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Sorry, But You’ve Only Worked at Large Companies June 25, 2014

Posted by Tim Rodgers in job search, Management & leadership, Organizational dynamics.
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There’s an interview question that I’ve heard from time to time: “You’ve only worked at big companies, what makes you think you can succeed at a smaller company?” Sometimes this isn’t even a question, just a comment that implies that no reasonable person would disagree with the premise. The assumption is that “big companies” are significantly different in a way that somehow deeply changes the people who work there, requiring re-education before they can be useful in another work environment.

I’m not sure how widespread this attitude is, but I think it’s worth exploring. What are the assumptions about big companies and the people who work there? How hard is it really for people to move from a big company to a smaller company? Are there legitimate differences that require adjustments by a new employee?

First, what exactly defines a “big company?” Revenue? Number of employees? Reputation? Interesting questions, but not really helpful in defining the problem. I’ve worked at both Fortune 100 firms and smaller companies with greater than $100M in annual revenue. Hewlett-Packard used to be characterized by relatively small and independent business units that managed their own product lines with full P&L responsibility. Many large corporations follow a similar model.

The real question should be: What characteristics and behaviors are “small companies” afraid of, and trying to avoid? I can’t claim to have broad insight here, but I think the assumption is that larger companies have more processes, more overhead, more administrative staff, and generally more infrastructure that’s developed over time as they’ve grown. This infrastructure costs money to maintain, and smaller companies need to focus their resources on new product development and market growth. Smaller companies also value flexibility, adaptability, and nimbleness, and “excessive bureaucracy” is often blamed for the inertia that plagues some larger companies.

An employee with “big company” experience is accustomed to working within that infrastructure; enjoying its benefits, but also (possibly) learning how to overcome administrative obstacles and getting things done by organizing internal resources. If the infrastructure is smaller, will the employee forget how to do those things? I don’t think so. Frankly, I’d be more concerned about people trying to move from a small company to a big company, and in fact there are a lot of examples of folks who have failed to make that transition, particularly following an acquisition.

Everybody is expected to work within some kind of schedule and expense budget, whether big or small. Everybody has to work within an organizational structure, whether big and bureaucratic or small and nimble. It’s fair to ask how a person works within these constraints, but let’s not assume that people who’ve worked at a big company can’t succeed elsewhere.

 

manufacturing differences, lower volume, smaller sample size, less attention from vendors

How Important Is Industry Familiarity? April 17, 2014

Posted by Tim Rodgers in job search, Organizational dynamics, strategy.
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I’m once again “between jobs” and “in-transition,” and I’ve been spending a lot of time looking at job postings. Every position seems to emphasize the preference or requirement for applicants with industry experience. It’s easy to imagine that many applicants are immediately eliminated from consideration without it.

I understand why familiarity with an industry is valued in a candidate. Different industries are characterized by different combinations of suppliers, internal value delivery systems, channels, competitors, and customers. People who work in the industry understand the relationships between these elements, and that understanding is an important consideration when setting priorities and making decisions. It takes time to learn that in a new job, and people who already have the experience don’t need to go through a learning curve and theoretically can make a more-immediate impact.

Industry familiarity doesn’t seem to be something you can acquire through independent study and observation; you have to actually work in the industry. This means that your preferred candidates are likely going to be people who have worked at your competitors, or possibly your suppliers, channels, or customers, depending on how broadly you define your industry.

This leads to a question I’ve been puzzling over: what are the unique characteristics of an industry that are true differentiators? What really distinguishes one industry from another, and what is the significance of those differences when considering job applicants?

In my career I’ve worked at a defense contractor, several OEMs in the consumer electronics industry, a supplier to the semiconductor manufacturing industry, and most-recently a supplier to the power generation and utilities industries. Different customers, different sales channels, different production volumes, and different quality expectations and regulatory environments. Some of the suppliers were the same, but most were different. Some produced internally, and some outsourced. Some of these companies competed on cost, some on technology. My modest assessment is that I’ve been successful in all of these industries.

