Tag Archives: strategic plan

Is It Time for Un-Change Management?

Pull back on the reins for a moment and come to a complete stop. What do you see behind you? Probably a wake of both straight and winding roads… some intact, some obliterated, most somewhere in between. You probably see customers satisfied and dissatisfied at a number of different levels. Same with employees.

Now look ahead of you. What do you see? A yet-to-be-unfolded strategic plan? A vision? Goals? Innovation?

“Change management” is used to make the transition to doing things a new or different way. It’s a tool used to implement change required for forward movement, innovation, strategies, etc.

“Un-change management” refers to the need for organizations to let go of the unwavering focus on innovation and advancement and share some of the time and energy removing that which is not valued by the external customer or not required by law. In a word, we’ll refer to it simply as “waste.”

Waste unattended grows, at best, in parallel with your company’s growth. If you are pleased with your growth goals, ask yourself if you’re pleased with your simplicity goals. The ratio of waste to value should be reduced when you grow. Unbridled growth often leads to an increase in the waste-to-value ratio, and that isn’t realized until years later, mostly because all eyes are on growth. Companies then scramble, point fingers, place blame and cut costs without really understanding were the problem could have and should have been addressed in the first place.

Continuous improvement is more about elimination of waste than it is about doing anything new. It requires serious focus on work and asking why things are done. The goal is to arrive as close as possible to creating perfect flow in your business systems — where orders are placed, where product or service is made or conducted and where they are provided to the customer for consumption.

Clean out the garage (and keep it clean)

For companies that have never emphasized waste, large gains are made in a relatively short period after they introduce their system of elimination. After that, removal efforts continue to whittle away at midsized waste and so on until, finally, the mindset converts to innovation. I think we’d all agree that an innovative company with little waste is a valuable thing indeed.

The way companies manage waste has a profound impact on the way the company culture emerges. (See www.ThreeBellCurves.com and download the free whitepaper.) Employees want to work on things that matter, not waste. Customers want to pay for things of value. Keeping the price low requires the elimination of as much waste as possible.

Is your company ready to share some of its change management with “un”-change management? If you are, you will create more room for value without escalating costs.

Top 10 Mistakes to Avoid as a New Risk Manager

The transition into your first risk management job can be difficult. Whether your boss promotes you into your first risk management job or hires you from another organization, you want to excel at your new position over the long haul. In part, that means avoiding mistakes. We often learn our best lessons when we fail, but some mistakes can seriously hurt your risk management program, harm your reputation or even derail your career. Here are 10 mistakes you can avoid.

  1. Don’t rush in with all the answers. You may arrive wanting to form your own alliances and acquire your own team, but avoid making hasty decisions. Give current employees a chance to prove themselves before you transfer them or hire your own team. The same applies to vendor relationships. You can lose a great deal of knowledge about loss history and coverage negotiation if you immediately decide to switch insurance brokers. “Changing brokers can be a great way to create significant coverage gaps or an errors and omissions claim for your friend the new broker,” according to one Atlanta broker. Some vendor alliances, such as relationships with contractors and body shops, may be long-standing, especially in a small town. Rushing in and making changes can cause big ripples in a little pond.
  2. Don’t try to do everything at once. In my teens, I read a book called Ringolevio, about a kid named Emmett Groan growing up in the streets of New York City. One of his compatriots frequently warned Emmett when he was about to rush headlong into a decision, “Take it easy, greasy, you’ve got a long way to slide.” I found that advice very applicable in risk management. If you inherit a big job, you will be faced with hundreds of decisions, some big, some small. Take your time. While you may feel overwhelmed at first, chip away at the organization’s most pressing problems. Put out fires as they arise. Then schedule time for you and your advisers — your brokers, your attorneys, your actuaries and your managers – to develop sound strategies and plans.
  3. Don’t use a shotgun, use a rifle. If the organization is experiencing too many injuries, for example, don’t jump to an obvious solution like using more personal protective equipment. Talk with front-line supervisors, study historical loss data and consider several options before you throw money at a problem. Once in the door, interview employees, talk with other managers, meet with your vendors and set a few important priorities for your first six months in the job. Using a rifle approach means you’ll have to say “No” to some people. This can cause problems. When possible, explain why you’re declining to act on the problems or the specific issues others may present to you. The more transparently you operate, the less criticism you will face. Openness reduces speculation and helps avoid resentment.
  4. Don’t job hop. Most people can be very ambitious early in their careers. Yet too much ambition can hurt your career. Think long and hard before changing jobs. Bad bosses rarely outlast their employees. Deciding to change jobs because of a conflict with a supervisor is often short-sighted. The grass might seem greener on the other side, but sometimes that’s because of a septic tank (to paraphrase a famous comedian). These questions may help you avoid rash decisions.
    • Am I making the change solely to earn more money or for a more prestigious title? If so, will this change “pay for” what I will lose?
    • Am I making the change because I’m feeling unchallenged or bored? If so, what steps can I take to make my current job more challenging? For example, would becoming more active in a trade association, offering expertise to a local nonprofit or mentoring an up-and-coming risk management professional add challenge and interest?
    • How will this affect my retirement financially? Will I be changing retirement systems, or will I lose significant bonuses or vacation because of the change? Always factor those figures into the salary decision. This question becomes more important as retirement age nears.
    • How will this change affect my family and my coworkers? Our coworkers can turn even a challenging job into an appealing one. Do you really want to leave your coworkers? As for family, what ages are your children? Disrupting school-aged children can have negative, long-term consequences.
    • What are the odds I will regret this decision? Go ahead, we’re numbers people. Put a percentage to your decision, then ask yourself if you’re really ready to take that gamble.

