Innovation has shaped our human society and daily lives throughout the ages. Without innovation, there won’t be electric lamps to provide light to our homes and workplaces, long distance-call would not be possible, air travel would have taken days and not hours to far reaching destinations, wireless communication would not exist, and the convenience of online purchases probably a figment of imagination. We won’t have the Internet, iPod, iPhone, iPad, GPS, industrial robots, solar energy-generating arrays today.

The world that we live in is constantly changing. It is changing at a very rapid rate. And change is unstoppable. Today’s solutions will be replaced by far more superior alternatives faster – unlike anything history has ever seen – within a few short years if not months. If companies do not innovate, they may be successful with its current products or services but for only a limited time before they are eventually displaced by competition or disruptive technologies.

Innovation takes place almost everywhere. If we look around us carefully, we will find it prevalent in technology, processes, services, marketing and distribution, and supply chains. We can even find it in business models adopted by very successful companies.

We have seen how economic growth was achieved in the past on the back of technological innovations in semiconductors, biotechnology, the Internet, and telecommunications. The next big wave may see innovation in energy technology. The low manufacturing costs of paints, chemicals, petroleum-based products, glass, sheet metals and assembled goods are the result of continuous process innovation over many years that have reduced assembly steps, labor costs and improved reliability. Viral marketing, overnight delivery service, and direct distribution via the Web are all based on innovations in marketing and logistics. And just-in-time supply system assures goods are on the shelf when people want them eliminating costly stockroom inventories and delays.

In business models, Apple found a whole new approach to generating revenue through iTunes downloads of music files, films, and audiobooks. Dell, through an innovative business model, customizes and sells directly to retail customers cutting out the middlemen. Amazon’s e-book, Kindle, is a new model for generating revenues from text content.

Innovation’s starting point is creativity. There must first be creative ideas before we get innovative solutions. Hence, creativity is the fuel that sparks innovation. Only ideas that are commercialized become innovation.

The challenge confronting business leaders today is how to generate creative ideas for their businesses? How to move from ideas to bringing their innovation to the market? How to combine their innovation with a strategic plan that can move their companies forward?

The answer lies in the leadership that is needed to take the effort through idea generation, working through creative groups, recognizing and seizing opportunities, garnering the necessary support, testing it for business potential, placing strategic bets, managing their risks, positioning for market entry, whilst at the same time ensuring strategic fit.

Most of us would prefer to give than to receive it. We find receiving it difficult perhaps because it is often viewed as something totally negative: someone has just expressed a view that is contrary to our beliefs or judgment implying we could be wrong and, as a result, that we may be seen in a less-than-positive light. We are also hurt most by critical feedback that questions our integrity and job performance.

Yet critical feedback can be constructive if properly given and received. It provides us information as to what is working and what is not. So if you are at the receiving end of critical feedback, it may not be wise to simply shut out.

Know that there are basically three types of critical feedback: valid, unjustified and simply a difference of opinion. As humans we are not perfect and we do make mistakes in which case the critical feedback would be valid and we would need to take corrective action. Sometimes, we may fall short of someone else’s expectations which are not communicated to us ending up with them disappointed in which case the critical feedback may be unjustified but would still require some sorting out. Yet there may be times where the critical feedback given may simply indicate a difference of opinion.

As a response to critical feedback, first overome our natural instincts that may cause us to over react such as counterattacking and becoming defensive. Next, assess how the critical feedback was given, the intention behind it, and how valid you believe it to be. Finally, decide on what action, if any, you want to take with the feedback.

There is nothing wrong with serving or learning to serve others. Learning to feel and care for others. In fact, it is a virtue to be cherished.  Perhaps we have had too much of a good life that we have forgotten about others around us other than ourselves. If you like to be served, as many of us do, do you not think others would love to have you do the same for them too? 

It is not impossible for us to excel in service. Afterall, we are a people known for our obsession with world class practices, across all industries and institutions, and have done well in many of these areas. It will be sad if we come this far with our hardware but void of the other heartware. Wouldn’t it be nice to have foreign friends and visitors say our country is “warm, friendly and hospitable” instead of the usual just “clean and green city”? Equally important is to also extend service excellence to our own kind so that we grow into a more gracious and caring society. 

Wherever you are, wherever you go, you can choose to create the ideal environment for interaction that creates a positive experience for you and others around you. Having that mindset will shape your attitude and determine your response. Your tone of voice will be more positive and engaging. You will be ready to listen and will come across as caring and concern. You will begin to smile more often. 

