Operations

Os dejo este regalo de un amigo y compañero de viaje por el aprendizaje, Patxi Bonel.

 Dentro de la entrada encontrareis una convocatoria y una llamada a aquellos en los que resuene el mensaje:

Acabo de terminar estas vacaciones de Navidad la lectura de la biografía autorizada de Steve Jobs por Walter Isaacson. Un ser humano complejo y contradictorio, pero apasionado por el diseño hasta sus últimas consecuencias.

Acaba de fallecer D. Manuel Fraga Iribarne, uno de los artífices de la Transición Española, un ejercicio de diseño de la nueva realidad democrática a partir de pasiones contrapuestas y  compartidas.  

 Es por ello que llevo días pensando que necesitamos diseñadores con esta pasión. Ya no valen los ejercicios de parchear el presente a base de ejercicios de Seis Sigma, ISO, Círculos de Calidad, Lean … necesitamos un diseño nuevo para este nuevo contexto, y necesitamos diseñadores: economistas, políticos, artistas, profesores, periodistas, ingenieros  apasionados por el diseño de un lugar común que sea mejor y un futuro brillante para todos.

El próximo día 30, en el Club de Operaciones de Antiguos Alumnos del IE, tenemos una oportunidad para juntarnos y comprender cómo el IBV, un centro de referencia de investigación español, está ayudando a otras empresas a mejorar y orientar el diseño de sus productos y servicios a sus clientes.

Nadie mejor qué Steve Jobs para explicarlo con sus propias palabras en una carta personal al final del libro (http://www.desdelanube.com/?p=931):

“Mi pasión siempre ha sido la de construir una compañía duradera en la que la gente se sienta motivada para crear grandes productos. Todo lo demás era secundario.

Obviamente, era fantástico obtener beneficios, porque eso es lo que te permite crear grandes productos. Pero la motivación eran los propios productos, no los beneficios. Sculley les dio la vuelta a esas prioridades y convirtió el dinero en la meta. Es una diferencia sutil, pero acaba por afectar a todos los campos: la gente a la que contratas, quién recibe ascensos, qué se discute en las reuniones.

Algunas personas proponen: «Dales a los clientes lo que quieren». Pero esa no es mi postura. Nuestro trabajo consiste en averiguar qué van a querer antes de que lo sepan. Creo que fue Henry Ford quien dijo una vez: «Si les hubiera preguntado a mis clientes qué querían, me habrían contestado: “¡Un caballo más rápido!”».

La gente no sabe lo que quiere hasta que se lo enseñas. Por eso nunca me he basado en las investigaciones de mercado. Nuestra tarea estriba en leer las páginas que todavía no se han escrito.

Edwin Land, de Polaroid, hablaba acerca del cruce entre las humanidades y la ciencia. Me gusta esa intersección. Hay algo mágico en ese lugar.

[…] Cuando los chicos de ventas dirigen la compañía, la gente que trabaja en los productos pierde importancia, y muchos de ellos sencillamente se marchan.

[…] Odio que la gente se etiquete a sí misma como «emprendedora» cuando lo que en realidad está intentando hacer es crear una compañía para después venderla o salir a bolsa para poder recoger los beneficios y dedicarse a otra cosa. No están dispuestos a llevar a cabo el trabajo necesario para construir una auténtica empresa, que es la tarea más dura en este campo. Así es como puedes hacer una contribución real y sumarte al legado de los que vinieron antes que
tú. Así es como construyes una compañía que siga representando unos valores dentro de una o dos generaciones.

Eso es lo que hicieron Walt Disney, Hewlett y Packard, y las personas que construyeron Intel. Crearon una compañía para que durase, y no solo para ganar dinero. Eso es lo que quiero que ocurra con Apple.”

Con esto de la crisis de la deuda, llevo meses escuchando a personas tratando de interpretar el comportamiento de mercados e inversores.

Los mercados no están satisfechos con tal o cual dimisión, cambio, reconfiguración o medida, los mercados necesitan más, los mercados se van a enfadar, los mercados no están entendiendo nuestras acciones a medio plazo, los mercados ya lo habían descontado, los inversores especulan con nuestra deuda, nos están vigilando, saben cuáles de las medidas adoptadas podemos o no cumplir….

