FW1 - Mental Imagery
Look at the map
225 days before opening.
In FW15 (Marketing mix) you have defined your marketing functions and estimated its costs: Salesmen, advertisement and so on. In FW16 (operations and manufacturing process) you have described how you will produce and what should be the different costs linked to the operations. You must now assemble these two functions inside a global organization.
Lesson: 1 Hour
External readings: 4 hours
Do it yourself: 30 Hours
Total: 35 Hours
Our objectives are:
-To persuade you that the goal of any organization is to bring value to the customer.
-To show you how to organize your business for this purpose.
By the end, you will be able to draw up the structures of your future business.
1-ORGANIZE FOR THE CUSTOMER
The goal of any organization is to bring value to the customer and as a result to improve its profitability.
11-Bring value to the customer
What are the goals of any business: The goal of any business is to bring value to the customer. When you transform raw material to produce goods, when you assemble goods coming from different places to make them available, you bring a benefit to the customer.
111-Conserve your competitive advantage
You are not alone on the market. Other companies compete with you and also try to bring a value. Therefore, you must have a competitive advantage. In general a competitive advantage relies on quality, on price, or on service. If you offer the best quality you have a competitive advantage. If you sell at the lower price, you have it too.
More you increase the value and more you increase your profitability. It means that your private goal that is to get profits, depends on your ability to bring value and to maintain your competitive advantage.
Consequently, when we think about organization the right way is to ask the following question: how will I organize my business to bring value to the customer and to maintain my competitive advantage. The following drawing shows this thinking process:
Down earth advice:
Some pundits teach that a good organization aims to increase the profitability of the biz by reducing its costs.
Be careful about this analyze: Let's suppose that you have chosen to bring a high quality to the customer. Of course this quality represents a cost for you. If you reduce this cost, you risk to reduce the quality too.
Your margin will increase but you will quickly realize that you are losing your customers!
12-Value cost and functional costs
It means that when analyzing the costs of your organization, you cannot just aim to reduce them. You must make a distinction between the costs that bring value and that I call value costs, and the other costs that I call functional costs.
121-Anatomy of a biz
In any business, whatever its size or its history, you have always some general functions:
-The top management: It means yourself in a small business.
-The operation function produces the goods or service: it's of course a crucial function.
-The sales and marketing function delivers the good to the customer and keeps in close contact with him.
-The finance and accounting function enables to track the money ( invoices, payments records) and establishes the big pictures (financial statements and so on)
-The human resources makes the payroll, stores the employees files and deals with labor regulations.
In some case, there are also a legal adviser and in general an information system (internet, intranet and so on).
No matter the size of the business, these functions have to be performed. If you are a home based biz it means that you should have to perform all these functions by yourself.
122-Value functions and support functions
What are the functions that bring value to the customer and what are the functions just useful for your biz. The answer is quite simple: The Operation function brings value because it produces the good. Marketing and sales bring value because they deliver the good.
What 'about the financial function: Do you think that the customer matters about your financial statements and the periodicity of your balance sheet? Financial function does not bring value to the customer.
As for human resource? Do you think that the customer is interested about the relational problems, the procedures, the payroll, or the system of notation inside your biz? The customer has nothing to do with that! In fact the human resource department is just a back office function.
Down earth advice
You can object that by recruiting the best people, it brings value at a whole. In fact, in any good organization, the recruitment must be led by the operational managers. The human resource has just to apply the inner and outside regulations.
For example, the application of a future salesman, and the first interviews are managed by the sales force manager and not by the human resource manager who in most case has never sold anything along his entire life!
The communication function is more difficult to classify because in some ways it provides also value to the customers.
Consequently you have to carefully distinguish value functions such as operations and sales and support functions. It's that I call the chain of customer value. Look at the following drawing which illustrates it.
Now, your organization must solve the following problem : How can I organize the value functions in order to bring more value to the customer? How can I reduce my back office functions as much as possible to increase my profitability?
2-YOUR BIZ STRUCTURE
In short, you must always focus on the value you bring to the customer.
Always focus on what we have said: Distinguish value function and support function. Always think that the organization must serve the customer.