Remember that service is interaction between two or more people. It is about building relationships between you and others. You can make the choice to respect the other person and treat her as you would have her treat you, and your attitude and behaviour will naturally reflect that commitment.

This is a sure killer. If your corporate music or marketing message comes on while your customer is on hold, your customer will become delirious.

Recently, I called XYZ for a cab to make a booking as I needed to get to a downtown office for a very important meeting with a client. When I got through and before I could say five words, I was put on hold. An automated voice came on, “Thank you for calling XYZ. All our lines are busy at the moment. Your call is important to us. Our service representative will attend to you shortly. Please hold.”

This message was repeated eight times as I was kept waiting for more than two minutes. I hung up and made a fresh call. The same thing happened again! Guess what? I simply hung up and called another company!

Did the company really value their customer call as important? Was that a good customer experience for me? You know the answer. Am I likely to forget especially when this has happened before with the same company? Not likely. In fact, you can be sure I will tell many other people about this bad experience.

Businesses need to remember that when a customer is put on hold for ten seconds, it probably is too long a wait. If the customer is kept waiting for longer, it will certainly feel like an eternity. Customer-centric organizations know the importance of setting service standards and meeting or exceeding them.

Delegation involves giving an employee the responsibility for part of your job and the authority to carry it out while you retain control and accountability. Empowerment is very similar to delegation with the added responsibility and authority to make decisions tied to the assignment while you retain control and accountability.

To ensure that things go smoothly when you delegate, you should:

• Make your expectations clear to your employees concerning the quality of the work, time frame for completion, etc.
• Invest time upfront preparing your employees to handle the task well by providing coaching or skills based training.
• Build employee confidence. Praise them for previous work and point up their knowledge and skills. Your staff need to know that you chose them to do a task because of their competence, and most importantly, because you trust them to do the job well.

If you want to truly empower your employees, you need to ensure the following:

• Invest in your employees’ knowledge, skills, and ability.
• Believe in your employees’ ability to be successful.
• Be absolutely clear about your expectations.
• Provide them a safety net.
• Identify those who can and those who can’t be empowered.
• Share information with them.

Delegating and empowering employees have positive benefits. Both build employee abilities, experience, and confidence. Therefore

• Use delegation and empowerment to train your staff members.
• Pick delegates who are confident enough to admit they are encountering problems.
• Make sure that those empowered to oversee tasks are not limited by lack of others’ support, both within and outside your unit.

The most common appraisal mistakes are:

1. Inadequately defined standards of performance
2. Overemphasis on recent performance
3. Miscomprehension of performance standards by employee
4. Insufficient or unclear performance documentation
5. Inadequate time allotment for performance appraisal discussion
6. Too much talking by manager/supervisor
7. Lack of follow-up plan

Inadequately Defined Standards of Performance

What is expected must be defined if the performance appraisal is to have any meaning for the employee, for the organization, and for the rating manager. A clear and measurable idea of effective or superior job performance is the indispensable basis for any performance appraisal. Yet, all too often, it is missing. Managers need to know what they expect of their employees otherwise evaluations cannot be made or defended at the end of the appraisal period.

Overemphasis on Recent Performance

If the manager does not gather data over the appraisal period, inevitably, whatever happened in the early part tends to be forgotten, and he or she ends up basing the appraisal on the events of the most recent month or two. Employees know the same thing and are likely to be on their best behaviour a month or two prior to their year-end appraisal. On the other hand, if the employee happens to be having some difficulty at the time the appraisal is completed, it is just as inaccurate. Either way, the manager is being overly influenced by a particular moment in time which does not present a truly balanced picture which leads to a flawed and inaccurate appraisal.

Miscomprehension of Performance Standards by Employee

Employees must be given adequate explanation of the performance standards by which they are being evaluated or the ratings at the end of the year, even if accurate, may be seen as unfair. They may not perform well in the first place because they did not have a clear target or benchmark to guide them. Employees should know not only what the standard is but also, at least in a general way, how judgments are reached.

Insufficient or Unclear Performance Documentation

Of all the performance appraisal errors, failing to document performance is the most common for two reasons: (1) managers tend to put off the work till performance appraisal is around the corner, and (2) managers seem to share a widespread ambivalence about the appraisal process as a whole. Often managers are reluctant to write down anything negative about an employee. But it is important to point out that a performance record in which accurate positive and negative factors are mentioned will give a balanced picture that is certainly a necessary basis for a plan that will go to work on the employee’s developmental needs.