Algunos, muchos,  me recuerdan a los sacerdotes de diferentes religiones tratando de interpretar y aplacar la cólera de esos dioses, los mercados, que tienen un poder absoluto sobre nuestro presente y futuro.  En  un libro magnífico sobre la sostenibilidad, Colapso (Jarred Diamond  Collapse: How Societies Choose to Fail or Succeed.) relata cómo los habitantes de la Isla de Pascua dilapidaban sus pocos recursos naturales tratando de construir estatuas cada vez más deprisa y compitiendo entre ellos para agradar a estos “dioses”.

Si nos dedicáramos a trabajar, administrar nuestros recursos y a buscar formas de ampliar y mantener los vínculos y enlaces que nos garanticen la conexión comercial, política, financiera…Tendremos más posibilidades,  ayudándonos nosotros, de que nos ayuden los dioses…je.

Today’s society is essentially driven by continuous change. Capability for planning has given way to the ability to improvise. We see this fact more clearly than ever in the world of finance and politics.
In this context, and transferring the same concept to the Human Resource field, maintaining  a low turnover rate while retaining worthy talent within a company is not  an easy task.

Appart from the issues we will comment below, we should  Never forget that Rotation is not always a terrible Disease, It is a Fact, a real Trend. Something to be embedded, even, as a natural need for both people and companies.- Projects and goals change. Refreshing also brings innovation. New challenges is part of growth,.
However, it is advisable to make certain distinctions when analyzing rigorously the employee turnover in our company. That which really hurts, that which we did not expect.
Firstly we should differentiate duo position/professional according to two main criteria:
1 .- Level of Criticity. It responds to the strategic value of the position / employee, by means of inherent responsibilities or  know-how acquired by the employee along his/her background in the business.
2 .- Demand for Replenishment. It relates the degree of difficulty to identify and seduce outsider professionals with similar skills in the market.
Therefore critical positions are those which comprisse a set of technical  and management skills coupled with the knowledge of organizational culture. The former factor can be imported, the latter  only can be built-up, it is never regenerated in the short term.
So, Critical employees are  those who, attending to their unique skills or knowledge, we face a limited supply of professionals in the market, so that substitutes are difficult and expensive to identify and attract.
Thus, we might think of an universe with 4 types of employees in our Organization:

A-      Critical Positions Hard to replace

B-      Critical Positions relatively easy to replace.

C-      Non Critical Positions Hard to replace.

D-      Non Critical Positions relatively easy to replace

Search and Replenishment  imply a high cost not only in terms of cash but also in terms of time  and effort spent and even more important, Transitional Organizational Void.

According to this approach, basically the company must focus on two major challenges:
1 .- Retaining Talent in Group A, whatever It takes.
2 .- Set Agility as primary goal on Replacement policies for the rest of groups.

Efficient Human Resources are those who lead to business success, by proactively listening and efficiently reacting to unexpected turbulences that arise, improving replacement processes, through speed and cost minimization.

Now.., how to retain Talent in the company?
As we said, It is all but easy. This essentially involves personal ad-hoc plans. Not all the employees will have the same preferences and concerns: namely, Professional Development, Training, Competitive Salary, Insurance Compensation covering the family, possibilities of internationalization, working environment and…. Flexibility, both in terms of time at work as well as ideological, workers need to contribute with their ideas, express and feel themselves useful in what they do.

So, It is important to highlight that there are not unique recipes or magic formula.

People are diverse, concerns too. Some people are motivated to change and growth, others are more attracted by salary and status, and there are those who like to remain in a stable environment where they feel safe in all respects. For some people, traveling is an incentive but for others it means a handycap … It is crucial therefore, to exactly know the motivations of each key employee in particular, to know in advance their concerns and be vigorously determined to change what is not going well for them.
In this sense it is essential for HR Department, to provide employees with a fully trusted environment. We must be certain that a disgruntled employee will come to us before seeking a solution outside even in our competitors.

