Space Exploration: Are space invading hoteliers predicting the future for food & grocery?

Having recently stayed in hotels in London, Sydney and New York I recognised just how efficient hoteliers have become when it comes to space. Even more impressive is the way in which hotel rooms have been stripped of everything that does not add value. Cupboard and wardrobe doors are gone, and with that, 20cm shaved off the bed. Bathrooms will only fit one person at a time, and have privacy doors which slide into the wall to remove the necessity for manoeuvring space. Flat screen TV’s and showers, and certainly no room for a bathtub. The hotels aren’t even shy about their space-saving escapades – I came across a room type with a double bed and not much else besides, aptly named a ‘shoebox’ room.

Having saved some space, the hotelier installs iPads to control everything at the touch of a button and compact coffee machines, creating a modern chic design which we associate with luxury. Rooms are quicker to service, cheaper to heat or cool, all while the hoteliers also achieve 30% more capacity.

So why aren’t we looking at our factories in the same way? Why aren’t they built on the current paradigm? We build with room for expansion using current constraints, not future possibilities. We think a full factory is efficient, but more likely it is inefficient.

Highly adaptive capacity

Factory utilisation is based on equipment usage, and more often than not it is just the equipment known as the production line. The biggest changes to the factory of the future will come from technology. Computer-aided design and simulation reduces the time and cost of bringing new goods to market. Advanced robotics make automation cheaper and more flexible, meaning it will be about a flexible footprint that can accommodate changes in equipment functionality, lines that can easily relocate, and plug in, plug out processes. The factory of the future could even be a pop up!

What is the average time it takes for a raw material to flow through your factory?

If hotel rooms can churn satisfied customers within the hour they would need less space to generate the same return. This is not possible. But the factory is different – the quicker the product churns through the plant, the less space that is required. Perhaps it is therefore time to redesign the process, and then the factory.

Think vertical

From the industrial revolution until after World War II, it was common to build factories on multiple stories. In 1928, FIAT opened its Lingotto Factory in Turin, Italy; it was the largest in the world. Parts would enter the building at the bottom, delivered from the adjacent railway lines, and cars would exit at the top. The whole roof was a test track; then the cars would whizz down the ramp and out of the building.

Cars are probably not the kind of product that lend themselves to vertical manufacture, but could vertical factories, like vertical farms, become the next big thing and bring the jobs closer to the workers again.

It is all linear

Factories that are regarded as well-designed are linear. They tend to have a goods in and goods out department with rooms in between, with a manager in each room. We need to challenge the paradigm, remove the walls, improve the flow and challenge whether a circular factory would actually be far more efficient in both flow and service.

Hub and spoke service to lines is easily applied, line lengths mean space can be optimised with the smaller lines on the inside. The nerve centre (people) and shared services will always remain at the centre with expansion simply adding another layer to the onion factory.

Written by Paul Eastwood, Coriolis Consulting Pty Ltd

Making Change Happen

In late 2004 I found myself sat in an MBA lecture hall in London perplexed by the Doctorate pretentious and vague discourse about Change Management. The discussions were focused on work by the likes of Lewins’ (1951), Imas (2005) and Chia (1999) defining change and understanding the characteristics of change. Mildly interesting, yes, but of no use to an impatient and experienced practitioner wanting to understand the practicalities of how to rapidly ‘fix’ a culture.

More than a decade later and with a wealth of management consultancy experience under my belt, I sat in an office in Melbourne a couple of weeks ago and was reminded of those rainy days and theoretical sermon. I was sitting with my very capable colleagues discussing and reviewing our own approach to change, but still with a backdrop of theoretical models and scholarly advice.

Our client needs change…

The right sort of change needs to happen. Now. That, essentially is our business.

So how do we fix the culture?

Lorsch’s Strategic Myopia describes how individuals in management roles have bounded rationality and become attached to their current beliefs – this is what they were taught and it has served them well historically. I see this time and again in organisations, often owner CEO, or family-run businesses that have experienced brilliant growth. At a critical mass, a successful organisation’s growth trajectory grinds to a halt; the breadth of the business is now too wide for the father/mother figure to direct at the micro level. The employees are too frightened or do not feel empowered enough to take ownership and deliver. The challenge of overcoming this Myopia should not be underestimated. The transition of releasing control at this level is often the hardest struggle. How can this be done in a controlled manner?