Inadequate Time Allotment for Performance Appraisal Discussion

If the manager wants to use the performance appraisal as a vehicle to develop employees, help them improve in their current job, and perhaps increase their opportunity for advancement or promotion, then he or she must schedule enough time to discuss the employee’s performance in depth. It should not be merely giving the employee the evaluation but having a meaningful dialogue about the implications of the appraisal.

Too Much Talking by Manager/Supervisor

To get the most out of the discussion, a manager needs to listen as well as talk. The manager may have completed the appraisal but there are still things he or she may need to know. To make the appraisal motivating for the employee, the manager needs to know what that employee is thinking and feeling and to listen carefully to what the employee is saying. This discussion is also a chance to get at the root of performance problems. So both good interviewing as well as presentation skills is needed here.

Lack of Follow-Up Plan

Without a follow-up plan, it is less likely the manager is going to meet his or her objectives. A formalize plan is needed for improving the performance of the employee making it more likely that it is going to happen. The manager also needs to talk with employees about how they can keep, support, and advance the mission of the organization over the coming performance period.

Focus on delivering customer satisfaction to achieve your long-term business goal

 

Another of my article is featured in CATS Recruit Section, page C30, of The Straits Times today, 17 June 2009. We have it reproduced here below for your reading pleasure.

Businesses will need to manage the process of cost reduction well to ensure that they do not unwittingly compromise their product quality or service standards. Cost-cutting is a short-term strategy. It is far more important that companies take a long-term view to build and strengthen their organisation and its capabilities now, positioning themselves for the eventual economic recovery.

Over the years, businesses have worked hard to win customers to get to where they are today. To lose their customers now would be tragic indeed. Studies have shown that it costs up to six times more money to acquire a new customer than to retain an existing one. In the slow economy, it would probably cost even more to win a new account.

Businesses must have an unrelenting focus on delivering the best customer experience. There must be the line of sight from the top to the bottom of the organisation. Take care of that and you will enjoy customer loyalty – and revenues and profitability will follow. Many companies find that 20 per cent of their customers provide over 80 per cent of their revenue. Thus, high levels of repeat customers will lead to high levels of profit.

To achieve that, companies must remain constantly vigilant about the changing requirements of their customers, understand their business models and the markets they operate in, know what their customers want and deliver these to help their customers succeed.

Achieving excellence

To achieve business excellence, everyone in the organisation needs to focus on delivering customer satisfaction by taking personal responsibility for improving processes and be empowered to make changes.

Departments need to become self-managed teams; cross-functional teams are needed at the company level; and the organisation needs to be flatter and more efficient for faster decision-making and response. When the company finds a problem or an opportunity for improvement outside, they need to collaborate to find the solution.

For that to happen and for that change to be successful and sustainable, a holistically integrated approach to business excellence, which engages all parts and elements of the organisation and its leadership, is required.

Leadership for change

Executives must lead the change process, the thinking about productivity and quality to learning to create a company that consistently delivers high value and customer satisfaction.
They must establish a culture of continuous improvement that seeks to remove bottlenecks, eliminate sources of wastes and customer dissatisfaction, and become more efficient and more effective.

There must be a focus on reducing cycle time, rapidly transferring knowledge and delighting the customer – these help the company to maintain its competitive edge.

Management must also be able to spot changing customer preferences, be aware of the changing competitive landscape, harness advances in technology, seize opportunities and implement new solutions rapidly.

Product and service standards have to stretch from the top to the bottom of the organisation and need to cut across all departmental lines. The organisation’s own learning and development process must be structured, systematic and focused on building on its strength. Critical systems that support hiring, training, recognition, career advancement and information access need to be in place.

Employee engagement

Organisations can reorganise, downsize and streamline their way to efficiency. These approaches are necessary but often not sufficient to catapult organisations into high performance mode because they neglect one essential component of performance – engaging employees in their work.

To mobilise the entire organisation, leaders must ask for employees’ inputs and their involvement, especially in areas that need improvement. Unfortunately, in modern day continuous improvement process this step is often missed which causes communication and ownership problems that hinder success. Employees must be trained and equipped to go from “good to great”.

Total approach needed

For companies to be successful in their business, they need to be responsive to their customers’ needs at every step of the business process involving every function, employee and leader. Anything short of a total approach is unlikely to deliver the desired outcomes.

Organisational transformation is a long-term process requiring a fundamental change in management practices and culture – a paradigm shift.

