does your conclusion follow logically from your introduction and body?
Remember: advisors are crucial to the revising process. Who better to spot the problems in your argument than a scholar in the field? And don't hesitate to ask others to look at your thesis. Not only can your advisor have good advice for you, other professors and other thesis-writers in your department may be very helpful. RWIT can also set you up with a tutor who can advise you throughout the revision process.
The Worst Part About Writing a Thesis
In general, students complain that thesis writing is time consuming and frustrating:
"I'm sure you'll have a moment when you're editing one small part of one chapter and you'll stop and can't even remember what you thesis is, and you'll realize that you're so up to your neck in the grindstone (excuse the mixed metaphor) that you've lost the big picture. It can be real drudgery at times."
"The time. There's not enough of it, and the added burden of classes makes life tough in winter and spring."
"It's hanging over you all senior year. Even if you are right on schedule, the thesis is not like an exam or a paper that is over and done with at the end of the term. Until you turn it in, it's always there waiting for you."
The Best Part About Writing a Thesis
While writing a thesis can be frustrating, it's also a very rewarding experience. First, writing a thesis presents you the challenge and the opportunity of pursuing a an intriguing intellectual question. Second, they allow you to work in close proximity with an advisor. And finally, there's that great feeling of satisfaction when the job is done.
Here are some testimonials:
"The entire project has been amazing - knowing you've accomplished (or will accomplish) such a major project is wonderful, and knowing that these ideas are yours is satisfying. Working with professors has also been a highlight - I've gotten very close to several professors as a result."
"You have a substantial piece of work that's all yours at the end of the process, and you can impress your friends at the presentation. If you stay on top of it and write as you read, your thesis doesn't have to take away from your senior-year experience."
"I'm really glad I wrote a thesis and I'm really proud of it. It's more for you, and maybe your advisors, than anything else. But don't do it unless you really love your topic and are really crazy about the idea."
"I think it's worth it, even if it's a tough experience sometimes. I think I'm a better person for having done it, and I think later on in life when I need to tackle something really big, I'll be ready."
Sunday, November 1, 2009
Logistics Strategy
What Is a Logistics Strategy?
When a company creates a logistics strategy it is defining the service levels at which its logistics organization is at its most cost effective. Because supply chains are constantly changing and evolving, a company may develop a number of logistics strategies for specific product lines, specific countries or specific customers.
Why Implement a Logistics Strategy?
The supply chain constantly changes and that will affect any logistics organization. To adapt to the flexibility of the supply chain, companies should develop and implement a formal logistics strategy. This will allow a company to identify the impact of imminent changes and make organizational or functional changes to ensure service levels are not reduced.
What Is Involved in Developing a Logistic Strategy?
A company can start to develop a logistics strategy by looking at four distinct levels of their logistics organization.
• Strategic: By examining the company’s objectives and strategic supply chain decisions, the logistics strategy should review how the logistics organization contributes to those high-level objectives.
• Structural: The logistics strategy should examine the structural issues of the logistics organization, such as the optimum number of warehouses and distribution centers or what products should be produced at a specific manufacturing plant.
• Functional: Any strategy should review how each separate function in the logistics organization is to achieve functional excellence.
• Implementation: The key to developing a successful logistics strategy is how it is to be implemented across the organization. The plan for implementation will include development or configuration of an information system, introduction of new policies and procedures and the development of a change management plan.
Components to Examine when Developing a Logistics Strategy
When examining the four levels of logistics organization, all components of the operation should be examined to ascertain whether any potential cost benefits can be achieved. There are different component areas for each company but the list should at least include the following:
• Transportation: Does the current transportation strategies help service levels?
• Outsourcing: What outsourcing is used in the logistics function? Would a partnership with a third party logistics company improve service levels?
• Logistics Systems: Do the current logistics systems provide the level of data that is required to successfully implement a logistics strategy or are new systems required?
• Competitors: Review what the competitors offer. Can changes to the company’s customer service improve service levels?
• Information: Is the information that drives the logistics organization real-time and accurate? If the data is inaccurate then the decisions that are made will be in error.
• Strategy Review: Are the objectives of the logistics organization in line with company objectives and strategies.
A successfully implemented logistics strategy is important for companies who are dedicated to keeping service levels at the highest levels possible despite changes that occur in the supply chain.
When a company creates a logistics strategy it is defining the service levels at which its logistics organization is at its most cost effective. Because supply chains are constantly changing and evolving, a company may develop a number of logistics strategies for specific product lines, specific countries or specific customers.
Why Implement a Logistics Strategy?
The supply chain constantly changes and that will affect any logistics organization. To adapt to the flexibility of the supply chain, companies should develop and implement a formal logistics strategy. This will allow a company to identify the impact of imminent changes and make organizational or functional changes to ensure service levels are not reduced.
What Is Involved in Developing a Logistic Strategy?
A company can start to develop a logistics strategy by looking at four distinct levels of their logistics organization.
• Strategic: By examining the company’s objectives and strategic supply chain decisions, the logistics strategy should review how the logistics organization contributes to those high-level objectives.
• Structural: The logistics strategy should examine the structural issues of the logistics organization, such as the optimum number of warehouses and distribution centers or what products should be produced at a specific manufacturing plant.
• Functional: Any strategy should review how each separate function in the logistics organization is to achieve functional excellence.
• Implementation: The key to developing a successful logistics strategy is how it is to be implemented across the organization. The plan for implementation will include development or configuration of an information system, introduction of new policies and procedures and the development of a change management plan.
Components to Examine when Developing a Logistics Strategy
When examining the four levels of logistics organization, all components of the operation should be examined to ascertain whether any potential cost benefits can be achieved. There are different component areas for each company but the list should at least include the following:
• Transportation: Does the current transportation strategies help service levels?
• Outsourcing: What outsourcing is used in the logistics function? Would a partnership with a third party logistics company improve service levels?
• Logistics Systems: Do the current logistics systems provide the level of data that is required to successfully implement a logistics strategy or are new systems required?
• Competitors: Review what the competitors offer. Can changes to the company’s customer service improve service levels?
• Information: Is the information that drives the logistics organization real-time and accurate? If the data is inaccurate then the decisions that are made will be in error.
• Strategy Review: Are the objectives of the logistics organization in line with company objectives and strategies.
A successfully implemented logistics strategy is important for companies who are dedicated to keeping service levels at the highest levels possible despite changes that occur in the supply chain.
Monday, October 12, 2009
Statistical Analysis , SPSS
SPSS is a computer program used for statistical analysis and is also the name of the company.SPSS (originally, Statistical Package for the Social Sciences) was released in its first version in 1968, and is among the most widely used programs for statistical analysis in social science. It is used by market researchers, health researchers, survey companies, government, education researchers, and others. In addition to statistical analysis, data management (case selection, file reshaping, creating derived data) and data documentation (a metadata dictionary is stored with the data) are features of the base software. The many features of SPSS are accessible via pull-down menus (see image) or can be programmed with a proprietary 4GL command syntax language. Command syntax programming has the benefits of reproducibility and handling complex data manipulations and analyses. The pull-down menu interface also generates command syntax, though the default settings have to be changed to make the syntax visible to the user. Programs can be run interactively, or unattended using the supplied Production Job Facility. Additionally a "macro" language can be used to write command language subroutines and a Python programmability extension can access the information in the data dictionary and data and dynamically build command syntax programs. The Python programmability extension, introduced in SPSS 14, replaced the less functional SAX Basic "scripts" for most purposes, although SaxBasic remains available. From version 14 onwards SPSS can be driven externally by a Python or a VB.NET program using supplied "plug-ins". SPSS places constraints on internal file structure, data types, data processing and matching files, which together considerably simplify programming. SPSS datasets have a 2-dimensional table structure where the rows typically represent cases (such as individuals or households) and the columns represent measurements (such as age, sex or household income). Only 2 data types are defined, numeric and text (or "string"). All data processing occurs sequentially case-by-case through the file. Files can be matched one-to-one and one-to-many, but not many-to-many. SPSS can read and write data from ASCII text files (including hierarchical files), other statistics packages, spreadsheets and databases. SPSS can read and write to external relational database tables via ODBC and SQL. Statistical output is to a proprietary file format (*.spo file, supporting pivot tables) for which, in addition to the in-package viewer, a stand-alone reader is provided. The proprietary ouput can be exported to text or Microsoft word. Alternatively output can be captured as data (using the OMS command) as text, tab-delimited text, HTML, XML, SPSS dataset or a variety of graphic image formats (JPEG, PNG, BMP and EMF). Statistics included in the base software:
Descriptive statistics: Cross tabulation, Frequencies, Descriptives, Explore, Descriptive Ratio Statistics
Bivariate statistics: Means, t-test, ANOVA, Correlation (bivariate, partial, distances), Nonparametric tests
Prediction for numerical outcomes: Linear regression
Prediction for identifying groups: Factor analysis, cluster analysis (two-step, K-means, hierarchical), Discriminant
Add-on modules provide additional capabilities. The available modules are:
SPSS Programmability Extension (added in version 14). Allows Python programming control of SPSS.
SPSS Data Validation (added in version 14). Allows programming of logical checks and reporting of suspicious values.
SPSS Regression Models - Logistic regression, ordinal regression, multinomial logistic regression, and mixed models (multilevel models).
SPSS Advanced Models - Multivariate GLM and repeated measures ANOVA (removed from base system in version 14).
SPSS Classification Trees. Creates classification and decision trees for identifying groups and predicting behaviour.
SPSS Tables. Allows user-defined control of output for reports.
SPSS Exact Tests. Allows statistical testing on small samples.
SPSS Categories
SPSS Trends™
SPSS Conjoint
SPSS Missing Value Analysis. Simple regression-based imputation.
SPSS Map
SPSS Complex Samples (added in Version 12). Adjusts for stratification and clustering and other sample selection biases.
SPSS Server is a version of SPSS with a client/server architecture. It has some features not available in the desktop version, one example is scoring functions.
Versions
SPSS version 16.0 runs under Windows, Mac OS 10.4 and earlier, and Linux. The graphical user interface is written in Java. The Mac OS version is provided as an Universal binary, making it fully compatible with both PowerPC and Intel-based Mac hardware. Prior to SPSS 16.0 different versions of SPSS were available for Windows, Mac OS X and Unix. The Windows version was updated more frequently, and had more features, than the versions for other operating systems. SPSS version 13.0 for Mac OS X was not compatible with Intel-based Macintosh computers, due to the Rosetta emulation software causing errors in calculations. SPSS 15.0 for Windows needed a downloadable hotfix to be installed in order to be compatible with Windows Vista.
SPSS Inc.
The program SPSS is sold by SPSS Inc., a company that sells a wide range of software for market research, survey research and statistical analysis. These include AMOS for structural equation modeling, SamplePower for power analysis, AnswerTree used for market segmentation, SPSS Text Analysis for Surveys to code open-ended responses, Quantum for cross-tabulation, Clementine for data mining and mrInterview for CATI and online surveys. The company is headquartered in Chicago, Illinois.
See also
List of statistical packages
Comparison of statistical packages
References
SPSS 15.0 Command Syntax Reference 2006, SPSS Inc., Chicago Ill.
Raynald Levesque, SPSS Programming and Data Management: A Guide for SPSS and SAS Users, Fourth Edition (2007), SPSS Inc., Chicago Ill. PDF
External links
SPSS Inc Homepage - support page includes a searchable database of solutions (login using "guest" as User name and Password)
Raynald Levesque's SPSS Tools - library of worked solutions for SPSS programmers (FAQ, command syntax; macros; scripts; python)
Archives of SPSSX-L Discussion - SPSS Listserv active since 1996. Discusses programming, statistics and analysis
UCLA ATS Resources to help you learn SPSS - Resources for learning SPSS
UCLA ATS Techical Reports - Report 1 compares Stata, SAS and SPSS against R (R is a language and environment for statistical computing and graphics).
Using SPSS For Data Analysis - SPSS Tutorial from Harvard
SPSS Developer Central - Support for developers of applications using SPSS, including materials and examples of the Python programmability feature
SPSS Wiki - A wiki on SPSS statistics (since December 2005)
SPSS Log - A blog posting answers on SPSS questions (since March 2006)
SPSS Experts - Profiles of six SPSS experts around the world
comp.soft-sys.stat.spss - SPSS Usenet newsgroup via Google Groups
SPSS Forum - A forum for SPSS users (since June 2007)
GNU PSPP - PSPP is a free SPSS replacement
Descriptive statistics: Cross tabulation, Frequencies, Descriptives, Explore, Descriptive Ratio Statistics
Bivariate statistics: Means, t-test, ANOVA, Correlation (bivariate, partial, distances), Nonparametric tests
Prediction for numerical outcomes: Linear regression
Prediction for identifying groups: Factor analysis, cluster analysis (two-step, K-means, hierarchical), Discriminant
Add-on modules provide additional capabilities. The available modules are:
SPSS Programmability Extension (added in version 14). Allows Python programming control of SPSS.
SPSS Data Validation (added in version 14). Allows programming of logical checks and reporting of suspicious values.
SPSS Regression Models - Logistic regression, ordinal regression, multinomial logistic regression, and mixed models (multilevel models).
SPSS Advanced Models - Multivariate GLM and repeated measures ANOVA (removed from base system in version 14).
SPSS Classification Trees. Creates classification and decision trees for identifying groups and predicting behaviour.
SPSS Tables. Allows user-defined control of output for reports.
SPSS Exact Tests. Allows statistical testing on small samples.
SPSS Categories
SPSS Trends™
SPSS Conjoint
SPSS Missing Value Analysis. Simple regression-based imputation.
SPSS Map
SPSS Complex Samples (added in Version 12). Adjusts for stratification and clustering and other sample selection biases.
SPSS Server is a version of SPSS with a client/server architecture. It has some features not available in the desktop version, one example is scoring functions.
Versions
SPSS version 16.0 runs under Windows, Mac OS 10.4 and earlier, and Linux. The graphical user interface is written in Java. The Mac OS version is provided as an Universal binary, making it fully compatible with both PowerPC and Intel-based Mac hardware. Prior to SPSS 16.0 different versions of SPSS were available for Windows, Mac OS X and Unix. The Windows version was updated more frequently, and had more features, than the versions for other operating systems. SPSS version 13.0 for Mac OS X was not compatible with Intel-based Macintosh computers, due to the Rosetta emulation software causing errors in calculations. SPSS 15.0 for Windows needed a downloadable hotfix to be installed in order to be compatible with Windows Vista.
SPSS Inc.
The program SPSS is sold by SPSS Inc., a company that sells a wide range of software for market research, survey research and statistical analysis. These include AMOS for structural equation modeling, SamplePower for power analysis, AnswerTree used for market segmentation, SPSS Text Analysis for Surveys to code open-ended responses, Quantum for cross-tabulation, Clementine for data mining and mrInterview for CATI and online surveys. The company is headquartered in Chicago, Illinois.
