AMN Perspectives by Thomas Group: Experience at Work
Posted: June 1, 2004, 9 a.m., EST
by John Steidl, Thomas Group consultant and Mike Manor, president, Automotive Aftermarket, Thomas Group
IRVING, TX — Last time we kicked off a series of articles on the subject of leadership for change. We identified critical responsibilities for change leadership, and talked about creating a vision. This week we’ll talk about how to convert that vision into action — through selecting and launching the right initiatives.
Choosing the right initiatives is not an easy task, in part because it’s not enough just to choose the right initiatives. We also have to select the right number of initiatives. All organizations are limited in their resources, and there are enough things to keep us busy for years. If we try to do it all at once, we’ll fail.
The first step is to carefully review the vision in terms of what needs to change. The core elements of change required by the vision should be the focus of our highest priority initiatives, and these should be sponsored at a corporate level. However there are likely to be many different initiatives that can all contribute to achieving the vision. Since we know we’re resource constrained, this implies the use of some mechanism to assess and rank the relative value of the different potential initiatives.
Application of a figure of merit — the ranking of initiatives in order of difficulty and impact of accomplishment — such as Net Present Value can help. But this does not usually provide a magic answer for a number of reasons. Any numerical figure of merit is based on key assumptions, and the figure of merit result is subject to manipulation based on the assumptions made. In addition, balance is required in several dimensions: short-term vs. long-term initiatives, revenue vs. cost initiatives, corporate vs. departmental sponsorship, etc. Unfortunately, this kind of balance is not something that can be easily captured in a figure of merit.
The right approach is to use a figure of merit as the starting point, and then apply an appropriate degree of management judgment. It’s very important that the process of applying management judgment be open and structured, with cross-functional input from different parts of the organization. The more people understand the process and contribute to it, the better everyone will understand why specific initiatives have been chosen and the stronger the buy-in will be.
A key point to keep in mind is that this is an exercise in portfolio management. The fundamental question is, “What portfolio of improvement initiatives will best achieve the goals and vision that management has put forward?”
As we mentioned previously, resources are always constrained, and this places limitations on the initiative portfolio in any given period. But how should we evaluate the resource situation in order to identify exactly what the constraints are? How do we know what we can or cannot accomplish? This requires a preliminary project plan. Select the leader and ask her to put this plan together. Who will be the key team members? What tasks will need to be accomplished, and what percent of the team’s time will be required? What additional support is needed from groups such as IT and finance? When generating even a preliminary plan, it’s important to identify specific resources by name as much as possible. Once each major initiative has a preliminary plan, management then needs to review the resource requirements and look for conflicts. These can occur in two ways, either excessive demand on a particular department, or excessive demand for specific individuals. Either situation can lead to significant delays down the road. Rather than launching too many initiatives, and experiencing delays and frustrations across the board, it’s leadership’s job to make tough decisions upfront about where to focus scarce resources to get the greatest possible performance improvement in the shortest possible time.
For additional information, visit www.thomasgroup.com or call Mike Manor at 972-401-4444.
Click here to view the rest of today’s headlines.
“AMN Perspectives by Thomas Group: Experience at Work” is written and sponsored by Thomas Group. The opinions expressed in “AMN Perspectives by Thomas Group: Experience at Work” articles appearing on aftermarketNews.com do not necessarily reflect the opinions of AMN or Babcox Publications.