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How To Get Purchasing Right

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


Procurement is a deep skill, with its own professional membership bodies around the globe:  the Chartered Institute of Purchasing and Supply in the UK. Yet small organisations rarely have the scale to justify a full-time qualified professional purchasing manager.

This means that all managers working within a supply chain need to be able to turn their hand to the craft of buying – and to be able to do it well enough to secure the right materials, assets or services, at competitive rates.

Another reason for needing a good basic understanding of procurement is because, if your organisation does have a professional purchasing team, their interests and yours may not always, on the surface, overlap completely.  Understanding how this is so, and what pressures they are under, will help you to negotiate  with them and influence the selection process. Often, in setting good practices, purchasing managers create ample flexibility. Your job is then to establish where it is and learn how to exploit it to the good of your organisation. The confrontational approach that many managers adopt with central functions will rarely achieve the results you need.

So what is it that Procurement Professionals know?

Professionals follow a simple purchasing cycle.

Procurement Process

What makes the cycle work well is the understanding that blindly following the process can produce unintended results. Each organisation will optimise the details of their process for certain factors, like price, speed, reliability or accountability. Adaptability is the key to getting it right in every case. Here are some tips for a strong underpinning to your process.

1: Cost and value are not the same thing. If you focus only on cost, you rarely achieve value.

2: If you do not specify what really matters, the negotiation process will optimise for cost and deliver the wrong result. Ensure you understand the functional and logistic requirements of the department or team on whose behalf you are procuring the goods or services. Use your expertise to adapt the process appropriately, to balance consistency and transparency against the genuine variability in requirements across a complex business.

3: Over-focus on cost comes with a price: ‘you get what you pay for’ as my dad used to say.

4: A paper and data based evaluation of your supplier is valuable, but if you are going to depend on that supplier, quality accreditation and balance sheets are not enough: you need to speak to other customers and visit the supplier’s site to meet the people you will rely upon.

5: Regular reviews are important to ensure that they are maintaining the quality and service standards that led you to select them at the start of your relationship.

6: The right balance of competitive market testing and long-term relationship building will yield the best results. If you commit to a supplier for too long, without subjecting their prices and services to competition, they may become complacent, but if you try to re-tender your contracts too frequently, suppliers will have little reason to be loyal to you, knowing that an opportunist competitor could offer a lower price in a year or two.

7: Everything is negotiable, but if you take a stance that is too aggressive, your supplier may need to make hidden compromises to maintain their profitability. Those could harm you in the long run.

8: Once you have built a relationship, it is tempting to relax and turn your focus elsewhere. Continue to invest in the relationship with frequent communication, regular meetings and constant research into new developments in the trade, from things like trade shows, conferences and trade journals. Discuss new developments with your supplier and gauge their levels of investment in new ideas and technologies.

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Styles of Management

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


In the ‘good old days’ – good old days for managers, that is – there was one style of management:

Tell them what to do – expect them to do it – punish them if they don’t.

Life must have been easy then for managers: no need to motivate people (more on that in coming weeks), no back chat and alternative ideas from staff, no worry about giving offence, and high levels of compliance.

Scientific Management

On the other hand, how efficient were workers then? Frederick Winslow Taylor wanted to apply the principles of science to management and was the first person to try to analyse an organisation, test his ideas with experiments, and document the results.

‘Taylorism’ treated people as cogs in a machine. Optimise all aspects of the process, including people, to get the best results. So Taylor introduced time and motion studies to optimise how workers did things, and piece rates as incentives for workers. He said ‘do it this way and you will get your reward’. This was scientific management.

Humanistic Management

Scientific Management largely failed. Yes, it led to the hugely successful production line and arguably to just-in-time concepts too. Six Sigma, TQM and Lean can all draw their origins from scientific management too.

But it failed as regards people. Elton Mayo was a follower of Taylor and tried to apply Taylorist principle in the Hawthorne Lighting Plant. He discovered that changing light levels changed work rates. But it didn’t matter how you changed the light levels, as long as you engaged the workers in the process. What mattered was engaging people. It still does – that’s why staff engagement is such a big deal.

Theory X or Theory Y

The tension between task focus and people focus was crystallised by Douglas McGregor in his models of management style called Theory X (task, transaction, process, incentive focused) and Theory Y (people, consensus, motivation, satisfaction focused).