See also
List of statistical packages
Comparison of statistical packages
References
SPSS 15.0 Command Syntax Reference 2006, SPSS Inc., Chicago Ill.
Raynald Levesque, SPSS Programming and Data Management: A Guide for SPSS and SAS Users, Fourth Edition (2007), SPSS Inc., Chicago Ill. PDF
External links
SPSS Inc Homepage - support page includes a searchable database of solutions (login using "guest" as User name and Password)
Raynald Levesque's SPSS Tools - library of worked solutions for SPSS programmers (FAQ, command syntax; macros; scripts; python)
Archives of SPSSX-L Discussion - SPSS Listserv active since 1996. Discusses programming, statistics and analysis
UCLA ATS Resources to help you learn SPSS - Resources for learning SPSS
UCLA ATS Techical Reports - Report 1 compares Stata, SAS and SPSS against R (R is a language and environment for statistical computing and graphics).
Using SPSS For Data Analysis - SPSS Tutorial from Harvard
SPSS Developer Central - Support for developers of applications using SPSS, including materials and examples of the Python programmability feature
SPSS Wiki - A wiki on SPSS statistics (since December 2005)
SPSS Log - A blog posting answers on SPSS questions (since March 2006)
SPSS Experts - Profiles of six SPSS experts around the world
comp.soft-sys.stat.spss - SPSS Usenet newsgroup via Google Groups
SPSS Forum - A forum for SPSS users (since June 2007)
GNU PSPP - PSPP is a free SPSS replacement
Sunday, August 2, 2009
Business Process Improvement
Business Process Improvement (BPI) is a systematic approach to help any organization optimize its underlying processes to achieve more efficient results.
The organization may be a for-profit business, a non-profit organization, a government agency, or any other ongoing concern. Most BPI techniques were developed and refined in the manufacturing era, though many of the methodologies (like Six Sigma) have been successfully adapted to work in the predominantly service-based economy of today. While there are differences in the challenges that each type of industry poses, the fact remains that the core principles of BPI and how they apply to business improvement remain portable across industries and functions.
It should be noted that BPI focuses on "doing things right" more than it does on "doing the right thing". In essence, BPI attempts to reduce variation and/or wastage in processes, so that the desired outcome can be achieved with better utilisation of resources.
BPI works by:
• Defining the organization's strategic goals and purposes (Who are we, what do we do, and why do we do it?)
• Determining the organization's customers (or stakeholders) (Who do we serve?)
• Aligning the business processes to realize the organization's goals (How do we do it better?)
The goal of BPI is a radical change in the performance of an organization, rather than a series of incremental changes (compare TQM). Michael Hammer and James Champy popularized this radical model in their book ‘’Reengineering the Corporation: A Manifesto for Business Revolution’’ (1993). Hammer and Champy stated that the process was not meant to impose trivial changes, such as 10 percent improvements or 20 percent cost reductions, but was meant to be revolutionary (see breakthrough solution).
Unfortunately, many businesses in the 1990s used the phrase "reengineering" as a euphemism for layoffs. Other organizations did not make radical changes in their business processes and did not make significant gains, and, therefore, wrote the process off as a failure. Yet, others have found that BPI is a valuable tool in a process of gradual change to a business.
Roles
There are four roles within a business Management system: Business Leader, Process Owner, Operational Manager, and Process Operator. The responsibilities of each of these roles are unique, but work together as a system. Some employees in an organization may perform as many as all four of these roles over the course of a day, week, month, or year.
Business Leader
Business Leaders are responsible to create the Business plans (including strategic plans created during the Strategic planning process) and associated resourcing plans necessary to cause the organization to be successful.
Senior leaders (Corporate) are responsible to define the customer and business objectives the organization needs to achieve in order to be successful. This process includes overseeing the development of the organization’s mission, vision, and values.
Lower leader levels (Business Unit and Functional) are responsible for translating senior leaders' business objectives into business objectives that make sense for their level and that support the accomplishment of the senior leaders' business objectives.
PDCA was made popular by Dr. W. Edwards Deming, who is considered by many to be the father of modern quality control; however it was always referred to by him as the "Shewhart cycle." Later in Deming's career, he modified PDCA to "Plan, Do, Study, Act" (PDSA) so as to better describe his recommendations.
The concept of PDCA comes out of the Scientific Method, as developed from the work of Francis Bacon (Novum Organum, 1620). The scientific method can be written as "hypothesis" - "experiment" - "evaluation" or Plan, Do, and Check. Shewhart described manufacture under "control" - under statistical control - as a three step process of specification, production, and inspection.[1] He also specifically related this to the Scientific Method of hypothesis, experiment and evaluation. Shewhart[2] says that the statistician "must help to change the demand [for goods] by showing...how to close up the tolerance range and to improve the quality of goods." Clearly, Shewhart intended the analyst to take action based on the conclusions of the evaluation. According to Deming[3] during his lectures in Japan in the early 1950's the Japanese participants shortened the steps to the now traditional Plan, Do, Check, Act. Deming preferred Plan, Do, Study, Act because 'Study' has connotations in English closer to Shewhart's intent than "Check."
A fundamental principle of the scientific method and PDSA, is iteration - once a hypothesis is confirmed (or negated), executing the cycle again will extend the knowledge further. Repeating the PDSA cycle can bring us closer to the goal, usually a perfect operation and output.
In Six Sigma programs, the PDSA cycle is called "Define, Measure, Analyze, Improve, Control" (DMAIC). The iterative nature of the cycle must be explicitly added to the DMAIC procedure.
PDSA should be repeatedly implemented in spirals of increasing knowledge of the system that converge on the ultimate goal, each cycle closer than the previous. One can envision an open coil spring, with each loop being one cycle of the Scientific Method - PDSA, and each complete cycle indicating an increase in our knowledge of the system under study. This approach is based on the belief that our knowledge and skills are limited, but improving. Especially at the start of a project, key information may not be known; the PDSA - scientific method - provides feedback to justify our guesses (hypotheses) and increase our knowledge. Rather than enter "analysis paralysis" to get it perfect the first time, it is better to be approximately right than exactly wrong. With the improved knowledge, we may choose to refine or alter the goal (ideal state). Certainly, the PDSA approach can bring us closer to whatever goal we choose.
Rate of change, that is, rate of improvement, is a key competitive factor in today's world. PDSA allows for major 'jumps' in performance ('breakthroughs' often desired in a Western approach), as well as Kaizen (frequent small improvements associated with an Eastern approach). In the United States a PDSA approach is usually associated with a sizable project involving numerous people's time, and thus managers want to see large 'breakthrough' improvements to justify the effort expended. However, the Scientific Method and PDSA apply to all sorts of projects and improvement activities.
The power of Deming's concept lies in its apparent simplicity. The concept of feedback in the Scientific Method, in the abstract sense, is today firmly rooted in education. While apparently easy to understand, it is often difficult to accomplish on an on-going basis due to the intellectual difficulty of judging one's proposals (hypotheses) on the basis of measured results. Many people have an emotional fear of being shown "wrong," even by objective measurements. To avoid such comparisons, we may instead cite complacency, distractions, loss of focus, lack of commitment, re-assigned priorities, lack of resources, etc.
The responsibilities of the Business Leaders follow the Plan, Do, Check, and Act PDCA Cycle.
Plan: The Business Leaders create and own the business performance objectives of the organization. Senior leaders need to first understand the requirements of their customers, stockholders, workforce, suppliers, and communities. They need to understand their competition. They need to understand the environmental, economic, technological, social, legal, and political environments that they do business within. Senior leaders need to consider all of these elements as they design a Business model and business Strategy map that will meet the customer and business requirements. Business Leaders then translate these requirements and business environment issues into business performance objectives. Business Leaders then create business plans and associated resourcing plans that will cause the organization to achieve these business objectives. The Business Leaders establish business performance metrics to measure the business’s capability to meet these business objectives. Many organizations create a Balanced scorecard to organize and communicate business performance metrics.
Do: The Business Leaders are responsible to communicate to the organization their business plans. As the organization conducts business, the Business Leaders are responsible to build bridges and remove barriers that will allow the business performance objectives to be met. The business performance metric data is produced and collected as business is performed by the organization.
Check: The Business Leaders periodically analyze the business performance data and use it to visualize the business’s capability to meet business objectives over time (performance trends), compare actual performance against performance targets, and identify performance issues.
Act: The Business Leaders are responsible to create improvement actions to address the performance issues that are identified during their analysis of the business performance data. These improvement actions are created to ensure the organization is able to achieve their business plans.
Process Owner
The Process Owner is the person who is responsible to design the processes necessary to achieve the objectives of the business plans that are created by the Business Leaders. The Process Owner is responsible for the creation, update and approval of documents (procedures, work instructions/protocols) to support the process. Many Process Owners are supported by a process improvement team. The Process Owner uses this team as a mechanism to help create a high performance process. The Process Owner is the only person who has authority to make changes in the process and manages the entire process improvement cycle to ensure performance effectiveness. This person is the contact person for all information related to the process.
The responsibilities of the Process Owner follow the Plan, Do, Check, and Act PDCA Cycle.
Plan: The Process Owners create and own the process performance objectives of the organization. The Process Owner first needs to understand the external and internal customer requirements for the process. This person uses the business plans as a source to help understand the long term and short term customer and business requirements. This person then translates these requirements into process performance objectives and establishes product (includes service) specifications. This person establishes process performance metrics to measure the process’s capability to meet the product specifications and overall process objectives. The set of metrics that are to be reviewed by Operational Managers and Process Operators are called Key performance indicators (KPI’s). The Process Owner then designs process steps to describe work that when performed will have the capability to produce product that meets the customer and business requirements.
Do: The Process Owner is responsible to communicate to the Operational Managers the details of the processes that the Operational Managers are responsible to execute. As the Operational Managers and Process Operators perform the processes, the Process Owner is responsible to build bridges and remove barriers that will allow the process performance objectives to be met. The process performance metric data is produced and collected as the process is performed by Process Operators. The Process Owner is continually involved with the Operational Managers and Process Operators as they use Kaizen to continually improve the process as they are performing the work.
Check: The Process Owner periodically analyzes the process performance data and use it to visualize the process’s capability to operate within control limits over time (performance trends), compare actual performance against performance targets, and identify performance issues.
Act: The Process Owner is responsible to create improvement actions to address the performance issues that are identified during their analysis of the process performance data. Improvement actions may include the initiation of Lean projects to reduce waste from the process or include the initiation of Six Sigma projects to reduce variation in the process. Improvement actions may include the use of problem solving tools that would include risk assessment and root-cause analysis. Risk assessment is used to identify and reduce, eliminate, or mitigate risk within the process. This is the proactive approach to avoid problems being created from the process. Root-cause analysis is the reactive way to respond to problems that occur from the process. Root-cause analysis is used to identify the causes of problems within the process and identify and implement improvement actions that will ensure these problems do not occur again.
Operational Manager
The Operational Manager is responsible to bring the resources and processes together to achieve the objectives of the business plans that are created by the Business Leaders.
The responsibilities of the Operational Manager follow the Plan, Do, Check, Act PDCA Cycle.
Plan: The Operational Managers - in collaboration with each Process Operator, create Process Operator performance objectives for the employees they supervise. The Operational Manager needs to understand the performance requirements of the process. They match employees (Process Operators) with the competency and skill requirements of the process to be performed. They ensure that the Process Operators have the budget, facilities, and technology available to them that is necessary to achieve the performance objectives of the processes.
DO: The Operational Manager is responsible to teach Process Operators how to perform the processes (work). Process Operator instruction usually consists of classroom and on-the-job training (OJT). The Operational Manager oversees the work and ensures Process Operators receive ongoing informal feedback as to their performance. As the Process Operators perform the processes, the Operational Managers are responsible to build bridges and remove barriers that will allow the process and Process Operator performance objectives to be met. Process and Process Operator performance metric data is produced and collected as the process is performed. The Operational Manager ensures that Process Operators are using Kaizen to continually improve the process as they are performing the work.
Check: The Operational Manager periodically analyzes the Key performance indicators (KPI’s) during the production cycle to evaluate the work group’s ability to achieve the process and Process Operator performance objectives. This data is used to visualize the process and Process Operator capability to meet business plan objectives over time (performance trends), compare actual performance against performance targets, and identify performance issues. They review this performance data and sort out Process Operator performance issues from process performance issues. Many organizations use a War Room concept to post performance data. Within the War Room, the Operational Manager conducts periodic review and analysis of this performance data.
Act: The Operational Manager is responsible to create improvement actions to address the performance issues that are identified during their analysis of the process and Process Operator performance data. They address Process Operator performance with ongoing feedback to the Process Operator and/or by using an employee performance management review process. They communicate process performance issues to the Process Operator(s) and the Process Owner.
Process Operator
The Process Operator is responsible to learn and perform the processes (work) necessary to achieve the objectives of the business plans that are created by Business Leaders.
The responsibilities of the Process Operator follow the Plan, Do, Check, and Act PDCA Cycle.
Plan: The Process Operators - in collaboration with their Operational Manager, create and own their performance objectives. Process Operators are responsible to understand the performance objectives of the process they are to perform and the specifications of the product they are to produce.
Do: Process Operators are responsible to learn the processes (work) that they are to perform. They ensure the processes are performed to meet the process performance objectives and produce product that meets specification. As the Process Operators perform the processes, they are responsible to communicate to their Operational Manager (supervisor) the bridges that need to be built and the barriers that need to be removed to allow the process and Process Operator performance objectives to be met. Process and Process Operator performance metric data is produced and collected as the process is performed.
Check: The Process Operator periodically reviewes the Key performance indicators (KPI’s). The Process Operator makes adjustments to their work based on their actual performance compared to KPI targets. The Process Operator is responsible for identifying and reporting any performance issues and stopping production if necessary.
Act: Process Operators practice Kaizen to continually challenge the process and communicate improvement suggestions to their Operational Manager (supervisor).
BPI: Key Considerations
Processes need to align to Business Goals An organization's strategic goals should provide the key direction for any Business Process Improvement exercise. This alignment can be brought about by integrating programs like Balanced Scorecard to the BPI initiative. e.g. When deploying Six Sigma, identification of projects can be done on the basis of how they fit into the Balanced Scorecard agenda of the organization.
Customer Focus Fast-changing customer needs underscore the importance of aligning business processes to achieve higher customer satisfication. It is imperative in any BPI exercise that the "Voice of Customer" be known, and factored in, when reviewing or redesigning any process.
Importance of Benchmarks BPI tools place a lot of emphasis on "measurable results". Accordingly, benchmarks assume an important role in any BPI initiative. Depending on the lifecycle of the process in question, benchmarks may be internal (within the organization), external (from other competing / noncompeting organizations) or dictated by the senior management of the organization as an aspirational target.
Establish Process Owners For any process to be controllable, it is essential that there be clarity on who is the process owners, and what constitutes success/failure of the process. These success/failure levels also help establish "control limits" for the process, and provide a healthy check on whether or not a process is meeting the desired customer objectives.