Considering the anatomy of any business, there are a lot of organizational model. You will frequently meet the worst of them:
211-The Feudal organization:
Outlaw organization charts in the form of rakes like the one below:
Sales Manager Financial Manager Personnel Manager
Department Manager Department Manager
Office Manager Office Manager Office Manager Office Manager
Team Manager Team Manager Team Manager Team Manager
Agent A Agent B Agent C Agent D Agent E Agent F Agent G
This type of organization is most commonly adopted by administrations. Each civil servant is given a grade and a status, in the image of the feudal society.
In this model the customer is nothing. To say the truth, the customer is the "user" or the "taxpayer". Like in the feudal system, any civil servant behaves like a Lord. Of course, if you want to go bankrupt, this is the type of organization you should choose!
Down earth advice:
A good tip is to scrutinize the public services organizations in your country. Study their chart and procedures.
Then, do exactly the contrary in organizing your biz. You can't be mistaken in following this tip!
212-Free market organization:
Try to adopt the following organization chart whatever your type of activity:
Pay special attention to the following elements:
-The support services that do not take part in either production or sales are reduced to a minimum. Some of their tasks are given to external consultants.
-The boss performs the interface between the support services and task managers. In a starting company, you just need two task managers, one in charge of production and the other in charge of sales.
-Each task manager leads a team seeking to reach an objective to satisfy the customer. Production is a customer service, sales is a customer service, after sales service is a customer service.
-There are only two levels between the boss and the customer; the task manager and the team, whereas in the previous diagram, there were seven levels!
-Any customer want to have a responsible person in front of him. Pay attention to have a short connection between you and the customer.
Remember that the customer is assuming your living. The customer is the real boss of your business! Repeat that sentence as much as you can and repeat it constantly to your staff.
The procedure must be based on customer service and, to a large extent, on initiative and responsibility because the customer has the right to have a responsible person in front of him.
Human resources experts recommend that an exhaustive descriptive notice should be written for every work station and that the various tasks should be detailed in procedure manuals. Be careful about all this paperwork.
The procedure aims to protect or satisfy the customer and not to protect the worker by limiting his tasks and responsibilities in the most restrictive way possible!
Since the entire staff must be interoperable, whatever you do, do not fix tasks on individualized, hierarchical task sheets. Think in the following way:
A TEAM--------------A PROCEDURE-----------AN OBJECTIVE: BRING VALUE TO THE CUSTOMER.
The team is fundamental. Here are the essential characteristics for a team:
About Teambuilding, go to the additonal comments. You will find two articles contributed by Alvin Quah from Singapore, a certified behavioral analyst ( In business consulting perspectives), who is registered with the Institute for the Motivational Living, Inc, USA. He can be contacted through the website: www.singaporeteambuilding.com– Innovative Team Building in Singapore
3-ASSEMBLE GREAT PEOPLE.
The value of a business relies on the quality of the people you assemble to bring value to the customers.
I underline the word "Assemble". It means that the quality of people does not only rely on your own staff: It relies also on temp agencies, outsourcing, and external consultants.
Of course, it does not rely at all on the human resource department, on the labor inspection, or on the state regulations.
As you can imagine there are full libraries dedicated to human resource. Biz schools always devote a long course to this matter. Unfortunately, the advices they give are quite the contrary of those that you will find here.
Real life example
I have observed over the years that the human resource departments were taking more and more an increasing place in most of the business.
As a result, many companies seem dedicated not to the customers but to their own staff. It's quite a rule in the public service but thanks to increased labor regulations, it begins also to be a rule in private corporate's.
This situation contributes to the long trend decrease of productivity.
Stick on your goals. You have three rules to observe: Recruiting the best, have always a minimum staffing by hiring external resources, motivate your staff with salaries indexed on the results.
31-Assemble the best
Work is not just another piece of merchandise. Merchandise is judged on the quality-price ratio, but for staff your judgment must favor quality. To convince you of this, imagine yourself in the two situations below:
You are surrounded by dirty and poorly educated people who are incompetent and constantly protesting. You pay them $1000 a month.