These are reflected in two contrasting styles of day-to-day management: Management by Objectives (MBO) and Management by Walking About (MWA).

MBO is all about setting clear objectives to staff and supporting them in achieving them – it is formal, transactional and has been seen as highly successful. For example, Bill Packard attributed the success of Hewlett Packard in its heyday to MBO.

But strangely, Bill Packard was well known for wandering around all areas of his business, chatting with people, building relationships, sharing ideas and offering inspiration.

Balance

There is no ‘right’ style of management. We each need to find the right balance, that works for us. We also need to adapt that balance to each individual and to changing circumstances.

Balance of Management Styles

Further Reading

You may also like the Pocketblog articleIt’s time to get enabling

Three Six Sigma Articles

  1. Belt up and Reduce Errors
  2. The DMAIC Solution Process
  3. Six Tools from Six Sigma
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Starting in Management

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


Beginning a career in management can throw the best of us.  You are probably excellent at the job you have just finished and, whilst you will still need some of your technical skills, they will play a far lesser role in determining your success.  You will naturally feel a draw towards the security and comfort of burying yourself in the technical aspects of your role, but almost certainly, this will be a mistake.  Your role is management and managing should now occupy the bulk of your time.

So, what are some of the things you will need to focus on now?

  • supporting and motivating your staff
  • setting expectations and assessing performance
  • giving recognition for achievement and corrections for errors
  • planning and preparing at increasingly strategic levels
  • maintaining an environment where your team can succeed
  • securing the resources your team needs – including new members
  • training and developing team members
  • reporting on progress and on setbacks
  • negotiating for opportunities, resources and funding
  • financial and personnel management

Exercise: Understand your Management Responsibilities

Using this checklist, speak with your boss and with your new peers to get a clear idea of what your roles are and also how you are likely to need to split your time among them.  Understand:

  • which are most important to your and your team’s success?
  • which are most time-consuming?
  • where are the pitfalls?
  • what are the annual cycles and how will the balance of priorities shift through the year?

What First?

As a manager, your role will be to manage resources: usually people, but sometimes materials or assets.

Step 1: Your first priority is to understand those resources: meet the people, inventory the stock and survey the assets.  As you do, make notes to help you remember what is important.

Step 2: When you have finished, write yourself a readiness memo, titled: ‘An analysis of the resources at my disposal and their fitness for the task at hand’.  You may want to conduct a SWOT analysis to help you with this.

Readiness Memo

Step 3: Next, use this as the basis for drawing up a two to three month plan of action.  At best, it will focus on stabilisation and incremental improvement.  At worst, it may need to be a turnaround plan.

Step 4: When you have done this, file your memo securely, where nobody else can access it or, better still, destroy it.  It will likely contain frank opinions about the people on your team that you will not want to become public.

Further Reading

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Alfred Chandler: Business History

It’s just a few people who could claim to have invented an academic discipline, but one who could, with some justice, is Alfred D Chandler. He was a historian who studied business, and in so doing, he inferred large historical patterns that still inform our thinking.

Alfred Chandler
Alfred Chandler, 1918 – 2007

Short Biography

Alfred DuPont Chandler was born in 1918 into a Delaware family that had commerce in its blood. In one branch of his family was grandfather Henry Poor, of Standard and Poors, and in another was the duPont family. He studied for a Masters degree at Harvard College before the war, where he was a friend of John F Kennedy. After service in a non-combat role, he returned to Harvard to finish his Masters and earn his PhD with a study of Henry Poor and the coming of the American railroads..

An appointment to MIT allowed him to study more large corporations in depth. His analysis of duPont, General Motors, Standard Oil, and Sears Roebuck & Co led to the publication in 1962 of the first of his three most noteworthy books (among over 25 in total): Strategy and Structure.

He also worked for a while at Johns Hopkins University, before returning Harvard in 1970, as the Isidor Strauss Professor of Business History at the Harvard Business School. There, he wrote his second major work, 1977’s The Visible Hand: The Managerial Revolution in American Business. This exceptional work won Chandler the Pulitzer Prize for History, and was the first business book to be recognised with a Pulitzer Prize. The title is a deliberate reply to Adam Smith, whose ‘invisible hand’ is the market. We’ll see what Chandler was referring to in a moment.

