Leading On The Edge Of Chaos R E V I S E D


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Leading On The Edge Of Chaos R E V I S E D

  1. 2. Leading On The Edge Of Chaos The 10 Critical Elements Foe Success In Volatile Times AUTHOR: Emmett C. Murphy and Mark A. Murphy PUBLISHER: Prentice Hall DATE OF PUBLICATION: 2002 NUMBER OF PAGES: 226 pages Book pic
  2. 3. <ul><li>A timely book for today’s chaotic economy, the Murphy’s suggest 10 key strategies for business leaders. </li></ul><ul><ul><li>If you fail to deliver, a volatile market can be terribly unforgiving. </li></ul></ul><ul><ul><li>How you handle uncertainty will determine your company’s success. </li></ul></ul>THE BIG IDEA
  3. 4. <ul><li>Rule 1: Resist the lure of “ready, fire, aim” </li></ul><ul><li>Rule 2: Aim at multiple targets –now. </li></ul><ul><ul><li>Prepare your team for all possible scenarios, not just one likely scenario. </li></ul></ul><ul><li>Rule 3: Pace yourself </li></ul><ul><li>Rule 4: Find a center that can hold. </li></ul><ul><ul><li>Focus. Focus. Focus. </li></ul></ul><ul><ul><ul><li>Many companies only pay lip service to their mission and vision statements. </li></ul></ul></ul><ul><ul><li>Take Enron. </li></ul></ul><ul><ul><ul><li>There was no real sense of values in that company. </li></ul></ul></ul>CHAPTER 1: MAKE HASTE SLOWLY
  4. 5. <ul><li>There are 3 models of customer partnership: </li></ul><ul><ul><li>The egoist </li></ul></ul><ul><ul><li>The bureaucracy </li></ul></ul><ul><ul><li>The Customer-as-partner model </li></ul></ul><ul><li>Customer retention and satisfaction drives profits. </li></ul><ul><ul><li>CAP checklist </li></ul></ul><ul><ul><ul><li>Does staff regularly involve customers in the R&D process? </li></ul></ul></ul><ul><ul><ul><li>Does R&D seek feedback from other departments during a product development cycle? </li></ul></ul></ul><ul><ul><ul><li>Does the sales staff feed information to other departments regarding changing customer needs? </li></ul></ul></ul><ul><ul><ul><li>Does marketing continually identify new areas of buyer need? </li></ul></ul></ul><ul><ul><ul><li>Do they constantly suggest new offerings for existing customer segments? </li></ul></ul></ul>CHAPTER 2: PARTNER WITH CUSTOMERS
  5. 6. <ul><ul><ul><li>Do billing and collections strategies strain or build customer relations? </li></ul></ul></ul><ul><ul><ul><li>Do your people understand the profitability of various customers? </li></ul></ul></ul><ul><ul><ul><li>Do you continually strive to improve quality, speed, and cost of the service? </li></ul></ul></ul><ul><ul><ul><li>Do people understand how the end-user benefits from your product/service? </li></ul></ul></ul><ul><li>Partner with your potential customers. </li></ul><ul><li>Partner with your lost customers as well. </li></ul><ul><li>Effectively increase wallet share through customer partnerships. </li></ul><ul><li>Let go of “poor fit” customers. </li></ul>CHAPTER 2: PARTNER WITH CUSTOMERS
  6. 7. <ul><li>Practical strategies for customer partnership: </li></ul><ul><ul><li>It’s important to remember your customers always have choices. </li></ul></ul><ul><ul><li>Your organization needs to honor what the frontline employees are saying. </li></ul></ul><ul><ul><ul><li>High-performing leaders take the initiative to discover what customers really want and then provide it. </li></ul></ul></ul><ul><ul><ul><li>They share this with the entire company. </li></ul></ul></ul><ul><ul><ul><li>Institute small changes for huge outcomes. </li></ul></ul></ul><ul><ul><ul><li>Find the magic in your products so you can delight your customers. </li></ul></ul></ul><ul><ul><ul><li>If you are a hospital, maybe sensitivity to customer’s feelings is your edge, for instance. </li></ul></ul></ul>CHAPTER 2: PARTNER WITH CUSTOMERS
  7. 8. <ul><li>“ A purpose is the eternal condition of success”. -Theodore T. Munger </li></ul><ul><li>How do you measure commitment and purpose? </li></ul><ul><li>“ It’s not you It’s me Culture” </li></ul><ul><li>Where does your organization stand in terms of commitment? </li></ul><ul><ul><li>Here are some techniques used to create a shared purpose: </li></ul></ul><ul><ul><ul><li>Orientation and training programs that emphasize corporate values. </li></ul></ul></ul><ul><ul><ul><li>Social gatherings. </li></ul></ul></ul><ul><ul><ul><li>Storytelling events and corporate histories that dramatize guiding values </li></ul></ul></ul><ul><ul><ul><li>A unique, shared corporate language that reflects these values </li></ul></ul></ul>CHAPTER 3: BUILD A CULTURE OF COMMITMENT
  8. 9. <ul><li>Know what you’re looking for! </li></ul><ul><li>Don’t fill up empty chairs with the people who are on the layoff boundary just for the sake of filling up the bases </li></ul><ul><li>Look behind the resume. </li></ul><ul><li>Check the references personally. </li></ul><ul><li>Look beyond the obvious choices. </li></ul>CHAPTER 4: PUT THE RIGHT PERSON IN THE RIGHT PLACE, RIGHT NOW.
