Social Networking – Changing the Context of Doing Business: Management Funda; V2 Issue 2

You find a perfect candidate for the new role in your department. You get insight into the management philosophy of your competition. Your company gets publicity.  All with some clicks of your mouse! Without attending networking conferences or exchanging business cards! Welcome to the new form of networking - social networking!

How does social networking work?

In general this is how social networking works…

1. A website owner establishes the style of the network, provides the functionality, creates/imports content and sets the rules.

2. A friend or contact invites you to join the networking service or you join by visiting the site and signing up. With most services the initial signup is free.

3. You create a profile describing yourself/your company and your interests.

4. You connect to your friends/colleagues or clients/suppliers and their network.

5. You further expand your own network via message boards, emails, blogs and by connecting with members with similar interests.

The best part of a social networking site is that it enables you and your company to connect with people who may not be familiar with you, or with your organization. Because you already know someone who knows them, you can begin a relationship with more trust and warmth than with a total stranger. According to the Hitwise, the online intelligence service, internet visits to the top 20 social networking websites in 2007 accounted for 6.5 per cent of all internet visits. The popular Orkut and Facebook are some of the networking sites used for personal purposes. LinkedIn.com and Ryze.com are some of the networking sites used mainly for professional and business purposes.

Social Networking changing business context

But should you or your company be investng time on networking? Because though it is in the early stages, social networking along with other web 2.0 tools (blogging, wikis) is changing the way we do business.

• New customer relationship management tool: Entrepreneurs and small businesses can expand their contact base easily since social networks connect people at low cost. These networks can act as a customer relationship management tool for selling products and services. Companies can advertise in the form of banners and text ads. For businesses operating globally, social networks can make it easier to keep in touch with contacts around the world. It helps in being more responsive to customers. Gerson Lehrman Group’s expert network connects customers to subject matter experts who can address their concerns etc.

• Increased internal and external communication: Social networking tools are easy and simple to use.So more and more people are communicating things they would otherwise not have communicated. Federal Aviation Administration (FAA)’s 200 or so disaster recovery specialists have invited people to join their networks so that post disasters, through communication with their contacts they can respond faster and more effectively.

• Collaboration and better knowledge management: Individuals and organizations needing a capability or service that is not within their reach, use social networking to work together with other individuals, communities and organisations. Flowserve, an industrial manufacturer built an internal version of Facebook. Its employees spread across 55 locations could now develop relationships and communicate with each other to leverage on each other’s knowledgebase to solve common problems.       

• Innovation: The collective intelligence of colleagues, peers in other companies, suppliers and customers can be tapped to develop innovative services and products. IBM India has seen that their social networking tools create healthy discussions around research and development thus contributing to the improvement of their products, processes and policies.

• More transparency and accountability: With increased levels of communication comes greater tranparency and companies are becoming more accountable for their actions to their consumers and employees.

• Hiring and working with people we know: Studies have found that those hired through social networks have a lower attrition rate and earn more than employees hired through other hiring methods.

• More connected workforce: More than 300 Zappos (an online shoe retailer) employees use social networking to let friends, colleagues and customers know what they are doing at any given time in the day. This informal and frequent communciation keeps employees connected. In India TCS is developing an interactive corporate directory called My Site. Employees can create a buddy list and connect with others having similar interests thus increasing bonding among employees irrespective of hierarchy.

• Increased C2C marketing: Messages being delivered from business to consumer (B2C) are being supplemented with consumer-to-consumer (C2C) messages about products and services through the social networks. So companies are finding ways to tap into them in order to be aware of them and influence them positively.

Looks like social networking will provide a new powerful way to get work done by making individuals and organizations more agile and efficient through better communications and sharing of expertise. Of course all this is possible if you use social networking effectively.

Using social networking effectively- few tips

• Choose the networking sites wisely – those which suit your requirement rather than the ones people have sent you invites for or other companies are using.

• Create a user friendly profile by ensuring it contains all the relevant details and gives the right impression about you or your company.

• Extend invitations to connect to friends and people or in the case of a company, clients, suppliers who know you.  You don’t want to create spam for people who have not heard of you right. Also don’t be pushy. It may put off people.