Kanter, Stein and Jick (cited through Chia, p211) identify five change events over which management have control:

1. Grassroots innovation
2. Crisis or galvanising events
3. Strategic decisions
4. Individual implementers and change champions
5. Action vehicles

Consider the last two events combined with O’Conner’s (1995) observations that Change revolves around a single person and their resolve, and they become the focus, rather than whether the company is suited to change. Change is not done by all, but by the implementer. Fine. We have a CEO as the principle implementer and change agent driven through an action vehicle (ie. Consultant) but I still need to answer three questions:

• How do I move my newly-designated Principle implementer away from their strategic Myopia?
• How do we actually and practically, and in a JDI kind of way, instigate the change?
• Considering the fact that better economic results have been proven if employees are involved, how do I bring the team with us now, as opposed to over an 18-month journey?

A change model may describe forms of change as Directive, Emergent, Masterful or Self-assembly. Emergent may well be the Utopian approach, but any foot soldiers will tell you that rapid change measured in days and weeks requires, and will only succeed, using Directive style.

Cultural change is the result of implementing new processes and structures to tackle tough business challenges. Think not about fixing the culture, but about a change in the way you operate. This in turn will create the cultural change you need.

The Paradox is that the evidence points to the need to relax an organisation to allow for change. Not many CEOs heading up a turnaround site would entertain that advice for too long; we know if we shorten the interval of control and tighten the controls we are more likely to gain control. How do we do both?

The Solution

This brings me back around rather nicely to where I started. How and what do we change?

• Decentralised Accountability though a clear and balanced set of metrics
• Accountability driven and directed from the top (principle implementer and change agent)
• Clear objectives and targets to ensure change is directed while retaining the autonomy and freedom to act and manage. If the targets are hit, you are free to continue on your path
• Reinforced hourly, daily and weekly routine. Again, from the top down

This provides an immediate shift from a ‘father knows best’ to a collaborative workforce with the empowerment and clear direction to deliver the required change. The CEO is freed up to focus on broader issues and assist the team with specific issues when required. The team learn to deliver on their own accord and grow into their roles and accountabilities. The metric and target are known. The leavers are learnt and become understood and acted upon by those at the appropriate level. The CEO can stand back from directive control.

As the confidence in the team is matured and the performance improved, a move towards a more flexible form of management is not so involved with control. This change in Management Style reflects the recommendations of Ferlie et al (1996), ‘Manage is therefore not to fully control but guide’.

At this point the culture is beginning to look more and more like it might be ‘fixed’…

Written by Leon Chandler, Coriolis Consulting Pty Ltd

References

Jay W Lorsch “You Cant Fix Culture” HBR April 2016, p96

O’connor, E. Paradoxes of Participation: textual Analysis and Organisational Change

Boje, D. and Dennehy, R. 2000, Managing in the Post-modern World. Human Relations Vol 53 (9)  1207-1226

Boje, D. (1994) Organizational storytelling: the struggles of pre-modern, modern and postmodern organizational learning discourses. Management Learning, Vol.25, No.3, 433-461.

Boje, D. (2001) Narrative Methods for Organizational & Communication Research. London: Sage.

Chia, R. (1999) A Rhizomic Model of Organisational Change and Transformation”  British Journal Of Management Vol. 10, 209-227

Dunford, R., and Jones, D. (2000) “Narrative in strategic change”

Eisenhardt (!999) “Strategy as Strategic Decision Making” Sloan Managemnt Review Vol 40, Issue 3

Ferlie, E., Pettigrew, A., 1996, Managing Through Networks: Some Issues and Implications for the NHS” British Journal of Management, Vol. 7

Ford, D and Ford L, (199?) “Conversations and the Authoring of change”

Lorenzo, L, (2004) Re producing the organisation through narrative: The case of a Multinational.

Lorsch, J.  ( ) Strategic Myopia: Culture as an invisible Barrier to change”

Johnson , G., and Scholes, K., and Whitington, R. 2005,Exploring Corporate Strategy, Seventh Edition, Pearson Education

Minzberg, H., Ahlstrand, B., Lampel, J. 1998. Strategy Safari. Prentice Hall

Mintzberg, H, Lampel, J., Quinn, J. and Ghoshal, S. “The Strategy Process” (2003) Pearson Education Limited.

Boje, D. (1994) Organizational storytelling: the struggles of pre-modern, modern and postmodern organizational learning discourses. Management Learning, Vol.25, No.3, 433-461.

O’Connor, E. S. (1995) Paradoxes of participation: textual analysis and organizational change.

Oswick, c., Lowe, S. & Jones, P (1996) “Organisational Culture as Personality” From Kingston SM2 Manual.

Oswick, C., Anthony, P., Keenoy, T., Mangham, I. L. (2000) A dialogic analysis of organizational learning.

