I think I've finally discovered the relevance of Isaac Newton to modern management. And it is not related to gravitation and how companies that go up must come down. His laws of motion describe action and reaction and how they are different and in many ways opposed to each other. How would you classify management behavior as actions or reactions?
Let's take a look at some typical business situations and behavior in the context of action and reaction.
What are actions and what are reactions? We associate actions with behavior based on standards and principles, knowledge, behavior that is well thought through and intelligent. Reactive behavior, on the other hand, tends to typically be inconsistent with standards (often ignored in haste), executed with insufficient knowledge of the situation and clearly not well-thought through and embellished with more emotion and not as much rationality. Reactive organizations tend to do more fire-fighting, have more cowboys than Indians and a ready-fire-aim attitude. They are always short on time and information. Is the business cowboy a real hero? Or is he really a lone ranger who is fast vanishing in tot he sunset?
How do we make the journey from a reactive organization to one that tends to act more often than it reacts? In addition to experience and thorough training, having a clear set of operating principles a fundamental difference is the awareness of the business - its customers, the supply chain, competitors, asking the right questions and making appropriate decisions. The two most important responsibilities of a business are to know (all of the above) and to execute flawlessly. A business that simply executes but lacks intelligence (has a clear, comprehensive picture of its environment) is severely handicapped.
What does it take to become an intelligent business? It's more than simply having lots of data and reports. Most businesses are swimming in an ocean of irrelevant bits and bytes provided by their IT staff. Being able to ask the right questions is even more important than getting lots of answers. For example, is it more important to hear about a new product announcement from the competition or to ask how the competition is able to get new products out on schedule and create a buzz in the market. An urgent priority for leadership is to think hard and deep to find the right questions for their business unit on an ongoing basis. Regardless of whether questions can be answered or not easily, the question must be raised. Management meetings should be rated by the number and sophistication of questions raised rather than information exchanged or issues resolved. Questions increase organic awareness and knowledge, result in actions, directions being set and risks being identified. Questions that are not raised result in risk exposures, blind spots and poor learning. I once asked the CFO of a local semiconductor equipment manufacturer about inventory levels and how these were determined and how his company determined they had inventory issues. His answer was not very surprising - as long as the year over year trends were acceptable and there were no shortages having millions of dollars in inventory or excess were not questioned.
A culture of seeking the right questions combined with powerful analytic capabilities using information (including benchmark data) from within the organization, from the market, from the competition and other external sources and tapping in to expertise is an essential step to becoming an intelligent, learning organization.
Let's take a look at some typical business situations and behavior in the context of action and reaction.
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| Analysis of business activity |
How do we make the journey from a reactive organization to one that tends to act more often than it reacts? In addition to experience and thorough training, having a clear set of operating principles a fundamental difference is the awareness of the business - its customers, the supply chain, competitors, asking the right questions and making appropriate decisions. The two most important responsibilities of a business are to know (all of the above) and to execute flawlessly. A business that simply executes but lacks intelligence (has a clear, comprehensive picture of its environment) is severely handicapped.
What does it take to become an intelligent business? It's more than simply having lots of data and reports. Most businesses are swimming in an ocean of irrelevant bits and bytes provided by their IT staff. Being able to ask the right questions is even more important than getting lots of answers. For example, is it more important to hear about a new product announcement from the competition or to ask how the competition is able to get new products out on schedule and create a buzz in the market. An urgent priority for leadership is to think hard and deep to find the right questions for their business unit on an ongoing basis. Regardless of whether questions can be answered or not easily, the question must be raised. Management meetings should be rated by the number and sophistication of questions raised rather than information exchanged or issues resolved. Questions increase organic awareness and knowledge, result in actions, directions being set and risks being identified. Questions that are not raised result in risk exposures, blind spots and poor learning. I once asked the CFO of a local semiconductor equipment manufacturer about inventory levels and how these were determined and how his company determined they had inventory issues. His answer was not very surprising - as long as the year over year trends were acceptable and there were no shortages having millions of dollars in inventory or excess were not questioned.
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| Business Maturity Model |
