The Manager's Toolkit - Part 1: The Basics

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Re-engineering the company

Today's complex business situations demand more sophisticated thinking methods and techniques, these techniques are the tools of the manager's trade and here we look at some of the new tools and to use them.

We have heard it all before haven't we? In the early 80s we had Quality Management and BS 5750; in the late 80s we had Total Quality Management (you should have got the T-shirt for that one by now) and yet somehow neither of these approaches delivered all the benefits that were promised.

Still, as we tried to implement them, there was a feeling that we were missing something; that we needed an extra edge to guarantee success. There was a glimmer of hope that perhaps we could yet stumble onto the right road. Quality Management and BS 5750 helped us to put systems in place to manage the business - not just product quality but the whole business. The problem was that it didn't really provide any methods for getting better at what we did.

Total Quality Management extended the concepts further to involve the whole company and to introduce ideas about customer focus and improving the company. It provided some ideas for how to get better, but we had to invent most of the structure as we went along.

Now we have the idea of Business Process Re-engineering (BPR) that takes us further along the road. The idea of BPR is that we re-define our business goals and then devise the systems and tools to support the goals. The concept is simple. Our business systems grow with the company and then become fixed in place (by BS 5750 / ISO 9000 sometimes) while the company is still changing. The systems then begin to lose contact with the real world no matter how much you try to make them fit and work whether by using TQM or other ideas. There eventually comes a time when the whole system needs to be redesigned to make it work at all. In order for this to work you need a definition of what the company is about and a clear set of goals.

What are we here for?

There is a new vision developing that the company should be seen as a structure for adding value to either the product or the service.

The rise in the use of contract workers (from fitters to managers) means that the core of permanent employees in most companies is shrinking and that we have to change our way of doing things. We must all ask ourselves 'What have I done today to add value to the product or service?' If the answer is 'nothing', then start worrying or keep reading.

Business Process Re-engineering defines the core processes of the company that truly adds value to the business. These processes are then engineered, defined and accounted for so that the added value for the business is maximised. The systems approach of the computing and quality people is being applied to the whole company with the specific aim of adding value. In many cases this involves down-sizing or delayering, but if the process can never add value then it should be disposed of. Before we can start the BPR we need to be able to measure and define what we want to change. To do this we need a set of tools for the job.

Thinking and analysis tools

The manager's tools of his trade are thinking methods and techniques and every so often, like any other tradesman, he needs to renew and maintain his tools. This series is a manager's toolkit' and describes some tools that you may not have come across before. They will serve you well, provided you choose the right one for the job. No one would attempt to cut wood with a screwdriver, so you would not be wise to use Pareto analysis when Ishikawa is the best tool.
Effective business decisions are based on thinking, facts and analysis and the toolkit is essentially a collection of techniques for thinking, fact gathering and analysis.
Before studying the actual techniques, some points should be made about the general use of the tools.

Visual management

There has been a history in industry of keeping information away from the workforce and of being surprised when they do not act in a responsible and sensible manner. Visual management gives the workforce information and they can then act in the required manner.

The theory and practice of visual management is that 'what gets measured (and displayed) gets done'. Alternatively, people do not act as you expect but rather as you inspect.

The practice is simple: display targets and performance data in as visible a place as possible and update this regularly to show achievements (or failures). Information displayed can be production targets, quality targets and achievements in both areas. The important thing is to ensure that the information is widely displayed, is visible to all personnel, and is relevant to the goals of the company.

Accuracy

There is a tendency to assume that accuracy of any information is improved by as many numbers as possible after the decimal point. In discussing figures, round numbers are more easily remembered than spurious accuracy. For management and many other purposes the word 'about' should be used frequently e.g.:

No of frames last week = 243

No of frames this week = 289

Increase = 18.93 per cent

Or about 20 per cent increase

Which number best focuses your attention on the real issue?

Sampling sizes

In making any statement where samples have been taken, then beware that a small sample may not be representative of the whole. It would be unrealistic to try to assess the average age of the UK population by asking five people in the street on a weekday their age. Most school children are at school; workers at work; and so on. Your sample is not representative and your average would be well adrift of the correct number. 

For any sample to be significant then there must be a minimum number of articles, or people, or tests made. Be warned - Making a judgement based on a sample size of 1 is not only foolish but downright dangerous.

Controls & benchmarks

When using visual management or any other technique, there is a need to clearly set targets. In the same sense, controls and benchmarks need to be set for any proposed change in a process or system. These need to be agreed and communicated before any change is made to the system.

The choices

'Act in haste, repent at leisure,' should be remembered when presented with a business decision. Try not to get your only exercise by jumping to conclusions.
When presented with two options by anyone then it is wise to investigate the third and other options - do not limit your opinions too early as this can drive you down the wrong path.

As a general rule it is best to try to adopt the 'helicopter view' of a situation first - standing back from the problem and looking for the root cause rather than the immediately apparent (and often wrong) effect.

Once you have located the real culprit then it is time to switch to the 'searchlight' method to determine the correct action. Other tools in the kit will help you to do this.

The action model

The action cycle for any business situation should be based on the action model:

The Action Model

The toolkit methods are designed to enable you to use and implement the action cycle into your business.

This series will not make your business better; only you can do that. What the series will do is introduce a range of techniques and tools that can be used to make your business better, but they will only be useful if they are used. As the photocopier serviceman once said to me: 'It works much better if it is switched on.' The tools will allow you to define and improve your business, but numbers will never be a substitute for your judgement, no matter how detailed they are. At the crunch time remember: 

'At times we must engage in an act of faith that key things are do-able that are not provable. Too often our expectation level is too little compared to what is possible.' - Robert Galvin, Motorola.

"The Manager's Toolkit" Series.

"The Manager' Toolkit" series is designed to give Managers and other staff an insight into the use and application of a new set of thinking tools. The series is:

Part 1: Introduction (This Section)
Part 2: The Pareto Principle
Part 3: Cause and Effect Charts
Part 4: Scatter Charts
Part 5: Flow Charts
Part 6: Histograms
Part 7: Capability Studies
Part 8: Mind Mapping

 

Last edited: 11/03/10

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