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Archive for May 2010

Are We Ready To Reinvent Our Management?

Here is another great article from Eduardo Braun – Director of HSM. In this article he articulates the challenges for reinventing management, improving efficiencies and more. Check it out!

-DF

Are We Ready To Reinvent Our Management?
Eduardo Braun, Director HSM

Not too long ago I had a chance to talk to Herb Kelleher, co-founder of Southwest Airlines, one of the largest airlines in the world, transporting more than 100 million passengers a year. Herb was CEO for 36 years, and during that period, Southwest produced the highest return on investment of any company ranked on the S&P 500. Yes, you read correctly, although it is in one of the industries with the highest profitability problems (just think about the fluctuation in oil prices and the repercussions of the 9/11 attacks, among other things), Southwest is among the most profitable companies in the last three decades.

How did he achieve this? According to Herb, there are two main reasons. The first consists of having a simple and focused strategy and the second, and perhaps most important, a people-centered culture. His motto is, employees come first, even before customers!

I would like to reflect on this particular aspect of the Southwest culture. It is about the habit to delegate, to trust, to leave problem-solving on the hands of employees who are in contact with the customer; in other words, it is about not “including everything within a process” since this undermines creativity. “We had some thick customer service manuals and we literally burnt them!”, giggled Herb and he added: “we replaced them for simple guidelines.”

As an example of his people´s creativity, he mentioned the occasion when a flight between Baltimore and New York was cancelled due to bad weather and the person who was responsible for customer service, an employee with only four months at the company, decided to rent five buses to carry all passengers to their destination. Instead of being punished for her decision, she was rewarded. But what happens if good ideas are too expensive? Herb tells employees that they cannot solve the problem the same way twice, but he does not set any rules or additional guidelines, he just discusses the issue with the employee face to face. And here lies his genius: he does not add a process to correct a mistake, he continues to trust the innovation capacity and the criteria of the people.

In the industrial age processes emerged to produce goods efficiently and repetitively, originally with unskilled labor. The process was designed by Management and “thinking” engineers with workers not having to make any decisions. According to expert Gary Hamel, the industrial age had a “Management” that enabled large-scale efficient production. I think that this same philosophy is what he called ISO “quality” standards, which essentially are a seal that guarantee the existence and “respect” for processes. But, are those the most adequate processes and do they optimize solution of a situation? Not necessarily.

The philosopher David Weinberger argues that “we analyze the complex systems that have failed sometimes due to complex reasons and we decide that the problem can be solved by adding some level of detail.” We write more processes and we end up transforming complex systems into complicated systems, sacrificing innovation and adaptability. How can a company be agile if every change or switch requires filling out a new set of forms? The excess of processes – even in an attempt to increase individual responsibility -, ends up suffocating human criteria. Similarly, if every time there is an accident we add a traffic light; we would end up with a traffic light in every corner and traffic chaos.

It seems that the industrial age is partially and gradually giving way to the services era. As a consequence, the client´s design and experience dimensions, both for products and services, will be enhanced in the upcoming years. Thus, what are the management challenges in such a context? Creativity and innovation at all levels. In particular, in the customer points of contact. Should a company design a process to regulate every conversation between employees and customers behind a desk or in a call center? Or should it train them how to think, and then trust the criteria of their employees?
Gary Hamel usually talks about the reinvention of Management and during an interview he emphasized: “People are creative at home, in the kitchen, in the computer, in the garden; but when they get to work that creativity is lost. Why? How have we organized work at companies for this to happen? Today more than ever we need to reinvent how to manage people to surface their creativity.”

Herb Kelleher achieved extraordinary results by trusting the capacity of his employees, and by not setting up a new process to correct each mistake. Are we ready to reinvent our management style? Are you ready to review your processes and to change whatever is necessary to trust your people more?

Written by David Frederick

May 26, 2010 at 3:56 PM

Three Big Shifts in Marketing

Here is an interesting article from Neuro- Marketing Expert Martin Lindstrom on the three big shifts in marketing. I hope you enjoy it.

-DF

Martin Lindstrom: Three Big Shifts in Marketing

The world of advertising and marketing has fundamentally changed. Here neuro-marketing expert Martin Lindstrom sets out the three biggest shifts.

If for one reason or another, you’d slept through the past five years, only to find yourself suddenly awake in 2010, you’d quickly realize the world of advertising and marketing has fundamentally changed. Here neuro-marketing expert Martin Lindstrom sets out the three biggest shifts:

1) Subconscious or subliminal communication (and research) has become part of the vocabulary of most marketers. Don’t fall into the trap of believing that conventional research will do the trick. More than 80% of all the decisions we make every day are decided upon in our non-conscious part of the brain. Now if we can trust these numbers, and every study indicates that we can, then 2010 will be the year where marketers will be forced to investigate alternative research methodologies that tap into the subconscious processes involved in decision making.

2) Second, power has shifted from brand owners to consumers – even the most powerful brands know that successful campaigns have to systematically engage consumers, who will in turn use their mighty word of mouth to spread the messages opposed to relying on big media budgets do the work. 2010 will also be the year where marketers will have to surrender their brand to the consumer. What do I mean by that? We increasingly witness how brands can be seriously damaged by consumers who choose to vent their frustration or anger online. Witness how Dominos Pizza’s share price dropped by a massive 10% in just one day after a negative video clip posted on YouTube. How can a large organization, which can rarely turn anything around in a matter of hours, handle such an attack? Yet, in order to stay abreast of the way things now work, brands are required to find the capacity to do just that.

3) Third, 2010 is shaping up to be dominated by guilt. Guilt for spending money in the midst of a debilitating global recession, guilt for polluting the world, and finally, parental guilt, as kids increasingly engage in their own online world, far removed from traditional values that were previously the exclusive domain of the family. This will be the year when marketers will play the guilt card in ways we’ve never seen before. This is the sad reality. Fear is probably one of the most powerful drivers when building a brand. Fear has a very close association with guilt, and as the world spins faster on its axis, guilt becomes a major by-product. Brands that are able to elicit guilt – or even better, remove guilt – will be the winners.

Written by David Frederick

May 26, 2010 at 3:42 PM