Manager as DecisionMaker

1
Manager as Decision-Maker

• Programmed versus non-programmed decisions
• Intuition (gut) versus judgment (brain)
• Evolution of decision-making process classical
  model to administrative model to
• Six-step model
• (1) Recognize need
• (2) Generate alternatives
• (3) Evaluate alternatives for strength and
  weakness
• (4) Evaluate alternatives for legality,
  ethicality, economic feasibility and
  practicality
• (5) Implement
• (6) Learn from feedback and improve (PDCA)

2
Decision-making

• Maintain a diverse, creative, learning
  organization that rewards risk-taking.
• Use cross-functional teams, brainstorming,
  devils advocacy and dialectical inquiry to
  maximize the number of thoroughly analyzed
  alternatives.
• Constantly re-examine basic assumptions as new
  information becomes available or the business
  environment changes.

3
Decision-making

• Prepare continuously, but make a decision only
  when necessary unless early foreclosure of
  alternatives will deliver substantial first-mover
  advantage.
• When the time arrives, dont hesitate you will
  never have perfect knowledge.
• Learn from success and failure use PDCA to
  institutionalize learning and continuous
  improvement.

4
Manager as Planner and Strategist

• Planning the process of selecting an
  organizations goals and the detailed steps to
  achieve them (i.e., drawing the road map)
• Strategy the set of decisions and actions
  produced by planning

5
Plannings Basic Objective

• The basic objective of all business planning
• is to answer three questions
• Who will buy?
• What do they want in the product and the sales
  and service processes?
• How can we give it to them in ways that will
  differentiate us from competitors, make money,
  capture customer loyalty and build sustainable
  competitive advantage?

6
Toyota Planning/Management Process

• Infect everyone with the corporate DNA.
• Determine and define vision, values, mission and
  goals.
• Formulate appropriate strategy based on SWOT
  analysis of internal Strengths-Weaknesses and
  external Opportunities-Threats.
• Communicate vision, values, mission, goals and
  strategy to organization (top-down).
• Require organization to respond with suggested
  strategic improvement, tactics, timetables and
  resource requests in order to find best ideas and
  build ownership of the plan (bottom-up).
• Bracket (best, likely, worst-case scenarios) to
  provide on-the-shelf capability for dealing with
  rapid change worst-case scenario should be the
  perfect storm never over-extend by implementing
  a best-case scenario -- even to fully exploit
  opportunities.
• Finalize and implement the three Rs by
  assigning responsibility, allocating resources
  and demanding results.
• Establish Key Performance Indicators (KPIs) with
  which to monitor and measure performance.
• Use zero-based budgeting to harvest cost-savings
  for re-investment.
• Recognize and reward results (you get what you
  reward).
• Compare results with targets, improve process,
  and re-implement (i.e., use PDCA to achieve
  continuous improvement).
• Occasionally cause the organization to gulp for
  air with a Big Hairy Audacious Goal (BHAG).
• Combine all of these techniques to build unique,
  difficult-to-copy capabilities that will create
  sustainable competitive advantage.

7
Value Chain Management

• Improving the system of functional-level
  strategies with which a company transforms inputs
  into outputs..
• 1. Production
• 2. Marketing
• 3. Selling
• 4. Servicing
• ..in order to serve customers better and to
  harvest cost-savings for re-investment in
  improvement.

8
Goals of VCM

• Attain superior efficiency by driving out waste
  and cost.
• Attain superior quality.
• Attain superior speed, flexibility and
  innovation.
• Attain superior responsiveness to customers.
• Gain brand strength, market share and superior
  profit to re-invest in the process.
• Congratulations, you have created competitive
  advantage.
• Now do it over and over forever because only
  improvement, not perfection, is attainable!

9
Total Quality ManagementFocusing all activity
on improving customer-defined quality

• 1. Build organizational commitment (burning
  platform)
• 2. Focus on customer
• 3. Solicit employee input (creativity,
  innovation, ownership)
• 4. Involve suppliers
• 5. Establish quality metrics (what and how to
  measure KPIs)
• 6. Set goals and create incentives
• 7. Tear down the walls, create teams, empower
  people
• 8. Identify defects, trace to root cause, fix
  problem
• 9. Drive out waste and cost
• 10. Introduce JIT inventory (vulnerable to
  stoppages)
• 11. Design for easy, idiot-proof production
• 12. Institutionalize continuous improvement
  (kaizen) with PDCA

10
Managing Structure

• Structure formal system of task and reporting
  relationships showing how workers use resources
  to create value (the org chart).
• Different bottles for different wine (matched to
  internal resources and external environment).
• Stable environment allows tall command-and-control
  structure not likely today.
• Quickly changing, uncertain environment favors
  flat and flexible structure designed to optimize
  communication, speed decision-making, foster
  team-generated innovation and enhance
  adaptability.

11
Tool Box

• Base structure on internal resources, corporate
  culture and external environment
• In most cases, simple, flexible and flat is best
• Decentralize, empower and drive authority down
• Re-assess often to assure it stays in tune with
  business environment and the growth of
  organizational needs and skills
• Strengthen corporate culture as you decentralize
  and empower (implant corporate DNA in each person
  so aggregate decision-making reflects ideal
  corporate culture and strategy)
• Never get complacent run scared!

12
Organizational Control and Change

• You have built the machine, now how do you drive
  it?
• Control Systems
• 1. Target-setting (be careful what you pick)
• 2. Monitoring (feedback metrics KPIs)
• 3. Evaluation (compare against targets)
• 4. Adjust or Improve (PDCA)
• 5. Process control
• 6. Behavior control through direct
• supervision
• 7. Bureaucratic control (SOPs) danger of
  ossification
• 8. Financial controls
• 9. Corporate or clan control (GE Way, Toyota
  Way, GM way) the best (or worst) way
• 10. Incentives tied to performance

13
Culture or Clan Control

• The internalized values, norms, standards and
  shared expectations that influence how employees
  behave and work with each other to achieve an
  organizations goals (individual gyroscopes match
  the big gyroscope)
• A corporation is the sum of the decisions made by
  the people who work there.
• The Toyota Way, The GE Way (positive and
  adaptive), the GM Way (negative and inert)

14
Human Resource Management

• Objective is to build a system of rewards (more
  of this) and punishments (less of this) that
  enhances organizational unity, efficiency,
  quality, innovation and responsiveness to
  customers.
• Building a system of carrots and sticks that
  motivates positive employee performance in order
  to achieve organizational goals.

15
Motivation and Performance

• Motivation the psychological forces that
  determine how hard and how persistently an
  individual will work
• Intrinsically motivated driven by a sense of
  achievement derived from work a self-starter
• Extrinsically motivated driven by potential
  consequences of behavior a drone

16
Expectancy Theory

• Workers will be highly motivated if they believe
  high effort will yield high performance will
  yield desired personal outcomes. You must make
  the linkage clear to them.
• In order to motivate people, find out what they
  want and give it to them when they perform well.
• Never forget that you get what you reward.