In 1990, Chandler published the last of his three major books, Scale and Scope: Dynamics of Industrial Capitalism. In this he shows that it is not just scale of operations that bestows big economies and hence competitive advantage. It is also scope – capturing a diverse spread of markets early on. Uncharacteristically, Chandler looked to economics and borrowed the term ‘first mover advantage’.

Having retired from the Harvard faculty in 1989, Chandler continued to work, write and comment on changes in business, and was a visiting professor at numerous institutions. He died in May 2007.

Themes of Alfred Chandler’s Work

Chandler’s approach of wide-ranging comparative analysis to find historical patterns of evolution and change initially encountered a lot of resistance from the academic business community. These academics favoured using economic and quantitative analysis to build their theories, but Chandler was able to change many (though not all) attitudes. Today’s business school focus on case studies and the rise to prominence of academics and writers like Jim Collins.

Strategy before Structure

The primary thesis of Chandler’s ‘Strategy and Structure‘ is that strategy must come before (and therefore dictate) the structure of the corporation. His historical observations led him to conclude that market forces need to drive shifts in the way organisations evolve, and he was able to predict the increasing trend for decentralisation that continues, in the largest businesses, today.

More recently, academic and business commentators have disagreed. Tom Peters observes that it is structure that determines which strategy a corporation will select, and Richard Tanner Pascale argued that Chandler assumed that organisations act rationally. They don’t, and he also notes that organisational structures play a big role in shaping strategy.

Trust Gary Hamel to sort it out, by seeing the subtlety of the competing views. He notes that the two are intertwined: new challenges lead to new structures, and new structures present new challenges. He concludes:

‘Few historians were prescient. Chandler was.’

Arguably, Chandler is, along with Igor Ansoff, one of the founding advocates of the study of business strategy.

Professional Management

Chandler also charted the rise of professional management; first in Strategy and Structure and then, more fully, in The Visible Hand. He saw managerially led corporations in the US rise with the growth of the railways and the need for complex, geographically-spread, systems. These first arose within the railway companies, and then in the corporations that grew nationally, due to the opportunities that long-distance transport offered.

It was the visible hand of an organisation’s managers that replaced Smith’s invisible hand of the market as a major driver of the structure of a modern business.

Further Reading

I rarely cite another website for further reading about our Management Thinkers, but in this case, I am compelled by the excellence of the article at the Strategy + Business site. I have deliberately avoided borrowing from it. If you are interested in Chandler, this should be your next port of call.

 

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Rosemary Stewart: Practical Management

Rosemary Stewart studied management extensively, in the UK. Rather than revolutionary, her ideas serve to underpin the day-to-day challenges real managers face in the real world.

Rosemary Stewart
Rosemary Stewart

Short Biography

Rosemary Stewart was born in London, England, in 1924, and grew up first in Sussex, and then moved to Saskatoon, Canada, where she finished her secondary education. She studied economics at the University of British Columbia and then returned to England in 1945, after graduation (and after the war), to study Social Psychology at the London School of Economics, where she also won her doctorate in Management Studies.

She joined the Acton Society Trust as a researcher, and rose to become its director. There, she researched the challenges of large organisations and, in particular, of the newly nationalised British industries. Her interest persisted and she is best known for her studies into and analysis of Britain’s National Health Service. While at the Acton Society Trust, she worked with Joan Woodward, and Reg Revans was also a researcher there.

After seven years, she joined the new Oxford Centre for Management Studies, which became Templeton College, where she was made a Fellow and then, in 1992, upon her retirement, an Emeritus Fellow. Her long-time interest in healthcare management matured when, in 1996, she became the first Director of the newly founded Oxford Health Care Management Institute.

Rosemary Stewart died in 2015.

The Reality of Management

Rosemary Stewart was a prolific author, although most of her books have fallen out of print. Her three most notable books are still available:

All of her books have a focus on real, day-to-day management challenges, pitched firmly at middle managers. They help managers navigate the choices they need to make and the structures within which they work.

They are neither heavy-weight academic tomes, nor lightweight populist handbooks, and so are ideal for the interested, thinking manager, who wants ideas to help her or him to be effective at work.

