This document provides a summary of articles in the Robert E. Nolan Company newsletter. It discusses topics like innovation during economic challenges, enterprise risk management, evaluating necessary resources, and using demand-based capacity models to objectively determine staffing needs based on workload. The newsletter advocates using these models to replace subjectivity with objectivity when making decisions about staffing during times of economic turmoil.
Interview With Aims International President Part Iistrittmatter
Rolf Heeb, CEO of AIMS International, discusses the impact of the recession on the recruiting industry. He estimates AIMS saw an overall 30% decline in business from 2008 to 2009. While financial services has been a major source of recruiting work, that sector is recovering more slowly. Some lasting effects may include recruiting firms expanding their services to include talent assessment and leadership development. He expects to see management consulting and coaching become larger areas that recruiters move into in the coming years.
A look into the complexities of managing change, the various forms of resistance, and suggestions for leadership trying to get their staff to work with them to move the company forward.
The document discusses forecasts for the insurance industry in 2010 from various industry leaders. They predict modest growth in life insurance sales of 3-5% but flat or negative growth for annuities and profits. Products with guarantees will be strongest. Consolidation may continue due to economic challenges including low interest rates and investment losses. The outlook is cautiously optimistic but the recovery will be gradual.
201012 IASA theInterpreter - An Industry in TransitionSteven Callahan
Article derived from the 2010 life and annuity executive survey highlighting the key points on strategies, gaps and priorities as seen by industry leaders.
201204 Nolan QNL: Life and Annuity Industry OutlookSteven Callahan
An abbreviated version of the industry forecast for 2012 pointing out the highlights of key issues, strategies, areas needing focus, and likely structural changes.
Interview With Aims International President Part Iistrittmatter
Rolf Heeb, CEO of AIMS International, discusses the impact of the recession on the recruiting industry. He estimates AIMS saw an overall 30% decline in business from 2008 to 2009. While financial services has been a major source of recruiting work, that sector is recovering more slowly. Some lasting effects may include recruiting firms expanding their services to include talent assessment and leadership development. He expects to see management consulting and coaching become larger areas that recruiters move into in the coming years.
A look into the complexities of managing change, the various forms of resistance, and suggestions for leadership trying to get their staff to work with them to move the company forward.
The document discusses forecasts for the insurance industry in 2010 from various industry leaders. They predict modest growth in life insurance sales of 3-5% but flat or negative growth for annuities and profits. Products with guarantees will be strongest. Consolidation may continue due to economic challenges including low interest rates and investment losses. The outlook is cautiously optimistic but the recovery will be gradual.
201012 IASA theInterpreter - An Industry in TransitionSteven Callahan
Article derived from the 2010 life and annuity executive survey highlighting the key points on strategies, gaps and priorities as seen by industry leaders.
201204 Nolan QNL: Life and Annuity Industry OutlookSteven Callahan
An abbreviated version of the industry forecast for 2012 pointing out the highlights of key issues, strategies, areas needing focus, and likely structural changes.
This newsletter article discusses how leadership inaction has become a problem in many organizations. It provides examples of leadership inaction such as unaddressed personnel problems, ignored product lines, and antiquated systems. The article argues that leadership effectiveness has deteriorated, costing the industry profits every day. It calls for leaders to identify areas of inaction within their organizations in order to take action that enables growth and profitability.
The document discusses how an interim manager can provide value to a company during times of transition or crisis by quickly stepping in to handle critical situations, focusing on key objectives, and helping to stabilize the business before transitioning to a permanent management solution. Interim managers are experienced executives who can quickly understand a situation, lead effectively on a short-term basis, and ensure the company's success during challenging periods. They charge daily rates that vary depending on their experience and the length and complexity of the assignment.
This book aims to help managers recognise, measure and control costs. Collinson Grant has been doing that for 40 years. And it is hard. The first challenge is to understand what influences costs and how they can be better related to outputs. The next is to find ways of keeping them under control, so that they rise only slowly when business is growing, but fall fast if turnover declines. These aims apply equally in services, manufacturing and the public sector.