• When you make a request for connection clarify your intentions ie., is it to find a candidate, discuss common interests, get product improvement ideas etc.

• Invest time in networking. Learn what works and does not work. Be clear what you are trying to accomplish through networking to use the time spent on it fruitfully.

• Display networking etiquette like responding to requests promptly, being truthful about your employment status etc while connecting with people and by not connecting with people every time you have news about yourself /your company or need some help.

• Aim for relationships rather than transactions. Help others before seeking help from them.

Conclusion

Is there a downside to social networking? Though networking sites are mindful of your privacy you cannot stop a person from writing to you or writing about your company. Maintaining your network will require taking out time from your already packed schedule. You may also feel emotionally disconnected with people you are in touch with only online. Valid concerns. But there are ways to take care of them. For instance you can talk to your contacts on phone or meet them in person to get a feel of the real people behind the emails.  And considering its various benefits it is worth making the effort. Soon social networking tools developed for use within organisations will be here (A McKinsey's survey found that 37 per cent of the executives interviewed were using or planned to use social networking functionality within their companies.) And when it does you and your organisation will be ready.

References

1. Taylor,D,“The Business Blog at Intuitive.com”, http://www.intuitive.com/blog/etiquette_for_linkedin_and_the_professional_networking_world.html.
2. Hoffman, A, “Seven Tips for Social Networking Online”, http://career-advice.monster.com/career-networking/Seven-Tips-for-Social-Networking-On/home.aspx.
3. Steckerl,S,“Start Networking Online”, Jan 2, 2007,http://www.ere.net/2007/01/02/start-networking-online/.
4. Fitzgerald ,M, “Why Social Computing Aids Knowledge Management”,http://www.cio.com/article/395113/Why_Social_Computing_Aids_Knowledge_Management_.
5. “The impact of social media on corporate culture”, http://gneil.blogspot.com/2008/06/impact-of-social-media-on-corporate.html.
6. http://www.livemint.com/2008/06/10001221/IT-companies-jump-on-the-socia.html?d=1.
7. Atchison, S, “Social Networking ROI: Measuring the Impact of C2C”, Jul 12, 2007,
   http://www.clickz.com/showPage.html?page=362638.
8. “Social network service”, http://en.wikipedia.org/wiki/Social_networking.

Six Thinking Hats: Management Funda; V2 Issue 1

When you are making an important decision at work, don’t you want your colleague or manager to provide their views on it?  You want their views because you want a different perspective on it. Imagine if can get not two but six different perspectives on it. This is exactly what the technique ‘Six thinking Hats’ gives you. This is achieved by encouraging you to recognize your habitual thinking and by helping you apply different types of thinking.

What is this technique?
The Six Hats represent six approaches to thinking. Each is symbolized by the act of putting on a coloured hat imaginatively. Most people use only one or two of the approaches. This limits their thinking. By deliberately adopting all six approaches to a problem people can be more productive. You can use ‘Six Thinking Hats’ in meetings or on your own. When done in group, everybody wears the same hat at the same time. The kind of thinking involved in each hat is explained below:-

White Hat: Focus on the facts and data available and gaps in your knowledge. Then either try to fill them or take account of them.

Red Hat: Look at the decision using intuition, gut reaction, and emotion. Think how other people will react emotionally.

Black Hat: Think negatively. See why ideas might not work. This is important because it highlights the weak points in a plan of action. It allows you to eliminate them, alter your approach, or prepare contingency plans to counter problems that arise.

Yellow Hat: Think positively. See the decision’s benefits and spot opportunities that arise from it. Yellow Hat thinking helps you to keep going when everything looks gloomy and difficult.

Green Hat: Develop creative solutions. It is a freewheeling way of thinking, in which there is little criticism of ideas.

Blue Hat: Control the thinking process. This is the hat worn by people chairing meetings. When ideas are running dry, they may direct activity into Green Hat thinking and so on.