  9. 10. <ul><li>Identify and eliminate organizational practices that promote knowledge hoarding and punish knowledge sharing. </li></ul><ul><li>Involve all departments in developing a culture that rewards knowledge sharing </li></ul><ul><li>Integrate special projects with the core business so people don’t treat it as a “flavor of the month” </li></ul><ul><li>Teach people to share information through Intranet, videoconferencing, and centralized databases </li></ul>CHAPTER 5: MAXIMIZE KNOWLEDGE ASSETS
  10. 11. <ul><li>First, confront your financial reality. </li></ul><ul><li>Draw a financial reality chart. </li></ul><ul><li>Plot your past, present, and estimated future revenues. </li></ul><ul><li>Next, plot your past, present, and future expenses along the same timeline. </li></ul><ul><ul><li>You cannot save your way to profit. </li></ul></ul><ul><ul><li>Do not invest in low-return projects </li></ul></ul><ul><ul><li>Aim for high-return opportunities. </li></ul></ul><ul><ul><li>Anticipate your upcoming cash expenditures. </li></ul></ul><ul><ul><li>If you choose debt to raise cash, you will not only face interest payments, you continue to drain on cash that could prevent future investments </li></ul></ul>CHAPTER 6: CUT COSTS, NOT VALUE
  11. 12. CHAPTER 6: CUT COSTS, NOT VALUE <ul><ul><li>Achieve a balance between payment of payables and conversion of receivables to cash. </li></ul></ul><ul><ul><li>In times of volatility, companies with strong cash positions will have better analyst ratings, bond ratings, investor support and borrowing rates. </li></ul></ul>
  12. 13. <ul><li>Measure demand. </li></ul><ul><li>Know thy competition, from the obvious rivals to the upstarts (never underestimate these) to the unforeseen rivals. </li></ul><ul><ul><li>Practical strategies for strengthening your competitive position: </li></ul></ul><ul><ul><ul><li>Take a multidimensional approach, aim for more advantages than just price and quality </li></ul></ul></ul><ul><ul><ul><li>Align the advantage with practice. Choose your main source of advantage and align the entire organization to support it </li></ul></ul></ul>CHAPTER 7: OUTPOSITION YOUR COMPETITORS
  13. 14. <ul><li>How do you keep your team motivated? </li></ul><ul><ul><li>Be vigilant for signs of stress. </li></ul></ul><ul><ul><ul><ul><li>Signs of team stress: </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>low morale </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>increase in sick-day usage </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>increase in complaints and grievances </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>increase in illnesses or injuries </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>increased turnover. </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>Signs of individual stress: </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Headaches </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Avoidance </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>difficulty concentrating </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Overreacting </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>short temper </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Depression </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Lackluster performance. </li></ul></ul></ul></ul></ul>CHAPTER 8: STIR, DON”T SHAKE
  14. 15. <ul><ul><ul><li>First identify the root of the problem, whether it is personal or organizational. </li></ul></ul></ul><ul><ul><ul><li>Act calm in the face of chaos. </li></ul></ul></ul><ul><ul><ul><li>Make time for humor and play. </li></ul></ul></ul><ul><ul><li>Remember, it’s ok to give yourself a break. </li></ul></ul>CHAPTER 8: STIR, DON”T SHAKE
  15. 16. CHAPTER 9: CUT THROUGH THE NOISE <ul><li>We experience communication breakdowns mostly because of interference, cross talk, attenuation, and glitches. </li></ul><ul><li>Attenuation is when the message is so filtered down from the top that by the time it reaches people down at the frontlines, it is no longer the original message. </li></ul><ul><li>When you communicate with different types of people, you need to fashion your message in the way that they will understand it according to their own communication style. </li></ul><ul><li>Rapid response is the key to communicating in a crisis. </li></ul>
  16. 17. CHAPTER 10: FOCUS OR FAIL <ul><ul><li>Define the challenge and measure the organization’s readiness to meet it. </li></ul></ul><ul><ul><li>Establish a vision for meeting the challenge </li></ul></ul><ul><ul><li>Plan for leverage with high-impact opportunities </li></ul></ul><ul><ul><li>Implementation means constantly adjusting short and long term goals </li></ul></ul><ul><ul><li>Test, refine, and repeat. Act like you only have one chance to get things right the first time. </li></ul></ul><ul><li>Four key rules all leaders must put into practice when bad things happen:  </li></ul><ul><ul><li>Understand the threat </li></ul></ul><ul><ul><li>Plan for crisis </li></ul></ul><ul><ul><li>Adapt on the run </li></ul></ul>
  17. 18. BusinessSummaries.com is a business book Summaries service. Every week, it sends out to subscribers a 9- to 12-page summary of a best-selling business book chosen from among the hundreds of books printed out in the United States every week. For more information, please go to http://www.bizsum.com. ABOUT BUSINESSSUMMARIES