(Or why ‘the way we do things round here’ stops us from doing things around here!)

Culture exists in every organisation; it controls the way people act and behave, how they talk, how trusting they are, and most importantly, how effective they are at delivering results. It affects staff retention, brand perception and it affects performance. It is completely within the capability of the business to control and shape, yet we often hear people moan about how the ‘organisation’, or its management style prevents work from happening, and projects from succeeding. People complain of being demotivated, disengaged and that the life and energy is being sucked out of the business.

Culture = Innovation killer?

The latest report by Booz & Company called ‘The Innovation 1000 Study’, clearly supports the impact culture has on an organisation. It shows that the success of a company (or a function within a company) is not a matter of how much is spent on R&D, marketing or technology, but rather how they spend it. This study took into consideration two particular qualities:

• Strategic alignment

• Culture

Soft issues, hard results

The Booz study found that culture is the key to innovation success, and its impact on performance is measurable.  It shows how 44% of companies who reported that their innovation strategies are clearly aligned with their business goals (and that their cultures strongly support those innovation goals) delivered 33% higher enterprise value growth and 17% higher profit growth on five-year measures than those lacking such tight alignment.

Addressing the cultural challenge

SEVEN has spent the last 5 years enhancing its significant SAP and Supply Chain capabilities with tools, approaches, training and skills to help companies develop effectiveness and the right environment for success.  If you were to read our website, any of my articles or attend our presentations you will notice that we talk a lot about ‘Culture’ and ‘mindset’, and its impact on an organisations capability to succeed.   This report explains why.

The 2011 Booz & Co report on strategy and business is a must-read for business leaders, regardless of industry. You can read the full report here.

Pleased to announce that my latest article for ‘The European Business Review’ was published today.

This is the second of a two part series I’ve written on ‘Operationalising Excellence – Making It Happen’ and completes the trilogy of articles on the ‘7 Keys to Unlocking Organisational Greatness’ that have been published in this journal. 

All three of these articles can be accessed via the following links:

The 7 Keys to Unlocking Organisational Greatness: 

Operationalising Excellence:  Making It Happen – Part I:

Operationalising Excellence:  Making It Happen – Part II:

I enjoyed writing them; I hope you enjoy reading them!

If you enjoyed these then you may be interested in my next article for The European Business Review, which I’m currently working through.  In this I will expand further the concept of Customer Value Chains and explain how to segment the business into strategic value chain teams, what measures to use, how to align competitive and risk strategies, and how they can be used to create ‘aligned integration’ that ensures long term plans and strategies are followed through to short term functional and systems execution.  I will be also going through specific case studies where we have achieved this, and will show the value organisations can expect to achieve from this ‘mindset’ and behavioural shift.

Organisational greatness is there for the taking.  The barriers are of your own making.  You just need to make the ‘conscious choice’ to go for it!

The last month of training has been dedicated to power and strength generation, and again developing throwing technique. It has been tough, exhausting physically and mentally, but I’ve kept my head down and worked very hard. I have even worn straight through the sole of my throwing shoes!

I am looking forward to being able to recover a little over Christmas, and also to seeing how much I’ve improved in January once I’ve rested.

See Laura in action!

I am so grateful to SEVEN for making this training possible, and thanks to their sponsorship I have been able to get myself new throwing shoes. Attached is a video of me throwing; this one was with a 3kg hammer and went 42.30m.

Launch video

I look forward to working hard in the New Year and wearing out this new pair of shoes in my training to get better!

I recently won a strongwoman competition! It was only a small charity event, but it was great to see my training paying off, and also to have a chance to compete and do something different to my usual training.

It’s all in the preparation…

The events ranged from deadlifting to holding a plank on two Swiss balls. My weights partner, Stef, was great in helping me prepare, and on many an embarrassing occasion she cheered me on as I rolled headfirst and out of control off the Swiss balls, in front of some of the best athletes in the country!

Bandaged but not broken

The observant among you might notice that I’ve got a few bandaged fingers in the photo with the trophy – I had an accident whilst lifting weights last weekend and crushed all of the fingers on my right hand. Initially, the nurses thought that I’d have to have my fingers re-straightened, but surprisingly all of the bones had remained intact! They are now a rather startling blue-green colour, and covered in cuts, but should make a full recovery very quickly.

Balancing Sports and Studies

It has been hard work balancing my training with degree deadlines, and unfortunately I have also had pressures from home, as my grandfather died and my mum has been very ill. I have spent a lot of time looking after her and some of my siblings, and things are starting to get better. I am hugely proud that I have been able to juggle this with both studying at a new university and my first ever term of elite level training.