Industry experience provides familiarity, but is industry experience an accurate predictor of success in a new job? What skills are really needed to succeed, and how transferable are a person’s skills from one industry to another? Could a unique perspective derived from a diversity of experiences be more valuable than industry familiarity? These are the questions that should be considered when writing a job posting and evaluating applicants.

 

Fake It Until You Make It: Is Structural Change a Prerequisite? April 14, 2014

Posted by Tim Rodgers in Management & leadership, Process engineering.
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Change management is frustrating. It can take a maddeningly long time to convince the required supporters that change is necessary, and then more time to get everyone moving in the new direction. Then once the tipping point is reached it becomes a runaway train. When the benefits of the change are significant and well-understood by all, there’s a lot of pressure to get it done already without regard to process, or documentation, or training other “details.” It’s hard to manage expectations during this transitional phase. Can’t we just hold on for a minute while we get our act together?

Well, you could, but would you risk losing momentum and tempting people to revert to the old ways of doing things? Can change management succeed when it’s implemented on a limited basis without structural changes? Can you “make it up as you go along,” and firm it up later?

I don’t see why not. In fact, there’s a lot of value in this kind of launch-and-learn approach. It’s unlikely that you’ll be able to anticipate and plan for all the consequences of the change, and early experiences after the change is implemented will identify these improvements. For example, the change may impact processes and organizations that are infrequently engaged, and it might take time to discover that the change is more or less effective than you expected.

Consolidating the change and fully-integrating it into the system is still important and shouldn’t be neglected. I’ve seen many quality management systems and process documents that are completely out-of-date because they were never updated after the change. At minimum that’s a non-compliance on an external audit, but it’s also a potential source of confusion when new people try to figure out what the right process is.

Nevertheless, if the change is worth doing, then it’s worth looking into ways of implementing it quickly in order to realize some benefits, demonstrate some early successes, and build momentum.

 

What Happened to HR? February 19, 2014

Posted by Tim Rodgers in Management & leadership, Organizational dynamics.
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In 1996 I started a new job at Hewlett-Packard’s facility in Vancouver, Washington. The site at that time was supported by a large HR organization that had about 10-15 full-time staff. In 2001 I transferred to a different HP location with slightly fewer employees, but only about 4 HR professionals. In the years that followed the HR function was transformed from a locally-based, hands-on organization to a self-help model with a handful of regional support staff.

I suspect that most large corporations went through a similar transition in the first decade of the century. Today’s HR organizations seem to be focused on recruiting, hiring and on-boarding; benefits administration; supporting downsizing and other termination events; and generally keeping the company out of legal trouble. It’s becoming hard to remember, but HR used to be a lot more than that, at least at those companies who considered their human resources to be a source of strategic advantage.

Obviously a lot of money was saved by reducing the size of the HR organization, and I’m sure it was assumed that line managers and web-based training could meet the needs of the business, and some things were given  up because they weren’t considered to be all that important. I understand that it’s unlikely that we will ever return to the old days of large HR organizations, but if we expect managers and leaders to pick up the slack, then we should remember what HR used to do and ask whether those things still have value.

I’ve been thinking about all this after finding my notes and readings from a class that I took in HR during my MBA program in the late 1990s. In those days HR was described as a key partner, working side by side with other functional leaders to ensure that policies matched the strategic needs of the business. HR professionals led programs in organizational design and improvement, change management, and competitive benchmarking. They worked with line managers to identify future leaders, and design career development opportunities and succession plans. New managers were provided extra training and support for their transition. Staffing plans were based on a long-term view that considered the specific skills and intellectual capital that the company needed, and the company-wide perspective of HR helped ensure that new initiatives were not starved for resources.

I realize that few companies can afford to keep full-time HR personnel to do all those things. My point is that if we don’t, then either we’re saying that we don’t care about those things, or we expect somebody else to do them. If human resources are important to the company, then line managers and other leaders will have to step up and assume the responsibilities of a virtual HR organization.

