Here’s an excerpt from article written by Jamie Campbell, Kenny Kurtzman, and Adam Michaels for strategy+business magazine, published by Booz & Company. To read the complete article, check out the free resources, sign up for email updates, and obtain subscription information, please click here.
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Start by choosing the metrics that matter most for your company, and then ensure the support of your employees and partners.
Many executives think of business intelligence (BI) merely as a software solution that needs to be bought and installed, a reporting tool for serving up data on a convenient “dashboard.” As a result of this misperception — and despite the significant procurement, installation, and maintenance costs — BI systems often generate inaccurate data or distract employees by delving too deeply into corporate minutiae. Gartner Inc., an IT research and advisory firm, predicts that through 2012, 35 percent of the top 5,000 global companies will regularly fail to make insightful decisions because they lack the right information, processes, and tools.
A fairly small number of executives and companies, in contrast, have discovered that true business intelligence is the key to running a performance-oriented organization. They use their systems to home in on a selected group of key performance indicators, often custom-crafted, that help them define corporate strategy and drive profitability. They have found that the data they receive gives them the ability to make sense of markets; to identify strengths and weaknesses; to measure the progress of the company against its goals; and to employ the skills, processes, technologies, applications, and practices that support good decision making.
We’ve witnessed these business intelligence success stories firsthand. One leading global logistics provider, for example, which had grown to more than 470,000 employees in 220 countries, recognized its need to reduce complexity, improve transparency, and transition from intuition-based to fact-based decision making. The company designed a new common reporting system that consolidated four business units and more than 3,000 reporting entities worldwide. And the key performance indicators that emerged as a result enabled the management team to improve financial reporting capabilities, increase financial control and transparency throughout the company, and harmonize the financial systems — and saved more than €1 billion (approximately US$1.4 billion).
In another example of a best-in-class BI implementation, a global software company worked to align its strategy by measuring the relative value of growth — an assessment of the strength the market places on revenue growth relative to margin growth — across its entire product portfolio, helping management balance the portfolio with corporate strategy. From the beginning, the company developed a clear message about its goal of improving top-line growth and share price, and built a strong case for change internally and externally. As a result, the company drove annual top-line growth from 4 percent to 7 percent and nearly doubled its stock price in two years.
The reason that most companies aren’t getting the most out of their business intelligence has nothing to do with the software itself. Most off-the-shelf BI products are easy to implement and incredibly powerful; they are rich with features and capable of aggregating, integrating, and analyzing data from nearly any part of the organization. The reason BI seems to be failing companies is that many of them have stumbled in their early attempts to leverage this performance-driven approach to running a business. Very few companies have the discipline to focus their operations in every business unit and product line on the things they do best. Those that do are the companies that identify their strongest internal capabilities; set thoughtful, strategic goals for them; and then constantly — almost obsessively — measure their performance against those goals.
When deployed properly, business intelligence should help define strategy, drive profitability, and develop a performance-oriented culture throughout an organization. It is much more than a reporting tool. Using BI is a way of doing business. Conceiving of metrics that will measure progress toward specific goals is critical. Once the right metrics have been identified, executives should focus on gaining the support of key stakeholders and the cooperation of their employees and partners to ensure smooth implementation.
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To read the complete article, check out the resources, sign up for email updates, and obtain subscription information, please click here.
Jamie Campbell is a principal with Booz & Company based in Houston. He focuses on performance management for technology clients.
Kenny Kurtzman is a senior partner with Booz & Company based in Houston. He leads the firm’s North American technology and communications practice, with a focus on corporate and business unit strategies, M&A, operations improvement, and organizational change.
Adam Michaels is a principal with Booz & Company based in New York. He specializes in developing and implementing innovative supply chain strategies to support new product introductions across consumer, media, and digital industries.
I have a stack of books I have never read, probably will never get around to, but occasionally pick up and peruse. (Do you have such a stack?)
Well, buried in that stack, I found a treasure. First, my bias: I belive that keeping things simple really, really helps. And this book is filled with “keeping it simple” language. In addition, I am a big fan of the basics. And, though I think I know most of the business basics, it is good to be reminded now and then.
The book is: China’s Management Revolution: Spirit, Land, Energy. The author is Charles-Edouard Bouée, a true international business person. MBA from Harvard Business School, Master of Science from Ecole Centrale Paris, and a Master’s Degree in Law from Paris University, he has spent time in Asia, Paris, London, North Africa… in other words, he’s been around, with eyes wide open and listening ears everywhere he has been.