A couple of weeks ago, I spoke at the Harvard Business Review’s Conference on Supply Chain Risk Management in Poland, where I presented the concept that Risk Management should be incorporated into the very fabric of the business, and seen as an opportunity to evaluate the end-to-end Supply Chain, identifying its strengths, threats and weaknesses, and positioning all of these as opportunities to improve.  Anything that could potentially impact your ability to deliver to the customer should be highlighted as a risk. This goes for both internal issues as well as external ones  – in fact internal factors, factors that are within your ability to control, are twice as likely to impact Supply Chain than external factors.

Evaluate your Supply Chains

The starting point for this exercise should be to first step back and evaluate the different Supply Chains that actually exist in your business. It is unlikely that you only have one type of demand in your business, but very likely that you only have one way of satisfying that demand. The key here is to realise that you are potentially taking a ‘cookie cutter’ approach, when in fact different Supply Chains may exist that have different competitive drivers, and thus require different metrics and different supporting behaviours.  Do you measure the purchasing department simply on their ability to buy goods at the cheapest cost, when the key measure should be ensuring reliable supply?

The Weakest Link?

Geographically map out your different Supply Chains – where are the external risks? You may believe you know your suppliers – but do you know their suppliers?  Or their supplier’s supplier?  Any weak link in the Supply Chain could bring your business to a crashing halt.

Tolerance for Risk

Once you understand the different Supply Chains that exist, what they look like, what their main competitive drivers are and what metrics to concentrate on in order to drive the right behaviours to get the right results – then the next step is to analyse the risks and disconnects that are either preventing you from winning, or present a potential risk in the future. Supply Chain strategies that focus on customer service (e.g. reliable delivery) or where the cost of late or lost deliveries are high, generally have a LOW risk tolerance, and thus could be drastically impacted by any risk that affects your ability to supply. Strategies that focus on cost reduction, or where the cost of late deliveries is low, generally have a HIGHER tolerance to risk. Ultimately, the tolerance for risk will determine how much the enterprise will invest in mitigation measures vs. reactive efforts.

Analyse the Impact

One of the key points I proposed is that you should analyse the impact risks have on your ability to compete, and also evaluate whether your risk mitigation activities support your competitive strategies. For example, it is great that you have identified an alternative source of supply – but if reliability is your key competitive driver, and this alternative source is cheap but unreliable, then again this has just strategically injected risk into the business. Looking at business issues and risk management as an opportunity to drive better competitive performance means that not only will you mitigate risk, but you may find new opportunities to strengthen your Supply Chain to create improved levels of performance.

Risk Mitigation

Fully understanding your Supply Chains and their competitive drivers is the best Risk Mitigation strategy you can make – and the biggest risk you can take is not taking time to think about the risks.

Have you taken the time to identify the different risks that impact your Supply Chains, and the effect these can have on your ability to compete?

We live in uncertain times.  

In the last twelve months we have seen governments topple, tsunamis and earthquakes cause personal and Supply Chain devastation, the continued fall out of the banking crisis, public sector strikes in the UK and major European countries unable to service their debt and on the brink of bankruptcy, potentially causing the collapse of the Euro. For as long as I’ve been alive (let’s not go there) I don’t recall a period of time when the immediate outlook appears to be so glum, without any obvious signs of recovery. 

Perfect Storm?

The question is whether what we are currently going through is a temporary ‘perfect storm’ of issues, or the new norm.

So what to do? The over-riding mindset of many businesses to these economic woes is to keep its head down and hope for the best. Many manufacturing companies are announcing major job cuts and the closure of production capabilities, taking a ‘blunt edged’ approach to removing costs out of the Supply Chain. Whilst this reaction is understandable, and companies are simply trying to survive at all costs, I can’t help wondering whether this is the smartest approach. In many cases they are selling the ability to compete tomorrow in order to survive today.

False Economy?

A number of strategic cost reduction decisions have inadvertently embedded new levels of risk and complexity into their Supply Chain - the one-dimensional pursuit of a ‘lowest cost’ model has led to many companies outsourcing and off-shoring key capabilities to countries where labour costs are cheaper. This, however, has sometimes proven to be a false economy, as rising fuel prices have dramatically impacted transportation costs, and labour costs in these countries have risen once people start to demand a higher standard of living. As a reaction to this changing situation, China, for example, has recently begun to outsource its manufacturing to Vietnam, and companies like BMW Motorcycles have moved production back from China to areas of ‘profitable proximity’ i.e. Eastern Europe where the level of risk is low, as well as the costs. Gartner also recently announced that they predict that by 2015 30% of outsourced and off-shored manufacturing will return.

Building Strong Foundations

Recently I posted about Unilever and how they are made the ‘conscious choice’ to invest and redesign their Supply Chains, focusing on customer value and sustainability rather than simply cutting costs. The result – the highest period of growth in 2010 for 30 years, at a lower cost model than when they were cutting costs. Rather than sacrificing the future, they are building strong foundations for it.

