a tour of new features presenting What Management is ?
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a tour of new features
presenting
What Management is ?
1The book 2Key Insights
Scope
Mai
n Th
emes
Design
• Value Creation• Business Models• Strategy• Organization
Execution
• Facing Reality• Mission &
Measures• Innovation• Delivering Results• People
Management
Patt
ern
used
in th
e bo
ok Contemporary and historical Context
Pro and against Cases
Questions addressed
Key Insights
Design
Valu
e Cr
eatio
nManufacturing Mindset
Marketing Mindset
Value creation - a system
Valu
e Cr
eatio
n
Manufacturing mindset
Efficiency as focusMade large-scale manufacturing possible
Dehumanizing and deskillingNarrow in focus – inward looking – market dynamics not considered
Valu
e Cr
eatio
n
Marketing Mindset
Who is the customer
What customer wants / needs
How much will he pay
Valu
e Cr
eatio
nMaximizing shareholder value
Increased accountability of managementIncreased focus on customers to be successful
Quarter to quarter existenceCreative accounting practicesAbsence of long term ownership and org building initiatives
Valu
e Cr
eatio
nConcept of Value chain# discount brokerage# budget carriers
Managing the Supply chain# taking responsibility for the whole flora and fauna# building partnerships beyond organizational boundaries to tap
commercial value – value engineeringimprove efficiency (JIT)Increase predictability /security
Maximizing shareholder value
Valu
e Cr
eatio
n
Business
Customer
Employees Shareholders
Community
Value Creation – a system
Busi
ness
Mod
els
A successful business model
Some Compelling storiesAMEX ,Eastern ExclusivesEbay
Business Models for Non-ProfitElderhostel
Busi
ness
Mod
els
BusinessCustomer
Employees
Shareholders Community
Upstream Manufacturers
Downstream Franchisees
A successful business model – Key players
Busi
ness
Mod
els
Eastern Exclusives
Small Businesses (more reach)
Students (convenien
ce)
Hostel (reputation)
Eastern Exclusives
(gains brand value)
Busi
ness
Mod
els
Ebay
Sellers(more reach)(better price discovery)
Customers (convenience)
(value)
Ebay (no inventory)
(fee based model)
Small businesses (providing associated services)
Busi
ness
Mod
els
Elderhostel
Increase in AffluenceFocus on comfort
Trainings and
boarding at appropriate
cost
Provide a sense of
community
Low cost trainings
Provide a sense of
community
Low cost boarding
Less affluentFrugal life style
Stra
tegy
Better by being different
Strategy and Performance
Game of strategy
Strategic trade-offs
Stra
tegy
Key Insights
Perfect Competition Monopoly
Stra
tegy
Blue Ocean or Red Ocean - WalmartKey investment decisions to improve logistics
A pyrrhic victoryCase of Japanese Consumer Electronics manufacturer Too Successful - Dairy Farmers in UK
Moderation in success – prolonging success – prolonging the value capture
Mission creep TNC
Key Insights
Org
aniz
ation
Important Factors
Manage or buy
Global Scale
Non-profit – tackling societies problems
Org
aniz
ation
# Ronald Coase – Make or buy depends on cost effectiveness
# Does an efficient market always serve the intended purpose?# NBA
# GM vs Ford – Different times, different strokesFord – Assembly line 1908 - 1912Sloan – multi-division corporation 1940
# Standardization as design & Backward integration – Aravind Eye Hospital
# Design should match the mission
Key Insights
Execution – Key to Excellence
Faci
ng R
ealit
yMaking sense of the numbers
Plan
DoCheck
Act
# Measure should be an integral part# Different stakeholder require different measures# Measurements are a guide# should always be read in context
Mis
sion
and
Mea
sure
sIn search of the holy grail – the universal measure
ROI / EVA/ EBIT et al - measure to fit the context - matching measures to mission – case of Fidelity Insurance
ROIC – Case of Dell (return on invested capital)
Battling the broken windows – NYPD
Key Insights
Mis
sion
and
Mea
sure
sTNC – Fish creek projectMission – maintain bio-diversity -Save mussels
Key Insights
New Short term indicator- land under no-till method of
agricultureMedium term indicator – silt
levels in the riverLong term – size of mussell
population
Old measure - number of acres of land under
conservationFunds raised
Mis
sion
and
Mea
sure
sGE – Mission and Measures
Fix/close/sell
Customer satisfaction /
employee satisfaction /cash
flow
Redefine markets
Six-sigma
Shake up complacence
To improve confidence
To ensure that gaming of the system is reduced
As core philosophy of the organization
Inno
vatio
n &
Unc
erta
inty
Good management is entrepreneurialentrepreneur -> Anti-malthusian – optimistic-upbeat -> self-confident -> good management
Apollo13 – using constraints as catalysts – Nano?
Surviving the numbers – Payback / NPV/Discounted cash flow etc. – xerox and alto
Del
iver
ing
resu
ltsPareto’s law – 80 %results /20 %areas
Resource allocation – Fighting inertia– Intel’s story from DRAM to Processors
The discipline of letting go – ignoring sunk costs
Competing with yourself – beating yesterday
# walmart
Peop
le M
anag
emen
tManaging the organization culture
#setting an example# communications KISS# organizational folklore
The golden rule : Trust# verizon – actions and statements
Respect for the individual# as current and future stakeholders
# improves brand valueSelf management
# feedback & coaching
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