Direct costs are usually better recognised and understood because managers can see the direct relationship between the output and the effort and materials applied. Indirect costs, on the other hand, are a little more difficult to define, as this book shows. Overhead is a term often used, but it is neither precisely defined not properly understood by most managers. It can assume a grandeur and immobility that defy any rational attempt to bring it under control, let alone reduce it. But indirect activities can cover every effort: to support production; to serve customers; to run traditional 'back office' processes; and to develop and maintain the organisation. This very complexity offers opportunities and presents risks. It means that managers must learn the interrelationships between activities and costs, and the options these present to tighten control and reduce expenditure.
Written by Collinson Grant's consultants, this book draws on their experience of restructuring large businesses in Europe, the USA and worldwide, including projects to integrate acquisitions or merge operations, change the organisational structure, reduce costs, improve profit, and manage transition.
Find out more at www.collinsongrant.com or get a hard copy of this book by emailing pmackenzie@collinsongrant.com
1. Managing indirect costs effectively requires understanding how businesses have changed with new technologies and the growth of services. While direct costs have been reduced, indirect costs have increased and are not always well controlled.
2. Technology has automated many processes but has not always reduced indirect costs as much as expected. Some indirect activities have become core to operations while others have grown beyond what is needed. Organizations must challenge all functions to operate as simply and efficiently as possible.
3. To successfully manage and reduce indirect costs requires understanding the context of external factors and the internal capabilities needed to support the organization's strategy. Sustained improvements need an integrated long-term plan.
Fundamental Cost Reduction - ManufacturshipMichael McLean
This document discusses the need for fundamental cost reduction in businesses. It notes that while cost reduction was a priority in the past, many companies now believe there is no more fat to cut. However, the business environment continues to change rapidly with factors like a rising Australian dollar, increasing costs, and competitive pressures. This makes dramatic cost reduction an imperative once again. The document argues there is still potential for 30% more cost reduction through new, innovative approaches that look beyond traditional areas and focus on the entire enterprise. It explores challenges with current cost reduction approaches and potential new strategies around people, processes and spending.
Agile Digital Enterprise is a framework for rapidly developing minimum viable digital solutions through cross-functional collaboration. It emphasizes responding quickly to customer needs, covering all communication layers, and continuous learning. The approach aims to organize resources, innovate, engage customers, address complex systems, and focus on customer-centered development through iteration and empiricism. Using drop-goals of concrete solutions, it helps increase understanding between stakeholders from different areas through action.
This newsletter article discusses the importance of adapting to change by becoming a learner rather than relying on past knowledge. It notes that the business environment is undergoing rapid technological, social, political, and economic changes. To succeed, leaders must pursue new knowledge and practices rather than sticking to existing approaches. The article highlights an example of a company owner who learned from mistakes as he adapted his father's business to a new context. It concludes that to manage change, leaders must question current practices, understand issues below the surface, and prepare for challenges ahead.
A brief presentation about the key findings by the world economic forum report called "The Future of jobs 2018" + The main reskilling concepts for the next years
SapientRazorfish: "Return on Experience"(RoX) OverviewAlec Coughlin
A big part of Digital Transformation is enabling F1000 companies to Compete on Customer Experience. RoX is a framework to evaluate the collective experience of your customers across analog, digital and hybrid touchpoint along with the methodology to improve your RoX score over time. Delivering significant ROI at the top and bottomline.
The article discusses how professional services organizations (PSOs) must carefully manage their resources and processes to maximize profitability in challenging economic times. PSOs rely on billable hours from employees but clients are demanding more transparency and paying less. To maintain profits, PSOs must optimize staff utilization, accurately track billable hours, and prove their value to clients. Standardizing business processes can help PSOs execute efficiently and generate the profits needed for growth.
Nolan newsletter article discussing the implications of social media on delivery of service and how social media can help or hinder gaining a competitive advantage using the service operation.
Leading & Inspiring Employees In the Collaborative EconomyAmy Bishop
Collaboration can increase workforce productivity, boost effectiveness and accelerate innovation. Inspire your workforce to innovate and collaborate to drive tangible business outcomes.
Learn how to harness trends of the collaborative economy to enable employees, managers and executives to build a connected and engaged company. Begin a strategy to implement collaboration within your company to create meaningful business value.