Attending to the concept itsel, we can find different approaches to the Definition of Employee Turnover. Most of them, point out the percentage of incorporations and departures in relation to the total number of employees. (Incorporations + Departures)x100 / Number. of Employees
According to other theories, the index should be calculated as: (Incorporations – Departures) x100 / No. of Employees
From our point of view this latter  is even less appropriate than former to analyze Talent Retention.

If we understand Turnover Rate as Data which helps us to assess how effective our strategies to retain talent in the organization results, It must be redefined as:
                                                          (Unexpected Departures needed to be Replenished) x100 / No. of employees

So, we should keep following cases aside from this approach:
1 .- New members resulting from company’s organic growth.
2 .- Expected departures (pensions, reduction plans ..) or those attending to time-bound projects.
3 .- Positions not necessarily essential previously identified as subject to removal.
4 .- Departures promoted by the company. They must be considered also as rotation, but for other purposes.

Then, this ratio has to be crossed in turn with each of the four groups of employees that we pointed out above.
In parellel, we need to measure:

a)        Average Period for Replacement, understood as the time elapsed from the start of a new Search to full integration (not just incorporation) of candidate in the Company.

b)      Replacement Cost: Dedication of HR Department to recruiting process, cost of Headhunter recruiting services, publications…. and more importantly the cost of Organizational Void incurred by the company until the replacement is complete.

So, the company has not only to focus endeavor on retaining Class A Positions, but also to establish mechanisms to reduce replacement time to a minimum. We insist, this time is not only cost effective in monetary terms but in relation to damage on organizational efficiency.
Conclusion, and trying to respond to the debate of what is that ideal rotation rate that balances stability with renewal, my answer is Zero, since we have to separate the replenishment promoted from the suffered, the expected from the unexpected departures and then weight each case with a value of criticality, which should be irrefutably linked to an average cost of replacement.

Only then, we will know at which extent we are able to retain talent and how turnover affects quantitatively our business.

Today is like we had forgotten what we eat, what we wear, what we learn, what we need and what is behind all these things, the work of all of us.

We decided to spend our resources on paying interest. We forgot the value of real things and the reasons by which  they come to us, opting for buying financial products, named with initials we do not even understand trusting phantoms who delivered dirt after promising gold.

Aspiring to buy the present, we have sold the future.

Capital flows have been channeled rapidly in the same direction, with the same destination, there where decision makers dwell, those who gave you crumbs before taking the bread away. The same guys who beat democracy today as penultimate step to a new form of slavery or revolution.

Raising capital to heaven, we have forgotten the value of the land.

We have forgotten the Reality. Now we only face fog ahead.

We have forgotten the value of Production System as the primary engine to gear the Big Wheel while we all preferred to play, nearly drunk, with casino chips, black, red, or purple but no color had exchange at the exit.

Juggling funny until the mace fell down over our heads.

And we have forgotten our principles, what living in society means, the fact that Governments are Elected by people, to Represent people and to Protect the people.
And we talk about public debt and deficit and accept all mutilated. This is not new at all. Countries have always had their debt and deficit. It was always like that since we play this game.
Why this panic now? Who benefits?
Who has turned the table down again to keep on eating the fish and the lamb?

They do not water the tree. They do not take care of the tree. They Just shake the tree. Because they know that shaking the tree the fruit ends falling on their hands..
If there are no pears for everybody, it is not their business. They never look backwards.

And we lifted these models .And when we realized we were wrong and we claimed to refund their casino, they refunded to all of us.

When we wanted to burn the market, merchants already had our homes. We could not even light the torch on, we had no time, we smelled something burning and it was our trousers.

Now It becomes essential to Back to simplest principles.

Actual work to produce and sell real things through real markets with clearfaced people. There is a broad real market out there, many needs. Do not close our eyes. Do not drive us crazy.

Choose Productive Investment. Choose sharing resources not concentring them.-

Lets Recover the Value of the Land. Hand on hands.