Rhodes, C. (1996) Researching organisational change and learning: a narrative approach. The Qualitative Report, Vol.2, No.4, December, http://www.nova.edu/sss/QR/QR2-4/rhodes.html

Blue Ocean Leadership Approach to Engagement

How’s your day going? Are you actively trying to do the best job you can? Or are you just going through the motions to collect your pay cheque? If the answer is the latter, you’re not alone. A 2013 study of 25,000 executives and employees in the United States found that only 30% of US employees are engaged and actively trying to do a good job every day, 50% were simply turning up to get paid and 20% were actually counterproductive through actively avoiding work and negatively influencing others.

What is the driver for this high level of disengagement? I’ll give you a clue… it is the number one reason employees leave an organisation, as well as the number one reason employees choose not to work for certain organisations… Poor Leadership.

The impact of poor leadership goes way beyond disengagement and reputational damage. Organisations with poor leaders incur real and measurable increases in costs associated with absenteeism, turnover and recruitment. In fact, according to Gallup’s 2013 State of the American Workplace report, disengagement costs the US economy over $500 billion USD per annum. Take a look at the stats below for each region to see how your country fares in terms of engagement:

So, if it is such a big issue, why are companies not doing more to address it? Simply put, it is because they don’t know. Often leaders have gained their level of seniority from rising through the ranks or displaying strong performance at a particular level, rather than because they have shown great leadership qualities. Therefore, organisations all too often assume that great soldiers are bound to make great leaders. Organisational self-awareness is the catalyst for change which is required to convert poor leaders into effective leaders. Unless organisations take steps to increase their leader’s self-awareness, these leaders can never hope to bridge the gap between organisation/team potential and the realised performance and energy of the people that they lead.

Many leaders will be familiar with the concepts of 360 feedback and the Leadership Styles Inventory (LSI), but another emerging and effective leadership improvement methodology exists. It involves the application of the highly successful marketing frameworks described in the revolutionary ’Blue Ocean Strategy’ (BOS) towards Leadership (Blue Ocean Leadership, or BOL).

The authors of BOS argue that companies can succeed not by battling competitors for demand in a ‘red ocean’ of fierce competition where the prospects for profits and growth are reduced, but rather by creating ″blue oceans″ of uncontested market space. These are created by tailoring an offering directly to a market whose needs are currently not being met, converting non-customers into customers. If leaders were to view their leadership as a service and their staff as customers who either buy (engage) or don’t buy (disengage) their service, they are able to adapt the marketing tools and techniques described in BOS into their leadership methods. This allows leaders to take a strategic approach to tailor their leadership to their target market.

Throughout their career, many leaders will have attended a vast array of conferences and workshop sessions on leadership behavioural styles with advice on how to change your leadership style, but it’s often difficult to track and measure the benefit of these approaches. By contrast, BOL is action and activity-based, focussing instead on ‘what acts and activities leaders need to undertake to boost their teams’ motivation and business results, not on who leaders need to be’.

The first step towards BOL involves gaining a complete and common understanding of the current situation, as a convincing argument for change will be difficult to form without knowing where the organisation’s leadership is falling short. Based on this, surveys of a set of stakeholders of organisational leadership are conducted to determine which activities leaders spend most of their time and efforts on. The results are then mapped on an ‘As Is’ leadership canvas (See Below).

A second round of surveys are then conducted using the ERRC grid (Eliminate, Reduce, Raise, Create) to determine which activities leaders are currently investing too much time and effort in whilst adding little to no value, which activities add significant value but currently do not receive enough attention and finally, activities that respondents have identified that leaders should be doing to add significant value to an organisations overall strategy and boost engagement. The results of these surveys are always interesting. As Kim and Mauborgne found, ‘It’s not uncommon to find that 20% to 40% of the acts and activities of leaders at all levels provide only questionable value to those above and below them. It’s also not uncommon to find that leaders are underinvesting in 20% to 40% of the acts and activities that interviewees at their level cite as important’

The results are plotted on another leadership canvas over the previous ‘As Is’ leadership canvas to show the divergence in the new leadership strategy from the ineffective ‘As-Is’ leadership strategy. Each leadership canvas should be given a compelling tagline which sums up the behaviour illustrated (e.g. Control and Play Safe VS Liberate, Coach and Empower.), which could then be used as a leadership mantra to ensure leaders remember the process and commit to the change.

Blue Ocean Leadership is a brilliant example of how frameworks of the broader business disciplines can be applied to improving leadership in your organisation. It allows leaders to take a ‘customer focused’ approach to leadership and provides them with the tools and techniques necessary to restart an organisations engagement engine, not through words and philosophy, but through action.