Methodology of BPI
• Carrying out BPI is a project, so all principles of project management apply.
• The first step in BPI is to define the existing structure and process at play (AS-IS).
• Then, the BPI process owners should determine what outcomes would add value to the organization's objectives and how best to align its processes to achieve those outcomes (TO-BE).
• Once the outcomes are determined, the organization's work force needs to be re-organized to meet the new objectives, using the variety of tools available within the BPI methodology.
Rummler-Brache Methodology
Geary Rummler and Alan Brache defined a comprehensive approach to organizing companies around processes, managing and measuring processes and redefining processes in their 1990 book, Improving Performance. This is probably the best known, systematic approach to business process change and ideas first introduced in this book have been very influential on other, less comprehensive approaches. This book draws heavily from the basic approach laid out in Improving Processes.
Implementing BPI
Most resistance to BPI comes from within an organization. Managers often do not wish to change existing structures. The labor force may resist BPI because of fears of layoffs; however, an organization using BPI on a regular basis, argue many proponents, will already have the proper work force to meet existing business challenges.
Some organizations have implemented BPI on a smaller scale and reported success, by doing the following:
• Start with a small process that can be completed in a short time frame.
• Set clear timelines.
• Do not spread resources thinly and focus on the short term payoff.
• Management and primary stakeholders must be involved, or else even a limited implementation will fail.
The organization may be a for-profit business, a non-profit organization, a government agency, or any other ongoing concern. Most BPI techniques were developed and refined in the manufacturing era, though many of the methodologies (like Six Sigma) have been successfully adapted to work in the predominantly service-based economy of today. While there are differences in the challenges that each type of industry poses, the fact remains that the core principles of BPI and how they apply to business improvement remain portable across industries and functions.
It should be noted that BPI focuses on "doing things right" more than it does on "doing the right thing". In essence, BPI attempts to reduce variation and/or wastage in processes, so that the desired outcome can be achieved with better utilisation of resources.
BPI works by:
• Defining the organization's strategic goals and purposes (Who are we, what do we do, and why do we do it?)
• Determining the organization's customers (or stakeholders) (Who do we serve?)
• Aligning the business processes to realize the organization's goals (How do we do it better?)
The goal of BPI is a radical change in the performance of an organization, rather than a series of incremental changes (compare TQM). Michael Hammer and James Champy popularized this radical model in their book ‘’Reengineering the Corporation: A Manifesto for Business Revolution’’ (1993). Hammer and Champy stated that the process was not meant to impose trivial changes, such as 10 percent improvements or 20 percent cost reductions, but was meant to be revolutionary (see breakthrough solution).
Unfortunately, many businesses in the 1990s used the phrase "reengineering" as a euphemism for layoffs. Other organizations did not make radical changes in their business processes and did not make significant gains, and, therefore, wrote the process off as a failure. Yet, others have found that BPI is a valuable tool in a process of gradual change to a business.
Roles
There are four roles within a business Management system: Business Leader, Process Owner, Operational Manager, and Process Operator. The responsibilities of each of these roles are unique, but work together as a system. Some employees in an organization may perform as many as all four of these roles over the course of a day, week, month, or year.
Business Leader
Business Leaders are responsible to create the Business plans (including strategic plans created during the Strategic planning process) and associated resourcing plans necessary to cause the organization to be successful.
Senior leaders (Corporate) are responsible to define the customer and business objectives the organization needs to achieve in order to be successful. This process includes overseeing the development of the organization’s mission, vision, and values.
Lower leader levels (Business Unit and Functional) are responsible for translating senior leaders' business objectives into business objectives that make sense for their level and that support the accomplishment of the senior leaders' business objectives.
PDCA was made popular by Dr. W. Edwards Deming, who is considered by many to be the father of modern quality control; however it was always referred to by him as the "Shewhart cycle." Later in Deming's career, he modified PDCA to "Plan, Do, Study, Act" (PDSA) so as to better describe his recommendations.
The concept of PDCA comes out of the Scientific Method, as developed from the work of Francis Bacon (Novum Organum, 1620). The scientific method can be written as "hypothesis" - "experiment" - "evaluation" or Plan, Do, and Check. Shewhart described manufacture under "control" - under statistical control - as a three step process of specification, production, and inspection.[1] He also specifically related this to the Scientific Method of hypothesis, experiment and evaluation. Shewhart[2] says that the statistician "must help to change the demand [for goods] by showing...how to close up the tolerance range and to improve the quality of goods." Clearly, Shewhart intended the analyst to take action based on the conclusions of the evaluation. According to Deming[3] during his lectures in Japan in the early 1950's the Japanese participants shortened the steps to the now traditional Plan, Do, Check, Act. Deming preferred Plan, Do, Study, Act because 'Study' has connotations in English closer to Shewhart's intent than "Check."
A fundamental principle of the scientific method and PDSA, is iteration - once a hypothesis is confirmed (or negated), executing the cycle again will extend the knowledge further. Repeating the PDSA cycle can bring us closer to the goal, usually a perfect operation and output.
In Six Sigma programs, the PDSA cycle is called "Define, Measure, Analyze, Improve, Control" (DMAIC). The iterative nature of the cycle must be explicitly added to the DMAIC procedure.
PDSA should be repeatedly implemented in spirals of increasing knowledge of the system that converge on the ultimate goal, each cycle closer than the previous. One can envision an open coil spring, with each loop being one cycle of the Scientific Method - PDSA, and each complete cycle indicating an increase in our knowledge of the system under study. This approach is based on the belief that our knowledge and skills are limited, but improving. Especially at the start of a project, key information may not be known; the PDSA - scientific method - provides feedback to justify our guesses (hypotheses) and increase our knowledge. Rather than enter "analysis paralysis" to get it perfect the first time, it is better to be approximately right than exactly wrong. With the improved knowledge, we may choose to refine or alter the goal (ideal state). Certainly, the PDSA approach can bring us closer to whatever goal we choose.
Rate of change, that is, rate of improvement, is a key competitive factor in today's world. PDSA allows for major 'jumps' in performance ('breakthroughs' often desired in a Western approach), as well as Kaizen (frequent small improvements associated with an Eastern approach). In the United States a PDSA approach is usually associated with a sizable project involving numerous people's time, and thus managers want to see large 'breakthrough' improvements to justify the effort expended. However, the Scientific Method and PDSA apply to all sorts of projects and improvement activities.
The power of Deming's concept lies in its apparent simplicity. The concept of feedback in the Scientific Method, in the abstract sense, is today firmly rooted in education. While apparently easy to understand, it is often difficult to accomplish on an on-going basis due to the intellectual difficulty of judging one's proposals (hypotheses) on the basis of measured results. Many people have an emotional fear of being shown "wrong," even by objective measurements. To avoid such comparisons, we may instead cite complacency, distractions, loss of focus, lack of commitment, re-assigned priorities, lack of resources, etc.
The responsibilities of the Business Leaders follow the Plan, Do, Check, and Act PDCA Cycle.
Plan: The Business Leaders create and own the business performance objectives of the organization. Senior leaders need to first understand the requirements of their customers, stockholders, workforce, suppliers, and communities. They need to understand their competition. They need to understand the environmental, economic, technological, social, legal, and political environments that they do business within. Senior leaders need to consider all of these elements as they design a Business model and business Strategy map that will meet the customer and business requirements. Business Leaders then translate these requirements and business environment issues into business performance objectives. Business Leaders then create business plans and associated resourcing plans that will cause the organization to achieve these business objectives. The Business Leaders establish business performance metrics to measure the business’s capability to meet these business objectives. Many organizations create a Balanced scorecard to organize and communicate business performance metrics.
Do: The Business Leaders are responsible to communicate to the organization their business plans. As the organization conducts business, the Business Leaders are responsible to build bridges and remove barriers that will allow the business performance objectives to be met. The business performance metric data is produced and collected as business is performed by the organization.
Check: The Business Leaders periodically analyze the business performance data and use it to visualize the business’s capability to meet business objectives over time (performance trends), compare actual performance against performance targets, and identify performance issues.
Act: The Business Leaders are responsible to create improvement actions to address the performance issues that are identified during their analysis of the business performance data. These improvement actions are created to ensure the organization is able to achieve their business plans.
Process Owner
The Process Owner is the person who is responsible to design the processes necessary to achieve the objectives of the business plans that are created by the Business Leaders. The Process Owner is responsible for the creation, update and approval of documents (procedures, work instructions/protocols) to support the process. Many Process Owners are supported by a process improvement team. The Process Owner uses this team as a mechanism to help create a high performance process. The Process Owner is the only person who has authority to make changes in the process and manages the entire process improvement cycle to ensure performance effectiveness. This person is the contact person for all information related to the process.
The responsibilities of the Process Owner follow the Plan, Do, Check, and Act PDCA Cycle.
Plan: The Process Owners create and own the process performance objectives of the organization. The Process Owner first needs to understand the external and internal customer requirements for the process. This person uses the business plans as a source to help understand the long term and short term customer and business requirements. This person then translates these requirements into process performance objectives and establishes product (includes service) specifications. This person establishes process performance metrics to measure the process’s capability to meet the product specifications and overall process objectives. The set of metrics that are to be reviewed by Operational Managers and Process Operators are called Key performance indicators (KPI’s). The Process Owner then designs process steps to describe work that when performed will have the capability to produce product that meets the customer and business requirements.
Do: The Process Owner is responsible to communicate to the Operational Managers the details of the processes that the Operational Managers are responsible to execute. As the Operational Managers and Process Operators perform the processes, the Process Owner is responsible to build bridges and remove barriers that will allow the process performance objectives to be met. The process performance metric data is produced and collected as the process is performed by Process Operators. The Process Owner is continually involved with the Operational Managers and Process Operators as they use Kaizen to continually improve the process as they are performing the work.
Check: The Process Owner periodically analyzes the process performance data and use it to visualize the process’s capability to operate within control limits over time (performance trends), compare actual performance against performance targets, and identify performance issues.
Act: The Process Owner is responsible to create improvement actions to address the performance issues that are identified during their analysis of the process performance data. Improvement actions may include the initiation of Lean projects to reduce waste from the process or include the initiation of Six Sigma projects to reduce variation in the process. Improvement actions may include the use of problem solving tools that would include risk assessment and root-cause analysis. Risk assessment is used to identify and reduce, eliminate, or mitigate risk within the process. This is the proactive approach to avoid problems being created from the process. Root-cause analysis is the reactive way to respond to problems that occur from the process. Root-cause analysis is used to identify the causes of problems within the process and identify and implement improvement actions that will ensure these problems do not occur again.
Operational Manager
The Operational Manager is responsible to bring the resources and processes together to achieve the objectives of the business plans that are created by the Business Leaders.
The responsibilities of the Operational Manager follow the Plan, Do, Check, Act PDCA Cycle.
Plan: The Operational Managers - in collaboration with each Process Operator, create Process Operator performance objectives for the employees they supervise. The Operational Manager needs to understand the performance requirements of the process. They match employees (Process Operators) with the competency and skill requirements of the process to be performed. They ensure that the Process Operators have the budget, facilities, and technology available to them that is necessary to achieve the performance objectives of the processes.
DO: The Operational Manager is responsible to teach Process Operators how to perform the processes (work). Process Operator instruction usually consists of classroom and on-the-job training (OJT). The Operational Manager oversees the work and ensures Process Operators receive ongoing informal feedback as to their performance. As the Process Operators perform the processes, the Operational Managers are responsible to build bridges and remove barriers that will allow the process and Process Operator performance objectives to be met. Process and Process Operator performance metric data is produced and collected as the process is performed. The Operational Manager ensures that Process Operators are using Kaizen to continually improve the process as they are performing the work.
Check: The Operational Manager periodically analyzes the Key performance indicators (KPI’s) during the production cycle to evaluate the work group’s ability to achieve the process and Process Operator performance objectives. This data is used to visualize the process and Process Operator capability to meet business plan objectives over time (performance trends), compare actual performance against performance targets, and identify performance issues. They review this performance data and sort out Process Operator performance issues from process performance issues. Many organizations use a War Room concept to post performance data. Within the War Room, the Operational Manager conducts periodic review and analysis of this performance data.
Act: The Operational Manager is responsible to create improvement actions to address the performance issues that are identified during their analysis of the process and Process Operator performance data. They address Process Operator performance with ongoing feedback to the Process Operator and/or by using an employee performance management review process. They communicate process performance issues to the Process Operator(s) and the Process Owner.
Process Operator
The Process Operator is responsible to learn and perform the processes (work) necessary to achieve the objectives of the business plans that are created by Business Leaders.
The responsibilities of the Process Operator follow the Plan, Do, Check, and Act PDCA Cycle.
Plan: The Process Operators - in collaboration with their Operational Manager, create and own their performance objectives. Process Operators are responsible to understand the performance objectives of the process they are to perform and the specifications of the product they are to produce.
Do: Process Operators are responsible to learn the processes (work) that they are to perform. They ensure the processes are performed to meet the process performance objectives and produce product that meets specification. As the Process Operators perform the processes, they are responsible to communicate to their Operational Manager (supervisor) the bridges that need to be built and the barriers that need to be removed to allow the process and Process Operator performance objectives to be met. Process and Process Operator performance metric data is produced and collected as the process is performed.
Check: The Process Operator periodically reviewes the Key performance indicators (KPI’s). The Process Operator makes adjustments to their work based on their actual performance compared to KPI targets. The Process Operator is responsible for identifying and reporting any performance issues and stopping production if necessary.
Act: Process Operators practice Kaizen to continually challenge the process and communicate improvement suggestions to their Operational Manager (supervisor).
BPI: Key Considerations
Processes need to align to Business Goals An organization's strategic goals should provide the key direction for any Business Process Improvement exercise. This alignment can be brought about by integrating programs like Balanced Scorecard to the BPI initiative. e.g. When deploying Six Sigma, identification of projects can be done on the basis of how they fit into the Balanced Scorecard agenda of the organization.
Customer Focus Fast-changing customer needs underscore the importance of aligning business processes to achieve higher customer satisfication. It is imperative in any BPI exercise that the "Voice of Customer" be known, and factored in, when reviewing or redesigning any process.
Importance of Benchmarks BPI tools place a lot of emphasis on "measurable results". Accordingly, benchmarks assume an important role in any BPI initiative. Depending on the lifecycle of the process in question, benchmarks may be internal (within the organization), external (from other competing / noncompeting organizations) or dictated by the senior management of the organization as an aspirational target.
Establish Process Owners For any process to be controllable, it is essential that there be clarity on who is the process owners, and what constitutes success/failure of the process. These success/failure levels also help establish "control limits" for the process, and provide a healthy check on whether or not a process is meeting the desired customer objectives.
Methodology of BPI
• Carrying out BPI is a project, so all principles of project management apply.
• The first step in BPI is to define the existing structure and process at play (AS-IS).
• Then, the BPI process owners should determine what outcomes would add value to the organization's objectives and how best to align its processes to achieve those outcomes (TO-BE).
