Sunday, December 21, 2003

Five Minds of a Manager, Part 3

Continuing to comment on the most excellent article from the November issue of Harvard Business Review by Jonathan Gosling and Henry Mintzberg (click for a free summary or to download for $7, if you don't have the article).

The second of the five mindsets of the manager is the analytical mind-set, the management of organizations. This is breaking down a complex phenomenon into it's component parts.

The authors suggest that conventional analysis is inadequate; rather it is crucial that managers dig up deeper.

That said, they don't offer ways to do this deeper analysis, other than to say to appreciate the "soft data" and to examine "biases and assumptions." Let me offer a way to do analysis, based on the well-known factors of the Balanced Scorecard.

  • Financial Factors. No amount of "soft data" can overwhelm an inadequate or nonsensical financial analysis. And financial analysis begins with a hard look at cash. Any lean initiative MUST lead to improved cash flow. Cash will usually lead us in the right direction. So, look at the cash flow first.
  • Customer Factors. How will the change affect the folks who pay for this? Will it get product or service to them sooner? Better? In a way that they want and will pay for? Has anyone actually asked the customer about it?? Does it make sense from the customer's point of view?
  • Process Factors. So how will it affect our own processes? Will it lower our operational cost? Will is shorten our cycle time? Will it lower our work-in-process inventory? How about our raw materials inventory? Will it make it easier to deliver and assess quality?
  • Development Factors. Will this help the training of our key people? Will it trigger more learning? Will we encourage or discourage our people?
This is a basis for analysis for a lean decision making process. It is not difficult nor is it complicated. Neither is it simplistic.

I hope this is helpful.

Feel free to forward to a friend. Email me

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