Clearly we are experiencing profound changes on People Management and Organizational Behavior within organizations as a result of the incorporation of women into management positions, the aging population, globalization of the economy and migratory movements.
Functional structures proliferate within organizations such as Corporate Services Centers divided into areas EMEA (Europe, Middle East and Africa), Asia Pacific, USA and Latin America or where members coordinate and operate with different teammates sited in remote parts of the world by question of minutes.
Therefore, and due to the existence of a highly competitive global environment, companies are pressured to develop the proper organizational flexibility and dynamism that impact significantly on People Management to foster coordination and responsiveness.
U.S. was a pioneer in terms of diversity and inclusion, perhaps out of necessity and the rest of the world is recently experiencing a growing interest in new management and leadership models that provide coverage to the demands of these diverse teams, as belonging to that new reality of business.
In order to lead Diversity efficiently as an integral and indispensable part of the People Management policies, it must be part of the company’s mission, flowing down from Top Management, and injected into the business processes of the organization, with goal setting, monitoring and evaluation of results.
Diversity policies should increase the satisfaction of both employees and and stakeholders demonstrating  the absence of boundaries and thus banishing concepts like strange or foreign.
Studies in the field claims that diversity brings enrichment of the team as a whole in areas such as: new skills, variety of information and knowledge, experience and culture, contributions that produce very positive effects, such as extending their social network members, the formation of new common values, new working habits as well as styles of communication and teamwork.  Also, Diversity should bring the generation of more creative solutions, increasing the flexibility and dynamism facing the opening of new markets or management of multinational Project Management Offices (PMO).
These new organizational changes at global scope require a plural handling of situations and deep analysis of decision making process that should be more efficient with the participation of diverse teams.
Despite all of this, some experts in People Management think Diversity might be a double-edged sword, becoming at times a powerful barrier that makes inaccessible certain areas of knowledge, put in risk the best understanding between critical departments and slows down the achievement of objectives.
For others, the positive discrimination that often accompanies policies of encouraging diversity may create comparative grievances between employees, organizational discomfort and even rejection.  Besides the fact, these policies could expand the idea that an employee occupies a particular position because of their race, ethnicity or gender and not by his/her strict professional value.
Therefore, and despite well-managed diversity means a source of benefits for the organization, nothing should replace the need to apply equal merit in an environment in order to ensure the attraction and retention of top talent, based on qualifications and appropriate experience.

Within this combination we find the challenge.

Before going ahead with the adjustment policies someone should take a look at the numbers because they speak by themselves.
By 2000 the Greek deficit was 3.7%. It would also be the last year that the Eurozone was in profit, though meager, 0.1%.
Over the next 5 years and after the birth of the Euro, during the supposed economic boom, the Eurozone annual deficit raised in numbers between 2.5% and 3%, decreasing to 1.4% in 2006 and presenting their best figure of the decade in 2007 with 0.7% still negative. In 2008, the year of explosion of the financial crisis Eurozone closes with a 2% deficit.
In 2009 adjustment policies began as well as deficit reduction intentions by means of spending cutting. Well, in these years the deficit in the euro zone was doubled, increasing to 6.3% in 2009 and 6% in 2010.
The conclusion from these data is devastating. The Eurozone, since the birth of the single currency, has increased its deficit by 33%. In other words, nothing less than a third of its annual GDP. Half of this deficit accumulated in the last two years. Is that the right way?

On the other hand, Greece, between 2001 and 2007 moved between 5% and 7% annual deficit. In 2008 this increased to 9.8% and in 2010 it grew to 15.4% to descend again in 2010 to 10.5%.

If we make the same exercise as in the case of Europe we find that these figures mean that just in a decade Greece has accumulated losses, exceeding a value of One annual GDP.

The behavior of the debt was stable in the euro zone about 70% until 2008. In just one year, 2009, the debt rose 10 points to 80% and additional 5 points in 2010 to reach 85%.

In the case of Greece, the figures are panic. For 7 years the public debt had an average of 100%. Over the next 3 years, It has risen over 140%.

Who cares about this before? No one.

Since European leaders concerned about that,  what has happened? It has gotten worse. Much worse. It is estimated that the Greek debt reaches 190% in 2012. A total Disaster.