You are surrounded by clean, smiling, dynamic and attentive people. You pay them $2000 a month.
Despite the cost difference, you pick the second situation. Consequently you must always opt for the top quality. It means that your choice must be based both on personal and professional qualities
Down earth advice:
Before making any recruitment decisions, constantly repeat to yourself the following basic notions:
1-The value of a company is equal to the value of the people who work for it,
2-The value of a bad worker is negative,
3-Consequently, whatever the nature of the company or the task to be performed, only recruit clean, likeable, qualified, professional and smart people.
Non qualified workers will bring you no value whatsoever, but you can be sure they will bring you a whole host of problems. Machines that are out of order due to maintenance errors, accidents in the workplace, constant problems with factory inspectors etc.
Never take on Parents or friends as part of your staff. Of course, never hire people who drink, who are addicted to drugs or who suffer from psychological problems whatever their other qualities might be.
What does personal quality mean in business terms?
Does it mean kindness, physical strength or a taste for the arts? With rare exceptions (firemen, artistic guides), the human qualities sought are those listed below:
Whatever the type of position and its responsibilities, you must ensure that candidates for a job in your company have these qualities and those that go closely with them (for example, they must be well dressed, clean and polite as well as sociable).
Real life example
Many people bring their personal problems on the biz place. It results in absenteeism, poor quality work and emotional turbulence. Executives devote an increasing part of their time in dealing with psychological problems.
What is more, I have observed that many labor inspectors think that a company must be both a vocational school, an hospital and a fun resort.
Whatever the task, you have to demand competence, i.e. the ability to master this task before being recruited. Your company is not a school, it is a production center where the factors must be immediately employable.
Competence is judged in terms of training received and experience acquired. For a complicated, non-repetitive task, you also have to demand smartness, agility and adaptability.
To check these personal and professional qualities, the recruitment process must imply:
-A description of the job.
-A letter of motivation
-An interview : Candidates talk about their autobiography from child education to the present situation.
-A test on the job to see how the candidate behaves with the customer: I highly recommend to make this real test.
-Check all the references. Call to former supervisors and peers.
-Always put the new employee on a 90-day probation.
If in any of these steps, you feel a problem or a doubt, do not recruit this candidate.
Quality allows you to limit quantity. Being short staffed stimulates the qualified members of staff:
People who are very busy don't complain,
The more work there is, the harder people work,
The tighter the deadlines, the more initiatives taken by staff,
The more tasks there are, the more they help each other.
Down earth advice
You can observe that it is in the public service suffering from over staffing that there are the more conflicts.
321-Limit permanent staff to your value functions:
Don't skimp on production and sales functions but encourage interoperability of your staff: Carefully evaluate the highs and lows of work for each function. Interoperability must enable you to smooth out these busy and slack periods so that your entire staff is permanently fully occupied:
322-Rely on outsourcing and external consultants for the support functions:
Temp agencies, temporary workers provide with elasticity in staffing and are often less expensive than one think. You can also save money by hiring free lance people rather than permanent employees. With Internet you get a vast number of new opportunities. You will find a list of useful contacts in the Do it yourself.
A highly qualified staff must be well paid.
In a traditional company Shareholders are paid by profits, and Employees are paid by salaries. This gives us the following equation:
SALES - SALARIES = PROFIT
In the traditional diagram, conflict is inevitable and permanent because the higher the salaries the lower the profits and vice versa
In your small biz try to reason as follows:
This gives us the following equation:
In this diagram, a part of the Staff remuneration is drawn from the profits in forms of bonuses and stock options. The result of which is no more conflict but solidarity.
Of course, I know that it's easier to say than to practice, but keep this advice in mind when you have to deal with remuneration problems.
Go to: http://peerspectives.org . Click on "Building and inspiring an organization". Then click on "organizational structures"
Click on "Human resources management" and scroll all the subtopics. You will find here a good creative think tank.
4-CHOOSE YOUR LOCATION
The location is the geographical spot where your business is implemented and at least its headquarters.
-For a retailer the choice of the location is the more crucial step. In fact many business idea for a retailer simply rely on a new location that brings a new market.