• Once the outcomes are determined, the organization's work force needs to be re-organized to meet the new objectives, using the variety of tools available within the BPI methodology.
Rummler-Brache Methodology
Geary Rummler and Alan Brache defined a comprehensive approach to organizing companies around processes, managing and measuring processes and redefining processes in their 1990 book, Improving Performance. This is probably the best known, systematic approach to business process change and ideas first introduced in this book have been very influential on other, less comprehensive approaches. This book draws heavily from the basic approach laid out in Improving Processes.
Implementing BPI
Most resistance to BPI comes from within an organization. Managers often do not wish to change existing structures. The labor force may resist BPI because of fears of layoffs; however, an organization using BPI on a regular basis, argue many proponents, will already have the proper work force to meet existing business challenges.
Some organizations have implemented BPI on a smaller scale and reported success, by doing the following:
• Start with a small process that can be completed in a short time frame.
• Set clear timelines.
• Do not spread resources thinly and focus on the short term payoff.
• Management and primary stakeholders must be involved, or else even a limited implementation will fail.
Sunday, July 19, 2009
变革型领导问卷
1－非常不同意
2－不同意
3－不好确定
4－同意
5－非常同意
德行垂范
1、廉洁奉公，不图私利。
2、吃苦在前，享受在后。
3、不计较个人得失，尽心尽力工作。
4、为了部门/单位利益，能牺牲个人利益。
5、能把自己个人的利益放在集体和他人利益之后。
6、不会把别人的劳动成果据为己有。
7、能与员工同甘共苦。
8、不会给员工穿小鞋，搞打击报复。
愿景规划
1、能让员工了解单位/部门的发展前景。
2、能让员工了解本单位/ 部门的经营理念和发展目标。
3、会向员工解释所做工作的长远意义。
4、向大家描绘了令人向往的未来。
5、能给员工指明奋斗目标和前进方向。
6、经常与员工一起分析其工作对单位/部门总体目标的影响。
个性化关怀
1、在与员工打交道的过程中，会考虑员工个人的实际情况。
2、愿意帮助员工解决生活和家庭方面的难题。
3、能经常与员工沟通交流，以了解员工的工作、生活和家庭情况。
4、耐心地教导员工，为员工答疑解惑。
5、关心员工的工作、生活和成长，真诚地为他（她）们的发展提建议。
6、注重创造条件，让员工发挥自己的特长。
领导魅力
1、业务能力过硬。
2、思想开明，具有较强的创新意识。
3、热爱自己的工作，具有很强的事业心和进取心。
4、对工作非常投入，始终保持高度的热情。
5、能不断学习，以充实提高自己。
6、敢抓敢管，善于处理棘手问题。
Working for a Transformational Leader can be a wonderful and uplifting experience. They put passion and energy into everything. They care about you and want you to succeed.
转型工作的领导者可以是一个美好的和令人振奋的经验。他们把激情和精力投入到一切。他们关心你，希望你成功。
2－不同意
3－不好确定
4－同意
5－非常同意
德行垂范
1、廉洁奉公，不图私利。
2、吃苦在前，享受在后。
3、不计较个人得失，尽心尽力工作。
4、为了部门/单位利益，能牺牲个人利益。
5、能把自己个人的利益放在集体和他人利益之后。
6、不会把别人的劳动成果据为己有。
7、能与员工同甘共苦。
8、不会给员工穿小鞋，搞打击报复。
愿景规划
1、能让员工了解单位/部门的发展前景。
2、能让员工了解本单位/ 部门的经营理念和发展目标。
3、会向员工解释所做工作的长远意义。
4、向大家描绘了令人向往的未来。
5、能给员工指明奋斗目标和前进方向。
6、经常与员工一起分析其工作对单位/部门总体目标的影响。
个性化关怀
1、在与员工打交道的过程中，会考虑员工个人的实际情况。
2、愿意帮助员工解决生活和家庭方面的难题。
3、能经常与员工沟通交流，以了解员工的工作、生活和家庭情况。
4、耐心地教导员工，为员工答疑解惑。
5、关心员工的工作、生活和成长，真诚地为他（她）们的发展提建议。
6、注重创造条件，让员工发挥自己的特长。
领导魅力
1、业务能力过硬。
2、思想开明，具有较强的创新意识。
3、热爱自己的工作，具有很强的事业心和进取心。
4、对工作非常投入，始终保持高度的热情。
5、能不断学习，以充实提高自己。
6、敢抓敢管，善于处理棘手问题。
Working for a Transformational Leader can be a wonderful and uplifting experience. They put passion and energy into everything. They care about you and want you to succeed.
转型工作的领导者可以是一个美好的和令人振奋的经验。他们把激情和精力投入到一切。他们关心你，希望你成功。
Saturday, July 18, 2009
ISO 9001:2000 Standard
The first four clauses (clause 0. Introduction to - clause 3. Terms and Definitions) do not provide any requirements for a QMS. They provide background information as to the purpose; concepts and principles used in the standard (e.g. process approach; PDCA); guidance on the QMS scope; reference to related documents; and key terms and definitions used. These clauses will all be explained in more detail as we go through each section.
The remaining five clauses numbering 4 through 8 provide the control requirements that a QMS must implement. The following is a summary explanation of these 5 major clauses or elements of the ISO 9001:20000 standard. Each major clause has several sub-clauses. Collectively, these 5 clauses set out the requirements for your QMS.
Clause 4- Quality Management System - sets requirements to identify, plan, document, operate and control QMS processes and to continually improve QMS effectiveness.
Clause 5- Management Responsibility - sets requirements for top management to demonstrate its leadership and commitment to develop, implement and continually improve the QMS.
Clause 6- Resource Management - sets requirements to determine, provide and control the various resources needed to operate and manage QMS processes; to continually improve QMS effectiveness; and to enhance customer satisfaction by meeting customer requirements.
Clause 7- Product Realization - sets requirements to plan, operate and control the specific QMS processes that determine, design, produce and deliver an organization’s product and services.
Clause 8- Measurement, Analysis and Improvement - sets requirements to plan, measure, analyze and improve processes that demonstrate product and QMS conformity and continually improve QMS effectiveness.
The overall objective of your QMS must be to enhance customer satisfaction by meeting their requirements. This objective can be achieved by using the ISO 9001 requirements to control your QMS processes and by continually improving QMS effectiveness.
The remaining five clauses numbering 4 through 8 provide the control requirements that a QMS must implement. The following is a summary explanation of these 5 major clauses or elements of the ISO 9001:20000 standard. Each major clause has several sub-clauses. Collectively, these 5 clauses set out the requirements for your QMS.
Clause 4- Quality Management System - sets requirements to identify, plan, document, operate and control QMS processes and to continually improve QMS effectiveness.
Clause 5- Management Responsibility - sets requirements for top management to demonstrate its leadership and commitment to develop, implement and continually improve the QMS.
Clause 6- Resource Management - sets requirements to determine, provide and control the various resources needed to operate and manage QMS processes; to continually improve QMS effectiveness; and to enhance customer satisfaction by meeting customer requirements.
Clause 7- Product Realization - sets requirements to plan, operate and control the specific QMS processes that determine, design, produce and deliver an organization’s product and services.
Clause 8- Measurement, Analysis and Improvement - sets requirements to plan, measure, analyze and improve processes that demonstrate product and QMS conformity and continually improve QMS effectiveness.
The overall objective of your QMS must be to enhance customer satisfaction by meeting their requirements. This objective can be achieved by using the ISO 9001 requirements to control your QMS processes and by continually improving QMS effectiveness.
The Eight Quality Management Principles
Principle 1 - Customer-Focus
Your organization depends on customers and therefore your organization should understand current and future customer needs, meet customer requirements and strive to exceed customer expectations (see clause 5.2; 7.2; and 8.2.1).
Principle 2 - Leadership
Leaders establish unity of purpose and direction of the organization. They should create and maintain the internal environment in which people can become fully involved in achieving the organization's objectives (see clause 5)
Principle 3 - Involvement of People
People at all levels are the essence of an organization and their full involvement enables their abilities to be used for the organization’s benefit (see clause 6.2).
Principle 4 - Process Approach
A desired result is achieved more efficiently when related resources and activities are managed as a process (see clause 4.1).
Principle 5 - System Approach to Management
Identifying, understanding and managing interrelated processes as a system contributes to the organization’s effectiveness and efficiency in achieving its objective (see clause 4.1)..
Principle 6 - Continual Improvement
Continual improvement of the organizations overall performance should be a permanent objective of the organization (see clause 8.5.1 and 4.1).
Principle 7 - Factual approach to decision making
Effective decisions are based on the analysis of data and information (see clause 4.1e and 8.4).
Principle 8 - Mutually beneficial supplier relationships
An organization and its suppliers are interdependent, and a mutually beneficial relationship enhances the ability of both to create value (see clause 7.4).
These eight management principles form the basis for all QMS standards within the ISO 9000 family. Each of these principles is included as requirements in one or more clauses of the ISO 9001:2000 standard.
Your organization depends on customers and therefore your organization should understand current and future customer needs, meet customer requirements and strive to exceed customer expectations (see clause 5.2; 7.2; and 8.2.1).
Principle 2 - Leadership
Leaders establish unity of purpose and direction of the organization. They should create and maintain the internal environment in which people can become fully involved in achieving the organization's objectives (see clause 5)
Principle 3 - Involvement of People
People at all levels are the essence of an organization and their full involvement enables their abilities to be used for the organization’s benefit (see clause 6.2).
Principle 4 - Process Approach
A desired result is achieved more efficiently when related resources and activities are managed as a process (see clause 4.1).
Principle 5 - System Approach to Management
Identifying, understanding and managing interrelated processes as a system contributes to the organization’s effectiveness and efficiency in achieving its objective (see clause 4.1)..
Principle 6 - Continual Improvement
Continual improvement of the organizations overall performance should be a permanent objective of the organization (see clause 8.5.1 and 4.1).
Principle 7 - Factual approach to decision making
Effective decisions are based on the analysis of data and information (see clause 4.1e and 8.4).
Principle 8 - Mutually beneficial supplier relationships
An organization and its suppliers are interdependent, and a mutually beneficial relationship enhances the ability of both to create value (see clause 7.4).
These eight management principles form the basis for all QMS standards within the ISO 9000 family. Each of these principles is included as requirements in one or more clauses of the ISO 9001:2000 standard.
Sunday, July 12, 2009
Disciplines
Above explanations, principles and general techniques lies the many professions in which changing minds is a core discipline. This section digs directly into the literature of these subjects to bring you some of the key aspects of the major disciplines of changing minds.
The disciplines list: A long list of disciplines that seek to change minds.
Argument: Classical argumentation, critical thinking and logic.
Brand management: Includes subtle changing of minds from a distance.
Coaching: Helping people develop.
Communication: Connecting with one another.
Change Management: Creating change in organizations.
Human Resources: Providing the right people for organizations.
Job-finding: One of the most critical skills you may need.
Leadership: Leading people requires much influencing of what people think.
Negotiation: Request, concession and exchange.
Politics: Power and influence in the large.
Propaganda: covert persuasion of populations.
Psychoanalysis: Freud and beyond.
Rhetoric: The art of persuasive language.
Sales: Perhaps the most direct and obvious discipline for changing minds.
Sociology: Understanding and supporting society.
Storytelling: Using stories to change minds.
Teaching: Educating others (mostly young people).
Warfare: Fighting the enemy.
Workplace design: The places where we work affect how we feel.
The disciplines list: A long list of disciplines that seek to change minds.
Argument: Classical argumentation, critical thinking and logic.
Brand management: Includes subtle changing of minds from a distance.
Coaching: Helping people develop.
Communication: Connecting with one another.
Change Management: Creating change in organizations.
Human Resources: Providing the right people for organizations.
Job-finding: One of the most critical skills you may need.
Leadership: Leading people requires much influencing of what people think.
Negotiation: Request, concession and exchange.
Politics: Power and influence in the large.
Propaganda: covert persuasion of populations.
Psychoanalysis: Freud and beyond.
Rhetoric: The art of persuasive language.
Sales: Perhaps the most direct and obvious discipline for changing minds.
Sociology: Understanding and supporting society.
Storytelling: Using stories to change minds.
Teaching: Educating others (mostly young people).
Warfare: Fighting the enemy.
Workplace design: The places where we work affect how we feel.
Monday, July 6, 2009
Managing Quality
This first step in building a ISO 9000 Quality Management System is the creation of a "Quality Manual". This is a separate and distinct step from developing quality procedures. The purpose is to state in a concise and brief format, the policies and objectives of the company required to achieve a desired level of quality for the organization or division.
More than likely the input for the Quality Manual will come from your customers. It is the customer that drives the Quality Process. There requirements, needs, and future desires are the basis for implementing an ISO 9000 quality system in the first place.
At a minimum, the ISO 9000 Quality Manual is required to address each one of the paragraphs of the applicable ISO 9000 Series that the company plans to become registered against. ISO 9001:2008 is the focus of this manual. But, you may need to expand the scope to include EMS 14001, QS-9000, AS-9000, or other industry specific quality requirements.
Each area that is written should include, at a minimum, three parts: Scope, Policy and Responsibilities.
The Scope portion should simply state the purpose of the covered area.
The Policy portion should state the company policy regarding the applicable ISO clause.
The Responsibility portion should state who, in generic titles or positions, is responsible for the policy.
ISO 9000 does not require a specific format for the Quality Manual. A sample manual is provided in this guide for your use as a template to create your own Quality Manual. The Quality Manual Table of Contents is based on the ISO 9000 standard itself. This ensures that each required element is addressed and provides an excellent starting point for building your Quality System.
ISO 9000 Quality Manual Consist of:
Master List
Forward
Administration
Company Information
Quality Management System
Management Responsibility
Resources Management
Product Realization
Measure Analysis Improvement
Attachment
b. ISO 9000 Operating Procedure
The ISO 9000 Operating Procedure Template includes and integrates the top level ISO 9000 quality manual and the six required quality procedures, thus containing the most difficult part of the ISO 9000 documentation. The ISO 9000 Operating Procedure Template include the detailed samples of the Operating Procedures to fulfill the ISO 9001 : 2008 requirements for the procedures, making the customization process even easier. The entire manual follows the structure of ISO 9001 : 2008.
ISO 9000 Operating Procedures Consist Of:
Control of documents
Control of records
Internal Audit
Control of non-conformance product
Corrective Action
Preventive Action
Training
Purchasing
c. ISO 9000 Forms
ISO 9001 : 2008 does not require forms but ISO 9001 : 2008 requires to keep records. Our well-designed forms make it easy to record the necessary information. In addition, our well-designed forms guide the user through a business process (for example, our Corrective & Preventive Action Plan Form guides you through the entire corrective action process), ensuring not only that all data is recorded but that all steps have properly been executed.
All our ISO 9000 Forms:
can immediately be used without any or with only little modifications(if you really need to, you can easily edit and customize in Microsoft Wordor Excel).
are designed by experienced quality managers and ISO 9000 auditors so that all forms are fully compliant with ISO 9001 : 2008 requirements.
are professionally laid out so that they are really easy to use without separate instructions.