How did it originate?
It was first propounded by Dr. Edward de Bono in the book ‘Six Thinking Hats’ in the early 1980s. The concept was actually conceived in just one afternoon by him while writing an article. He imagined a situation for creative thinking and thought of the negative criticism that people usual encounter while ideating. Wanting to counter this, he thought what if there is a time and place where that sort of critical thinking is perfectly correct, but other times where it’s not. So it started out as a reaction to the negativity. The article was then expanded into the book.


An Example
Lets look at how an issue can be viewed 'wearing' each of the thinking hats in turn.

Situation:  The directors of a property company are looking at whether they should construct a new office building. The economy is doing well, and the amount of vacant office space is reducing sharply.

Benefits
While the obvious benefit is that it helps you make sound decisions, the other benefits are:-

• It helps you conduct more productive meetings. Since everyone focuses on a particular approach at any one time, the group tends to be more collaborative than say if one person is reacting emotionally (Red hat) while another person is trying to be objective (White hat).

• It allows necessary emotion and skepticism to be brought into what would otherwise be purely rational decisions.

• Black Hat thinking makes your plans more resilient by helping you spot fatal flaws and risks before you embark on a course of action.

• The technique can help, for example, persistently pessimistic people to be positive.

• This allows an issue to be addressed from a variety of angles, thus servicing the needs of all individuals concerned.

• It encourages creative, parallel and lateral thinking along with rational thinking.

Conclusion
To use “Six thinking hats” effectively it is important to put on and take off a hat metaphorically speaking. I mean using all of the hats at the same time is not a good idea. Also, do not use the hats to categorize individuals, even though most people automatically use one kind of hat more often than the others. Hats symbolize types of thinking and not types of people. So, which hat did you have on while reading this write-up?

References

• ‘Six Thinking Hats’, http://www.mindtools.com/pages/article/newTED_07.htm.
• Vas, L S. R, ‘Six Thinking Hats of creativity’, http://www.lifepositive.com/Mind/Creativity/Six_Thinking_Hats_of_creativity52004.asp.
• Labelle,S, ‘Six Thinking Hats’, http://www.members.optusnet.com.au/charles57/Creative/Techniques/sixhats.htm .
• ‘de Bono Hats’,http://en.wikipedia.org/wiki/Six_Thinking_Hats.

Disruptive Innovation : Management Funda; July'08

What is it?

The term ‘Disruptive Innovation’ first appeared in the 1997 best-seller ‘The Innovator’s Dilemma’ by Harvard Business School professor Clayton Christensen. Disruptive innovation is an innovation that improves a product or service in ways that the market does not expect. It disrupts the market and forces other competitor companies to radically change their business or face serious consequences. It can be of two types:-

• Low-end : This is typically cheaper or simpler to use version of an existing product that targets low end customers. 
• New market disruption: This addresses an entirely new set of customers in the same product space.

When a Disruptive innovation is made, usually by a new entrant, an established company, instead of retaining its share in a not so profitable segment, tends to move up-market and focus on its more profitable customers. Eventually the disruptive innovation meets the demands of the most profitable segment and drives the established company out of the market. A good example is producers of downloadable Digital Media disrupting companies producing CDs. File sharing technologies, were initially free. Then came inexpensive online retailers such as the iTunes music store. This low end disruption eventually undermined the sales of physical CDs. Similarly, Google.com has disrupted online advertising and created a new revenue stream by placing highly targeted text ads besides the search results of its search engine. In contrast a Sustaining Innovation seldom causes the downfall of established companies. It improves the performance of existing products along the dimensions that mainstream customers value. For example Contact Lenses as an improvement over Eye Glasses.

Examples of Disruptive Innovations

Disruptive innovations can happen in a process or a business model too. Dell’s adoption of just-in-time delivery for its computers’ electronics parts, substantially cutting warehousing and depreciation costs is a process disruptive innovation. Disruptive innovations have been demonstrated by no frills airlines with their low-cost business model allowing them to strongly compete with established airlines. So how does one know one is making a disruptive innovation?

Determining if an innovative idea is Disruptive

Step 1: Firstly explore whether the idea can become a new-market disruption by determining…

• Whether there is a large population who historically has not had the money, equipment, or skill to use it themselves and as a result went without it altogether or paid someone with more expertise to do it for them?
• Whether customers need to go to an inconvenient, centralized location to use the product or service?