-For an industry, the choice of a location is connected to many factors such as the availability of skilled labors, of energy, of raw materials and of a good transportation network.
-For a service, the factors can be more extended but they are less critical than for a retail shop.
I have found a good course about this matter:
Go to www.myownbusiness.org . Click on "course" and then on "Session 6: Location and leasing". It is the good analysis about the location choosing process.
Down earth advice
In choosing a location always keep in mind:
1-Its convenience for your customers
2-Its convenience for the transportation network: It 's better to be located near a freeway than in some inaccessible out post!
3-Its situation regarding the regulations and the security network ( for some business it's better to be located close to the police or the fire station).
5-ESTIMATE YOUR ADMINISTRATIVE COSTS
In FW16 (Operation and manufacturing process) you have estimated the costs of the manufacturing process. You must now do the same for the administrative costs.
The administrative costs include:
-the cost of the office, building, land and so on: It depends on the solution chosen: buying, renting, leasing.
-The cost of the administrative equipments such as computers, desks, fax, and so on.
-The costs of the people affected to these support functions: Human resources, accounting, secretarial offices and so on.
-The costs of the consumables: phone, papers, power, cleaning and so on.
These administrative costs do not include:
-The costs of the salesmen: Salaries or commissions, vehicles, travels and so on.
-The costs of the advertising , promotion or public relations.
Remember that all these costs have been already listed in FW15. Do not count them twice!
Once you have identified these costs, you distinguish the starting and the running period and you fill up your grid costs exactly as you have done in FW16. It's not worth to repeat here the process.
According to the entire lesson, try to reduce as far as possible all these support costs that do not bring any value to the customers!
Real life example:
Years ago when I was banker, one customer intended to borrow and he asked me to visit his new enterprise. We went on the site and he was very proud to show me a wonderful office well situated in the best place in the town.
Moving around the desk, I saw a lot of nice girls reading fun newspapers and chatting like in a beauty saloon. My host said me "As you can see Mister Pince, we take care of our staff. We enjoy to make them working in the best conditions!"
I was quite astonished and finally I asked " have you keep in mind that all these fixed costs are superior to your entire expected turnover?". " I have not calculated it soon" he said "No matter, we shall make all the calculations, when we shall get the loan".
Then I exploded " Poor guy! You are going straight to bankruptcy" I said " I never will lend you a dime" and I returned to my desk.
A successful business always relies on a well organized business and a well motivated people. Well organized means to bring an increased value to the customer.
Organize your structures and procedures in focusing on the functions bringing value to the customer.
Reduce the support office functions and entrust external consultants to reduce the functional cost and improve your profitability.
The value you bring to the customer is largely the value of the persons you have assembled for doing the job.
Do not rely only on your own staff but also on all the outside resources allowed by the internet.
DO IT YOURSELF
1-Design your future structures.
Constantly think about the following target: how to bring as much value as possible to the customer.
Only in a second step, evaluate the costs this policy implies and how to compensate them in reducing the cost of the support functions.
This good brainstorming can take 5 hours within several thinking sessions.
2-Define your procedures
Time is coming to think about procedures regarding recruitment of staff, choice of consultants contractors and the buying process of items a company currently need
In principle, you should have to consult the labor regulations that are different according the countries. Nevertheless, I don't recommend you to do it because you should take the risk to fall in heavy depression and to never start your biz! Just keep in mind the above advices and for the future try to make your best.
3-Estimate the administrative staff you need.
You have yet done the estimation for selling and operation. You must now think about the support functions such as secretarial, reception, accounting and so on.
list the support functions which could be operated by external consultants ( for example accounting). Ask to some consultants around your location what are their fees.
In FW12 (Fist sketch) we recommended you to consult the temp agencies. Regarding the administrative staff you could also consult some specialized offices.
4-Estimate your administrative costs
Add these above costs to your grid costs. Include the insurance costs and also an hypothesis about the renting of your office (we do not expect that you will buy an office or a building).
5-Establish your global grid costs
-The sales functions costs that you have estimated in FW15
-The operations and manufacturing costs that you have estimated in FW16
-The administrative costs that you have just completed.
