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Personal capacity

5/12/2019

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Read a very interesting article the other day on personal productivity. The tendency with human productivity is to work harder, longer, have todo lists etcetera. Fill time available and fill it with as many tasks as possible. Work harder, probably not smarter.

This article however came from a different angle and stated that you should work according to available energy (believe one can also use 'available capacity').

​This statement makes a lot of sense to me. I am sure also you have had these moments when you had a spurt in which you cleared work very quick while it didn't feel you needed to make a big effort. 

​Quite a few productivity gurus have stressed the fact to use your best energy on the critical few, the items that really mater and  deliver critical results, in stead of just creating business.
​This also requires learning to say 'No' in a polite way to tasks that only take your time yet don't advance you at all.

It does take courage though to take this approach in a world where being busy seems to be recognized more than results. 

That immediately sets the contradiction. In spite of only having to accomplish the critical few to achieve objectives, people remain extremely busy, as busy is what in many organizations gets  noticed and rewarded. 

So if you do choose to take the path of the critical few you must visibly demonstrate you now deliver more results than ever before!
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is multi-tasking productive?

4/30/2019

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​With the rapid development of technology, multitasking as mode of operation has spread like an oil spill and has become the norm. Computers enable this as they can have many different applications open at the same time.  Users jump from email to chat to an ERP transaction and so on. Increasing workloads stimulate multi-tasking in an effort to juggle through the work day.

More and more productivity experts advocate to have only a few critical tasks to do each day and to do them first thing, one at the time. Some go as far as even recommending to shut of any distraction like internet, email, phone, chat. The underlying idea is that focused work on one task without jumping around will increase productivity. All those that swear by this approach will tell you that their output in quantity and quality has increased a lot. I tend to agree to this - have applied this and found it very beneficial. Does require discipline though!
On the one side, we have multi-tasking and on the other, single tasking. Which way is the right way?

Somewhere in the middle - between the two extremes - can we find good multi-tasking. So how to define that... Well, good multi-tasking means I have more than one task, yet just enough to not run out of work most of the time (we can;t plan for each exception). 

Many project tasks have a dependency. If I only have one task assigned and need to wait, my productivity will likely come down. To make sure i can utilize my time well, i must know the most important task to work on and have maybe two or three tasks assigned so that I can continuue working if one of the tasks has to wait for someone or something.

Not all multitasking is bad. Doing it right will actually increase productivity. Just make sure the decision rules what to work on and when are clear to all.
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Win-Win

4/3/2019

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In the world of business, integrity is an important attribute. A definition of integrity: "The following of moral or ethical principles, and doing the same as what you say." There are more definitions out there yet most turn out to be pretty similar.

Business is about the bottomline. No two ways about that. So how to translate integrity in a simple and proper way into business principles. You probably guessed it, it is about creating a solid win-win between you and your business partners.

Many companies nowadays more than ever try to squeeze cost. There is nothing wrong with trying to operate low cost, in fact, capitalism puts that as a business requirement to begin with, to utilise resources economically. 
When the squeeze between companies on cost becomes too high, the low cost attitude can turn to cheap. And when acting cheap you really only cheat yourself sooner or later. Of course, based on the laws of economics, these situations will self correct as and when the squeeze gets too big and business can be damaged badly. Better to avoid reaching this point.

Win-Win goes beyond cost alone. As stated, there is nothing wrong with low cost, even more, something I would encourage as in the long run it is in the interest of producers and consumers both. Creating true Win-Win relationships look at ways to service markets better, at generating competitive edge by generating value throughout supply chains until the end customer. Sounds like a good form of integrity to me.
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Need for change

2/28/2019

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​Seeing the need for change is a subjective perception most of the time. What one person sees as an evident need for change is the other man's comfort zone that does well and doesn't create any drive to change. This can lead to a lot of frustration with both parties.

An often used term to describe a change kickstarter is the 'burning platform'. This burning platform sometimes needs to be created to encourage people to make the change needed. But is that enough...? Isn't change more about not wanting to get out of a comfort zone or seeing too much risk for oneself related to the change?

In other words, the person that wants to drive the change talks about what he sees as the benefits of making the change and also the problems if the change is not made. At the same time, the person that needs to go through the change is more concerned with the risks he is facing and the comfort zone to abandon if the change is pursued.


​​The change matrix as provided by Goldratt gives a good idea how to address change and how to help people to go through a change and at the same time take ownership of that change.

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Going through the change well can really only happen if you can own your change, if you address the risk that is a threat to you and also find a way to get out of your comfort zone, defining what your new comfort zone might look like.
Take a look at the video. Hope this will help you approach change management in a slightly different and simple way. Of course, simple doesn't mean easy...
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Time is money?

2/25/2019

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The old saying goes that time is money. But is that how businesses tend to act? The common ways for businesses to asses the money piece is of course in the P&L which comes monthly, quarterly and yearly. At an aggregated level money gets reported as a function of time.
 
How does business do this at a product level?  To this purpose, most apply cost accounting principles.
 
Does cost accounting have any pitfalls? To understand that, first we need to examine what cost accounting tries to accomplish. Normally, cost accounting allocates cost based on resources used to produce a unit, to come to a fair cost allocation that represents the cost of setup, labor and other. So far, so good.
 
A complicating factor comes in the batch-size produced. Bigger batches are perceived lower cost as the setup cost can be spread more thinly over a bigger number of units produced. Now product cost and target margins help to determine selling price. Many businesses need this as it is never easy to guess how much a customer is willing to pay. You need a starting price that you can defend when offering a product. I am assuming that a customer will always challenge a price and that the majority of business is no monopoly, to the contrary.
 
Once the base cost for each product is set, a next level use of cost accounting is to tune product cost to drive the most desired product mix. This of course will be the most profitable mix. Here we do run into a critical issue with cost accounting… cost calculated is two dimensional. It only links cost to volume (batch size) to drive variation.
 ​
For a tool that drives critical decisions which products to promote, for which products to increase price and which products to discontinue, cost accounting lacks the critical element of time.

In Theory Of Constraints, the time element of Throughput (profit contribution) is used per so called constraint unit. Although there is more to it, a simpler version is explained here.
 
TOC uses the concept Throughput which you determine by the subtraction :
selling price – raw material cost
for a product. If the selling price for a product is 90 and the raw material cost for that product is 40, the Throughput equals 50.
 
If we have two products and product A has a Throughput of 50 and product B has a Throughput of 40, at face value you will want to promote product A, right? Higher Throughput.  Well, we need some more info to make a better decision.
 
Would it change your mind if you know product A takes 25 minutes to produce and B only 10 minutes? The Throughput per minute for A then shows as 2 where for B it is 4! Promoting product B will grow your bottom line twice as fast..?
 
Of course, you will now need to revisit cost accounting and determine whether you need to subsidise B and put a higher cost allocation on A to not let cost accounting become a stumbling block.
 
Bottom line: Time is money and as a third dimension view added to your existing cost accounting process helps you make the right decisions. This approach is most important if you have an internal capacity or even a cash constraint. If you want more understanding on this, please contact us for a free discussion to asses how this can help you boost your bottom line in the shortest time possible. 
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    In this section we will frequently add short articles on different topics related to business, processes improvement, aiming to provide insights from a slightly different angle. To provoke your thoughts.

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