This little jewel has a terrific summary of the “knowing, doing, being” emphasis written about by Srikant Datar, David Garvin, and Parick Cullen of HBS, in their book Rethinking the MBA: Business Education at a Crossroads.
In his discussion of the “knowing, doing, being” idea, he includes this paragraph:
To do, managers need the skills, capabilities, and techniques that lie at the heart of the practice of effective management. Examples include executing tasks as a team member, implementing a project, conducting performance reviews, delivering a presentation, selling a product, and innovating.
Or… let’s look at this in a list format:
• executing tasks as a team member
• implementing a project
• conducting performance reviews
• delivering a presentation
• selling a product
A good list. I think it probably gives us enough to work on for a few days….
Here is an excerpt from PsyBlog, a website that features scientific research into how the mind works. Its author is Jeremy Dean, currently a researcher at University College London, working towards a PhD, having previously completed an MSc in Research Methods in Psychology at the same institution. The studies he covers have been published in reputable academic journals in many different areas of psychology.
Image credit: Angie Torres
To read the complete article, check out others, and sign up for email updates, please click here.
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Psychological experiments demonstrate the power of a simple technique for committing to goals.
Here’s a brief story about why we all sometimes get distracted from the most important goals in our lives. Perhaps you recognise it?
You are thinking about changing your job because your boss is a pain and you’re stagnating. As the weeks pass you think about how good it would feel to work for an organisation that really valued you. You think this might be a good goal to commit to but…
Work is busy at the moment, the money is OK and your home-life is also packed. And don’t even mention the economy. When do you have time to update your CV and start exploring the options?
Apart from anything else you’ve been thinking about learning a musical instrument. With the lessons and hours of practice there wouldn’t be any time for interviews.
A few months pass. You forget about changing your job and start to fantasise about learning the piano. Wouldn’t it be wonderful after a hard day’s work to immerse yourself in music?
Unfortunately everyday life intervenes again and you do little more than search online for the price of electric pianos. Then you wonder if what your life needs is…and so on.
After six months you come back full circle to changing your job, still without having made a real start towards any of these goals.
Written like this, with six months compressed into a few paragraphs, it’s obvious the problem is a lack of goal commitment; although in reality, with everyday life to cope with, the pattern can be more difficult to spot.
One major reason we don’t achieve our life’s goals is a lack of commitment. This article describes psychology experiments that suggest how we can encourage ourselves to commit to beneficial goals that could change our lives.
In a previous article we saw some of the dangers of fantasising about the future. Here, in a series of experiments by Gabriele Oettingen and colleagues, fantasy is involved again, but this time combined with a sobering dose of reality (Oettingen et al., 2001).
The researchers divided 136 participants into three groups and gave them each a different way of thinking about how they wanted to solve a problem, in this case it was an interpersonal one.
Indulge: imagine a positive vision of the problem solved.
Dwell: think about the negative aspects of the current situation.
Contrast: first imagine a positive vision of the problem solved, then think about the negative aspects of reality. With both in mind, participants were asked to carry out a ‘reality check’, comparing their fantasy with reality.
Crucially, participants were also asked about their expectations of success in reaching their goal.
The researchers found that the contrast technique was the most effective in encouraging people to make plans of action and in taking responsibility but only when expectations of success were high. When expectations of solving their interpersonal problem were low, those in the mental contrast condition made fewer plans and took less responsibility.
The contrast condition appeared to be forcing people to decide whether their goal was really achievable or not. Then, if they expected to succeed, they committed to the goal; if not, they let it go.
Using this technique, the same thing happens to emotions as well as thoughts. In a second experiment the mental contrasting had the effect of committing people emotionally to the goal if they thought they could succeed, or letting the goal go if they didn’t. Both those who indulged or dwelled made no such emotional investment.
A third experiment found that people in a mental contrast condition were more energised and took action sooner than those who only entertained positive or negative fantasies on their own. Once again people didn’t commit themselves to goals they didn’t expect to achieve.
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To read the complete article, check out others, and sign up for email updates, please click here.
If you work with statistics, one of the great challenges that you may have faced is how to write up results in a coherent and efficient manner.
Here is a great source for you! This book is a short, comprehensive, and invaluable resource: From Numbers to Words by Susan E. Morgan, Tom Reichert, and Tyler R. Harrison (Allyn & Bacon, 2002).
While I can assure you we will never present a book like this at the First Friday Book Synopsis, because it would induce sleep – for anyone who worries over how to present findings from a statistical test in a written report, this is a crown jewel.
