Friday, June 12, 2009

On Optimizing Organization

* For increasing the overall productivity of an organization, focus should be made on increasing the utilization, efficiency & effectiveness while dealing with resources.
* Management by objectives should cover following 8 areas:
1. Marketing objectives
2. Innovation
3. Human resources
4. Capital resources
5. Physical resources
6. Productivity
7. Social Responsibility
8. Profitability
* Organizations tend to focus only on needs of customers but one should remember that ratio of non-customers to customers is always much more higher. Even for large empires like Walmart its 87:13. To increase market share its very important to identify needs of non customers also.
* Theory of business is based on assumptions about environment, mission & core competencies of Organization. Unless its not enlarged, organization can't grow much.
* 90% of results of organization are based on 10% activities. Effective executives should try to identify that & take few important decisions which can cause impacts. He should know when it should be based on principle & when pragmatically.
* While making people decisions: 1. Think thru assignment 2. Look at no. of qualified people 3. Think hard abt how to look at each candidates 4. Discuss each candidate with several people 5. Make sure appointee understands the job.
* While dealing with idea: 1. must meet rigorous test of practicality 2. must have economic validity 3. meet test of personal commitment
* While making decision don't go for specific. go one step further & take generic decision & go one more step further & take preventive measure.... e.g. in restaurant customer tells waiter that salt is less in curry. Waiter coming & solving his problem is specific decision. Waiter informing to the cook & cook adds salt to whole pot of curry to correct problem is generic decision & cook changing the recipie book for that item is preventive measures.... This way of taking decisions will save lots of time.
* Don't go for changing any process without doing root cause analysis & studying about its implications. Try to pin point the flaw & apply correction there. Don't start any new process without giving much thought. It may eat up lots of time. Stop the processes which are not giving effective results. That will help in freeing up the resources which can be used some where else.
* Innovation is work rather than genius & effective innovations start small.
* Management needs to find better ways to increase productivity of knowledge workers. A country which will lead in that will be the next economic power.
* It costs just as much to do the paper work for a small order as for a larger one.
* Studies reveal that revenues & efforts allocates them to 90% of events that produce practically no results.
* Managers should concentrate their efforts on smallest no. of products, product lines, services, customers, markets etc. which will produce large amount of revenues.
* Channelise staff efforts on very few things that are capable of producing significant results.
* Apply effective cost control on very few areas which will have significant impact.
* Allocate resources to activities which provide opportunity for high economic results.
* The area of greatest potential for opportunity should be given the fullest resource support in quality & quantity before next promising area gets any thing.
* Source of wealth is something specifically human: KNOWLEDGE. If we apply knowledge to tasks we already know how to do, we call it "productivity". If we apply knowledge to tasks that are new & different, we call it "innovation". Only knowledge allows us to achieve those 2 goals.

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