Step 2: Then explore the potential for a low-end disruption by determining…

• Whether customers at the market low-end would be happy to purchase a product with less, but good enough performance if they could get it at a lower price?
• Whether a business model can be created that enables to earn attractive profits at the discount prices required to win the business of the over served customers at the low end?

Step 3: If the idea passes the new-market or low-end disruption test, finally determine…

• Whether the innovation is disruptive to all of the important existing players in the industry? If it seems to be sustaining to one or more of them, then that player has an edge, and the entrant is unlikely to win.

But what if it is not your company but your competition that is making the disruption, how will you deal with that

Dealing with Disruption from competition

Let’s examine the reasons companies fail to counter competition from disruptors effectively. They are:-

• Tendency to listen to and focus too much on its main customers failing to recognize potentially disruptive innovations that serve only marginal customers.
• Not taking Disruptive products seriously since they compare badly with existing products.
• Not being interested in deceptively small markets typically available for a disruptive innovation compared to the market for the established product.
• Even if a disruptive innovation is recognized, reluctance to take advantage of it, since it would involve competing with one’s existing and more profitable technological approach.

In order to address these problems companies can adopt the following two approaches:-

• Chase the market: Create small independent business unit to cater to the emerging market and at the same time continue to push technological demands in your core market so that performance stays above what disruptive technologies can achieve. Quantum Corporation, a leading producer of 8-inch drives was not sure what applications 3.5-inch drives could have in the computer industry. Instead of shelving the project they created a spin-off unit to develop 3.5.inch drives. After 10 years the 8-inch market had completely disappeared while their small venture had grown to become the world’s largest disk drive producer.
• Find new market based on one’s expertise: When it became clear that digital imagery would forever change the photography market, Fuji not only began producing digital imagery products but also identified numerous opportunities for using its photographic chemicals knowledge.  

Conclusion

To sustain and grow a business it is imperative that one not only makes disruptive innovations but also detects them early enough in one's competitive landscape. So, next time you brainstorm on generating revenues for your company think of how your competition is possibly disrupting your business or better still how you can innovatively disrupt your competition. And needless to say this will be one disruption that your company is going to welcome!

Reference

• Disruptive technology’, http://en.wikipedia.org/wiki/Disruptive_technology
  Scocco, D, ‘Disruptive Innovation’, October 04, 2006, http://innovationzen.com/blog/2006/10/04/disruptive-innovation/.
• ‘Key Concepts - Disruptive Innovation’, http://www.claytonchristensen.com/disruptive_innovation.html.
• Osterwalder, A, ‘Designing Disruptive Innovations’, November 28, 2005,http://business-model-design.blogspot.com/2005/11/designing-disruptive-innovations.html.
• Baumgartner, J, ‘The best strategies for dealing with disruptive innovation’, 8/29/2008, http://www.innovationtools.com/Articles/EnterpriseDetails.asp?a=340
• Patrick, ‘What is Disruptive Innovation?’, 1/08/2005, http://www.brinq.com/workshop/archives/2005/01/08/what-is-disruptive-innovation/

Becoming Lean – Reaping benefits of Lean Solutions : Management Funda; March'08

Becoming Lean means eliminating waste at every product or service creation phase and becoming highly responsive to customer demand while producing quality products and services. For example the new car ‘Nano’ uses less steel, less plastic, less space and less energy to run. People love it and there is already a huge demand for it. This definitely makes the car ‘Lean’.

Origin of Lean
Lean was born with the Toyota Production System a manufacturing methodology developed originally by Taichi Ohno for the manufacture of automobiles at Toyota. Its goal was "to get the right things to the right place at the right time, the first time, while minimizing waste and being open to change". During the 1980s, Lean production was adopted by many U.S. and European manufacturing plants. It has also been implemented with success by service organizations, logistics and supply chain organizations.