Finally, the organisational direction that advocates the strategic intent has to be clear about the objectives that needs to be achieved, the type of values and capabilities that are needed and how all this is going to be implemented for successful change to occur.

If you like this article, please subscribe to our blog and get our Free Report on “10 Secrets to Successful Employee Engagement”. If you have comments, we would love to hear. Please post them below.

P.S. To find out more about this topic, Register NOW and enjoy early bird discounted fee (by 19 June 2009) for our 2-day workshop at ST701 Professional Development Workshop to be held on 29 & 30 June 2009. Please log on to www.jobs.st701.com or email to st701@sph.com.sg. Alternatively, you may also call 6319 5979 / 6319 5923.

My article was featured in CATS Recruit Section, page C26, of The Straits Times on 11 June 2009. We have it reproduced below for your reading pleasure.

There are costs involved in manufacturing a product or providing a service. In fact, every activity in an organisation costs money. And prudence would have it that money in any business should be well spent or invested.

Cost is, undoubtedly, a key factor to competitiveness. As organisations face the current global economic challenge, the pressure now is even far greater for them to find ways to reduce their operating costs to remain profitable. But it has also become increasingly difficult to compete on price alone.

For businesses to remain profitable and viable over the longer term, companies will have to continue to satisfy the needs of their customers in more efficient ways, demonstrating value for money.

Prominent American quality consultants Armand Feigenbaum and James Harrington have pointed out that 25 to 40 per cent of operating costs result in waste. Separate studies undertaken by the American Society for Quality (ASQ) have also shown that waste can go as high as 40 per cent of sales.

Waste is any resource-consuming activity that adds no value for the customer. For most organisations, customers are the users or consumers of their products, services or both. Clearly, the focus is on external customers. But identifying waste can and must also be applied to the support activities that serve internal customers.

High Costs

In the past, there was insufficient information about production and service costs. Hence, there was limited scope for comparisons and benchmarking. Organisations, as a result, were able to pass on their high costs of production and services to their customers and continued to do so for a long time.

Nowadays, customers are more well-informed about processes and the service delivery supply chain. They are now able to analyse and compare the cost structure of their supplier organisations to determine where they might be able to derive highest value for the money they pay to acquire goods and services.

Limitations

In traditional accounting, organisations may know their total revenues and costs to the penny. But they have no idea how much they throw away every day on plain simple ineffectiveness, inefficiency and waste.

These are not visible on financial reports because traditional accounting methods do not provide a means of separating value-added activity from wasteful or low-value activity. As such, they do not show the high costs of ineffectiveness and inefficiency within the organisation.

Reducing Waste

Since traditional accounting methods have their limitations, the management of most organisations attempt to control inefficiency and ineffectiveness the best they can without proper tools and metrics – resulting in much wasteful activity.

If your accounting systems are of little help and your management practices lack the knowledge to be lean and productive, then how do you identify waste and unproductive costs?

There are two approaches. The first is a variation of cost accounting and is called activity-based costing, or ABC. It is an excellent system for identifying low-value activity, but it has drawbacks. It is a formal accounting system that parallels existing systems; it depends on considerable input from large numbers of individuals who already are working at their time capacity limits, and it requires a high level of system support.

The second approach is one with assessment and problem-solving capabilities and is called the cost of quality or COQ.

Improve Processes

The biggest opportunity organisations have to boost the bottom line comes from improving their business processes. The survival of many organisations is dependent on these improvements.

In many companies, management can make more profit by cutting unnecessary costs in half than doubling sales. This can be accomplished without hiring one new person, building a new facility, or finding one new customer.

Organisations must therefore identify unnecessary costs in the business processes and take action to improve the company’s bottom line.

Organisations must help their employees recognize wastefulness, maintain a high visibility of what these are, systematically reduce non-value-added activities and reducing costs the smart way.

An organisation that focuses on profit may have maximum profits in the near future. But an organisation that focuses on its reputation of being the highest value provider will provide the best return to its investors in the long haul.

If you like this article, please subscribe to our blog and get our Free Report on “10 Secrets to Successful Employee Engagement”. If you have comments, we would love to hear. Please post them below.

P.S. To find our more about this topic, Register NOW and enjoy early bird discounted fee (by 19 June 2009) for our 1-day workshop at ST701 Professional Development Workshop to be held on 26 June 2009. Please log on to www.jobs.st701.com or email to st701@sph.com.sg. Alternatively, you may also call 6319 5979 / 6319 5923.

We will be delighted to have you at these workshops. Please register early to enjoy discounted fees.

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