Presented at the PRSA 2014 International Conference on October 12, 2014 in Washington D.C.
Understanding the relationships between time, money, productivity and value -- A keynote presentation for iSummit by Michael Parler, Chief Strategy Officer at Purple, Rock, Scissors.
The document discusses how digital transformation has changed marketing through the arrival of the internet, rise of global branding, and emerging technologies like artificial intelligence. It emphasizes that marketing must be agile, automated, and integrated to be effective. It provides an example of a marketing campaign by an Indian mutual fund that was agile, using various channels and content to increase conversations, engagement, and new investments in mutual funds. The key takeaways are to keep marketing agile, automated, and integrated in order to continuously deliver value to customers.
Whole-brain leadership prepares C-suites for the digital challenges ahead, ensuring seamless growth and high-value problem solving capabilities. Read more.
[Free Guide] Keys to Successful Project Management and Growth for Agencies Mohamed Mahdy
This document discusses challenges that professional services agencies face in scaling their businesses, including commoditization of services, competition for talent, and difficulties generating new business. It emphasizes the importance of project management and time tracking for agencies to understand employee productivity, project profitability, and make informed hiring decisions. The document promotes Vorex's online project management platform as a solution to provide agencies visibility into these key business metrics and help manage complexity as they grow.
Asset integrity management (AIM) ensures that assets perform their planned functions successfully and productively throughout their lifecycles. AIM programs aim to anticipate safety issues and minimize risks of failure for critical infrastructure. Effective AIM considers risks at all stages from design to decommissioning. While some risks can never be eliminated, systematic risk management can significantly reduce likelihood and impacts of failures.
June 2013 newsletter article addressing the sins of the pastConfiance Australia
1. We summarize the key points from the document in 3 sentences:
The document discusses strategies for mining companies to manage through an economic downturn, including focusing on retention through leadership, communication, training and rewards rather than voluntary turnover; bringing remuneration under control after high pay during the boom; and engaging workers to create a culture of commitment through performance management and incentives. Knee-jerk cost-cutting will not strengthen companies long-term, and the industry has an opportunity to address past issues to help future viability.
June 2013 newsletter article addressing the sins of the pastConfiance Australia
1. We summarize the key points from the document in 3 sentences:
The document discusses strategies for mining companies to manage through an economic downturn, including focusing on retention through leadership, communication, training and rewards rather than voluntary turnover; bringing remuneration under control after rates increased dramatically during boom times; and engaging workers to create a culture of commitment through performance management and incentives aligned with company objectives.
201207 Tech Decisions: 5 Keys to Fast Successful New Deployments.pdfSteven Callahan
Article reviews how to deal with the deluge of new technological options and the aspects of a strategy for quick, high quality implementations of emerging technologies. Based on company success stories, article lays out what will work.
20140826 I&T Webinar_The Proliferation of Data - Finding Meaning Amidst the N...Steven Callahan
Joint presentation with I&T's covering the proliferation of data available to insurance companies today and a high level view of searching for value and leveraging the relevant and useful buried in all of the trivia.
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This newsletter article discusses how leadership inaction has become a problem in many organizations. It provides examples of leadership inaction such as unaddressed personnel problems, ignored product lines, and antiquated systems. The article argues that leadership effectiveness has deteriorated, costing the industry profits every day. It calls for leaders to identify areas of inaction within their organizations in order to take action that enables growth and profitability.
The document discusses how an interim manager can provide value to a company during times of transition or crisis by quickly stepping in to handle critical situations, focusing on key objectives, and helping to stabilize the business before transitioning to a permanent management solution. Interim managers are experienced executives who can quickly understand a situation, lead effectively on a short-term basis, and ensure the company's success during challenging periods. They charge daily rates that vary depending on their experience and the length and complexity of the assignment.
This book aims to help managers recognise, measure and control costs. Collinson Grant has been doing that for 40 years. And it is hard. The first challenge is to understand what influences costs and how they can be better related to outputs. The next is to find ways of keeping them under control, so that they rise only slowly when business is growing, but fall fast if turnover declines. These aims apply equally in services, manufacturing and the public sector.