Implementing Lean
The following steps need to be followed:-

• Define who are the customers

• Define desired outputs and value in customer terms

• Define current process as it really is, not as it is supposed to be

• Identify and eliminate waste (non value adding steps) ie., all steps should directly contribute to satisfying customer need

• Make the process flow so the customer can ‘pull’ (i.e. demand from the customer)

Types of waste in Service context
Now, let’s move away from Production environment and see what resources typically a service company wastes.

Points to remember while implementing Lean:

• The focus of Lean initiative is on delivering continuous improvement and a mix of long term as well as short term improvements.

• Ever heard of continuous improvement taking place in the absence of measurements? So, a regular measurement of improvements is important.

• Kaizan, Just In Time, Six Sigma, process reengineering etc are some of the Lean tools. But unless you know what you want to achieve using the tools, the tools are useless. It’s like giving a cook lot of ingredients without telling him what needs to be cooked. Thus it is necessary to have a clear vision of your organizational objectives before you choose your Lean tools.

• A holistic approach is the key to making Lean work. Every one who is involved in providing the service needs to understand what and how they are delivering to the customer and how they can eliminate the waste from their actions.

• While the principles of Lean are common for all organizations, the way it gets implemented will differ from company to company.

Examples of benefits that you will enjoy

• Operational excellence: Companies such as ICICI Bank and Wipro have been successfully using Lean for driving this.

• Flexibility to meet varied customer demands: By reducing production system response time Toyota was able to quickly change and adapt to market demands.

• Minimised costs: Dell implemented Lean to remain profitable by minimizing costs.

• Better service: By combining Agent-assisted Voice Solutions and Lean's waste reduction practices, a call centre company reduced handling time, between agent variability and accent barriers to improve live agent call handling.

• Better price realization: General Cable achieved this from ‘Lean’ initiatives.

• Competitiveness: Lean manufacturing reduced lead time, reduced costs and improved quality providing opportunities for new marketing campaigns, allowing companies to gain market share from competitors that were slower, costlier or of poorer quality.

Conclusion
Can you ever say you have done all that is required to become ‘Lean’? Well, can you ever say that my customer will always be happy with my current level of service or that there are no more ways I can improve my processes? No! Since becoming ‘Lean’ is a continuous process and to bring about meaningful results Lean management needs to be sustained over a period of time. Regardless of the industry, company size or culture, the Lean concept can be used to provide value to your company and yourself.

References

• Malloy, J, “Lean production”, http://searchcio.techtarget.com/sDefinition/0,,sid182_gci810519,00.html.
• “Leading In Lean Time”’, http://www.themanagementor.com/EnlightenmentorAreas/sm/MS/Leanlead.htm.
• Kumar, V. R, “Just get Lean and mean”,http://www.thehindubusinessline.com/ew/2005/01/17/stories/2005011700180300.htm.
• Sarkar ,D,  “ ‘Lean’ is more than a cost-cutting tool”, http://www.thehindubusinessline.com/2008/02/14/stories/2008021450240900.htm.
• “Lean manufacturing”, http://en.wikipedia.org/wiki/Lean_manufacturing.
• ‘Lean Process Improvement - effective organizational improvement though your people’ pdf document.

Balanced Scorecard: Management Funda; Jan'08

What does it mean

The Balanced Scorecard (BSC) is a performance measurement framework that focuses on a range of measures under 4 perspectives to provide a balanced view of organization performance. A BSC typically comprise of both leading indicators (measures which drive performance, eg., in sales ‘order bagged’) and lagging indicators (actual results of performance, eg., in sales ‘pipeline value’). By focusing not only on leading indicators like financial outcomes but also on lagging indicators like human issues, the BSC provides a more comprehensive view of a business thus helping organizations act in their long-term interests.