    It takes months to settle into a new job. It’s often a year or more before we feel comfortable. Some studies show that many people who change jobs would have done much better if they had stayed put longer. Change for the sake of change frequently is not positive.

  5. Don’t entertain gossip about your predecessors. Some at your new organization may try to build an alliance with you at the expense of your predecessor. Short-circuit these conversations whenever possible. Tactfully turn the conversation to another subject or excuse yourself from the conversation. Try not to make an enemy of the person who is trying to get into your good graces.
  6. Don’t revisit your predecessor’s decisions. Especially when working with unions, you may find people lined up at your door asking you to revisit your predecessor’s judgments. Unless your predecessor’s conclusions hurt your overall program, don’t rush into undoing the decisions and the work he or she completed. You may not be operating under the same set of facts or with the same long-term vision that the former risk manager had at his or her disposal.
  7. Don’t believe your own PR. Never pretend you know more than you know, and don’t start believing your own “press.” While others may soon invite you to participate on panels and present at conferences, remain humble and teachable. It’s terribly painful to learn humility through humiliation.
  8. Don’t fail to communicate. A lack of communication is one of the most damaging mistakes a risk manager can make. A risk manager must have the ear of employees across the organization, from line supervisors to senior management. According to Don Donaldson, president of LA Group, a Texas-based risk management consulting group, “A risk manager needs to be an excellent communicator and facilitate his or her message across the entire organization. In my mind, that requires getting out of the office and pressing the flesh; seeing and being seen and listening, really listening, to determine what is going on in the organization.” Management by walking around is one strong tool in a new risk manager’s tool bag. Once people see that you’re willing to leave your office to discover what is happening, whether it’s on the shop floor or on the sewer line, they’ll more readily accept your expertise and counsel.
  9. Don’t get discouraged. “New risk managers may make the mistake of thinking that risk management is as important to others in the organization as it is to them,” according to Harriette J. Leibovitz, a senior insurance business analyst with Yodil. “It takes time, and more time for some than others, to figure out that you're more than an irritation to the folks who believe they drive all the revenue.” Over time, you will prove your value to the organization many times over. Until that day, quietly do your job and find encouragement from your risk management peers.
  10. Don’t forget to laugh. You will be privy to the peculiarities of human nature both at its finest and at its worst, so don’t forget to find the lighter side of situations when you can. A robust sense of humor will help you through the rough spots and build bonds with your coworkers.

While these are just a few tips to help you in your new role as a risk manager, your peers probably can offer many more ways to ensure success. Over my career in risk management, I have found my fellow risk management professionals to be some of the most generous people in my life, always willing to share their expertise and provide me with a helping hand. Develop and lean on your network. If this is your first job as a risk manager, you’re in for a wonderful experience. Take time along the way to enjoy the experiences, appreciate the great people you will meet and appreciate the lighter side of risk management.

Personal Effectiveness – The Continuing Challenge

I was recently going through my notes, preparing to give one of my workshops on the subject of Personal Effectiveness. In preparation for the workshop each participant is requested to read some background material so all who attend have a passing understanding of (1) what the Best Practice looks like in action, (2) what it contributes to the business, and (3) if it’s truly beneficial, how a business team would put it to work.

The material I pondered that caused me to start writing about it in this article is a Harvard Business Review article: Beware the Busy Manager by Heike Bruch and Sumantra Ghoshal.

The authors ask an intriguing question — Are the least effective executives the ones who look like they are doing the most? Hmmmmm.

Of course, being seasoned scholars, the authors backed up their observations in their article with some impressive research. For about a ten year period they studied the behavior of busy managers in companies in the US, UK, Germany and Switzerland, interviewing hundreds of managers. Their findings were not particularly encouraging. They report fully 90% of managers squander their time in all sorts of ineffective activities. In other words, a mere 10% of managers spend their time in a committed, purposeful, and reflective manner. Okay, what does that look like?

It seems the highly effective 10% had these common traits: (1) concentrated attention — focus, (2) vigor fueled by intense personal commitment, and (3) selecting a manageable number of projects for early contribution. From both my CEO days as well as consulting experiences, these patterns are absolutely what I have observed in highly productive executives. Of the three, I want to elaborate a bit more on the last one, the number of projects currently under management.

In our consulting practice I have facilitated a significant number of strategic planning sessions. As part of preparing an annual Strategic Plan, one of the very significant by-products is the Action Plan, which schedules accomplishment for all the projects that enable the achievement of the Strategic Plan. Most companies struggle with the above three traits — focus, commitment and scope in the Strategic Plan implementation process (the Action Plan). In fact, I would say just about 10% really do it well. Of the traits, the scope (number of initiatives) seems most troubling.

We urge clients approaching the Action Plan for the first time to limit the number of goals / projects / activities to a critical few, get them accomplished as soon as possible, then select some others and do the same.

The tendency is to select way too many initiatives and then get bogged down, get discouraged and abandon a potentially powerful process.

In support of simplifying the focus and reinforcing vigor and commitment, I developed the Law of Three. Applying this principle, you are encouraged to pick three high-impact projects and work like heck to get them accomplished in the next three months.

Variations on this theme are encouraged as long as it supports the accomplishment of the critical few projects that will have the greatest impact. This is where strategy and personal effectiveness team up for high performance. It is effective!