Moved by our “Learning and Teaching” value, since 2010 Prof. Falconi shares his management experience and knowledge with the readers of Exame magazine on a monthly basis. Through objective answers, he establishes a dialogue and clarifies doubts about methods, entrepreneurship, career and leadership, among other topics related to the business world.
Check out the November/2016 column below. Enjoy your reading!
INSTEAD OF CUTTING COSTS, CUT WASTE
1. Nowadays, many companies have exerted great effort to reduce their costs. The idea is to constantly challenge their teams to maintain leaner operations and avoid waste. What is your advice on establishing priority and providing continuity to this effort? Anonymous
I prefer to discuss a reduction in waste. It is difficult to involve costs due to the simple fact that there are good costs and bad costs. In the first group are the costs that help to build value for clients and which are later reverted into an increase in revenues and profits.
It is important to remember that, in order to improve the situation of companies at difficult times, like that which we are experiencing, it may even be necessary to increase certain investments, especially in marketing and sales. And the second group – bad costs – includes waste. These should certainly be eliminated.
Another important point to consider is that it is not always easy to detect waste. People get used to everything and, in the case of costs, begin to ignore things that are not necessary. Certain aspects of waste are cultural, it is ingrained in people’s behavior and very often no one can see it because they feel it is something “natural”.
It is usually easier for someone from the outside, without any cultural ties, to detect and point out excesses. Regarding the list of priorities, I recommend prioritizing according to the final financial impact on the company and, once the list has been drawn up, draft plans of action to tackle each item. Take care: people tend to procrastinate. Go on and check that each item on the plan has been executed.
Speaking of costs, just out of curiosity, I will recount a short case about a company manager. This company initiated an aggressive cost cutting campaign to guarantee its survival. The manager was charged with the duty of analyzing the processes from his area and propose improvements. At the end of the project, he reached the conclusion that his department was no longer necessary within the company. His reward: he was promoted to director.
2. What do you think of the mapping and strategic scorecard methodology by American researcher Robert Kaplan? In your opinion, what are the positive and negative points of the methodology? Anonymous
I think that all methods can be good. The principle of constant improvement in our lives calls for an initial method, even though it might not be the best. Another point is this: all methods have a very positive side that can always be beneficial.
I do not appreciate manichaeism. I think that everything in this world has aspects that should be enjoyed and we must be humble at the time of accepting and learning. Only the humble learn.
I think that the strategic map has a lot to offer. However, the balanced scorecard– which determines how the goals can be developed at all levels of hierarchy in a company – has little. In my opinion, there are far better alternatives.
It is possible to find more information regarding this in my book Daily Work Routine Management (Hoshin Kanri), in which I detail the methodology of developing goals according to a Japanese origin. It is much better.
The strategic map and balanced scorecard originate from Harvard. Great. Much respect. But Hoshin Kanri arose from the daily battle to perfect everything that existed beforehand. The results achieved with this methodology can be phenomenal when good leadership exists.
3. I am close to 40 years old and I have advanced in my career. I haven’t done an MBA yet and I have doubts regarding whether a course would help me at this point. Is an MBA for those under 30 years old? Or are you never too old to study? Anonymous
Perhaps an MBA would be more beneficial now than in the past. Doing a graduate course after having worked and experienced a tough daily routine is, in my opinion, far better. I think it should even be a prerequisite.
I completed a graduate degree after having worked for three years in production and I had already gained intimate experience about how things really work in a company. This was fundamental to me and armed me with a completely different attitude in terms of learning.
Many people have the wrong idea that learning only happens in courses. Learning happens on a daily basis. We learn a certain amount of things during a day and never much more than this. A graduate course will help a lot in forcing you to use your entire daily learning quota, for a period of time.
But don’t be fooled: if you really want to be exceptional, you need to absorb and discuss, as well as study. A day without learning is a day lost, because the following day you only have that day’s quota. Go ahead.
Source: Exame.com – Visual Management column – 11/03/2016
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