By the end, you must get the total costs of your project in distinguishing the starting costs and the running costs.
It's the opportunity to think again how to reduce the costs because your present estimation is maybe above those of your first sketch.
6-Insert in your business plan.
Open you Plan ware folder and complete:
-The description of your business.
-The grid costs
According to the experience, count about 30 hours for performing the five tasks.
You will have all the elements you need for starting your financial studies.
Click on Contact
These two articles were contributed by Alvin Quah from Singapore, a certified behavioral analyst ( In business consulting perspectives), who is registered with the Institute for the Motivational Living, Inc, USA. He can be contacted through the website: www.singaporeteambuilding.com– Innovative Team Building in Singapore
1-MULTIPLE INTELLIGENCES AND TEAMBUILDING
11-The Theory of Multiple Intelligences
The theory of Multiple Intelligences surfaced in 1983 when Dr. Howard Gardner’s renowned book titled, “Frames of Mind: The Theory of Multiple Intelligences” was published. Within the next 10 years, educators world wide embraced the theory as a basis to identify talents in the children they work with.
Before that, most people perceived people to be intelligent if they score high in an I.Q. test or other psychometric tests, or are good with logical thinking, mathematical, musical and perhaps, linguistic skills. In his book, which has been described to have caused paradigm shifts, Dr. Gardner identified 7 distinct types of intelligence:
12-Brief History of Teambuilding
No one can be sure how the term “teambuilding” was formed or when teambuilding first started. The term “teambuilding” is probably the combination of the words “team” and “building”, which means “building a team”. Teambuilding could have started as early as the 1930s, when Professor Elton Mayo’s research in The Hawthorne Experiments (1927 to 1932) concluded that the need for recognition, security and sense of belonging has a greater effect on workers' morale and productivity than other working conditions.
Today, teambuilding can mean different things to different organisations. To some it may simply mean building cohesion among participants, while to others it may mean improving communication and sharing of information between departments.
So How Does Multiple Intelligence Help Teambuilding? Multiple intelligence has been widely applied to children, particularly in the early detection of talents and gifts in children. So does the theory of multiple intelligence still hold true among adults? Are we able to apply the theory to adults? We began to ask these questions a few years ago when we were helping clients with their teambuilding exercises.
Over the years, we have successfully conducted teambuilding sessions for many corporations, using multiple intelligence in our games, to bring out strengths of different people in different situations, creating an environment to promote mutual respect, understanding and patience with adult participants.
Organisation may define teambuilding in different ways, yet one very basic reason for teambuilding is to get the participants to acknowledge the importance of teamwork and appreciate that people are different.
Dr. Sandy E. Kulkin, founder of Institute for The Motivational Living, Inc, USA (the world’s largest publisher of DISC personality profiling system) once said, “People are different, but they are predictably different”. Dr. Sandy is an expert in human behaviour and he develops courses, trains and certifies professional trainers in behavioural analysis for personal and business settings. He is a firm believer that in order for us to be better able to work with one another, we need to understand why people behave in the way they do and how they look at things differently from us.
Thus in our view, if we can help participants realise that people are different and see these differences as strengths in the other person, we will be able to help them learn to celebrate the differences, thereby creating mutual respect.
Understanding multiple intelligence helps broaden our perspectives of the people around us. In the context of teambuilding, it uncovers the types of intelligence fellow team mates possess, which may never surface within the office setting. This brings about better understanding among the participants. Exposing participants to multiple intelligence during teambuilding also creates an environment in which participants share their knowledge in the type of intelligence that they possess with their fellow colleagues; it helps participants to be patient with one another as they take turns to learn from one another.
It can also be a humbling experience when we realise that there are other types of intelligence which may not be well developed in us. Introducing multiple intelligence during teambuilding can also help participants become conscious that if we work as a team, we will be well-equipped to tackle different issues and problems as people who are more developed in different areas of intelligence tend to look at different aspects of an issue. These people will also be better at solving different challenges that the team face.