What are the 4 perspectives

The original BSC method developed by Robert S. Kaplan and David P. Norton in the early 1990s as a result of a year’s research with 12 companies, mentioned the following 4 perspectives:-

• Financial perspective: This examines if the company’s strategy, implementation and execution are contributing to the company’s bottom-line improvement. It incorporates tangible strategy outcomes in traditional financial terms like cash flow, costs, ROI, revenue growth etc.
• Customer perspective: This defines the value proposition of the organization to satisfy its customers to generate more sales through the most desired (i.e. the most profitable) customer groups. The measures selected for the customer perspective measure both the value delivered to the customer like delivering committed quality or service and the outcomes of this value proposition like customer satisfaction, market share etc.
• Internal process perspective: This is concerned with the processes that create and deliver the customer value proposition. It focuses on all the activities and key processes required in order for the company to excel at providing the value expected by the customers both productively and efficiently. Some measures are accident ratios, defect rates etc.
• Learning and growth perspective: This is concerned with the intangible assets - jobs (human capital), the systems (information capital), and the climate (organization capital) of the enterprise basically the infrastructure needed to meet ambitious objectives in the other three perspectives. Measures can include employee satisfaction, internal promotions %, employee turnover etc.

Can other perspectives be used

Yes. Since the introduction of BSC by Kaplan and Norton many writers have suggested alternative headings for these perspectives and use of either additional or fewer perspectives. But basically designing the BSC requires selecting both leading and lagging indicators and selecting five or six good measures for each perspective. Thus the major design challenge faced is justifying the choice of measures made. If users are not confident that the measures are well chosen, they will have less confidence in the information it provides.

Example of a BSC of a Regional Airline

Mission: Dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride and Company spirit.
Vision: Continue building on our unique position -- the only short haul, low-fare,high-frequency, point-to point carrier in America.

How does it work

The general steps to using a BSC, which are also illustrated in the above Regional Airline example are as follows:-

1. Identify a vision: Implementing BSC starts from the company vision ie., where is the organization going?
2. Identify strategies: By identifying strategies you tell how you will get there.
3. Define perspectives: This means you have to ask what we have to do well in each perspective.
4. Identify the measures: From the perspectives defined, measures are identified.
5. Evaluate: Thereafter ask how do we measure that everything is going the expected way.
6. Create action plans: Based on this work you should create action plans and plan reporting and operation of the BSC.
7. Follow up and manage: Here you should have answers to …How will the BSC be managed? Who should have reports and what should they look like?

What are it applications

Kaplan and Norton found that companies are using the scorecard to drive strategy execution, to clarify strategy and make strategy operational, to identify and align strategic initiatives, to link budget with strategy, to align the organization with strategy, to conduct periodic strategic performance reviews and to learn about and improve strategy.
 

How can I use it

Before you dismiss this tool as just another organization strategy tool please note like any strategy tool, BSC can also be creatively applied in different spheres of our life. While the implementation of the scorecard generally begins at the corporate level, it can be useful at all levels of an organization. So as a manager you can create a scorecard for your team or as the head of a department you can create a scorecard for your department. All you have to ensure is that there is a good mix of leading and lagging indicators and the different perspectives selected by you provide a balanced approach to improving performance.  Talking of applications for you, would it not be great to see your life’s score card.

References

• • ‘Balanced scorecard’ , http://en.wikipedia.org/wiki/Balanced_scorecard
  • http://www.balancedscorecard.org/Portals/0/PDF/Regional_Airline.pdf.
  • ‘How to use the Balanced Scorecard’, http://thebalancedscorecard.com/how_to_bsc.htm.
  • Missroon, A M,  ‘Demystifying the Balanced Scorecard’, DM Direct, May 1999 , http://www.performance-appraisals.org/cgi-bin/links/jump.cgi?ID=8131.

SWOT Analysis: Management Funda; Nov'07

What does it mean

SWOT Analysis is a powerful but simple strategic planning technique used for evaluating the Strengths, Weaknesses, Opportunities and Threats of any context - a business venture, a project or any activity. Strengths and weaknesses are often internal, while opportunities and threats often relate to external factors. Hence the SWOT Analysis is sometimes called Internal-External Analysis and the SWOT Matrix (refer below) is called an IE Matrix. This tool can even aid in your career planning by helping you utilize your talents, abilities and opportunities in the best possible way. How? Let’s find out!

How does one use SWOT

• You need to start by defining a desired objective like choosing between two business ventures that you want to work on or determining your firm’s business strategy.

• Then create a SWOT matrix as illustrated below. We have taken as an example here a small internet business that mostly employs contractors.