In Spain, the same kind of measures has not contributed even a bit to improve things.

The conclusion is brutal. With public debt still well below the euro area average (approx 20 points down), the financial cost of it, that is, only what we pay in interest every year exceeds the Total Cost of Personnel of Central Administration, about 3% of the national budget.

If we continue with policies of investment cutting, fueling a vicious cycle that only leads to dismantle States, damaging public services, depress and ruin their citizens just to pay interest for entities that have moved from doing business with people to do it directly with States. Again a bad idea. They also will fall acting this way cause of default rates..

When Markets tighten to the States, the States drown to their citizens. It is really Dramatic.

And in this way,  the States loose assets, capabilities.., they dilute.., disappear .. leaving people they must protect simply helpless, abandoned.
A lack of political power?

How far can this wheel of misery prevail?

Well, maybe it is not dead yet, but it may gradually be in many cases.

I have recently been preparing some material about retailing, and one of the things I have found is that it seems to be following a similar evolution pattern to the one in manufacturing.

The pattern shown in the picture (left) talks about a trip from craftsmanship to mass production, the typical topic could be the car manufacturing and the Ford “T” though there could be many more examples. Scale economies through standardization and process improvements enable the mass consumption as savings can be transferred to customers.

Once reached the top level of volumes for standard products to be offered. Human need of differentiation, increase in competition, development of mass customization practices and leaner approaches to reduced lot sizes, in many cases aided by technological leaps, allow the way  back to some kind of mid volume and highly  customized options at competitive price.

My opinion is that mass retail services and consumption has followed a similar initial path coming from the small and highly customized retail practices based on a reduced and focused product and a specific geographical localization to big formats, department stores, category killers, which could provide high level of customer attraction through enhanced product offer and lower prices. In many cases in detriment of highly customized approaches those small retailers could provide (Old book-store in the film “You´ve got Mail”). Even though, some small retailers have remained alive through hyper specialization or highly customized and valuable service approach in the “Customer experience era”.  

The point is that I foresee (or just see) a rocketing uptrend way back to a highly customized approach. Current technological possibilities and trends in retailing, including the channels reconfiguration due to new entrants configure a new retail which is being reborn.

From the customer standpoint we are in the path of finding it hyper-convenient (anywhere, any media, any time, any form), hyper targeted, hyper customized…but form the classic and not so classic retailer a second wave of hyper competition is about to come..

Which are, for you, the main drivers?

Hoy me llama la atención el lenguaje. En algunas ocasiones hemos comparado la esencia de Lean con depuración y el virtuosismo en el diseño de procesos con la poesía. ¿Cómo se puede minimizar  el gasto? ¿Cómo una sola palabra puede contener un conjunto de acepciones que puedan en un momento dado resonar de modo conjunto para proyectar una imagen coyuntural compleja?  

En el tema de la tertulia de la radio de esta mañana, se han conjugado las 4 acepciones de “Recorte” que aparecen en la RAE, y que son:

1. m. Acción y efecto de recortar.

2. m. Taurom. Regate para evitar la cogida del toro.

3. m. Méx. murmuración. Murmurar, extenderse el rumor.

4. m. pl. Porciones excedentes que por medio de un instrumento cortante se separan de cualquier materia trabajada hasta reducirla a la forma que conviene.

 Esta mañana, en la radio, se hablaba acerca de recortes;  en los salarios de los médicos, en las dotaciones de los colegios, pensiones  y otros. Unos ya recortados y otros por recortar. En su acepción taurina, de recortes empresariales relacionados y de los recortadores, que parece ser que no sufrían la misma suerte que los desterrados toreros.  Entre las murmuraciones y rumores  se extendía el  recorte de que mientras se practicaban los recortes se gastaban muchos millones en la inmersión del lenguaje y en la parte de excedentes o sobrantes, recortes a la postre, quedaban las libertades, algunos conceptos nacionales, empleo, ahorro y negocio… en fin, se va uno a trabajar “recortando”  sobre  el “recorte”.

El recorte es, en muchos casos, la solución al descontrol en el gasto. La idea consiste en pensar constantemente en como reducir el gasto mejorando así la productividad y evitando pues, el recorte.