ISO 9000 Forms Consist Of :
Orientation Checklist
Training Calendar
Training Needs Analysis
Training Record
After Training Valuation Form
Training Request Form
Application Form
Leave Application Card
Meeting Attendance
Training Attendance List
Store Card
Order Tracking Form
Material Issue Record
Material Return Note
Document Issue Record
Request For Uncontrolled Document
Document Change Notice
Preventive Maintenance Record
Approved Supplier List
Selection / Evaluation of Supplier
Audit Schedule
Internal Audit Checklist
Corrective Action Report
Preventive Action Report
Outgoing Form
Corrective &Preventive Tracking List
Equipment Calibration Tracking List
Customer Semi-Product Inspection
Non Conformance Corrective Action Report
Record Master List
Customer Feed Back Form
Customer Satisfaction Evaluation
Customer Information List
More than likely the input for the Quality Manual will come from your customers. It is the customer that drives the Quality Process. There requirements, needs, and future desires are the basis for implementing an ISO 9000 quality system in the first place.
At a minimum, the ISO 9000 Quality Manual is required to address each one of the paragraphs of the applicable ISO 9000 Series that the company plans to become registered against. ISO 9001:2008 is the focus of this manual. But, you may need to expand the scope to include EMS 14001, QS-9000, AS-9000, or other industry specific quality requirements.
Each area that is written should include, at a minimum, three parts: Scope, Policy and Responsibilities.
The Scope portion should simply state the purpose of the covered area.
The Policy portion should state the company policy regarding the applicable ISO clause.
The Responsibility portion should state who, in generic titles or positions, is responsible for the policy.
ISO 9000 does not require a specific format for the Quality Manual. A sample manual is provided in this guide for your use as a template to create your own Quality Manual. The Quality Manual Table of Contents is based on the ISO 9000 standard itself. This ensures that each required element is addressed and provides an excellent starting point for building your Quality System.
ISO 9000 Quality Manual Consist of:
Master List
Forward
Administration
Company Information
Quality Management System
Management Responsibility
Resources Management
Product Realization
Measure Analysis Improvement
Attachment
b. ISO 9000 Operating Procedure
The ISO 9000 Operating Procedure Template includes and integrates the top level ISO 9000 quality manual and the six required quality procedures, thus containing the most difficult part of the ISO 9000 documentation. The ISO 9000 Operating Procedure Template include the detailed samples of the Operating Procedures to fulfill the ISO 9001 : 2008 requirements for the procedures, making the customization process even easier. The entire manual follows the structure of ISO 9001 : 2008.
ISO 9000 Operating Procedures Consist Of:
Control of documents
Control of records
Internal Audit
Control of non-conformance product
Corrective Action
Preventive Action
Training
Purchasing
c. ISO 9000 Forms
ISO 9001 : 2008 does not require forms but ISO 9001 : 2008 requires to keep records. Our well-designed forms make it easy to record the necessary information. In addition, our well-designed forms guide the user through a business process (for example, our Corrective & Preventive Action Plan Form guides you through the entire corrective action process), ensuring not only that all data is recorded but that all steps have properly been executed.
All our ISO 9000 Forms:
can immediately be used without any or with only little modifications(if you really need to, you can easily edit and customize in Microsoft Wordor Excel).
are designed by experienced quality managers and ISO 9000 auditors so that all forms are fully compliant with ISO 9001 : 2008 requirements.
are professionally laid out so that they are really easy to use without separate instructions.
ISO 9000 Forms Consist Of :
Orientation Checklist
Training Calendar
Training Needs Analysis
Training Record
After Training Valuation Form
Training Request Form
Application Form
Leave Application Card
Meeting Attendance
Training Attendance List
Store Card
Order Tracking Form
Material Issue Record
Material Return Note
Document Issue Record
Request For Uncontrolled Document
Document Change Notice
Preventive Maintenance Record
Approved Supplier List
Selection / Evaluation of Supplier
Audit Schedule
Internal Audit Checklist
Corrective Action Report
Preventive Action Report
Outgoing Form
Corrective &Preventive Tracking List
Equipment Calibration Tracking List
Customer Semi-Product Inspection
Non Conformance Corrective Action Report
Record Master List
Customer Feed Back Form
Customer Satisfaction Evaluation
Customer Information List
Sunday, July 5, 2009
Trait Theory
Assumptions
People are born with inherited traits.
Some traits are particularly suited to leadership.
People who make good leaders have the right (or sufficient) combination of traits.
Description
Early research on leadership was based on the psychological focus of the day, which was of people having inherited characteristics or traits. Attention was thus put on discovering these traits, often by studying successful leaders, but with the underlying assumption that if other people could also be found with these traits, then they, too, could also become great leaders.
Stogdill (1974) identified the following traits and skills as critical to leaders.
Traits Skills
Adaptable to situations
Alert to social environment
Ambitious and achievement-orientated
Assertive
Cooperative
Decisive
Dependable
Dominant (desire to influence others)
Energetic (high activity level)
Persistent
Self-confident
Tolerant of stress
Willing to assume responsibility
Clever (intelligent)
Conceptually skilled
Creative
Diplomatic and tactful
Fluent in speaking
Knowledgeable about group task
Organised (administrative ability)
Persuasive
Socially skilled
McCall and Lombardo (1983) researched both success and failure identified four primary traits by which leaders could succeed or 'derail':
Emotional stability and composure: Calm, confident and predictable, particularly when under stress.
Admitting error: Owning up to mistakes, rather than putting energy into covering up.
Good interpersonal skills: Able to communicate and persuade others without resort to negative or coercive tactics.
Intellectual breadth: Able to understand a wide range of areas, rather than having a narrow (and narrow-minded) area of expertise.
Discussion
There have been many different studies of leadership traits and they agree only in the general saintly qualities needed to be a leader.
For a long period, inherited traits were sidelined as learned and situational factors were considered to be far more realistic as reasons for people acquiring leadership positions.
Paradoxically, the research into twins who were separated at birth along with new sciences such as Behavioral Genetics have shown that far more is inherited than was previously supposed. Perhaps one day they will find a 'leadership gene'.
See also
Preferences
Stogdill, R.M. (1974). Handbook of leadership: A survey of the literature, New York: Free Press
McCall, M.W. Jr. and Lombardo, M.M. (1983). Off the track: Why and how successful executives get derailed. Greenboro, NC: Centre for Creative Leadership
People are born with inherited traits.
Some traits are particularly suited to leadership.
People who make good leaders have the right (or sufficient) combination of traits.
Description
Early research on leadership was based on the psychological focus of the day, which was of people having inherited characteristics or traits. Attention was thus put on discovering these traits, often by studying successful leaders, but with the underlying assumption that if other people could also be found with these traits, then they, too, could also become great leaders.
Stogdill (1974) identified the following traits and skills as critical to leaders.
Traits Skills
Adaptable to situations
Alert to social environment
Ambitious and achievement-orientated
Assertive
Cooperative
Decisive
Dependable
Dominant (desire to influence others)
Energetic (high activity level)
Persistent
Self-confident
Tolerant of stress
Willing to assume responsibility
Clever (intelligent)
Conceptually skilled
Creative
Diplomatic and tactful
Fluent in speaking
Knowledgeable about group task
Organised (administrative ability)
Persuasive
Socially skilled
McCall and Lombardo (1983) researched both success and failure identified four primary traits by which leaders could succeed or 'derail':
Emotional stability and composure: Calm, confident and predictable, particularly when under stress.
Admitting error: Owning up to mistakes, rather than putting energy into covering up.
Good interpersonal skills: Able to communicate and persuade others without resort to negative or coercive tactics.
Intellectual breadth: Able to understand a wide range of areas, rather than having a narrow (and narrow-minded) area of expertise.
Discussion
There have been many different studies of leadership traits and they agree only in the general saintly qualities needed to be a leader.
For a long period, inherited traits were sidelined as learned and situational factors were considered to be far more realistic as reasons for people acquiring leadership positions.
Paradoxically, the research into twins who were separated at birth along with new sciences such as Behavioral Genetics have shown that far more is inherited than was previously supposed. Perhaps one day they will find a 'leadership gene'.
See also
Preferences
Stogdill, R.M. (1974). Handbook of leadership: A survey of the literature, New York: Free Press
McCall, M.W. Jr. and Lombardo, M.M. (1983). Off the track: Why and how successful executives get derailed. Greenboro, NC: Centre for Creative Leadership
Monday, June 22, 2009
Reading Financial Statements
The balance sheet and income statement are fundamental to any business. They could be thought of as a "report card" on the performance of the business for the period. But what do they really tell you, other than the bottom line result? Once the financial statements have been prepared for your own business, how can you use them and learn from them to help you manage your business? Or, if you are considering making an investment in a company’s stock, how can you use its financial statements to help you decide whether it might be a good investment? One of the tools you can use is ratio analysis.
Ratio analysis as an evaluation tool
Obviously there are many different aspects and factors involved in evaluating a business, including management capability, innovations in products and technology, shifts in market demands, and general economic conditions, among others. But one of the advantages of using financial statements is that they provide you with objective, concrete data with which to perform analysis. Ratio analysis by itself is just one tool you can use in evaluating your own business, or a potential investment opportunity. For example, comparisons of balance sheets and income statements from one period to another can be very effective in detecting changes, trends and shifts. Calculating ratios based on the current period balance sheet and income statement can be very useful, and when combined with a comparative analysis from period to period, it becomes a very dynamic way of gauging performance.
How you use the insights you gain from your analytical work will of course depend on your purpose in reading the financial statements. If you are looking at a company in which you already have an investment, or in which you are thinking about investing, you may use the results of your analysis to either buy or sell, or to increase or decrease your holdings of that stock. If you are looking at your own company, you can use your analysis to see where your business is strong, and where it could use some adjustments or improvements. This will help you make financial decisions about your business operations.
Types of ratios
Some of the different types of ratios that can be calculated from data in the financial statements and used to evaluate a business include:
Liquidity ratios
Solvency ratios
Activity ratios
Profitability ratios
Liquidity ratios
Liquidity ratios measure a business’s ability to cover its obligations, without having to borrow or invest more money in the business. The idea is that there should be sufficient cash and assets that can be readily converted into cash to cover liabilities as they come due.
One of the most common liquidity ratios is:
Current Ratio = Current Assets / Current Liabilities
Current assets basically include cash, short-term investments and marketable securities, accounts receivable, inventory, and prepaid expenses. Current liabilities include accounts payable to vendors and employees, and installments on notes or loans that are due within one year. This ratio could also be seen as a measure of working capital – the difference between current assets and current liabilities. A company with a lot of working capital will be in a better position to expand and improve its operations. On the contrary, a company with negative working capital does not have sufficient resources to meet its current obligations, and therefore is not in a position to take advantage of opportunities for growth.
Another stringent test of liquidity is the:
Acid-test Ratio = Current Assets minus Inventories / Current Liabilities
Inventory is a current asset that may or may not be quickly converted into cash. This depends on the rate at which inventory is being turned over. By excluding inventory, the acid-test ratio only considers that part of current assets that can be readily converted into cash. This ratio, also called the Quick Ratio, tells how much of the business's short-term debt can be met by using the company's liquid assets at short notice.
A ratio that shows how many times inventory is turned over, or sold during the period is:
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
A high turnover ratio is a sign that products are being produced and sold quickly during the period. A ratio of 1.0, for example, would mean that at any given time you have enough inventory on hand to cover sales for the entire period. The higher this ratio, the more quickly inventory is being turned over and producing assets that are more liquid -- accounts receivable and then cash.
If you want an even clearer idea of exactly how much ready cash is on hand to cover current liabilities, you can use the:
Cash ratio = Cash + Marketable securities / Current Liabilities
The cash ratio measures the extent to which a business could quickly cover short-term liabilities, and therefore is of particular interest to short-term creditors. A ratio of 1.0 would indicate that all current liabilities would be covered at any average point in time by cash and marketable securities that could be readily sold and converted to cash. A ratio of less than 1.0 would mean that other assets, such as accounts receivable or inventory, would have to be converted to cash to cover short-term obligations. A ratio of greater than 1.0 means that there is more than enough cash on hand.
Solvency Ratios
Solvency ratios are measures to assess a company’s ability to meet its long-term obligations and thereby remain solvent and avoid bankruptcy. Two general, overall solvency ratios include:
Solvency Ratio = Total Assets / Total Liabilities
and
Solvency Ratio = Net Worth (Total Capital or Equity) / Total Liabilities
These ratios basically tell whether a company owns more than it owes. The higher the ratio, the more solvent the company.
Another ratio that can tell how much a company relies on debt to finance its assets is:
Debt Ratio = Total Debt / Total Assets
Traditionally, both short-term and long-term debts and assets are used in determining this ratio. In general, the lower a company’s reliance on debt to finance its assets, the less risky the company.
The debt to equity ratio is a measure of a company’s leverage – how much financing it has in the form of debt as compared with how much it has invested in the business.
Debt-equity Ratio = Total Liabilities / Total Owners’ Equity, or
Debt-equity Ratio = Long-Term Liabilities / Total Owners’ Equity
In assessing solvency, it is also important to take into consideration the breakdown of a company’s liabilities. Not all liabilities are debt in the form of bank loans or notes payable, for example. There are also accounts payable to vendors, salaries and wages payable, taxes payable, and accrued liabilities, among others. One of the measures of what debt constitutes in terms of total liabilities is:
Indebtedness Ratio = Total Debts / Total Liabilities
In general, a company that is heavy on debt may be better leveraged, but is also less solvent.
The debt repayment terms are another consideration. Short-term debt, payable within one year, may pose a greater burden on cash flow and eventual solvency than long-term debt, which is due beyond one year. A ratio used to quantify this is:
Short-term Debt Ratio or Quality of Debt = Short-term Debt / Total Debt
A lower value for this ratio would indicate less concern for installments coming due within a year.
There are other ratios intended to assess a company’s capacity to cover its debt repayments and financing costs. One of these ratios measures how interest expense is being covered by the net income the company is generating:
Interest expense coverage = Net income before interest and taxes / Interest expense
This ratio is also called Number of Times Interest Earned, and represents how many times the net income generated by the company, without considering interest and taxes, covers the total interest charge. The higher the ratio the more solvent the company.
Another similar ratio often used to measure a company’s capacity to cover its fixed charges is:
Ratio of Earnings to Fixed Charges = Earnings before income tax and fixed charges / Interest expense (including capitalized interest) and amortization of bond discount and issue costs
Capitalized interest is the amount of interest on a loan to finance a project or acquisition of fixed assets, that has been capitalized and included as part of the cost of the project or asset on the balance sheet. You will probably need to see the notes to the financial statements to find this figure.
Activity Ratios
Many useful gauges of operations can be calculated from data reported in the financial statements. For example, you can determine the average number of days it takes to collect on customer accounts, the average number of days to pay vendors, and how much of the operation is effectively being financed with payment terms extended by vendors.