• Strengths need to be maintained, built upon or leveraged. So maintain low overheads by changing pay structure to include performance bonus.
• Weaknesses need to be remedied or stopped. We can consider implementing project planning system.
• Opportunities need to be prioritized and optimized. Testing new market with one existing service would be a good idea.
• Threats need to be countered or minimised. Maybe we can look at including contractors in performance based bonus schemes.

• Next review your SWOT matrix in order to create an action plan to address each of the four areas. Determine what needs to be done on a priority basis or what is a better option between two options. Let’s consider our example.

• You can then use another decision making tool to help you plan further.

Effectively using SWOT analysis

Some key points to remember while using SWOT Analysis are:-

• It is easy to get lost in compiling lists rather than thinking about what is actually important in achieving objectives. If the desired end state is not defined, the participants doing SWOT analysis may have different end states in mind and the results will be ineffective.

• SWOT also presents lists without prioritization. For example, weak opportunities may appear to balance strong threats. Just remember only SWOT items that produce valuable strategies are important.

• SWOT analysis may limit the strategies considered. You might conclude that you have done adequate planning and ignore aspects like calculating ROI for alternate strategies.

• SWOTs are sometimes confused with possible strategies. SWOTs are descriptions of conditions, while possible strategies define actions.

Where can I use it

You would be surprised to know that apart from using it for business planning there are many ways you can use SWOT analysis for professional and personal effectiveness.

To construct your own SWOT analysis for your career planning, examine your strengths and weaknesses. How can you capitalize on your strengths and overcome your weaknesses? What are the external opportunities and threats in your career field?  

Think of the times you wanted to change an existing practice. Wouldn’t SWOT analysis have helped you determine the best course of action? In fact it is a good way of involving other people in a change process. Or think of the times when you started a project and in the middle of the project encountered problems. If you had done a SWOT analysis identifying threats at the beginning you could possibly have avoided the problems.

People have found SWOT useful for determining strategic directions for their team and department. You are faced with umpteen situations where you have to choose between two options right? Next time you have to choose between 2 job applicants who both seem to fit the bill try using SWOT. I guess by now you have ideas of your own as to where you can use SWOT analysis. Happy analyzing!

References

• SWOT analysis, http://en.wikipedia.org/wiki/SWOT_analysis.
• Swinton, L, “How To Do A SWOT Analysis: Strategic Planning Made Easy”, http://www.mftrou.com/how-to-do-a-SWOT-analysis.html.
• SWOT analysis, http://www.managementresources.org/universal.php?c=11&a=46.
• S. Hansen,R and. and Hansen,K “Using a SWOT Analysis in Your Career Planning”, http://www.quintcareers.com/SWOT_Analysis.html.

Pareto Principle: Management Funda; Jun'07

What does it mean
The Pareto Principle also called the 80/20 Rule means that in anything a few (20%) are vital and many (80%) are trivial. For instance roughly 80% of your orders come from 20% of your customers. 80% of decisions come from 20% of meeting time. 80% of customer complaints are about the same 20% of your projects, products or services. You will notice this even in mundane matters like we wear 20% of our most favoured clothes about 80% of the time.

How did it have its origin?
In the late 1800s, economist and avid gardener Vilfredo Pareto established that 20% of the people owned 80% of the wealth. While gardening he observed that 20% of the peapods in his garden yielded 80% of the peas harvested. After Pareto made his observation many others observed similar phenomena. Quality management pioneer, Dr. Joseph Juran in the 1930s recognized a universal principle he called the "vital few and trivial many" which stated that 20% of something is always responsible for 80% of the results.

What are its applications?
The Pareto principle has several applications. Some of them are listed below:-

Are there any limitations to using it
Yes, but we should view it as challenges which need to be addressed rather than limitations. One challenge is to identify which actions make up the useful 20% and that too in advance. The other challenge is to determine whether this useful 20% always contain more or less the same actions or differ in different times.

 How can I use it
So often we say “There is so much to do and so little time” or “What an unproductive day!”  Consistent application of 80/20 rule can help us dramatically improve our productivity.