Choices for the Manager

In the latest of Stewart’s three classic books, she fully articulates the model with which she is most closely associated. She suggested that management effectiveness arises from dealing well with demands and constraints, and, as a result, making good choices.

Demands, Constraints, & Choices - Rosemary Stewart
Demands, Constraints, & Choices – Rosemary Stewart

The diagram sums up 15 years of Stewart’s research.

Demands

Demands on a manager set out what they must do; their responsibilities or duties. But they also  include the demands we make upon ourselves, alongside those imposed by your organisation, manager, peers, and external players, like customers, suppliers and other stakeholders.

Constraints

These are the factors that will also limit a manager’s scope for choices. If anything, they have grown in number since Stewart originally wrote her list. Whilst we arguably have more technology choices, and more choices of where to outsource work to, she did not account these as constraints. Rather, using the one technology available, in the one location it was sited was something she took as a given.

Choices

What everyone in a creative role knows is that constraints don’t just limit choices, they make them clear and give us scope for innovation. But managers do have a lot of freedom about how they work with the resources they have. How well you exercise these choices will dictate your performance as a manager.

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Jamie Oliver: Chef Businessman

There are many celebrity chefs, and many of them operate successful businesses, so choosing one to feature as one of our management thinkers is tough. But British chef, Jamie Oliver, more than fits the bill. For nearly twenty years, he has maintained the love of the public in the UK, avoiding mis-steps as he took his celebrity career to the US, retains fierce loyalty of people who have worked for and with him, and continues to grow his businesses steadily, whilst contributing significantly to some major philanthropic initiatives, many of which he has led.

Jamie Oliver

Short Biography

Jamie Oliver was born in Essex in the UK, in 1975. He grew up in Cambridge, where his parents ran and continue to run a pub. It was in their kitchen that he first learned the skills of cooking, which developed at catering college and started to take wings when Oliver spent time in France, learning the basics of classical cuisine.

Returning to England, he worked for renowned UK-based Italian chef Antonio Carluccio, where he met long-time friend and cooking mentor, Gennaro Contaldo. From there, he moved to a role as sous chef at Fulham’s River Cafe, where he appeared, unscripted, in a one-off 1997 documentary about the restaurant, and caught the eye of numerous TV producers. After five offers, he signed a deal that led directly to two series of The Naked Chef; a title that reflected his ideas of simplicity in cooking, rather than an alternative to traditional chefs’ whites.

This kicked off a hugely successful TV and recipe book career that continues today, with the addition of massively profitable mobile apps and his own YouTube channels with nearly 2 million subscribers between them. Perhaps his most notable television endeavours are:

  • The 2002 Jamie’s Kitchen,in which he took fifteen seemingly unemployable young people and trained them to be chefs in a restaurant, Fifteen, that subsequently won awards. The model has been replicated in several places and continues to train new cohorts of apprentices under the aegis of the charitable Jamie Oliver Food Foundation
  • The 2002 Jamie’s School Dinners which saw him campaigning for better food in Britain’s schools. This has led to other public health campaigns in the UK, US and Australia. In 2013, Oliver was made Honorary fellow of the Royal College of General Practitioners in recognition of his food health campaigning
  • The same year also saw the first of many culinary travelogue programmes – a format that is particularly popular in the UK. This one took him to Italy and a cuisine he seems particularly attached to
  • Other food campaigns include Atlantic fish stocks, pig farming and poultry

But hey, this is the Management Pocketblog!

Reading about Jamie Oliver’s business nous, it is hard to select a shortlist of admirable management lessons that we can learn from him. These range from the obvious, like seizing opportunities that arise, assessing choices shrewdly, and trading on an endearing personality, to those which are hard for most of us to generalise to our own practice, like keeping a large proportion of your business interests within your family and network of close and trusted friends and colleagues. One might also have added, until recently, maintain a large share of the equity in your business (I believe Oliver owns around 80% in total of his many businesses at time of writing). However, in early June 2015, the press started to report that he is trying to raise significant equity capital to fund a major global expansion of some of his restaurant brands.

So what to focus on?

Jamie Oliver is a public personality, but he has used his charm and charisma shrewdly. He has avoided all manner of scandals that attach to celebrities (including other British celebrity chefs) and seems by all accounts to be a genuinely nice and decent chap, who inspires great loyalty. Many of his close business advisors and staff have been with him from very early on, and many people rush to praise him in the press. On the other hand, there seem to be very few public feuds. This has allowed Oliver to take his personality as the basis for all of his brands, many of which have his name attached to them: most recently, Jamie Oliver’s Food Tube – his primary YouTube Channel.

