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Frank Patrick's Focused Performance Business Blog
This Focused Performance Weblog started life as a "business management blog" containing links and commentary related primarily to organizational effectiveness with a "Theory of Constraints" perspective, but is in the process of evolving towards primary content on interactive and mobile marketing. Think of it as about Focusing marketing messages for enhanced Performance. If you are on an archive page, current postings are found here.

Wednesday, November 26, 2003

Thanksgiving -- Breaking my hiatus here for a moment, and recognizing tomorrow's significance in the US, I'd like to thank the people who read between the lines of my last posting, offering me their support and good wishes despite my decision to not really go into the source of my current distraction in this business blog. This weblog, business-oriented though it may be, has blessed me with a number of faceless friends (as well as a few that I can put a face to), for which I am very thankful. Thank you all for reading, participating, linking, arguing, and encouraging me in this little effort at communication on my part.

I hope that, whether you celebrate the American holiday of Thanksgiving or not, you all have much to be thankful for as well and can take the time to reflect on it and appreciate it. If you do get together with loved ones tomorrow (or whenever), be sure to take a bit of time between the turkey and the football, to look around the table (and beyond if necessary) and thank them for what they've given you, either out loud or in your heart.

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Thursday, November 20, 2003

Light Blogging Ahead -- You might have noticed a bit of quiet here for the last week. There's something going on in my life right now that is taking precedence over both my business and this weblog. This note is just to let my regular readers know that I'll be back, but maybe not for a bit more.

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Tuesday, November 11, 2003

Lean and Mean -- Speaking of "fads" (some of which are worthy to follow), from the Boston Globe...
"...Lean manufacturing will not end factory shutdowns or layoffs. One reason, specialists say, is manufacturers are the victims of the very efficiencies they attained. The introduction of new processes and technological productivity has never been higher. Neither have job losses."
But that is only a fait accompli if there is no innovation applied to the demand side -- if there is no planned effort to grow the business either by taking advantage of the new capabilities and capacities, or finding new uses for those capabilities and capacities. Sustainability, growth, and success of a business and of its associates/employees does not come from the internal leanness alone, but from using that leanness to protect and grow what matters -- the top line. (via Fast Company Now)

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Management Fads -- From Professor Bainbridge...
"Is it possible that rational managers would chase fads? Herd behavior, which refers to the tendency to imitate the actions of others, ignoring one's own information and judgment with regard to the merits of the underlying decision, provides an answer. Corporate managers are scarcely immune to herd behavior; to the contrary, the faddish aspects of participatory management suggest the possibility that herd behavior is relevant to the demand side of the equation. [While consultants happily take care of the supply side.]... Following the crowd may have a pay off even if the chosen course of action fails. Because even a good agent can make decisions resulting in a bad outcome, the market evaluates the agent by looking at both the outcome and the action before forming a judgment about the agent. If a bad outcome occurs, but the action was consistent with approved conventional wisdom, the hit to the manager's reputation is reduced."
Does anybody know where I can find a herd?

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Talk About Value! -- From Joe, a discussion of "Value. Defining value from the customer's perspective. What he/she wants. How he/she wants it. When. In what manner." He goes on to talk about value he finds in a particular feature of Google. I recently stumbled onto one myself. At Google, enter stocks:[stock symbol], and you get info from Yahoo, Quicken, Motley Fool, MoneyCentral, and ClearStation. (Here's a sample.)

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Qualifications for Management -- From Esther, a short piece about "some minimum qualifications to become a great manager." (Hint: It's got to do with people.)

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Monday, November 10, 2003

Quote of the Day - Beginner's Mind --
"I have learned the novice can often see things that the expert overlooks. All that is necessary is not to be afraid of making mistakes or of appearing naive."
     - Abraham Maslow
(via Seb's Open Research)

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Sunday, November 09, 2003

Critical Chain Case Study - Application of Critical Chain on High Value Petrochemical Projects -- I frequently get asked about examples of the use of Critical Chain Project Management in specific environments. This link points to a case study of its use in two construction contracts completed by Krupp Uhde, a South African engineering contractor in the design and build business. It talks about two projects; one that finished "in 16 months vs. industry norm of 24 months," and one that completed...
"in 4 month including working over the Christmas period vs. an industry norm of 12 months for a plant of this size. This is phenomenal when one considers that the conventional equipment delivery time for a large distillation column, which was part of the plant, is 9-10 months."
The case study also offers a list of lessons learned...
- Always start with a simple plan.

- Do not allow the momentum of a large project lull you into a false sense of security in terms of progress. A large project is like a large ship with a huge amount of momentum, once you are going in the wrong direction it is very difficult to steer onto the right course. The critical chain approach makes for easy steering.

- Identify critical path and manage to keep one critical path.

- Identify "bottleneck" vendors/sub-contractors early on.