To maximize personal productivity, realize that 80% of one's time is spent on the “trivial many” activities.  Analyze and identify which activities produce the most value and then shift your focus so that you concentrate on the “vital few” 20%. Similarly to increase department productivity, focus attention on the top 20% of activities or transactions by first identifying and ranking projects and purchases in order of risk and productivity; and then focus remedial activities on those select few. Assign or delegate the 80% “trivial many” to subordinates or reduce them to clerical processes.  Identify that 20% of all transactions which account for the greatest risk and concentrate on minimizing those risks rather than minimizing all risks at much greater time and expense.  To reduce costs, identify which 20% are utilizing 80% of the resources. 

So go ahead and identify that 20% in your work that really matter. Remember they are going produce 80% of your results.

References

1. http://en.wikipedia.org/wiki/Pareto_principle.
2. Callos, JD, “The Pareto Principle (a.k.a. The 80:20 Rule)”, http://www.4hb.com/08jcparetoprinciple.html.
3. Savage,A, “How Useful Is the Pareto Principle” http://www.lifehack.org/articles/lifehack/how-useful-is-the-pareto-principle.html.
4. Reh,FJ,“How the 80/20 rule can help you be more effective”;   http://management.about.com/cs/generalmanagement/a/Pareto081202.htm.
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Mind Mapping: Management Funda, Aug'07

Mind Mapping: What does it mean?
Human brain works through associations. Every idea has a number of links attaching it to other ideas. Mind Mapping is a technique that utilizes this ability of our minds. By using mind maps, we can quickly identify and understand a subject’s structure, the way the pieces of information fit together. They hold information in a graphical format that our minds find easy to remember and quick to review. They help us avoid thinking linearly by opening us up to creativity and new ways of thinking. This can be best illustrated with an example.

An example of a mind map

Steps followed in making the above mind map:

1. Write the subject title you're exploring in a circle in the page center. This is shown by the black rectangle (time management) in the above figure.

2. As you come across major subheadings for the topic, draw lines from this rectangle. Label these lines with these subheadings. These are shown by the red lines (time wasters, effective use of time etc).

3. As you go deeper into the subject and uncover another level of information ie., further facts belonging to the subheadings above, draw these as lines linked to the subheading lines. These are shown by the blue lines (focus, planning etc.).

4. Delve further into the subject and uncover another level of information ie., more facts belonging to the subheadings above, draw these as lines linked to the sub-subheading lines. These are shown by the orange lines(diaries, priorities etc.).

5. Finally, for individual facts or ideas, draw lines out from the appropriate heading line and label them. These are shown by the green lines (order of execution, allocate importance etc.).

How was it invented
Mind Mapping was invented by Tony Buzan following his research on note taking techniques. He tested how much was learned or remembered using each of the following techniques for taking notes:

He found that the ‘Least learned’ was 1 and ‘Most learned’ was 6. So, Tony Buzan came up with a new method for note taking based on the idea of making the notes brief and interesting to the eye.

What are it applications
Not surprisingly mind maps can be used in many different ways other than just simple note taking.

How can I use it
Want to show your team the big picture about the next assignment? Stuck with problem you are trying to solve? Getting bogged down by the loads of information about the topic you are researching? Want to come up with a new way of selling your product. Make a mind map! Thus you can use mind mapping to summarize information, think through complex problems, consolidate information from different sources and enhance creativity. You can easily find more such workplace uses for mind maps.

Once you understand how to make notes in the mind map format, you can develop your own unique way of making mind maps. For instance you may decide to use different colors to distinguish different ideas or use symbols and images along with words. So, try experimenting with mind mapping. I bet you will find mind maps effective.

References

• ‘Mind Mapping FAQ’, http://members.optusnet.com.au/~charles57/Creative/Mindmap/mindmapfaq.html
• ‘Mind Maps A Powerful Approach to Note Taking’, http://www.mindtools.com/pages/article/newISS_01.htm
• Dunn, S, ‘For Greater Success in the New Year Try the Miracle of Mind Mapping’, http://www.mind-mapping.org/mindmapping-and-you/basic-introduction-to-mindmapping.html