We don’t want to get too carried away with excitement but an article in the HBR blog gives a glimmer of hope that the folks with the big brains just might be capable of learning something after all. In The Most Common Mistake People Make In Calculating ROI, a guy by the name of Joe Knight suggests that cash is king. “Analyzing ROI isn’t always as simple as it sounds and there’s one mistake that many managers make: confusing cash and profit,” he writes.
A couple of academics and a consultant wrote a piece in Harvard Business Review called, “Why Strategy Execution Unravels—and What to Do About It”. They could have just as easily titled it, ‘Why a Lean Transformation is Like Pushing a Rock Uphill’.
The article is all about the lack of alignment around strategic objectives. This is nothing more than pointing out that there is not alignment around the company’s core value streams; that any and every strategy requires cross functional value stream agreement, coordination and cooperation; but companies are by and large organized around functions.
One phrase you rarely hear at companies with a keen understanding of lean is “the cost of doing business”. In fact, that particular expression is a sure fire indication that the person using it has missed the central point of lean entirely. There are few, if any, universal ‘costs of doing business’. There are only costs of how management has chosen to do business.
I’ve written from time to time about the fallacy of MBO – Management by Objectives – in contrast to the fundamental lean principle of MBM – Management by Means. MBM is process centered management, while MBO is pretty much ‘process be damned’ management. At last week’s Lean Accounting Summit in a session concerning metrics I explained the point as follows:
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