Direct costs are usually better recognised and understood because managers can see the direct relationship between the output and the effort and materials applied. Indirect costs, on the other hand, are a little more difficult to define, as this book shows. Overhead is a term often used, but it is neither precisely defined not properly understood by most managers. It can assume a grandeur and immobility that defy any rational attempt to bring it under control, let alone reduce it. But indirect activities can cover every effort: to support production; to serve customers; to run traditional 'back office' processes; and to develop and maintain the organisation. This very complexity offers opportunities and presents risks. It means that managers must learn the interrelationships between activities and costs, and the options these present to tighten control and reduce expenditure.
Written by Collinson Grant's consultants, this book draws on their experience of restructuring large businesses in Europe, the USA and worldwide, including projects to integrate acquisitions or merge operations, change the organisational structure, reduce costs, improve profit, and manage transition.
Find out more at www.collinsongrant.com or get a hard copy of this book by emailing pmackenzie@collinsongrant.com
1. Managing indirect costs effectively requires understanding how businesses have changed with new technologies and the growth of services. While direct costs have been reduced, indirect costs have increased and are not always well controlled.
2. Technology has automated many processes but has not always reduced indirect costs as much as expected. Some indirect activities have become core to operations while others have grown beyond what is needed. Organizations must challenge all functions to operate as simply and efficiently as possible.
3. To successfully manage and reduce indirect costs requires understanding the context of external factors and the internal capabilities needed to support the organization's strategy. Sustained improvements need an integrated long-term plan.
Fundamental Cost Reduction - ManufacturshipMichael McLean
This document discusses the need for fundamental cost reduction in businesses. It notes that while cost reduction was a priority in the past, many companies now believe there is no more fat to cut. However, the business environment continues to change rapidly with factors like a rising Australian dollar, increasing costs, and competitive pressures. This makes dramatic cost reduction an imperative once again. The document argues there is still potential for 30% more cost reduction through new, innovative approaches that look beyond traditional areas and focus on the entire enterprise. It explores challenges with current cost reduction approaches and potential new strategies around people, processes and spending.
Agile Digital Enterprise is a framework for rapidly developing minimum viable digital solutions through cross-functional collaboration. It emphasizes responding quickly to customer needs, covering all communication layers, and continuous learning. The approach aims to organize resources, innovate, engage customers, address complex systems, and focus on customer-centered development through iteration and empiricism. Using drop-goals of concrete solutions, it helps increase understanding between stakeholders from different areas through action.
This newsletter article discusses the importance of adapting to change by becoming a learner rather than relying on past knowledge. It notes that the business environment is undergoing rapid technological, social, political, and economic changes. To succeed, leaders must pursue new knowledge and practices rather than sticking to existing approaches. The article highlights an example of a company owner who learned from mistakes as he adapted his father's business to a new context. It concludes that to manage change, leaders must question current practices, understand issues below the surface, and prepare for challenges ahead.
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The article discusses how professional services organizations (PSOs) must carefully manage their resources and processes to maximize profitability in challenging economic times. PSOs rely on billable hours from employees but clients are demanding more transparency and paying less. To maintain profits, PSOs must optimize staff utilization, accurately track billable hours, and prove their value to clients. Standardizing business processes can help PSOs execute efficiently and generate the profits needed for growth.
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The document discusses strategies for mining companies to manage through an economic downturn, including focusing on retention through leadership, communication, training and rewards rather than voluntary turnover; bringing remuneration under control after rates increased dramatically during boom times; and engaging workers to create a culture of commitment through performance management and incentives aligned with company objectives.