The book covers practically every possible statistical test. For each, you will learn what to report, the key syntax, and the suggested format. The book includes excerpts from articles that have used the statistic.
And, it does all this in 125 pages!
As part of my responsibilities as an adjunct professor in the College of Business at the University of Dallas, I teach MBA students a course in Research Methods. How to write up statistical results is the most frustrating and time-consuming endevaor they face. I have now required this book for the past two terms, and have seen great results.
I commend it to you – if you are a numbers-person.
At the First Friday Book Synopsis, we have covered many books which have included a reference to “wisdom over knowledge.” And, there is a strong correlation between wisdom and age.
Maybe not! I thought a recent article in the Wall Street Journal entitled “The Search is on for Fresh Executive Talent” (April 11, 2011, p. B9) demonstrated otherwise.
The article highlighted two key picks across six industries: health care, high tech, retail, industrial products, financial services, and consumer goods.
The range in age was very tight: the youngest were Charles Scharf (age 45), head of retail-banking operations at J.P. Morgan Chase, and Dave Donatelli (age 45), an executive VP at Hewlett-Packard, while the oldest was Eric Wiseman (age 55), CEO at VF Corporation.
Here is the breakdown by age:
45 - 2
46 - 1
47 - 1
49 - 1
50 - 1
51 - 1
52 - 1
54 - 1
55 - 1
That is a mean age of 49.4 years. So, you do not have to be old have talent, and perhaps wisdom. That is promising.
What is disapponting? Nine of the ten are caucasian. Nine of the ten are men.
Maybe we have made progress on age, but if these are representative of the pool of “fresh executive talent,” we have not come very far on other aspects of corporate diversity.
What do you think? Let’s talk about it really soon!
I thought a survey of CEO’s published in the Monday, April 18, 2011 edition of the Wall Street Journal underscores that many just never learn. The survey was conducted by the highly credible Conference Board, Inc., a non-profit research organization.
The article is by Joe Light, entitled “Most CEO’s Prize Growth, But Other Priorities Vary” (p. B8), surveys ten key priorities across three types of industries: manufacturing, financial services, and other services.
Across the board, the # 1 priority was “business growth.” Also, # 9 (international expansion) and # 10 (investor relations) were unanimous choices.
Perhaps you will be as shocked as I was to learn about where the CEO’s ranked ”customer relationships.” In manufacturing, this ranked 9/10, while in financial services and other services, it was # 6. Overall, it received a ranking of 7/10.
What? How can relationships with customers be in the bottom half of the list? How can these CEO’s expect to grow their businesses (unanimous # 1 choice) while not developing relationships with their customers? Perhaps this explains why manufacturing is a commodity for many consumers – since there is no loyalty, customers just buy at the lowest price. When there is not a relationship, issues such as quality even matter less than price.
And, do you really want to work with people at a financial services firm whose CEO is more interested in growing the business (#1), government regulation (#2), talent (#3), corporte brand and reputation (#4), and cost optimization (#5) than you – the customer?
Over the 14 years of the First Friday Book Synopsis, we have delivered many books about customer service. But this survey was not about perceptions on “serving the customer.” It was on “customer relationships.”
In addition, the article does not even discuss or elaborate upon customer relationships. Even to its author, the survey result does not seem important.
Yet, we have seen many years of published advice on how to develop customer relationships, yielding loyalty, even in the face of changing conditions.
Wouldn’t you really like to sit down with some of these CEO’s and ask how they plan to grow their business (# 1 priority) without developing relationships with their customers (# 7 priority)? Is cash really king? Is the price more important than the person who pays the price?
Are you surprised? How do you interpret this? Let’s talk about it really soon!
Easter is the most significant time of the year for the Christian community. While some Christians herald Christmas because without a birth, there could not have been a death, nothing makes the emotional roller coaster as much as the remorse over the death on Good Friday to the celebration of life on Sunday with the resurrection.
We read and blog about business books, but I have long believed that we should be consumers of all types of books, including novels, biographies, autobiographies, essays, anthologies – in all types of arenas: sports, politics, news, health, religion, and so forth.
So, I want to call your attention to a new book by Marcus Borg, who is a retired religion professor at Oregon State University, and who has authored numerous works, including The God We Never Knew and Meeting Jesus Again for the First Time. I like him because he is forthcoming, non-pretentious, provocative, and simply honest.