What are the elements of his personality-based leadership and management approach that can be emulated, if you put the work into them? I think there are five:

  1. Care
    Care passionately about what you do, whether it is your core business, your campaigns, or your appearances in public. And don’t be afraid to let your enthusiasm engulf those around you. This is charisma. And care also about the people around you. This attitude of Oliver’s has clearly rubbed off on many of the people who give interviews and quotes about him.
  2. Inspire
    Set out a vision that you truly believe in with a passion and you can engage people to follow you. Choose your fights wisely, but do be prepared to take on a big fight, if it is important enough to commit everything. You may lose, but Oliver shows that dedication and passion can mean that a catering college educated son of publicans, with little academic background can do better than win the ear of Prime Ministers, he can create an environment where senior politicians can barely afford not to take him seriously.
  3. Work Hard
    Without a doubt, Oliver works hard. His is not a glitzy celebrity without substance. He puts in the hours and models what he expects his followers to emulate. He doesn’t tell, he shows. He doesn’t enforce standards, he sets them for himself.
  4. Learn
    At every stage, Oliver has learned from his experience and grown with that learning. This is wisdom: to become more than you were yesterday, to learn from your mistakes, to shift your approach, and to come back again and again. He has made very commercial misjudgements, but when he has done, he has acted decisively, rather than hesitating, and moved on.
  5. Have Fun
    It is hardly possible to imagine Jamie Oliver without a smile. Even in the serious portrait shot at the head of this blog, he seems to me to be about to smirk. His sense of fun is a big part of his personality and his brand, but more than that, I suspect it is a major resource for him, in maintaining his resilience.

The Power of Food

Jamie Oliver being serious, passionate, and provocative about the impact of food on health: Teach every child about food.

[ted id=765]

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David Maister: Trust and Professionalism

David Maister was described to me by a friend and colleague* as ‘the first good consultant’s consultant’. A former Harvard Business School professor, who hails from the United Kingdom, Maister carved out a niche as perhaps the most influential thinker about professional services and and the role of trust in business.

David MaisterBrief Biography

David Maister was born in London, in 1947,and studied Maths, Economics, and Statistics at the University of Birmingham. He went on to achieve a Masters in operational research from the London School of Economics and a DBA from Harvard Business School, in 1976. He then taught, first at the University of British Columbia, and then, from 1979 to 1985, at Harvard Business School.

During this time, he specialised in transportation and logistics. His books on the topic are now all out of print. He left academia to establish his own consultancy and started to focus on advising professional firms, like accountants, lawyers, marketers and consultants. This led to his keystone work, in 1993, ‘Managing the Professional Services Firm‘. This remains in print and a strong seller. Maister had found his niche. I came under his spell when given a copy of his 1993 book, ‘True Professionalism‘, while a manager at Deloitte. It was written for people like I was then: professional services managers, looking to build a career, a reputation, and a client portfolio.

Perhaps Maister’s most influential book, however, was his 2000 book (co-written with Charles Green and Robert Galford), ‘The Trusted Advisor‘, which introduced us to ‘The Trust Equation’. His last book (to date) is ‘Strategy and the Fat Smoker: Doing What’s Obvious But Not Easy‘. The subtitle summarises the book’s thesis succinctly. At the start of 2010, Maister announced his retirement, shortly after being awarded the Carl S Sloane Award for Excellence in Management Consulting. He now spends his time in his home town of Boston, having forsworn air travel, enjoying the arts with his wife. How unusual and refreshing to see a top business person enjoying a fulfilling retirement.

Five Inter-connected Ideas

I’d like to summarise and interpret some of Maister’s ideas and how they link together by isolating five inter-connected themes, and showing how Maister joins them up.

1. The Trust Equation

At the heart of ‘The Trusted Advisor’ is The Trust Equation, which Maister and his co-authors use to illustrate how the ‘four realms’ of trust interact, to answer questions like: ‘My client knows I am credible and reliable, so why doesn’t my client trust me?’. Trust (T), they argue is the result of four factors: Credibility (C), Reliability (R), Intimacy (I), and Self-orientation (S).