Written by Sam Byrnes, Coriolis Consulting Pty Ltd

References

Myatt, M (2014) ‘Businesses Don’t Fail, Leaders Do’ Forbes http://www.forbes.com/sites/mikemyatt/2012/01/12/businesses-dont-fail-leaders-do/#7855037c6b91

Kim, W.C & Mauborgne,R  (2015). Blue Ocean Leadership, Harvard Business Review Press. pp 27, 35

Kim, W.C & Mauborgne,R (2005) Blue Ocean Strategy – From Theory to Practice. California Management Review Vol 47 pp105-121

Cross, R & Prusak, L 2002, ‘The People Who Make Organisations Go Or Stop’, Harvard Business

Review, June pp105-108

http://employeeengagement.com/wp-content/uploads/2013/06/Gallup-2013-State-of-the-American-Workplace-Report.pdf

https://www.thomasinternational.net/en-gb/business/our-approach/employee-engagement/

Do you have a DRIP problem?

Have you ever found yourself with a huge amount of data but still feeling none the wiser as to what decision to make?  Most of us have experienced this at some stage in our professional career, leading to the coining of the term DRIP (Data Rich, Information Poor).

As a society we have seen increasing availability of technology that collects and stores data which can be used to drive decision-making. On a personal level we can see what our friends are doing and who else they know. We can also see what people like and what the latest trends are, but that only helps us to make the popular decision, not the decision that is right for us. Professionally, the adoption of Lean and Six Sigma improvement methodologies have been driving teams to collect more data for decision-making, and because we have the support of automated control, enterprise resource planning and customer relationship management systems, we have seen exponentially increasing amounts of data being captured. However the data is often not brought together in a cohesive way, presented in a timely manner or is missing aspects that are necessary to make a decision.

In order to make good decisions, we need data to be converted into information that gives us insights into what is happening and what our opportunities are.

To move from data gatherers to information users, we need to consider five things:

1. What decisions do I need to make?
2. What data do I currently have to make those decisions?
3. How effective is that data in defining the situation you are in, so you can make a decision?
4. What is missing from the existing data that would help make better decisions?
5. How should the data be presented in order to make decisions (eg. electronically, manually, frequency)

By considering these items you will not necessarily reduce the amount of data collected, but you will find it easier to make the decisions you need and have better outcomes.

Written by Ashley Tan, Coriolis Consulting Pty Ltd

The Power Factor

Most of us use electricity every day for a variety of uses, with businesses and manufacturing sites using a whole lot more, but how often is the use and delivery of this resource truly analysed and improved?

Expanding on Richard Jeffers’ recent blog on simplifying Energy Management, upgrading and improving the end users can result in immediate and very visible savings. Changing lights from old metal halide to LED variants not only improve the consumption of power, but reduce the heat load of the surrounding building and, more often than not, decrease the maintenance cost. Swapping motors for high efficiency models generally isn’t done until the original motor reaches the end of it’s life span but can, once again ,contribute to a lower power cost – However cataloguing, and then justifying the individual savings that could be made by replacing individual and varied items can be incredibly time consuming.

 

There are some pieces of equipment that can be added or improved to have a much larger impact in both direct power consumption charges and other indirect fees – a bank of capacitors and inductors designed to smooth power loads and correct phases. These are rolled up into a category of kit called Power Factor Correction (or PFC).

In an electric power system, a load with a low power factor draws more current than a load with a high power factor for the same amount of useful power transferred. The higher currents increase the energy lost in the distribution system, and require larger wires and other equipment. Because of the costs of larger equipment and wasted energy, electrical utilities will usually charge a higher cost to industrial or commercial customers where there is a low power factor.

In layman’s terms, the smaller the PF, the more power that must be delivered to site. This is because less is used efficiently. The ideal Power Factor (PF) ratio is 1.00 – meaning that all the power delivered to site is used to its greatest potential.

In Australia, power factor correction is an investment that helps to improve company’s profit performance. NSW, WA, and Victoria have existing penalty structures in place for customers that operate on a poor power factor as well as daily charges for kVa (power delivered to) in addition to kWh (power consumed).

Improving a site’s PF from 0.75 to 0.95 can result in a 62% reduction in kVa. For a typical power load of 1,000kW and a 37.75 cents per day per kVa charge, this change can result in a saving of just over $200 per day. For a site of this scale, the equipment and installation should cost less than $40,000, resulting in a payback of less than 7 months.

The opportunity to improve a site’s overall power consumption with one project rather than a series of small and ongoing upgrades is an extremely effective way to improve the bottom line, especially for such a small investment.

The first port of call to check if these savings are realisable is to contact your Electricity provider –  it is in everybody’s best interest to reduce power consumption and in turn, reduce waste.

Written by Alex Tate, Coriolis Consulting Pty Ltd