- Do not fast track by traditional methods like early orders and start of construction before you know what to order and what to build. These methods give a false sense of security in terms of schedule progress. The true result of such steps is the snowballing of errors that will exist in any project. It is cheaper and quicker to fix something on paper than in concrete and steel.

- Give change management the highest priority.
There's more details in the study. Read the whole thing.

And if there's anyone else out there interested in bragging about their accomplishments via Critical Chain, let me know, and I'll pass them along here. I get a lot of questions about its use in software and pharmaceutical development environments.


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Friday, November 07, 2003

Friday Fun - Genesis of Failure --
In the beginning was THE PLAN.
And then came The Assumptions.
And The Plan was without substance.
And The Assumptions were without form.
And darkness was upon the face of the Workers.

And they spoke among themselves, saying,
'It is a crock of s--t, it stinks.'
And the workers went unto their Supervisors, and said,
'It is a pail of dung, and none may abide the odour thereof.'

And the Supervisors went unto their Managers, saying
'It is a container of excrement, and it is very strong,
such that none may abide it.'

And the Managers went unto their Directors, saying,
'It is a vessel of fertiliser, and none may abide its strength.'

And the Directors spoke among themselves saying one to another,
'It contains that which aids plant growth, and it is very strong.'

And the Directors went to the Vice-Presidents, saying unto them,
'It promotes growth, and it is very powerful.'

And the Vice-Presidents went to the President, saying unto him,
'This new plan will actively promote the growth and vigour of the company, with powerful effects.'

And the President looked upon The Plan, and saw that it was good.
And The Plan became policy.
And that is how S--t happens."
Attribution Unknown, from Project Management Jokes

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Thursday, November 06, 2003

Corporate Dis-Integration -- Dave Pollard, in Is a "World of Ends" the Future of Business, Too? takes a look at the dis-integration of formerly integrated entities known as "big corporations." He comes to a conclusion that I hinted at a while back. If outsourcing is taken to its logical conclusion, the original entity runs the risk of becoming an empty shell, consisting primarily of, in Dave's words,
"A small management team and an army of lawyers who contract all of the risky functions of the company to outside organizations. Assets that are all intellectual -- patents, trademarks, contracts, etc. Essentially no front-line employees, no liabilities, and no risks. And no direct contact with those pesky customers. The corporation has buffered itself against everything. In the all-important ROI, it has minimized its 'I', and guaranteed that, while the 'R' might not be as high as it was in the high-flying dot-com days, it's now virtually risk-free."
But not quite risk-free. To actually perform the manufacturing, the customer service, even the marketing and promotion, the "service providers" will inevitably start to understand the business better than those few at the center. As I said back in September, you better watch out if those to whom you outsource figure out how to do things better than you ever did because you don't want to do them anymore. The usual TOC advice of segmenting markets but not resources is being ignored to the nth degree in such situations, but then TOC usually assumes a goal of sustainability and growth of the organization to which it is applied.

(The Creative Generalist also touches on this in a recent post regarding the effects of the dis-integration of the creative industries. I wish CG would add an RSS feed. I keep missing good stuff on that weblog.)

Taking a cue from the concept of a world of ends that so aptly defines the network known as the Internet, Pollard points to the potential of critical knowledge disseminating out into the network of outsourced functions, leaving those at the center with little control over what once was their organization, with little role to play, and with less and less value add associated with their existence.

It's interesting that some organizations think that they need to break down functional silos and others are running full speed to create them through outsourcing. (These might not even be different organizations, come to think of it.) Our old siloed companies really probably only look like that cliched model when looking at an organization chart, since all the real work gets done in the "white space," in the cross-functional processes, and probably most importantly, in the informal networks of underlings that carry the real knowledge of the organization and actually get things done. The replacement of the org chart pyramid with the sphere of a networked (or as Dave Weinberger refers to it, hyperlinked) org is already a done deal in most organizations, and becoming openly evident even in that public world of power known as politics.

In the 80's and 90's, the effect of dissemination of knowledge and disintegration of power relationships was most strongly felt by middle management. I suspect that as we go forward, it's top management that might just need to watch out for their futures, unless they learn how to facilitate the internal network rather than dismantle it, only to watch it re-form outside of their illusory "control."

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Wednesday, November 05, 2003

Bottlenecks -- A random synapse fired this afternoon, combining the previous post with a conversation I had today about the impact on performance of policies from on high...
Bottlenecks are usually found at the top of the bottle.
I know I saw something along these lines somewhere recently, not sure where, but here's something I found looking for the reference.

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Bill the Bottleneck - Our favorite engineer has a new co-worker.