T = (C + R + I ) / S

But trust, they say, is not about knowing and it is not about tactics: it is all about attitudes and character. People will trust you if you show an interest  in them, demonstrate a genuine desire to help them, and have a low self-orientation – that is, you are less interested in yourself than in them. Excellence, Maister says, arises from acting according to agreed principles and values, which also build trust (through reliability – or being predictable in your ethical choices).

Here is the first link: A high trust business will experience high growth. Trust is the best business strategy.

2. Business Strategy

Maister observes that many professional services firms in the same market will often have near-identical strategies. So what will determine which one wins, competitively. Since they are all smart, it isn’t the choice of customers, products, services or marketing: it is the drive and commitment to implement the strategy effectively. And this comes from people and how the leaders of the business manage and lead them.

Here is the second link: To deliver a business strategy, you need energy, excitement and enthusiasm from your team

3. Management

Management is about people, passion and principle. Maister says that one-on-one management is the only real managerial activity, because this is the only way to properly engage with people. A manager’s agenda must be to create a great place to work, rather than working at building their own career: that will follow.

In an article published in 2002 (Business: The Ultimate Resource), Maister sets out 13 rules on which successful managers model their behaviour. I have selected some of my personal favourites:

  • Act as if not trying is the only sin
  • Act as if you want everyone to succeed
  • Understand what drives individuals
  • Know all your people as individuals

Here is the third link: Management is about doing what’s right over the long term for your clients and people. This is the route to great client service.

4. Client Services

Maister sees the world of client services in a fairly simple way. But his work has been able to justify this with logic and evidence. A manager’s role is to energise their people. These people will then serve their clients excellently. Clients will reward the company with their patronage and loyalty. This will lead to great financial performance.

So stop focusing on the financial results – they are a lagging indicator of what matters: focus on energising your people. Maister notes that formal systems, policies and procedures do little to build a business: what it needs is managers to use their informal influence on employees, and demonstrate honour, character and integrity.

Here is the fourth link: Honour, character and integrity are the foundations of a meaningful career

5. Career – Professionalism

True Professionalism was where I started with Maister, and his subtitle neatly summarises Maister’s point of view: ‘the courage to care about your people, your clients, and your career’. His definition of professionalism takes in four critical commitments:

  1. to provide the best, most effective services to your clients
  2. to self-improvement
  3. to caring about your clients
  4. to not compromising your values

Here is the final link, back to the start: Not compromising your values is the key to ‘values in action’. Without this, there can be no trust.


* Michael Coleman, who sadly died in September 2011.

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Henri Fayol: Planning and Administration

Henri Fayol is the daddy.

Henri FayolThere is no other way of putting it: so much of what we take for granted in the way modern organisations are run can be attributed to him.

As a highly successful business manager, he turned around the mining company for which he worked in senior roles for 36 years.

In comparison to FW Taylor, a close contemporary, his contribution was huge.  While Taylor saw managers as mere overseers, Fayol raised them to a professional status and gave them an agenda, a curriculum, and a set of guiding principles.


His ‘functional principles’ of management set out the things we take for granted today:

  • making annual and 10-year plans… and implementing them
  • Using organisation charts to communicate an orderly management structure
  • Sticking to the chain of command
  • Co-ordinating management activities through regular meetings of department heads
  • Getting recruitment and training right

‘And what departments?’ you ask.  In his writing, Fayol described six  business functions:

  1. technical – engineering and production
  2. commercial – sales and procurement
  3. financial – capital management
  4. accounting – cost accounting, stock management, reporting
  5. security – protecting people and assets
  6. management – planning, organising, co-ordinating

He also identified six functions of management:

  1. Forecasting
  2. Planning
  3. Organising
  4. Commanding
  5. Co-ordinating
    (commanding and co-ordinating are sometimes conflated to ‘leading’)
  6. Controlling

Short Biography

Born in 1841 in Istanbul (where his father was a civil engineer) to French parents, Fayol trained as a mining engineer and was employed at the French iron and steel business, Comentry-Fourchamboult-Decazeville. In 1872, he was appointed the director of a group of mines and he became managing director of the company in 1888.  He retained the post until he retired in 1918. sadly, it was only in 1949, when his 1909 book, General and Industrial Management, was published in English, that he gained the recognition he deserved.