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1. The Nolan Newsletter
People, Process, and Technology
ROBERT E. NOLAN C O M PA N Y
MANAGEMENT CONSU LTA N TS
Four t h Qu art e r 2009 Volum e 36, Nu mbe r 4
3. The Nolan Newsletter
People, Process, and Technology
Table of Contents
Innovation, Growth, and the Expense Challenge.....................................2
That Doesn't Work Anymore.....................................................................3
Enterprise Risk Management:
The Checks and Balances of Strategy Implementation..............................5
Do You Really Need That Bus?...............................................................8
Can You Compete on the New Basis?......................................................10
Reaping the Bene of Parkinson's Law...............................................11
ts
Client Spotlight: Customer Claims Care Centers....................................14
Process Innovation is the Lower-Cost Growth Engine.............................16
Nolan Annual Bank Performance Study
Scheduled for First Quarter of 2010..............................................................18
Toothpaste or Toilet Paper..........................................................................19
Small Potatoes are Harder to Peel..................................................................22
Poised for Recovery: A Powerful Preparation..........................................24
Manage Expenses Continuously....................................................................27
Nolan Events...............................................................................................28
Vol. 36 No. 4 Fourth Quarter 2009
4. Steve Callahan
Senior Consultant / Practice Development Director
steve_callahan@renolan.com
In a 1955 edition of The Economist, Cyril Parkinson
ci dt aae“ okepns oa t flh t e
o e h dg w r xad s s o i t i
n e l em
aaal fri cm li . Wh ei edd a t
vib o t o p t n
l e s eo ” i n ne s h
l t e
simple lead sentence to a humorous article, the adage
gi d le fto nr nocd y on r y 15 bo oesy,
a e ai o i w , i r b Jh Mur ’ 98 ok fs s
n f s ef e as a
Pri o’L w T e usi f rges
a n n a : h P r t Por .
ks s uo s
From humor to reality: studies were then conducted within Great
Bii sC l i O f et dt m n t cue o a i xlal
ra ’ o n l fc o e r i h ass f n n p cb
tn oa i e e e e i e
growth in overhead. The findings?
1. Officials (management) tend to add subordinates in lieu of allowing
staff to be added to "rival" organizations; and,
2. Over time, officials (management) create work for each other at a
rate of 5 to 7% more per year regardless of the amount of "real"
work being done.
Not surprising for those who work closely with organizational design
and operational efficiency.
Fsfr a t t a’eoo yw e i li a fr s o b e
atow r o o y cnm , hr n ao r oc cm i
d d s e ftn y e n
with inexplicably declining productivity to put direct pressure on
growth and profitability. These challenges bring an intense pressure on
l dr i r srfre om nehta se a otvr hl i
e e h —pe ueopr r ac t cn em l soe e n
a sp s f a m w m g
at times. Under this pressure, the unfortunate reality is that more often
than not reactive, short-term decisions get made; decisions that have long
lasting and negative impact on performance.
Yet if leadership is able to extricate itself from the distracting clamor
for action, instead taking a thoughtful look at the overall situation from
a strategic perspective, history shows that there is typically opportunity
hidden within crisis. Anecdotally, yet consistently, it has been shown that
it is in times of crisis that millionaires are made and companies rise to the
t o t ii ut o f l t bt m T eum i foa’m re ,
o fh rn sy ra t h o o . h t o o t y a t
p e d r lo e t r l d s ks
in hindsight, will be shown to have brought along similarly dramatic
opportunity for those willing to rise to the occasion.
Being strategic amidst turmoil is a bit like firefighters trying to decide
where to dig the firebreak while trees around them are aflame. It takes
an intense level of concentration, which in our industry translates into
11
5. a focus on product competitiveness, distribution channel effectiveness,
operational efficiency, strategic investment levels, talent management,
and customer service.
Many companies ignore the benefit of the firebreak and instead turn
their hoses on the burning trees, typically by initiating generic cost-
cutting measures which, for most companies, translates into headcount
reductions. Reductions that are typically ordered as an across-the-board
cut; indiscriminately set at an arbitrary level so that the pain can be equally
shared across the leadership team. While this may be an emotionally
equitable approach to expense savings, it is not an effective strategy
for the forward-thinking company. Mandated percent-of-budget cuts
rarely achieve the elimination of "fat" expected, but instead end up often
detracting from longer-term necessities, reducing critical intellectual
capital, or generating a subtle deterioration in an area of competitive
advantage.