The book that I am reading is called Meeting Jesus in Mark (SPCK Publishing, 2011). It is a short, highly readable, and very different study of this gospel than you will find other places. If you want to purchase it, this is the link:
For those who are interested, are you aware that in Mark: (1) the context is the year 70 – the time just before the highly unsuccessful Jewish revolt against the Roman Empire? (2) the story does not begin with Jesus’ birth, but rather, as an adult? (3) that the story of Jesus’ temptations with the devil last a full two passages? And, on and on – the book is full of interesting revelations.
No, it is not for everyone. But, if you want an interesting read on a topic that you may have long forgotten or never studied, it is well worth your time.
What do you think? Let’s talk about it soon!
In a global study by consulting firm BlessingWhite, the top reason employees give for staying with their employer is “My work. I like the work that I do.”
Employees were asked “What is the most important factor influencing your plans to stay?” Thirty percent cited their work and liking their job. Seventeen percent said their job had “significant development or advancement opportunities.” Other answers included, their organization’s mission, no desire for change, job conditions, and their finances.
In contrast, the top reason for employees of all age groups to leave their job was for their careers. Twenty-six percent said they didn’t have the opportunities to grow or advance. Fifteen percent said they didn’t like what they were doing in their current position. Other reasons cited were finances, desire for change, and management.
“Business leaders are right to be concerned about retention of top talent,” said Christopher Rice, BlessingWhite CEO. “And while raises may encourage some workers to stick around, our findings suggest that employees — especially high performers — will remain in jobs that challenge them, utilize their expertise, and provide meaning.”
The Employee Engagement Report 2011 explores workplace attitudes among employees on four continents and is based on survey responses of nearly 11,000 employed professionals. Among the study’s other findings:
• After enjoyable work, career advancement is the second most important retention factor in India, China, Australia/New Zealand and Southeast Asia. In North America and Europe, favorable job conditions (e.g., a good commute or flexible hours) ranks second.
• Although workers across generations agree on their top reasons for staying and leaving, the youngest workers (Generation Y or Millenials) place higher priority on career opportunities than they do their work. Likewise, Gen Y employees are more likely to leave in pursuit of more money. Baby Boomers, on the other hand, seek more interesting work and change (something new).
“When employees understand that today’s career is all about creating a portfolio of assignments and projects, not necessarily promotions and new titles, they’re better prepared to concentrate on finding work that they enjoy – and work that can help the organization achieve its goals,” Rice said.
To read and/or download a copy of the Employee Engagement Report 2011, please click here.
Here is an excerpt from an artricle featured by the web site of BSchool.com, “a leading online resource for MBA information and resources”. If you are interested in continuing education and receiving your MBA, please browse our directory using the links to the resources available at this website.
Here are three of the ten destinations. To read the complete article, please click here.
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Posted on April 18th, 2011
Any student, no matter her or his major, should snap up any affordable opportunities to study abroad that present themselves. Such experiences infuse lessons with far more diverse perspectives than the ones touched upon in the classroom. Business classes especially benefit from a generous shot of multiculturalism — and one need not focus on international trade to get something out of it! When the urge to hop a plane and head overseas for some valuable lessons hits, look into programs at some of the following locations first.
Hong Kong, China: This Special Administrative Region is touted as one of the top financial centers in the world, and business students harboring a love of economics come here to see laissez-faire capitalism in action. It’s ranked 2nd on the Ease of Doing Business Index as well. Combined with its status as one of the world’s foremost centers for banking, finance and international commerce and trade, Hong Kong should be one of the top destinations for business students hoping to study abroad.
Singapore: Considered one of the four economic juggernauts of Asia, Singapore ranks first on the Ease of Doing Business Index. A largely trade-based economy, the city-state thrives mainly on exporting goods and retooling imports. Suffice to say, it boasts one of the world’s most active ports on top of being considered the fourth most prosperous financial centers anywhere. Business students hoping to enter into the chemical, petroleum, electronics, biomedical or mechanical engineering industries have plenty to explore here as well.
Taipei, Taiwan: Taiwan is considered another one of the “Asian Tigers” of business and commerce, with capital Taipei as its flourishing center. Even though the global economy is experiencing a downturn, the city boasts the 2nd -highest per-capita GDP in all of Asia and still expands at a rate of roughly 5% per year. Inflation and unemployment are both kept to a staggering minimum, too. Despite the popularity of textiles and electronics, business students with different goals can still easily walk away from a stint in Taipei with some great experiences and lessons under their belts.