Accounts Receivable Turnover = Total Credit Sales / Average Accounts Receivable
This tells you the average duration of accounts receivable for credit sales to customers. This in turn can be expressed in terms of the collection period, as follows:
Average Collection Period = Days in Year / Accounts Receivable Turnover
or
Days to Collect = Trade Accounts Receivable / Credit Sales x 365
A similar calculation can be made on the liabilities side, with accounts payable to vendors:
Days to Pay = Trade Accounts Payable / Purchases x 365
To determine how much of a company’s accounts receivable and inventory are effectively being financed by the credit extended to the company by its vendors:
Financing of Trade Accounts Receivable in terms of Trade Accounts Payable = Trade Accounts Payable / Trade Accounts Receivable
Financing of Inventory in terms of Trade Accounts Payable = Trade Accounts Payable / Inventory
Effectively managing the credit extended by vendors can help a company’s cash flow and therefore its liquidity and solvency.
From data reported on the income statement, various relationships can be calculated between different expenses and revenues, or a certain type of expense as a percentage of total expenses.
Labor Cost Percentage = Payroll and Related Expenses / Total Revenue or Total Expenses
Interest Expense Percentage = Interest Expense / Total Revenue or Total Expenses
These types of ratios or percentages can be calculated for any item on the income statement. Which accounts are more important will depend on the nature of the business. For example, some operations are more labor intensive and some are more capital intensive. In a labor intensive operation, the percentage that employee-related expenses, including wages, salaries and benefits, represent in terms of total operating expense is relevant. In a capital intensive operation, repairs and maintenance may take on more importance.
Profitability Ratios
One of the most common profitability ratios is the profit margin. This can be expressed as the gross profit margin or net profit margin, and it can be expressed by company, by sector, by product, or by individual unit. The information reported on the income statement will enable you to determine the overall profit margin. If additional breakdowns are provided, more detailed margins can be calculated.
Gross Profit Margin = Gross Income / Total Revenue
Net Profit Margin = Net Income / Total Revenue
Other commonly used ratios are returns, expressed as return on investment or equity, return on assets, and return on capital employed. These ratios measure a company’s ability to use its capital, or its assets, to generate additional value.
Return on Investment (ROI) or Return on Owners’ Equity = Net Income / Average Owners’ Equity
Return on Assets (ROA) = Net Income / Average Total Assets
Return on Capital Employed (ROCE) = Net Income Before Interest and Tax / Capital Employed (Total Assets minus Current Liabilities)
When evaluating investment opportunities, profits are often measured per share:
Earnings per Share = Net Profit After Tax and Dividends / Ordinary Shareholders' Equity
Another commonly used ratio to show the yield on an investment is:
Dividend Yield Ratio = Dividends per Share / Market Value per Share
And, to measure how the price of an investment correlates with the earnings on that investment, you can use the:
Price to Earnings Ratio = Market Value per Share / After-Tax Earnings per Share
Summary
The bottom line on the income statement is not the only important figure on the financial statements, and may not even be the most important. There is another whole dimension of valuable information that can be obtained from the data reported in the financial statements. Ratio analysis is one of many tools that can be used to evaluate a company’s performance, its current status, and its evolution over time. And if you are the owner of the business, this type of analysis can help you make the right decisions to improve your operations and make your business stronger and more successful.
Ratio analysis as an evaluation tool
Obviously there are many different aspects and factors involved in evaluating a business, including management capability, innovations in products and technology, shifts in market demands, and general economic conditions, among others. But one of the advantages of using financial statements is that they provide you with objective, concrete data with which to perform analysis. Ratio analysis by itself is just one tool you can use in evaluating your own business, or a potential investment opportunity. For example, comparisons of balance sheets and income statements from one period to another can be very effective in detecting changes, trends and shifts. Calculating ratios based on the current period balance sheet and income statement can be very useful, and when combined with a comparative analysis from period to period, it becomes a very dynamic way of gauging performance.
How you use the insights you gain from your analytical work will of course depend on your purpose in reading the financial statements. If you are looking at a company in which you already have an investment, or in which you are thinking about investing, you may use the results of your analysis to either buy or sell, or to increase or decrease your holdings of that stock. If you are looking at your own company, you can use your analysis to see where your business is strong, and where it could use some adjustments or improvements. This will help you make financial decisions about your business operations.
Types of ratios
Some of the different types of ratios that can be calculated from data in the financial statements and used to evaluate a business include:
Liquidity ratios
Solvency ratios
Activity ratios
Profitability ratios
Liquidity ratios
Liquidity ratios measure a business’s ability to cover its obligations, without having to borrow or invest more money in the business. The idea is that there should be sufficient cash and assets that can be readily converted into cash to cover liabilities as they come due.
One of the most common liquidity ratios is:
Current Ratio = Current Assets / Current Liabilities
Current assets basically include cash, short-term investments and marketable securities, accounts receivable, inventory, and prepaid expenses. Current liabilities include accounts payable to vendors and employees, and installments on notes or loans that are due within one year. This ratio could also be seen as a measure of working capital – the difference between current assets and current liabilities. A company with a lot of working capital will be in a better position to expand and improve its operations. On the contrary, a company with negative working capital does not have sufficient resources to meet its current obligations, and therefore is not in a position to take advantage of opportunities for growth.
Another stringent test of liquidity is the:
Acid-test Ratio = Current Assets minus Inventories / Current Liabilities
Inventory is a current asset that may or may not be quickly converted into cash. This depends on the rate at which inventory is being turned over. By excluding inventory, the acid-test ratio only considers that part of current assets that can be readily converted into cash. This ratio, also called the Quick Ratio, tells how much of the business's short-term debt can be met by using the company's liquid assets at short notice.
A ratio that shows how many times inventory is turned over, or sold during the period is:
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
A high turnover ratio is a sign that products are being produced and sold quickly during the period. A ratio of 1.0, for example, would mean that at any given time you have enough inventory on hand to cover sales for the entire period. The higher this ratio, the more quickly inventory is being turned over and producing assets that are more liquid -- accounts receivable and then cash.
If you want an even clearer idea of exactly how much ready cash is on hand to cover current liabilities, you can use the:
Cash ratio = Cash + Marketable securities / Current Liabilities
The cash ratio measures the extent to which a business could quickly cover short-term liabilities, and therefore is of particular interest to short-term creditors. A ratio of 1.0 would indicate that all current liabilities would be covered at any average point in time by cash and marketable securities that could be readily sold and converted to cash. A ratio of less than 1.0 would mean that other assets, such as accounts receivable or inventory, would have to be converted to cash to cover short-term obligations. A ratio of greater than 1.0 means that there is more than enough cash on hand.
Solvency Ratios
Solvency ratios are measures to assess a company’s ability to meet its long-term obligations and thereby remain solvent and avoid bankruptcy. Two general, overall solvency ratios include:
Solvency Ratio = Total Assets / Total Liabilities
and
Solvency Ratio = Net Worth (Total Capital or Equity) / Total Liabilities
These ratios basically tell whether a company owns more than it owes. The higher the ratio, the more solvent the company.
Another ratio that can tell how much a company relies on debt to finance its assets is:
Debt Ratio = Total Debt / Total Assets
Traditionally, both short-term and long-term debts and assets are used in determining this ratio. In general, the lower a company’s reliance on debt to finance its assets, the less risky the company.
The debt to equity ratio is a measure of a company’s leverage – how much financing it has in the form of debt as compared with how much it has invested in the business.
Debt-equity Ratio = Total Liabilities / Total Owners’ Equity, or
Debt-equity Ratio = Long-Term Liabilities / Total Owners’ Equity
In assessing solvency, it is also important to take into consideration the breakdown of a company’s liabilities. Not all liabilities are debt in the form of bank loans or notes payable, for example. There are also accounts payable to vendors, salaries and wages payable, taxes payable, and accrued liabilities, among others. One of the measures of what debt constitutes in terms of total liabilities is:
Indebtedness Ratio = Total Debts / Total Liabilities
In general, a company that is heavy on debt may be better leveraged, but is also less solvent.
The debt repayment terms are another consideration. Short-term debt, payable within one year, may pose a greater burden on cash flow and eventual solvency than long-term debt, which is due beyond one year. A ratio used to quantify this is:
Short-term Debt Ratio or Quality of Debt = Short-term Debt / Total Debt
A lower value for this ratio would indicate less concern for installments coming due within a year.
There are other ratios intended to assess a company’s capacity to cover its debt repayments and financing costs. One of these ratios measures how interest expense is being covered by the net income the company is generating:
Interest expense coverage = Net income before interest and taxes / Interest expense
This ratio is also called Number of Times Interest Earned, and represents how many times the net income generated by the company, without considering interest and taxes, covers the total interest charge. The higher the ratio the more solvent the company.
Another similar ratio often used to measure a company’s capacity to cover its fixed charges is:
Ratio of Earnings to Fixed Charges = Earnings before income tax and fixed charges / Interest expense (including capitalized interest) and amortization of bond discount and issue costs
Capitalized interest is the amount of interest on a loan to finance a project or acquisition of fixed assets, that has been capitalized and included as part of the cost of the project or asset on the balance sheet. You will probably need to see the notes to the financial statements to find this figure.
Activity Ratios
Many useful gauges of operations can be calculated from data reported in the financial statements. For example, you can determine the average number of days it takes to collect on customer accounts, the average number of days to pay vendors, and how much of the operation is effectively being financed with payment terms extended by vendors.
Accounts Receivable Turnover = Total Credit Sales / Average Accounts Receivable
This tells you the average duration of accounts receivable for credit sales to customers. This in turn can be expressed in terms of the collection period, as follows:
Average Collection Period = Days in Year / Accounts Receivable Turnover
or
Days to Collect = Trade Accounts Receivable / Credit Sales x 365
A similar calculation can be made on the liabilities side, with accounts payable to vendors:
Days to Pay = Trade Accounts Payable / Purchases x 365
To determine how much of a company’s accounts receivable and inventory are effectively being financed by the credit extended to the company by its vendors:
Financing of Trade Accounts Receivable in terms of Trade Accounts Payable = Trade Accounts Payable / Trade Accounts Receivable
Financing of Inventory in terms of Trade Accounts Payable = Trade Accounts Payable / Inventory
Effectively managing the credit extended by vendors can help a company’s cash flow and therefore its liquidity and solvency.
From data reported on the income statement, various relationships can be calculated between different expenses and revenues, or a certain type of expense as a percentage of total expenses.
Labor Cost Percentage = Payroll and Related Expenses / Total Revenue or Total Expenses
Interest Expense Percentage = Interest Expense / Total Revenue or Total Expenses
These types of ratios or percentages can be calculated for any item on the income statement. Which accounts are more important will depend on the nature of the business. For example, some operations are more labor intensive and some are more capital intensive. In a labor intensive operation, the percentage that employee-related expenses, including wages, salaries and benefits, represent in terms of total operating expense is relevant. In a capital intensive operation, repairs and maintenance may take on more importance.
Profitability Ratios
One of the most common profitability ratios is the profit margin. This can be expressed as the gross profit margin or net profit margin, and it can be expressed by company, by sector, by product, or by individual unit. The information reported on the income statement will enable you to determine the overall profit margin. If additional breakdowns are provided, more detailed margins can be calculated.
Gross Profit Margin = Gross Income / Total Revenue
Net Profit Margin = Net Income / Total Revenue
Other commonly used ratios are returns, expressed as return on investment or equity, return on assets, and return on capital employed. These ratios measure a company’s ability to use its capital, or its assets, to generate additional value.
Return on Investment (ROI) or Return on Owners’ Equity = Net Income / Average Owners’ Equity
Return on Assets (ROA) = Net Income / Average Total Assets
Return on Capital Employed (ROCE) = Net Income Before Interest and Tax / Capital Employed (Total Assets minus Current Liabilities)
When evaluating investment opportunities, profits are often measured per share:
Earnings per Share = Net Profit After Tax and Dividends / Ordinary Shareholders' Equity
Another commonly used ratio to show the yield on an investment is:
Dividend Yield Ratio = Dividends per Share / Market Value per Share
And, to measure how the price of an investment correlates with the earnings on that investment, you can use the:
Price to Earnings Ratio = Market Value per Share / After-Tax Earnings per Share
Summary
The bottom line on the income statement is not the only important figure on the financial statements, and may not even be the most important. There is another whole dimension of valuable information that can be obtained from the data reported in the financial statements. Ratio analysis is one of many tools that can be used to evaluate a company’s performance, its current status, and its evolution over time. And if you are the owner of the business, this type of analysis can help you make the right decisions to improve your operations and make your business stronger and more successful.
Sunday, May 24, 2009
10 Principles of Change Management
Market transparency, labor mobility, global capital flows, and instantaneous communications have blown that comfortable scenario to smithereens. In most industries — and in almost all companies, from giants on down — heightened global competition has concentrated management’s collective mind on something that, in the past, it happily avoided: change. Successful companies, as Harvard Business School professor Rosabeth Moss Kanter told s+b in 1999, develop “a culture that just keeps moving all the time.”
This presents most senior executives with an unfamiliar challenge. In major transformations of large enterprises, they and their advisors conventionally focus their attention on devising the best strategic and tactical plans. But to succeed, they also must have an intimate understanding of the human side of change management — the alignment of the company’s culture, values, people, and behaviors — to encourage the desired results. Plans themselves do not capture value; value is realized only through the sustained, collective actions of the thousands — perhaps the tens of thousands — of employees who are responsible for designing, executing, and living with the changed environment.
Long-term structural transformation has four characteristics: scale (the change affects all or most of the organization), magnitude (it involves significant alterations of the status quo), duration (it lasts for months, if not years), and strategic importance. Yet companies will reap the rewards only when change occurs at the level of the individual employee.
Many senior executives know this and worry about it. When asked what keeps them up at night, CEOs involved in transformation often say they are concerned about how the work force will react, how they can get their team to work together, and how they will be able to lead their people. They also worry about retaining their company’s unique values and sense of identity and about creating a culture of commitment and performance. Leadership teams that fail to plan for the human side of change often find themselves wondering why their best-laid plans have gone awry.
No single methodology fits every company, but there is a set of practices, tools, and techniques that can be adapted to a variety of situations. What follows is a “Top 10” list of guiding principles for change management. Using these as a systematic, comprehensive framework, executives can understand what to expect, how to manage their own personal change, and how to engage the entire organization in the process.
1. Address the “human side” systematically. Any significant transformation creates “people issues.” New leaders will be asked to step up, jobs will be changed, new skills and capabilities must be developed, and employees will be uncertain and resistant. Dealing with these issues on a reactive, case-by-case basis puts speed, morale, and results at risk. A formal approach for managing change — beginning with the leadership team and then engaging key stakeholders and leaders — should be developed early, and adapted often as change moves through the organization. This demands as much data collection and analysis, planning, and implementation discipline as does a redesign of strategy, systems, or processes. The change-management approach should be fully integrated into program design and decision making, both informing and enabling strategic direction. It should be based on a realistic assessment of the organization’s history, readiness, and capacity to change.