If we said, last week, that Hewlett Packard marked a clear route in its overall business strategy of turning their efforts from selling hardware to the deployment of software services, we can say today that the decision to abandon the PC business has brougth the Board of Directors´ decision to fire at recently appointed CEO and President, Leo Apotheker.

It seems that those intentions have not been understood neither by large HP shareholders nor by its Board of Directors who has not only dismissed Apotheker from his maximum responsibility but It has left him without any chair inside the council. Just struck.!

Apotheker, German, has faced a completely different culture and even an opposite way of doing business that has nothing to do with his background at the other side of the pond. His success at the forefront of SAP has not provided him a guarantee against the shareholders, tired of watching how the market value of the company falls day after day to worrying 50% of its value earlier this year. An unprecedented financial disaster in an  internationally prestigious company as Hewlett Packard.
No doubt, the announcement of abandoning PCs market has meant  definitely the straw that broke the camel after a series of acquisitions undertaken by Apotheker for which shareholders have not found any meaning.

Especially the purchase of Autonomy by 10,000 million dollars which had been already critized so strategically as economically even claimed as a terrible wasteful by some sector in press.

So HP turns back to put things where they were.

The new HP president, Ray Lane, was quick to report on CNBC: “Why we would come out of a business of 43,000 million dollarswhich is the number one on profit margins?”  referring to the PCs business unit.

The charges of President and CEO have been separated again and the position of the latter has been delivered to Meg Whitman, former Ebay CEO and last candidate to Republican Governor of California.

With this move, HP aims to shelter in its core, stepping back to the traditional model inside the house and trying to recover and boost the image and even the Identity through a more conservative strategy.

The financial markets, whi hates uncertainty, after HP announcing the replacement, has brought down another 5% on the share, who  and the company will have to wait for reward,  if it happens.

Now we wonder .. what will be the new strategic value of IT services in this new term? 

The new upcoming IKEA store in Valladolid (Spain),  will be the only one in the world that has the complete package of sustainability measures studied and approved by the Comapny in recent times, as Mercedes Gutierrez, responsible for Sustainability in the Swedish company highlighted this week. She also explained that the new facilities will serve as a pilot project to test and see if it works as expected and then analyze the convenience to extend the model to other branded stores.

The new green measures  will allow IKEA Valladolid  to be out of 20% more energy efficient than the rest of the company stores, bringing savings estimated about 100,000 per year.

Among the most pioneering solutions, we can underline the following:

a)      The system called “Trigeneration”, a method that will “generate power for air conditioning of the building and electricity supply. This revolutionary system, also called CCHP (combined cooling, heat and power), refers to the simultaneous generation of electricity, useful heating and useful cooling from the same original heat source such as fuel or solar energy. So, mechanical energy is converted into electrical power by an electric generator. Waste heat which is insufficient in energy as input to the electric generator is then recycled for other purposes such as heating or cooling of facility or as input to other energy demanding processes.

b)      The lighting system will be composed exclusively by low energy light bulbs and LED technology. In addition, the lighting control mechanism will be built upon programs that will manage intensity depending on the occupation of the shop, a practice that is expected to reduce between 20% and 30% of energy consumption.

In this vein, Ikea Valladolid have installed high-efficiency skylights on the roof of the building and that will mean a saving of up to 70% as well as a new system that will remove hot air from the upper to the ground reducing a 25% of consumption.

c)      Following the same principle, the new air conditioning smart system will adjust the power according to the occupation of the store at any time.

d)      On the field of Construction, materials have been carefully selected. So that, IKEA has carried out a striking and innovative way for building up the store. Thus, PVC elements of ground and cover have been completely removed and they have been replaced by low polluting materials.
Valladolid Ikea will also make a call for the Electric Car because the parking will contain electro -chargers for this type of vehicle. The battery collection points, the classification of waste or the gradual replacement of wooden pallets recycled cardboard complete other sustainable supply store in Valladolid

 Once again, IKEA makes a pioneering step forward setting the path for Sustainability in Retail Market.