There's a business revolution coming, believes management guru and author John Bernard. He wants you to be ready for it. It's called "Managing in the NOW." (Listen to the interview is here.)
Executing in the NOW means that "every employee can act on every opportunity every time" – to improve the customer experience, grow revenue and reduce costs. For this to happen, management must have its act together at a level that few have ever experienced. John's company, Mass Ingenuity, has developed the NOW Management System to help management fully enable action in the NOW.
How to Seize Opportunity
In many of our companies, when opportunities arise, workers have to get permission to try to take advantage of them. Opportunity to treat a customer better? Go get approval. Opportunity to grow revenue? Get approval. To cut costs? Get approval.
That process takes time and slows you down -- so you miss some opportunities. Workers get frustrated and stop asking, letting even more opportunities go by.
And most managers actually manage "by the seat of their pants" -- they oversee the day-to-day work using techniques borrowed from their parents and their current and prior bosses. Few managers are actually taught to manage.
John believes a crucial step in getting better performance is to empower workers. I said "Yes, that's great, and I'd happily give them more autonomy -- if I thought they could handle it." However, if they cannot handle more autonomy, it's my fault as a manager. My management system needs to communicate what's expected and needs to support empowerment and autonomy, or I won't get those things.
Old vs New Style Management
We're still using the management techniques of the early Industrial Age. We don't expect much of our people and we've effectively "dumbed down" the work force.
Compare that with Zappos, where every employee is empowered to do whatever they think is right to make the customer happy. Zappos has raving fan customers. Its workers are happy and its managers are not loaded down with approving decisions or taking problems away from front line workers.
The old style was about mass production. Old style management can oversee that.
The new style is about mass customization. This requires our front line workers to make decisions and have power.
One Zappos Story
Zappos runs a discount site called www.6pm.com, and one night they had a bug in their pricing engine -- everything on the site sold for $49.95, including a $3,500 watch. Oops.
So Zappos found the error, fixed it, and posted a blog entry saying
"[T]his morning, we made a big mistake in our pricing engine that capped everything on the site at $49.95. [...] While we’re sure this was a great deal for customers, it was inadvertent, and we took a big loss (over $1.6 million - ouch) selling so many items so far under cost. However, it was our mistake. We will be honoring all purchases that took place on 6pm.com during our mess up. [...] Even though our terms and conditions state that we do not need to fulfill orders that are placed due to pricing mistakes, and even though this mistake cost us over $1.6 million, we felt that the right thing to do for our customers was to eat the loss and fulfill all the orders that had been placed before we discovered the problem."
This became a great positive PR story, and reinforced their customers' loyalty. Lots of customers commented on the blog, concerned that someone would be fired. But no, Zappos said that their values include learning, so they were treating this as an educational opportunity for the staff: "To those of you asking if anybody was fired, the answer is no, nobody was fired - this was a learning experience for all of us."
Enabling Mass Customization
The only way you can really mass-customize your product or service is by enabling the flow of information from the customer to the front line worker, quickly and without distortion.
And there's a critical role for technology in enabling this information flow.
John relates that a client created a cross functional problem-solving team. One of the workers on the team had been there for 14 years and had never before done anything like it. She was very nervous. When they succeeded, solving a $2 million problem, she felt very proud. However, the bad news was she was there for 14 years before she was empowered to help her own company.
Don't wait 14 years.
Bad Management - One Example
John mentions lots of bad management practices that just don't work, yet keep getting repeated.
For example, problem solving.
Most managers have no training or experience on reliable problem solving methodology. Yet there are lots of very good, proven methods for effective problem solving. It all already exists.
Most managers have no clue how to model good problem solving, because they're doing it by the seat of their pants.
So, for example, a manager convenes a problem-solving team, and starts with "anybody have a solution?" Or there's drama or blame.
However, the proven effective way is to always start with creating an agreed problem statement. Only when the group agrees on the problem, can they effectively work on solutions.
Management as a System
Management is nothing more than a collection of processes, and a process is something that can be methodically improved using process-improvement techniques. (There are countless books on how to apply process improvement methods to manufacturing and even sales.)
John and his people have taken these techniques and applied them to the major processes of management, such as:
- Organize the Work
- Let People Know what They are Accountable For
- Put in place Metrics
- Have Closed Loop Reviews
By contrast the average firm just has a budget, maybe a strategic plan, and some loose performance reviews. That's not enough.
Where to Start
John recommends you back up and begin to connect:
- our Mission Vision and Values,
- our key metrics that show our progress, and
- our key processes that make us effective
We too often leave out the processes. We need to identify them, and we need to identify the key metrics that tell us if those processes are being effective or not.
For example, how do we know our Marketing process is working? One key metric is number of leads, and another key metric would be the quality of those leads (i.e. the conversion rate or how well qualified they are). Yet another is the cost per lead.
If we are tracking these metrics and the numbers are good, then we're happy and we don't need to intervene.
If the metrics are off, we need to get into problem solving mode and identify and fix the underlying problem.
And if the metrics don't exist, we're flying blind. We must create and begin to track those metrics.
Ultimately, the competitive landscape is changing. Mass customization is coming. We need to take our management to a new level.
What stops us?
A lot of managers are afraid to get into the details of their own business -- they feel a little overwhelmed. This is an opportunity to organize the numbers better and stop being overwhelmed.
It's on us to make it clear to each of our people, what it is they are accountable for. The root of "Accountable" is "Count" -- we need metrics and definitions.
Our firms must become more agile. The way to do that is to empower our people to "act in the NOW."
Listen to the entire interview here.