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Tuesday, November 04, 2003

Born Today --
Will Rogers (1879 - 1935)
Walter Cronkite (1916 - )
Art Carney (1918 - )
Loretta Swit (1937 - )
Laura Bush (1946 - )
Frank Patrick (1950 - )
Ralph Macchio (1961 - )
Matthew McConaughey (1969 - )
Sean 'Puffy' Combs (1971 - )
Happy Birthday to me!

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Monday, November 03, 2003

Questions and Ignorance -- From the archives of John Lienhard's Engines of Our Ingenuity radio show...
"I'm pretty sure that the only real function of a teacher is to guide students in asking and pursuing questions. Once a student develops the rare talent for seeking his or her own ignorance, teachers become irrelevant. But it's hard to look at your own ignorance. And it's not easy to ask a true question. It feels like humiliation."
But a little humiliation is worth it to find the bliss within your ignorance. Since "Knowledge...flows to the point of greatest ignorance.", it's the real questions that break the dams impeding that flow. As a result, it behooves teams and organizations to both solicit and embrace them.

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Sunday, November 02, 2003

The Innovator's Solution -- There's been a lot of buzz going on among blogs and various business publications about the new book by Clayton Christensen and Michael Raynor, The Innovator's Solution: Creating and Sustaining Successful Growth. It's a follow-up to Christensen's insightful look into disruption, The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, and provides, according to Ross Mayfield, "frameworks and checklists for deciding where and how to innovate."

I've got the book on order for myself right now, but gleaning the reviews and writings about it, a lot of what I'm seeing has a lot in common with the Theory of Constraints view of marketing "at the margins" as a way of growth and of recognizing the value of "low margin" products to a market constrained organization. According to Christensen, in a Business 2.0 interview, the book's core is about...
Why sticking to core competencies is a bad idea: "It's dangerously inward looking. Competitiveness is more about doing what customers value than doing what you think you're good at."
The TOC model of developing market offerings -- the products and services and terms that wrap around them -- is all about looking at the constraints and core problems faced by your targeted market segments, and finding a way to position your offerings to address them. This is critical because, while you are selling a product or service, what the customer is actually buying is a solution to their problems. And the most valuable problems are associated with constraints and/or deep core problems at found at the root of many symptoms. Value is in the eye of the buyer.
Why it's difficult for companies to sustain growth: "There are many explanations -- bad management, aversion to risk, the unpredictability of innovation -- but the way established companies filter new ideas encourages executives to get it wrong. They have to define new markets using available data, but by the time the data is clear, the game is already over."
One of the key erroneous filters of ideas, according to the TOC litany, is based in the "data" known as "product margin." Too much attention is paid to this distorted and distorting piece of data. In organizations that are externally constrained, like those post-bubble tech companies that have more capacity than their markets are absorbing, concern about small margins might kill products, when if they have the capacity to produce them with largely existing resources, most of the difference between directly variable raw costs and revenue can really go straight to the bottom line. Misguided attempts to allocate non-variable direct labor and overhead to particular products, through either traditional cost accounting or activity-based management, leads to filters that are misaligned with what should be the company's goal -- increasing company throughput and revenues. Profitable growth starts at the top line, not with the results of funny-money allocations.
How to ensure that your company is the disruptor, not the disruptee: "You know that expression, 'If you build a better mousetrap, they'll beat a path to your door'? Well, it's not true. Someone will build a cheaper, not-as-good mousetrap, which you'll dismiss at first but which eventually steals your customers. Historically, established companies have stayed atop their industries by creating separate organizations that can follow completely different business models. The book describes how you know when it's time to take that step."
"Separate organizations" is one way to do it. Another way is to use the TOC mantra of "segmenting markets, not resources." It's about designing tweaks of product characteristics "at the margins" of the basic offering and clearly mapping those tweaks to well-understood segments who will be happy to pay a premium because one of your tweaks addresses their constraint or helps to solve a core problem, or simply solves a problem for them. The various combinations of tweaks and new products adds up to a collection of business models that can be managed without organizational disruption and inefficiency of "separate organizations."

Another tenet of the TOC approach to marketing and product development is not only to look at your immediate customer, but also to their customers further down the supply chain. Along these lines, a Fast Company article links Cristensen's Innovator's Dilemma to the success of a TOC-savvy company...
At Harvard Business School, Professor Christensen is watching his old favorite industry's most recent transformation with considerable interest. "The fundamental elements of The Innovator's Dilemma are always at work within all companies," he says. "It's like the laws of gravity. But in the same way that airplanes can fly, companies can sometimes overcome some of these pressures. If Seagate is figuring out how to sell smaller, cheaper, and simpler drives to a big new class of customers, it has a high probability of success."
Smaller, cheaper, and simpler might mean lower margin. And it can also mean higher growth in an industry whose product line is subject to the acceleration of innovation. Once again, the book is The Innovator's Solution: Creating and Sustaining Successful Growth. Check it out. I'll report back once I'm done reading it if my take on the synopses is in line or off base.

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