Two very different mindsets, and two very different approaches to the current economic crisis. One approach is all around surviving, keeping your head down and hoping this ‘perfect storm’ will pass. The other assumes this is the ‘new normal’, and tales the opportunity to manage their business better in the downturn by taking the opportunity to better position themselves for the upturn – and in doing so finding that growth in this period is possible, as long as you work together, take time to step back from the chaos, and make the choice to make courageous, informed, intelligent decisions about how you can compete in this new environment.

Which approach is your business taking?

In my next post I will discuss an approach businesses can adopt in order to create customer focused, risk conscious, segmented Value Chains. As Charles Darwin once wrote, “It is not the strongest of the species that survives, nor the most intelligent. It is the one that is the most adaptable to change.”  

Recent research by the Conference Board asked executives across the world what their ‘greatest concerns’ were – the top two answers, surprisingly, were not external factors, but instead were:

• Excellence in Execution
• Consistent Execution of Strategy by Top Management

Nike’s Journey

Here at SEVEN, we spend a lot of time developing approaches and solutions that allow for the disciplined execution of strategy within organisations – part of our ‘joined-up’ philosophy; in this case joining-up direction with delivery. At the Supply Chain World conference in Amsterdam recently, I was therefore delighted to have a second chance to listen to An Claes, Head of Innovation at Nike, on how they have managed to ‘Operationalise Excellence’. An’s story about Nike’s journey gets more impressive every time I hear it

An declared that “strategy is easy – it’s making it work that’s the hard part.”  She stated that at Nike they have developed a very flat hierarchy, and are empowered to go out to, as their tagline says, ‘just do it.’

The Definition

An defines ‘operationalising excellence’ as follows:

• Operationalising:  ‘Turning Vision into Reality, consistently and deliberately at all levels of the organisation’.
• Innovation: ‘Incremental and / or step change in performance against strategic objectives’

The Key

The key, says An, is to ‘boil down a strategy to something that is relevant to the people at ground level’. They had to deliberately redesign the organisation to foster the end-to-end alignment of the Supply Chain, and rotate roles so that people get to experience life on the other side of the fence. She also stated that at Nike there is ‘no hiding place’ – they have created a culture of accountability, and in doing so had to lose 12% of the people – the wrong people – as there was no place for them on the Nike bus.

Their Approach

Nike developed a process for operationalising excellence, following a Plan, Do, Check, Act (PDCA) approach, summarised as follows;

• Define: Agree on your organisation’s ‘True North’ – the strategic and philosophical goal.
• Develop: The Plan. Create guidance and focus – ‘catchball’
• Deploy: The Plan – create an appropriate management process, and create accountability. A3 thinking – the plan must fit on a single side of A3.
• Monitor: The Plan – Nike have a 4,4,4 approach. 4 hours every Thursday looking for 2 ‘game changers’, 4 hours once a month reviewing the business performance, 4 hours once a quarter reviewing the A3 plan.
• Solve: Problems – identify constraints and disconnects, PDCA
• Improve:  The System – identify what to keep, and what to stop doing.

Get it Right

An stated when this is right, you just know because ‘it catches fire, it really catches fire!’  This is very much as per Jim Collins’ ‘flywheel’ concept; consistent pushing in a single direction on the flywheel starts to make it turn, and slowly results appear. People then become motivated by the results and decide to join the effort, creating more force which in turn creates better results – and so the cycle goes on until the flywheel develops a momentum of its own.

Evolution not Revolution

An explained that Nike are on a journey; it’s evolution not revolution – but no worthwhile strategy can be planned without taking into account the organisations ability to execute it.

Execution must, therefore, be a core element of any organisations culture – is it a core element of yours?

Listened to an interesting presentation by Robert Pink, Industry Head at Google UK a couple of weeks ago, on how they develop a ‘culture of innovation’ at Google through creating an environment where the team have the opportunity to both input and spend time on developing their ideas. The challenge for Google, Robert stated, is to continue to adapt quickly to a constantly changing environment and stay ahead of the game. He then shared the ‘nine rules of innovation’ they believe are key to creating an environment where anyone within Google can contribute and make a difference.

Google’s Nine Rules of Innovation – ‘creating a culture of Do’s’

Rule 1 – Hire the Best

• Robert stated that hiring is at the heart of what Google do – and ensuring that they recruit people with ‘passion’ is a key element of their policy

Rule 2 – Everyone can contribute – a license to pursue your dreams

• Ideas can come from anyone and everywhere. Google have embedded a cultural philosophy called ‘20% time’ – where people are encouraged to spend 20% of the time on being ‘innovative’. This is very similar to 3M’s ‘15% Dream Time’, which led to the creation of the ‘Post It’ note and Sellotape. A good example of what has come out of 20% time at Google is Froogle, Calculator and Suggest.
• Also, develop a fun and relaxed environment – people are more innovative when they are enjoying themselves!