2. Start at the top. Because change is inherently unsettling for people at all levels of an organization, when it is on the horizon, all eyes will turn to the CEO and the leadership team for strength, support, and direction. The leaders themselves must embrace the new approaches first, both to challenge and to motivate the rest of the institution. They must speak with one voice and model the desired behaviors. The executive team also needs to understand that, although its public face may be one of unity, it, too, is composed of individuals who are going through stressful times and need to be supported.
Executive teams that work well together are best positioned for success. They are aligned and committed to the direction of change, understand the culture and behaviors the changes intend to introduce, and can model those changes themselves. At one large transportation company, the senior team rolled out an initiative to improve the efficiency and performance of its corporate and field staff before addressing change issues at the officer level. The initiative realized initial cost savings but stalled as employees began to question the leadership team’s vision and commitment. Only after the leadership team went through the process of aligning and committing to the change initiative was the work force able to deliver downstream results.
3. Involve every layer. As transformation programs progress from defining strategy and setting targets to design and implementation, they affect different levels of the organization. Change efforts must include plans for identifying leaders throughout the company and pushing responsibility for design and implementation down, so that change “cascades” through the organization. At each layer of the organization, the leaders who are identified and trained must be aligned to the company’s vision, equipped to execute their specific mission, and motivated to make change happen.
A major multiline insurer with consistently flat earnings decided to change performance and behavior in preparation for going public. The company followed this “cascading leadership” methodology, training and supporting teams at each stage. First, 10 officers set the strategy, vision, and targets. Next, more than 60 senior executives and managers designed the core of the change initiative. Then 500 leaders from the field drove implementation. The structure remained in place throughout the change program, which doubled the company’s earnings far ahead of schedule. This approach is also a superb way for a company to identify its next generation of leadership.
4. Make the formal case. Individuals are inherently rational and will question to what extent change is needed, whether the company is headed in the right direction, and whether they want to commit personally to making change happen. They will look to the leadership for answers. The articulation of a formal case for change and the creation of a written vision statement are invaluable opportunities to create or compel leadership-team alignment.
Three steps should be followed in developing the case: First, confront reality and articulate a convincing need for change. Second, demonstrate faith that the company has a viable future and the leadership to get there. Finally, provide a road map to guide behavior and decision making. Leaders must then customize this message for various internal audiences, describing the pending change in terms that matter to the individuals.
A consumer packaged-goods company experiencing years of steadily declining earnings determined that it needed to significantly restructure its operations — instituting, among other things, a 30 percent work force reduction — to remain competitive. In a series of offsite meetings, the executive team built a brutally honest business case that downsizing was the only way to keep the business viable, and drew on the company’s proud heritage to craft a compelling vision to lead the company forward. By confronting reality and helping employees understand the necessity for change, leaders were able to motivate the organization to follow the new direction in the midst of the largest downsizing in the company’s history. Instead of being shell-shocked and demoralized, those who stayed felt a renewed resolve to help the enterprise advance.
5. Create ownership. Leaders of large change programs must overperform during the transformation and be the zealots who create a critical mass among the work force in favor of change. This requires more than mere buy-in or passive agreement that the direction of change is acceptable. It demands ownership by leaders willing to accept responsibility for making change happen in all of the areas they influence or control. Ownership is often best created by involving people in identifying problems and crafting solutions. It is reinforced by incentives and rewards. These can be tangible (for example, financial compensation) or psychological (for example, camaraderie and a sense of shared destiny).
At a large health-care organization that was moving to a shared-services model for administrative support, the first department to create detailed designs for the new organization was human resources. Its personnel worked with advisors in cross-functional teams for more than six months. But as the designs were being finalized, top departmental executives began to resist the move to implementation. While agreeing that the work was top-notch, the executives realized they hadn’t invested enough individual time in the design process to feel the ownership required to begin implementation. On the basis of their feedback, the process was modified to include a “deep dive.” The departmental executives worked with the design teams to learn more, and get further exposure to changes that would occur. This was the turning point; the transition then happened quickly. It also created a forum for top executives to work as a team, creating a sense of alignment and unity that the group hadn’t felt before.
6. Communicate the message. Too often, change leaders make the mistake of believing that others understand the issues, feel the need to change, and see the new direction as clearly as they do. The best change programs reinforce core messages through regular, timely advice that is both inspirational and practicable. Communications flow in from the bottom and out from the top, and are targeted to provide employees the right information at the right time and to solicit their input and feedback. Often this will require overcommunication through multiple, redundant channels.
In the late 1990s, the commissioner of the Internal Revenue Service, Charles O. Rossotti, had a vision: The IRS could treat taxpayers as customers and turn a feared bureaucracy into a world-class service organization. Getting more than 100,000 employees to think and act differently required more than just systems redesign and process change. IRS leadership designed and executed an ambitious communications program including daily voice mails from the commissioner and his top staff, training sessions, videotapes, newsletters, and town hall meetings that continued through the transformation. Timely, constant, practical communication was at the heart of the program, which brought the IRS’s customer ratings from the lowest in various surveys to its current ranking above the likes of McDonald’s and most airlines.
7. Assess the cultural landscape. Successful change programs pick up speed and intensity as they cascade down, making it critically important that leaders understand and account for culture and behaviors at each level of the organization. Companies often make the mistake of assessing culture either too late or not at all. Thorough cultural diagnostics can assess organizational readiness to change, bring major problems to the surface, identify conflicts, and define factors that can recognize and influence sources of leadership and resistance. These diagnostics identify the core values, beliefs, behaviors, and perceptions that must be taken into account for successful change to occur. They serve as the common baseline for designing essential change elements, such as the new corporate vision, and building the infrastructure and programs needed to drive change.
8. Address culture explicitly. Once the culture is understood, it should be addressed as thoroughly as any other area in a change program. Leaders should be explicit about the culture and underlying behaviors that will best support the new way of doing business, and find opportunities to model and reward those behaviors. This requires developing a baseline, defining an explicit end-state or desired culture, and devising detailed plans to make the transition.
Company culture is an amalgam of shared history, explicit values and beliefs, and common attitudes and behaviors. Change programs can involve creating a culture (in new companies or those built through multiple acquisitions), combining cultures (in mergers or acquisitions of large companies), or reinforcing cultures (in, say, long-established consumer goods or manufacturing companies). Understanding that all companies have a cultural center — the locus of thought, activity, influence, or personal identification — is often an effective way to jump-start culture change.
A consumer goods company with a suite of premium brands determined that business realities demanded a greater focus on profitability and bottom-line accountability. In addition to redesigning metrics and incentives, it developed a plan to systematically change the company’s culture, beginning with marketing, the company’s historical center. It brought the marketing staff into the process early to create enthusiasts for the new philosophy who adapted marketing campaigns, spending plans, and incentive programs to be more accountable. Seeing these culture leaders grab onto the new program, the rest of the company quickly fell in line.
9. Prepare for the unexpected. No change program goes completely according to plan. People react in unexpected ways; areas of anticipated resistance fall away; and the external environment shifts. Effectively managing change requires continual reassessment of its impact and the organization’s willingness and ability to adopt the next wave of transformation. Fed by real data from the field and supported by information and solid decision-making processes, change leaders can then make the adjustments necessary to maintain momentum and drive results.
A leading U.S. health-care company was facing competitive and financial pressures from its inability to react to changes in the marketplace. A diagnosis revealed shortcomings in its organizational structure and governance, and the company decided to implement a new operating model. In the midst of detailed design, a new CEO and leadership team took over. The new team was initially skeptical, but was ultimately convinced that a solid case for change, grounded in facts and supported by the organization at large, existed. Some adjustments were made to the speed and sequence of implementation, but the fundamentals of the new operating model remained unchanged.
10. Speak to the individual. Change is both an institutional journey and a very personal one. People spend many hours each week at work; many think of their colleagues as a second family. Individuals (or teams of individuals) need to know how their work will change, what is expected of them during and after the change program, how they will be measured, and what success or failure will mean for them and those around them. Team leaders should be as honest and explicit as possible. People will react to what they see and hear around them, and need to be involved in the change process. Highly visible rewards, such as promotion, recognition, and bonuses, should be provided as dramatic reinforcement for embracing change. Sanction or removal of people standing in the way of change will reinforce the institution’s commitment.
Most leaders contemplating change know that people matter. It is all too tempting, however, to dwell on the plans and processes, which don’t talk back and don’t respond emotionally, rather than face up to the more difficult and more critical human issues. But mastering the “soft” side of change management needn’t be a mystery
This presents most senior executives with an unfamiliar challenge. In major transformations of large enterprises, they and their advisors conventionally focus their attention on devising the best strategic and tactical plans. But to succeed, they also must have an intimate understanding of the human side of change management — the alignment of the company’s culture, values, people, and behaviors — to encourage the desired results. Plans themselves do not capture value; value is realized only through the sustained, collective actions of the thousands — perhaps the tens of thousands — of employees who are responsible for designing, executing, and living with the changed environment.
Long-term structural transformation has four characteristics: scale (the change affects all or most of the organization), magnitude (it involves significant alterations of the status quo), duration (it lasts for months, if not years), and strategic importance. Yet companies will reap the rewards only when change occurs at the level of the individual employee.
Many senior executives know this and worry about it. When asked what keeps them up at night, CEOs involved in transformation often say they are concerned about how the work force will react, how they can get their team to work together, and how they will be able to lead their people. They also worry about retaining their company’s unique values and sense of identity and about creating a culture of commitment and performance. Leadership teams that fail to plan for the human side of change often find themselves wondering why their best-laid plans have gone awry.
No single methodology fits every company, but there is a set of practices, tools, and techniques that can be adapted to a variety of situations. What follows is a “Top 10” list of guiding principles for change management. Using these as a systematic, comprehensive framework, executives can understand what to expect, how to manage their own personal change, and how to engage the entire organization in the process.
1. Address the “human side” systematically. Any significant transformation creates “people issues.” New leaders will be asked to step up, jobs will be changed, new skills and capabilities must be developed, and employees will be uncertain and resistant. Dealing with these issues on a reactive, case-by-case basis puts speed, morale, and results at risk. A formal approach for managing change — beginning with the leadership team and then engaging key stakeholders and leaders — should be developed early, and adapted often as change moves through the organization. This demands as much data collection and analysis, planning, and implementation discipline as does a redesign of strategy, systems, or processes. The change-management approach should be fully integrated into program design and decision making, both informing and enabling strategic direction. It should be based on a realistic assessment of the organization’s history, readiness, and capacity to change.
2. Start at the top. Because change is inherently unsettling for people at all levels of an organization, when it is on the horizon, all eyes will turn to the CEO and the leadership team for strength, support, and direction. The leaders themselves must embrace the new approaches first, both to challenge and to motivate the rest of the institution. They must speak with one voice and model the desired behaviors. The executive team also needs to understand that, although its public face may be one of unity, it, too, is composed of individuals who are going through stressful times and need to be supported.
Executive teams that work well together are best positioned for success. They are aligned and committed to the direction of change, understand the culture and behaviors the changes intend to introduce, and can model those changes themselves. At one large transportation company, the senior team rolled out an initiative to improve the efficiency and performance of its corporate and field staff before addressing change issues at the officer level. The initiative realized initial cost savings but stalled as employees began to question the leadership team’s vision and commitment. Only after the leadership team went through the process of aligning and committing to the change initiative was the work force able to deliver downstream results.
3. Involve every layer. As transformation programs progress from defining strategy and setting targets to design and implementation, they affect different levels of the organization. Change efforts must include plans for identifying leaders throughout the company and pushing responsibility for design and implementation down, so that change “cascades” through the organization. At each layer of the organization, the leaders who are identified and trained must be aligned to the company’s vision, equipped to execute their specific mission, and motivated to make change happen.
A major multiline insurer with consistently flat earnings decided to change performance and behavior in preparation for going public. The company followed this “cascading leadership” methodology, training and supporting teams at each stage. First, 10 officers set the strategy, vision, and targets. Next, more than 60 senior executives and managers designed the core of the change initiative. Then 500 leaders from the field drove implementation. The structure remained in place throughout the change program, which doubled the company’s earnings far ahead of schedule. This approach is also a superb way for a company to identify its next generation of leadership.
4. Make the formal case. Individuals are inherently rational and will question to what extent change is needed, whether the company is headed in the right direction, and whether they want to commit personally to making change happen. They will look to the leadership for answers. The articulation of a formal case for change and the creation of a written vision statement are invaluable opportunities to create or compel leadership-team alignment.
Three steps should be followed in developing the case: First, confront reality and articulate a convincing need for change. Second, demonstrate faith that the company has a viable future and the leadership to get there. Finally, provide a road map to guide behavior and decision making. Leaders must then customize this message for various internal audiences, describing the pending change in terms that matter to the individuals.
A consumer packaged-goods company experiencing years of steadily declining earnings determined that it needed to significantly restructure its operations — instituting, among other things, a 30 percent work force reduction — to remain competitive. In a series of offsite meetings, the executive team built a brutally honest business case that downsizing was the only way to keep the business viable, and drew on the company’s proud heritage to craft a compelling vision to lead the company forward. By confronting reality and helping employees understand the necessity for change, leaders were able to motivate the organization to follow the new direction in the midst of the largest downsizing in the company’s history. Instead of being shell-shocked and demoralized, those who stayed felt a renewed resolve to help the enterprise advance.
5. Create ownership. Leaders of large change programs must overperform during the transformation and be the zealots who create a critical mass among the work force in favor of change. This requires more than mere buy-in or passive agreement that the direction of change is acceptable. It demands ownership by leaders willing to accept responsibility for making change happen in all of the areas they influence or control. Ownership is often best created by involving people in identifying problems and crafting solutions. It is reinforced by incentives and rewards. These can be tangible (for example, financial compensation) or psychological (for example, camaraderie and a sense of shared destiny).
At a large health-care organization that was moving to a shared-services model for administrative support, the first department to create detailed designs for the new organization was human resources. Its personnel worked with advisors in cross-functional teams for more than six months. But as the designs were being finalized, top departmental executives began to resist the move to implementation. While agreeing that the work was top-notch, the executives realized they hadn’t invested enough individual time in the design process to feel the ownership required to begin implementation. On the basis of their feedback, the process was modified to include a “deep dive.” The departmental executives worked with the design teams to learn more, and get further exposure to changes that would occur. This was the turning point; the transition then happened quickly. It also created a forum for top executives to work as a team, creating a sense of alignment and unity that the group hadn’t felt before.
6. Communicate the message. Too often, change leaders make the mistake of believing that others understand the issues, feel the need to change, and see the new direction as clearly as they do. The best change programs reinforce core messages through regular, timely advice that is both inspirational and practicable. Communications flow in from the bottom and out from the top, and are targeted to provide employees the right information at the right time and to solicit their input and feedback. Often this will require overcommunication through multiple, redundant channels.