Here are some of Dr. Howard Gardner's books on Multiple
2-O.P.T.I.M.A.L. APPROACH ON ORGANISING A SUCCESSFUL TEAMBUILDING EVENT
Tasked by your boss to organise a teambuilding event when you have not even conducted an ice breaker before? Do not despair. This article seeks to provide insights on intelligent questions to ask and important things to look out for when organising a teambuilding event: The O.P.T.I.M.A.L. approach:
1. Objective “Why are we holding this teambuilding event, & what do we expect to achieve?”
To have an end in mind, a purpose, is crucial. Having conducted teambuilding sessions a variety of organisations with their teambuilding event, we discovered that there are a number of reasons why corporations conduct teambuilding events, some of them are:
To create synergy in a new team
Each of the reasons above will require emphasis on different aspects during the teambuilding session. For example, if we are teambuilding a new team, we may want to spend a little more time during ice breakers to let the participants get to know one another better. If we are going to reinforce corporate values, we may want to make sure that the values are visible to the participants, for example, as banners, posters or on the little premiums that they receive.
If there are underlying issues (past issues between participants or departments that needs to be addressed) to be resolved or addressed during the teambuilding session, it is best to get an experienced moderator or facilitator. It can be someone from senior management whom the people respect or if senior management is not available or involved in the teambuilding then probably an external consultant with similar experience.
Once we have nailed down the objectives, we will be able to plan with the end in mind. The objectives will, in many situations, form the guiding principals to select the appropriate programmes.
Profile of Participants (Who will be attending the
Special consideration should also be made for participants who have certain disabilities; they should still be able to participate in the programmes.
One other crucial thing that many organisers frequently miss out is dietary preferences of participants. In a multi-racial country like Singapore, participants may be vegetarians, strict vegetarians, Hindus (who do not consume beef), while others only consume Halal food (food that is prepared in accordance with certain Muslim guidelines). Some participants will even insist on the Halal certificate of the food and beverage vendor or caterer. There may also be participants who are allergic to certain types of food. They best way to find out about dietary requirements is to check with the participants directly.
Time Frame (When are we holding the teambuilding
Duration of the teambuilding should also be considered, is it going to be a half-day or full-day event? If there are specific issues to be tackled or training involved, it may be good to consider a 2-day or even 3-day programme.
4. Inclinations (What will the participants like
to do during teambuilding?)
Chances are, if your group size is big, you will have a mixture of all sorts of people, however, there are cases where the group size is big and yet the participants are all fairly active and prefer outdoor kind of games.
We should also take note that it is impossible to please everybody especially when you are planning an event for eighty or a hundred people. The rule of thumb is to have a good mix of indoor and outdoor activity especially if your size is big, unless you are deliberately exposing the participants to a particular type of setting, or you know their preferences.
Money matters (Budget for the teambuilding event,
including food and beverage and venue rental)
Next you have to decide if the teambuilding portion is to be outsourced to an external vendor. Of course, if budget permits, there are many advantages to outsourcing the teambuilding portion.
Firstly, to run a teambuilding event, you will need manpower and, chances are, if your colleagues are executing the event with you, they cannot be participating. Staff from the teambuilding vendors will likely be more experienced in conducting the activities and less likely to make mistakes.
teambuilding vendor will also help you with all the logistics involved
in the teambuilding exercise, leaving you to basically tell them your
requirements and sit down with them to go through the detailed programme.
Assessment of success (how will the teambuilding
event be considered successful?)
Some organisers will have to submit a post event report to management after the event. Certain organisations will even require pre and post event survey to find out about the issues at work to be addressed and track the effectiveness of the teambuilding session.
Knowing the requirements better will assist us in finding the right activities, tools and decide on how detailed the documentation should be.
Location (Where will we hold the teambuilding event?)
With the O.P.T.I.M.A.L. approach, we trust that you will be able to plan for your teambuilding event effectively. If you are running the teambuilding event with your committee internally, be sure to draw up a detailed work plan and budget, with clear responsibilities for every task.
Next, remember that one of the key ingredients of effective teambuilding is rehearsals. You will need to get your staff on the ground, look at the venue and rehearse through all the activities of the event, very likely there will be issues raised during trials and improvements will be made.