C ni r h ere r e net Pri o’ L w Wh et cs
os e t a i e r c o a n n a . i h ot
d e lr f e ks s l e -
conscious manager will attempt to maintain efficiency regardless of
f ac l od i , ees tn v wll e f l r tPri o’
i ni cnio t l aet e i i l a pe o a n n ,
n a tn h s t i lk y l y ks s
hiring as allowed and then benefiting from the work by filling their
ad i a s fst e o nti t asc t dcn i at l
dio l t f i —nt o c g h s ie el e n c a
tn a ’ m in e o a d i u
transactional productivity. During times of profit and growth, this is
acceptable but when faced with turbulent markets like we have today, the
impact of reductions is dramatic. In effect, the cost-conscious manager is
f e wtctn at lm a — i eet lailn tet awl
a d i u i c a" et n lc acp aada nt t i
c h tg u " tl u t l h l
b epni tr l e shy ae r e e pout i ee dr g
e xes eo e a —at hv pe r d rdcv y vn ui
v pc e sv it n
t t e o go t C ne e ,h Pri o’ m ngrwl hv
h i s f rwh ovr l t a n n aae i ae
e m . sy e k s s l
gradually built up an excess level of staff they can cut without impact
as their staff simply returns to prior levels of productivity without any
detrimental impact to service or effectiveness. To make matters worse,
t Pri o’m ngrsna l eho bi pa e fr io hr
h a n n aae ii l i l od e g r sd o h r e
e ks s lk i n i s
ability to weather the storm.
So how does the strategically-focused organization avoid the anomaly
o Pri o’L w epc l g e t cr neoo ii t it
f a n n a ,seil i nh ur tcnm cn a ly
ks s ay v e e s bi?
One of the quickest and most equitable methods is through the use of
demand-based capacity models that, based upon actual transaction data,
illustrate the required number of employees necessary for a given set of
functions. By accounting for transaction times along with vacations, sick
time, staff experience, and predetermined overhead factors, the capacity
models are able to objectively forecast staffing needs based on projected
fluctuations in demand. Given that the models are based upon actual
12
6. transaction times, using techniques like direct observation stopwatch
s d s ri e adr t r in ro fr a i o’L w t gi a
t i o t l e ,h e s o om o Pr n n a o a
ue m d s e ks s n
fo o —t r i n ro fr up sT edm ns f r m aue
ot l h e s o om o srl . h e ad o pe esr
hd e u - d
transactions lead directly to the determination of required staffing levels,
creating the ability to trim staff-related costs in a way that will have the
least negative impact on productivity and service.
As a result, companies that have implemented demand-based capacity
models rarely resort to arbitrary across-the-board cuts; instead, they have
the ability to focus on areas where cost reduction is justified by surplus
capacity. As a result, no longer is the cost-conscious manager penalized
frfc n y aai t is f w i t Pri o’m ngrs o
o e iet m ng gh rt f h eh a n n aaeinw
fi l n e a, l e k s s
forced to identify and eliminate the non-value-added work that has filled
the available resources over time.
There are a few other exceptional benefits to having these tools at
hand; specifically, the ability to run "what-if" scenarios that help estimate:
1. the staff required to do a specific function within a unit;
2. individual performance levels compared to overall unit
performance;
3. the impact of procedural or systemic changes on staffing levels; or
4. the ability to calculate overtime and contingent staff needs for
addressing backlogs.
The steps involved in developing effective demand-based capacity
models are relatively straightforward.
1. Identify the key drivers that generate work.
2. Determine the individual work times for each driver.
3. Develop the maximum operating efficiency for the staff within the unit.
4. Calculate the volumes of work for each of the drivers being
modeled.
5. Incorporate all of the aforementioned factors, checking for
reasonableness.
Given the economic challenges we face, what better time than now
to search for the inefficiencies in your organization, recognizing the
i v ait o i l ne l ePri o’L w oe t e U i t l
n ib i fn u cs i a n n a vri . s g o s
e t ly fe k ks s m n o
like demand-based capacity models, subjectivity can be replaced by
objectivity, and arbitrariness by reason. The result, for those that take the
time, will be a healthier and more competitive organization.
Sr nt C uci sii et H w vr eu fl e t t yyu
i s n hr l a t s “ o eebatut sa g,o
Wi o hl d b : i h re
solocs nl l k t eeu s
hu cai ayo at r l.
d o l o h s t”
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