In the late 1990s, the commissioner of the Internal Revenue Service, Charles O. Rossotti, had a vision: The IRS could treat taxpayers as customers and turn a feared bureaucracy into a world-class service organization. Getting more than 100,000 employees to think and act differently required more than just systems redesign and process change. IRS leadership designed and executed an ambitious communications program including daily voice mails from the commissioner and his top staff, training sessions, videotapes, newsletters, and town hall meetings that continued through the transformation. Timely, constant, practical communication was at the heart of the program, which brought the IRS’s customer ratings from the lowest in various surveys to its current ranking above the likes of McDonald’s and most airlines.
7. Assess the cultural landscape. Successful change programs pick up speed and intensity as they cascade down, making it critically important that leaders understand and account for culture and behaviors at each level of the organization. Companies often make the mistake of assessing culture either too late or not at all. Thorough cultural diagnostics can assess organizational readiness to change, bring major problems to the surface, identify conflicts, and define factors that can recognize and influence sources of leadership and resistance. These diagnostics identify the core values, beliefs, behaviors, and perceptions that must be taken into account for successful change to occur. They serve as the common baseline for designing essential change elements, such as the new corporate vision, and building the infrastructure and programs needed to drive change.
8. Address culture explicitly. Once the culture is understood, it should be addressed as thoroughly as any other area in a change program. Leaders should be explicit about the culture and underlying behaviors that will best support the new way of doing business, and find opportunities to model and reward those behaviors. This requires developing a baseline, defining an explicit end-state or desired culture, and devising detailed plans to make the transition.
Company culture is an amalgam of shared history, explicit values and beliefs, and common attitudes and behaviors. Change programs can involve creating a culture (in new companies or those built through multiple acquisitions), combining cultures (in mergers or acquisitions of large companies), or reinforcing cultures (in, say, long-established consumer goods or manufacturing companies). Understanding that all companies have a cultural center — the locus of thought, activity, influence, or personal identification — is often an effective way to jump-start culture change.
A consumer goods company with a suite of premium brands determined that business realities demanded a greater focus on profitability and bottom-line accountability. In addition to redesigning metrics and incentives, it developed a plan to systematically change the company’s culture, beginning with marketing, the company’s historical center. It brought the marketing staff into the process early to create enthusiasts for the new philosophy who adapted marketing campaigns, spending plans, and incentive programs to be more accountable. Seeing these culture leaders grab onto the new program, the rest of the company quickly fell in line.
9. Prepare for the unexpected. No change program goes completely according to plan. People react in unexpected ways; areas of anticipated resistance fall away; and the external environment shifts. Effectively managing change requires continual reassessment of its impact and the organization’s willingness and ability to adopt the next wave of transformation. Fed by real data from the field and supported by information and solid decision-making processes, change leaders can then make the adjustments necessary to maintain momentum and drive results.
A leading U.S. health-care company was facing competitive and financial pressures from its inability to react to changes in the marketplace. A diagnosis revealed shortcomings in its organizational structure and governance, and the company decided to implement a new operating model. In the midst of detailed design, a new CEO and leadership team took over. The new team was initially skeptical, but was ultimately convinced that a solid case for change, grounded in facts and supported by the organization at large, existed. Some adjustments were made to the speed and sequence of implementation, but the fundamentals of the new operating model remained unchanged.
10. Speak to the individual. Change is both an institutional journey and a very personal one. People spend many hours each week at work; many think of their colleagues as a second family. Individuals (or teams of individuals) need to know how their work will change, what is expected of them during and after the change program, how they will be measured, and what success or failure will mean for them and those around them. Team leaders should be as honest and explicit as possible. People will react to what they see and hear around them, and need to be involved in the change process. Highly visible rewards, such as promotion, recognition, and bonuses, should be provided as dramatic reinforcement for embracing change. Sanction or removal of people standing in the way of change will reinforce the institution’s commitment.
Most leaders contemplating change know that people matter. It is all too tempting, however, to dwell on the plans and processes, which don’t talk back and don’t respond emotionally, rather than face up to the more difficult and more critical human issues. But mastering the “soft” side of change management needn’t be a mystery
Sunday, May 10, 2009
防范
防范掠夺的小贴士：
1． 尽量结伴外出。
2． 选择州在于交通工具方向的路旁，因为这可以看得见迎面而来的车辆，加以防备。
3． 将手提袋或背包背或拿在靠内的方向，使近身的匪徒较难以下手抢夺。
4． 情况容许的话，勿带手提袋出门，尽量使用腰包或将钱包放进裤袋里。
5． 身上避免带过多现金以防钱财露眼。
6． 尽量选择人多的大路或光亮的马路，避免走偏僻小巷的捷径。
1． 尽量结伴外出。
2． 选择州在于交通工具方向的路旁，因为这可以看得见迎面而来的车辆，加以防备。
3． 将手提袋或背包背或拿在靠内的方向，使近身的匪徒较难以下手抢夺。
4． 情况容许的话，勿带手提袋出门，尽量使用腰包或将钱包放进裤袋里。
5． 身上避免带过多现金以防钱财露眼。
6． 尽量选择人多的大路或光亮的马路，避免走偏僻小巷的捷径。
防范抢劫小贴士：
1． 勿携带过多现金出门，使到钱财露眼招惹匪徒。
2． 勿佩戴耀眼的饰物，如果非得如此，则找人陪伴，避免落单。
3． 商店装设闭路电视，确保正常操作。
防范破门行窃小贴士：
1． 确定你采用稳固的门锁。
2． 不管出门多久都需要有深锁大门的习惯。
3． 各个走廊，出入口处以及屋外需够明亮。
4． 经常修剪长得过高的树枝或草丛以防止不速之客利用作为隐蔽之处，进而闯入屋内造案。
5． 避免把锁匙藏在显眼的地方如地毯或花盆下。
6． 安装警报系统。
7． 若离家一段时期，需交代邻居或附近巡逻的警员，留意屋子的状况。
防范偷车小贴士（包括电单车）：
1． 把车辆停放在较亮的地方。
2． 紧记得锁车门，包括在驾车时。
3． 避免把重要物件包括密封的包裹或箱子留在车内显眼的地方，引起匪徒注目。
4． 在下车后确定车门已安全的锁上。
5． 在离合器与煞车器上装置安全锁，以及加上防盗系统。
6． 尽可能在下车前拆下光碟机，收藏在隐秘的地方。
7． 用最安全实用的锁头紧锁电单车。
8． 喷沙汽车镜子。
9． 别把车锁匙交给代客泊车员。
Tuesday, April 21, 2009
Malaysia Education Syatem
A decade before the end of the British rule, the educational system in Malaya was reorganized along the lines of the Barnes Report of 1951. Up to that point of time, Malaya's educational system lacked uniformity in curriculum and an articulated rationale for a policy which would be relevant to the political and socio-economic goals of the people. The country's three principal ethnic communities—Malays, Chinese and Indians (mostly Tamils from South India)—ran their own schools, the latter two often importing a syllabus used in the countries of their origin. The Barnes Report recommended a national school system, which would provide primary education for 6 years in Malaya and English, hoping that over a period of time, the attraction to have separate schools in Chinese and Tamil would wane and disappear. The reaction of the Chinese community to the Barnes Report was not totally positive. While the community agreed with the basic recommendation that Malay be treated as the principal language, it felt that there should be some provision to recognize Chinese and Tamil as important components of a new definition of Malaya's national identity.
Partly to pacify the ethnic sensitivities, the colonial government approved a modified formula that would allow bilingualism in Malay schools (Malay and English) and three language "solution" in Tamil and Chinese schools (either Tamil-Malay-English or Chinese-Malay-English). It recommended a common curriculum for all schools, hoping that a national school system would evolve. In 1955, two years before Malaya's independence, the Razak Report endorsed the concept of a national education system based on Malay (the national language), being the main medium of instruction. A key paragraph from it was reproduced in Section 3 of the Education Ordinance of 1957:
A national system of education acceptable to the people of the Federation [of Malaya] as a whole which will satisfy their needs and promote their cultural, social, economic and political development as a nation, having regard to the intention to make Malay the national language of the country while preserving and sustaining the growth of the language and culture of other communities living in the country.
In the national discussion that followed the Razak Report, two alternative models figured: Switzerland with three languages had fostered national unity "without impairing the autonomy and equality of different languages and cultures." On the other hand, the United States had assimilated the divergent immigrant communities by the use of a common dominant language. The Razak Report revealed an intention to follow the American model. At the same time, the last part of the concluding sentence endorsed the need to include the Swiss component of "sustaining the growth of other languages and cultures" in order to foster the unity of all people.
The Razak Report recommended two types of secondary schools: those using Malay as the medium of instruction to be called "national schools" while those using Chinese, Tamil or English were to be designated "national-type schools." Both being "national," the government should give financial aid to both the types. With the attainment of independence, the new government basically followed the Razak Report. There was no problem at the primary school level since the child's mother tongue would be the medium of instruction. The parents had the option to choose any other language; in practice, such a choice would narrow it down to the use of English as the medium of instruction. There was also a general consensus that at a later stage at the primary level, English and/or Malay could be learned as a "foreign language." The emphasis in these early years was on the need to establish a system that would foster national unity but not at the cost of harmony among the three communities, each of them being keen on preserving its own cultural traditions. Therefore, until the mid-1960s, the government focused on upgrading the content of education rather than on the medium of instruction. Thus, the grant-in-aid to schools were tied to adopting the national curriculum and to offer professional training to teachers to qualify them to teach the advanced syllabus in most subjects particularly, mathematics and sciences. This was because the government felt obliged to link education to the needs of an expanding, modern economy.
In 1967, Malaysia proclaimed Bahasa Melayu the national language for purposes of administration and education. In an effort to promote national integration, it was progressively made the main medium of instruction in schools and institutions of higher learning. At the same time, the people had the option to use their mother tongue and other languages.
In late 2000, the Malaysian government announced that technology education and high-tech industries would have leading roles in the country's economy which would thereafter be predominantly "knowledge-based" or "K-economy." It would address the country's "digital divide by de-emphasizing past practices of promoting businesses run by ethnic Malays." For this purpose the government would focus on education "as a means to deliver the promise of empowering the individual in the twenty-first century." In real terms, economy and education would aim at closing the digital divide between the rural and urban centers of population. The emphasis on high-tech economy and education shifted the government focus from the practice of hand-picking individuals and businesses under the indigenous or Bumiputra policy to introducing information technology at the level of the masses.
The government had emphasized developing a technology infrastructure program called the Multimedia Super Corridor (MSC). By the end of 1999, there were 32 MSC-approved companies, 33 percent of which were software companies and 29 percent dealt with multimedia. Together, the MSC companies helped to augment the manufacturing output of the country by an estimated 20 percent for several years. There was criticism, however, that the MSC helped the upper class industrialists and businessmen leaving the middle and lower classes and rural populations out of the prosperity loop. The anomaly would be rectified through the new policy. The 2001 budget provided for the spread of computer literacy on a mass scale, including computers in all schools, building 167 schools and 4 new universities, and allocating $316 million for training institutes. If the trend continues, Malaysia would join nearby Singapore in its efforts to minimize the digital divide.
Partly to pacify the ethnic sensitivities, the colonial government approved a modified formula that would allow bilingualism in Malay schools (Malay and English) and three language "solution" in Tamil and Chinese schools (either Tamil-Malay-English or Chinese-Malay-English). It recommended a common curriculum for all schools, hoping that a national school system would evolve. In 1955, two years before Malaya's independence, the Razak Report endorsed the concept of a national education system based on Malay (the national language), being the main medium of instruction. A key paragraph from it was reproduced in Section 3 of the Education Ordinance of 1957:
A national system of education acceptable to the people of the Federation [of Malaya] as a whole which will satisfy their needs and promote their cultural, social, economic and political development as a nation, having regard to the intention to make Malay the national language of the country while preserving and sustaining the growth of the language and culture of other communities living in the country.
In the national discussion that followed the Razak Report, two alternative models figured: Switzerland with three languages had fostered national unity "without impairing the autonomy and equality of different languages and cultures." On the other hand, the United States had assimilated the divergent immigrant communities by the use of a common dominant language. The Razak Report revealed an intention to follow the American model. At the same time, the last part of the concluding sentence endorsed the need to include the Swiss component of "sustaining the growth of other languages and cultures" in order to foster the unity of all people.
The Razak Report recommended two types of secondary schools: those using Malay as the medium of instruction to be called "national schools" while those using Chinese, Tamil or English were to be designated "national-type schools." Both being "national," the government should give financial aid to both the types. With the attainment of independence, the new government basically followed the Razak Report. There was no problem at the primary school level since the child's mother tongue would be the medium of instruction. The parents had the option to choose any other language; in practice, such a choice would narrow it down to the use of English as the medium of instruction. There was also a general consensus that at a later stage at the primary level, English and/or Malay could be learned as a "foreign language." The emphasis in these early years was on the need to establish a system that would foster national unity but not at the cost of harmony among the three communities, each of them being keen on preserving its own cultural traditions. Therefore, until the mid-1960s, the government focused on upgrading the content of education rather than on the medium of instruction. Thus, the grant-in-aid to schools were tied to adopting the national curriculum and to offer professional training to teachers to qualify them to teach the advanced syllabus in most subjects particularly, mathematics and sciences. This was because the government felt obliged to link education to the needs of an expanding, modern economy.
In 1967, Malaysia proclaimed Bahasa Melayu the national language for purposes of administration and education. In an effort to promote national integration, it was progressively made the main medium of instruction in schools and institutions of higher learning. At the same time, the people had the option to use their mother tongue and other languages.
In late 2000, the Malaysian government announced that technology education and high-tech industries would have leading roles in the country's economy which would thereafter be predominantly "knowledge-based" or "K-economy." It would address the country's "digital divide by de-emphasizing past practices of promoting businesses run by ethnic Malays." For this purpose the government would focus on education "as a means to deliver the promise of empowering the individual in the twenty-first century." In real terms, economy and education would aim at closing the digital divide between the rural and urban centers of population. The emphasis on high-tech economy and education shifted the government focus from the practice of hand-picking individuals and businesses under the indigenous or Bumiputra policy to introducing information technology at the level of the masses.
The government had emphasized developing a technology infrastructure program called the Multimedia Super Corridor (MSC). By the end of 1999, there were 32 MSC-approved companies, 33 percent of which were software companies and 29 percent dealt with multimedia. Together, the MSC companies helped to augment the manufacturing output of the country by an estimated 20 percent for several years. There was criticism, however, that the MSC helped the upper class industrialists and businessmen leaving the middle and lower classes and rural populations out of the prosperity loop. The anomaly would be rectified through the new policy. The 2001 budget provided for the spread of computer literacy on a mass scale, including computers in all schools, building 167 schools and 4 new universities, and allocating $316 million for training institutes. If the trend continues, Malaysia would join nearby Singapore in its efforts to minimize the digital divide.
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