His Big Idea

As if the three lists at the top of the blogs were not enough, Fayol’s fourteen principles of management set the tone for business administration for over 100 years, to the present day.

  1. Division of work . Work should be divided among individuals and groups to focus effort and attention on each part of a task. Specialisation allows workers to become more expert and thus more productive.
  2. Authority. Managers have the authority to give orders, but that right also implies responsibilities.
  3. Discipline. Employees must obey and respect the rules and their managers, as long as managers respect the need for sound leadership.
  4. Unity of command. A clear chain of command, in which every employee should receive orders from only one superior (oh don’t we just miss that one, in our modern matrix organisations!)
  5. Unity of direction. Every set of organizational activities needs the same objective and to be directed by one manager using one plan (nice if you can get it).
  6. Subordination of individual interests to the general interest. The good of the organisation is paramount – and then workers must work for their team (sounds like the US Marines – god, country, corps, family, self – Hooah).
  7. Remuneration. Workers must be paid a fair wage for their services.
  8. Centralisation. The degree of centralisation or decentralised should be determined for each situation.
  9. Scalar chain. The line of authority runs from top management to the workers.  this is the scalar chain, and communications should follow it. However, if following the chain creates delays, communications across the organisation should be used, providing everyone is kept informed.
  10. Order. This principle is concerned with systematic arrangement of men, machine, material etc. to minimise waste of time and duplication of stock (reminds me of the 5S methodology).
  11. Equity. Managers should be kind and fair to employees (John Stacy Adams would have approved).
  12. Stability of tenure. High employee turnover is inefficient. Management and staffing should be stable, and managers should plan to fill vacancies.
  13. Initiative. Employees who are allowed to originate and carry out plans will exert high levels of effort (this was Theory Y well ahead of McGregor… even employee empowerment and Corporate Kinetics).
  14. Esprit de corps. Promoting team spirit is a role of managers.  It builds harmony and unity within the organisation.

It would be naive to ignore the many critiques of Fayol’s writing, but it would also be churlish not to credit him with massive strides in understanding, documenting and promoting the discipline of management.  If you are a manager, you need at least to acknowledge his contribution to what you do everyday.

Will his ideas last, as we move fully into the 21st century of ad-hocracy and holacracy? Who knows; but I for one am prepared to predict that managers will be working substantially to his agenda for the rest of my working life.

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Backwards and Forwards

Pocketblog comes out on Tuesdays, which means that this year, it coincides with both Christmas Day and New Year’s Day.  Which means that there will be a short hiatus before the next edition.

But never fear – I shall be busy.  I will be preparing for next year’s exciting new project.  More about that later.  But first…

The Best of 2012

As before, here is a selection of my own favourite Pocketblogs from 2012.

Early in the year, we did two blogs about Emotional Intelligence: ‘There’s more to Emotional Intelligence than Daniel Goleman’ and then offered practical tips to ‘Boost your EQ’.

Emotional Intelligence

In this Jubilee year, we let you into The Management Secrets of Queen Elizabeth II.  Sadly, advance orders for the Modern Monarch’s Pocketbook have been disappointing (we just received our third, with the same address as the last) and we are holding back on publication until orders pick up.

The Modern Monarch's Pocketbook

Another big event for us was the launch of our Management Pocketblog 100 Day Challenge.  We know (from orders) that some of you took it up.  Please do tell us (on the blog page comments) about your experiences.  If you have not yet, it is not too late to take up the challenge.

The Management Pocketblog 100 Day Challenge

We were able to offer readers insightful business and management tips from to impeccable sources this year.  In ‘What matters today, in Business and Management?’ we extracted tips from Time Magazine’s 2012 100 Most Influential People in the World.  In ‘The Oracle of Omaha’, we took guidance from some of Warren Buffet’s top CEOs.

Our three-part series: ‘The New Manager’s Guide to Interviewing’ will be a helpful resource if you are new to this role.  It covered:

  1. Preparing the Ground
    Increase your chances of success well before the interview
  2. Getting it Right
    Hints and advice for conducting and effective interviews
  3. Polishing your Process
    Tips and tricks of the trade

And, for people on the receiving end, we wrote ‘Seven Ways to Interview Well’ just for you.  If you want to stick with your current job, but spice it up a little bit and renew your motivation, try ‘Same Job: New Job’.