Rule 3 – Share as much information as you can

• Generate, reward and encourage people to act on new ideas

Rule 4 – Everyone must understand the vision

• It must be shared with the team

Rule 5 – Morph Ideas, don’t just kill them

• Robert quoted Woody Allen ‘If you’re not failing every now and then, you are not doing anything very innovative’. He stated that it is Google’s intention to create an environment where failure is seen as a positive – we tried something, it didn’t work – let’s try something else. Fail fast and fail often, but whenever possible, fail in private.

Rule 6 – Iterate products 

• Speed matters – product improvements and variations

Rule 7 – Data, data, data.

• Data drives all decisions – make sure it’s accurate.

Rule 8 – Users come first, not money. 

Rule 9 – Develop Breathing space in order to develop good ideas

• The 20% time principle is at Google’s core – but it’s not mandated. The key is to allow people the space to be innovative – without trying to mandate innovation.

Whatever you think about Google, there’s no denying the fact that the results have been impressive,  both from a financial and innovation perspective, but also from the fact that Google was ranked the best company in the world to work for in 2007 and 2008, and fourth in 2009 and 2010. The Google mantra is that ‘Work should be challenging and the challenge should be fun’.

Do you agree with Google’s approach to Innovation?  Do you operate similar approaches in your business? Or do you feel that people would abuse having the time to just ‘think’?

One of the questions I often ask senior managers in companies we work with is: ‘How many projects do you have on the go at the same time?’ 

The reason for asking is to establish whether there is a clearly-aligned business-improvement plan, or whether the company is trying many different things all at once. Generally, what we find is the latter – that they are being asked to devote time to numerous different activities, all at the same time – to ‘multi-task’.

Multi-Tasking – a Myth?

Now – trying to improve is to be commended, and the point of the post isn’t to recommend standing still, as standing still in today’s economic climate equates to going backwards! The point I’m trying to make is that people are naturally ‘hard-wired’ to only focus on one or two key objectives at a time. Recent research by neuroscientists in the US has identified that ‘multi-tasking’ is actually a myth. What people are really doing is actually switching repeatedly between tasks. With practice, our brains can do this so fast that we appear to be doing several things at once, but the research suggests that only around 3% can actually do this well. If we are constantly distracted from one task, we work faster but produce less.

“Multi-tasking actually costs us time because we have to switch back and forth, remember where we were in the task and re-start,” says neuroscientist Sandra Aamodt.

A recent study from Stanford University in California also found that ‘multi-taskers’ suffer real problems when trying to concentrate on a single assignment. It is a well proven fact that we can only really focus on completing 2-3 separate activities, with excellence, at the same time. Move this number to 4-5 and our ability to complete any of them well drops substantially. Increase this to 6–10 and hardly anything gets completed properly at all.

Multi-tasking therefore makes us more efficient, but less effective – more activity, but less achievement. We become, as a client said to me recently, ‘busy fools’.

So – time to step back and think about which of the activities you or your team are currently doing are really ‘wildly important’.  If you cannot clearly define how this task or project moves your organisation closer to its strategic goals, or adds real value to the customer, then perhaps you shouldn’t be doing it at all.   Narrow your focus and you’ll actually get more done.

Does this ring true with you? Are you overstocked with activity, yet running short on achievement?

The 7 Habits of Highly Effective People®  explores the above in detail.

One month after the start of term at Loughborough, I am settling into a strong regime, studying and training hard. My throwing and weights are progressing well, and while I can’t remember the last time I didn’t ache from head to toe, I’m loving every minute of it.

Mind over matter

I have completed the basic foundation section of my training, and the focus is now on strength development, as well as the ongoing task of technical practice. The hammer is a very unusual sport in that it requires the athlete to move their centre of gravity away from over their feet which causes the balance mechanisms in the inner ear to send out “distress signals”. It takes a good deal of practice to learn to ignore this, and not least to become able to turn at considerable speed, countering astonishing centrifugal forces at times on one foot, while ignoring one of the body’s key balance mechanisms! It is great to be able to focus on this challenge.

New challenge

I am extremely excited by a new challenge that has been presented to me. The British University Championships (BUCS) for outdoor athletics are next year being held in the Olympic stadium, as a “trial run” for the London Olympics! These are being held in May 2012, and I am determined to qualify. While I already can comfortably throw the qualifying distance, the concentration of skilled hammer throwers in Loughborough means that it will be a good goal for me to get into the top two university hammer throwers to guarantee a place.

With my training going well and fantastic short-term goals, I’m confident I’m up to the challenge!