Edward de Bono's Six Thinking Hats

Closest to my own heart were:

Our three-part series about dealing with poor performance in staff, ‘Let’s sort out poor performance’, parts:

          1. Infrastructure
          2. Turnaround
          3. The Alternative

These followed on from two blogs, ‘What is Performance Management?’, and ‘The Root of the Issue: Dealing with Poor Performance’.

Bruce Tuckman: Group Development model...  forming - storming - norming - performing - adjourningOur blogs about Bruce Tuckman’s model of Group Development (Forming-Storming-Norming-Performing) continue to be the most heavily read.  In February, we provided a link to all four of them.

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And finally…  Pocketblog honoured two sad losses this year: Neil Armstrong, the astonishingly humble all-American/all-global hero; and Stephen Covey, who wrote one of the very best of the best personal effectiveness book: The Seven Habits of Highly Effective People.

Neil ArmstrongStephen Covey


Coming Next Year

Pocketblog is nearly 3 years old (we started on 23 February 2010) and has chalked up over 150 posts to date.  It’s time for a little refresh.  So 2013 will see a new style of Pocketblog.  Not a radical departure: more of a shift in emphasis.

Next year, we’ll be presenting our Management Pocket-Correspondence Course.  Over the course of the year, we’ll be blogging about the full range of management skills in a structured way.  Why not Subscribe to the Blog by email (towards the top of the column to the right of this) to receive them all in your inbox.

Until then…

From everyone at Management Pocketbooks…

Have a very merry Christmas,
and a happy and healthy New Year.

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Why is an Appraisal like an Ice Age?

That’s a pretty bizarre question – even for a blog title.  So, before I try to answer it  …and to give myself time to think, let me tell you how I come to be asking it.

Glacier

Metaphors

I have been pondering the use of metaphors in business and management theory.  If you have taken an interest in business books or management training for any length of time, you will have come across them – probably many.  Here are a few that come to mind:

  • Decision = Gate
  • Dilemma = Rubber band
  • Management styles = Greek Gods
  • Motivation = Pyramid
  • Negotiation = Ju Jitsu
  • Personality = Window
  • Progress = Traffic lights
  • Resistance = Onion

Some of these are more effective than others, of course.  All of them contain some elements of insight that make them useful.

Time to Play

I like models.  So I decided it’s Friday afternoon, and it’s time to play.  I wondered how easy or how difficult it would be to develop a metaphor for a randomly chosen management topic, using a randomly chosen concept.

Methodology

My methodology – and I followed this honestly – was this.

Step 1
I picked a compendium of management ideas [1] off the shelf and opened it at random to give me the subject of my model.

Step 2
I then picked a book filled with different ideas[2] that happened to be by my desk (having bought it last week at the wonderful Book Warehouse by Waterloo Station).  I opened it at random to give me the basis of the metaphor.

The Results: ‘Appraising Staff’  and  ‘Ice Ages’

Step 3
Brainstorming – is that a metaphor itself, I wonder?

So, why is an appraisal like the ice ages?

  • It can be a bit chilly
  • When it’s over it eventually gets warmer and things get back to normal
  • There is often a cycle of ‘advance and retreat’
  • If you want to be sure to survive it, you need to prepare well
  • It can move mountains, carve rivers and refresh the landscape – resetting expectations of how to live
  • It gives everything and everyone the opportunity to start again
  • It’s a bigger deal in North America and Northern Europe than in South America and Southern Europe
  • You can learn all about it in training, but the reality never quite matches expectations
  • When it’s all over you soon forget about it… until next time

Well, it can do with a bit of a polish, but it wasn’t hard.
Next week, why managing your career is like the Higgs Boson.[3]

In the meantime, why not have a go?
Put your favourite established or newly coined management metaphors in the comments.


1. Dorling Kindersley Successful Manager’s Handbook, page 454

2. Science in 100 Key Breakthroughs, page 126

3. Same books, pages 766 and 332 respectively, but I will find something else for next week, I promise.

In the meantime, if you want to play this game, but need to know what the Higgs Boson is, try this 8 minute animated video from PHD Comics.

The Higgs Boson Explained - PHD Comics

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