Focus on Projects, Not Jobs January 24, 2014

Posted by Tim Rodgers in job search, Organizational dynamics, Project management.
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I’ve been doing a lot of professional networking these last few months, particularly since my most-recent transition from the corporate world. I’ve met a lot of new people, and re-connected with many former colleagues. Everyone wants to know how the job search is going, and what I’m looking for in my next job. The more I think about those questions, the more I wonder whether I’m really looking for a “job.”

Yes, I do want to be compensated for my work, and I prefer having some degree of stability and continuity in my work life, and (like most folks, I suspect) I have associated those things with a full-time position that doesn’t have a pre-determined end date. In other words, a job.

Lately, however, I’m starting to believe that there’s really no such thing as job security, at least in the traditional sense of staying with a single employer for an extended period of time. At-will employment seems to be the norm these days as companies emphasize staffing flexibility over long-term commitments. Those who have been laid off complain that there’s no loyalty any more, but I think that cuts both ways. More employees seem to be accepting this new reality, and getting laid off doesn’t have the same stigma that it did before.

If there’s little assurance of a long-term relationship with a single employer, any security is derived from the varying market demand for your skills and experiences. A career is a series of jobs, or maybe even just a series of projects. The company has a need, you’re hired because you’re the right fit for that need, you work until the company doesn’t have that need any more, and then you’re available for the next opportunity (which might be at the same company, but more likely, not). If your skills and experiences are in-demand, you won’t have to spend much time “in transition,” although you may have to be willing to relocate.

Look, everyone is different and has different needs. I enjoy learning new things, and I like the feeling of accomplishment that comes from solving problems that need solving. I just need to learn how to be better at the transitions.

Does Your Company Need a Quality Department? November 13, 2013

Posted by Tim Rodgers in Management & leadership, Process engineering, Product design, Project management, Quality, Supply chain.
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You already have a quality department, you just don’t realize it. Do you have suppliers or service providers? You have people managing supplier quality when you receive parts or services that don’t meet your specifications. Is your product manufactured? Whether you build it yourself or outsource to a contract manufacturer, you’ve got quality issues. Do your customers have problems with your product or service? Somebody in your team is managing your response. Poor quality is costing you money, whether through internal rework or post-sale costs. The question is whether you want to pull all this activity together into a separate, centralized organization.

Some organizations, particularly early stage companies, may feel they can’t afford a dedicated quality team. After all, quality is fundamentally a non-value-added function. It doesn’t contribute directly to the delivery of a product or service. However, we live in a world of variability, where every step in the delivery process can cause defects. You may be passionate about eliminating defects and saving money, but do you really know how? Quality professionals understand how to determine root cause, and they can investigate from an impartial perspective. They have expertise in sampling and statistics, and that enables them to distinguish between a one-time occurrence and a downward trend that requires focused resources.

Do you care about ISO 9001 certification? If you do, you need someone to develop and maintain a quality management system, monitor process conformance, and host the auditors. If you’re in regulated industry, you need someone to understand and communicate process and documentation requirements throughout your organization. Other responsibilities that could be assigned to the quality team include environmental, health and safety (EHS), new employee training, equipment calibration, and new supplier qualification.

All of these tasks can theoretically be handled by people in other functional groups, but you have to ask yourself whether you’re getting the results your business requires. Organizational design derives from a logical division of labor. The sales  team is separate from product (or service) fulfillment so that one group can focus on the customer and another can focus on meeting customer needs. Fulfillment may require separate teams for development (design) and delivery. As the business grows, other functions are typically created to handle tasks that require specialized skills, such as accounting and human resources.

Quality is another example of a specialized function, one that can help identify and eliminate waste and other costs that reduce profit and productivity. Maybe those costs are tolerable during periods of rapid growth, but at some point your market will mature, growth will slow, and you won’t be able to afford to waste money anywhere in your value stream. That’s when you need quality professionals, and a function that can coordinate all the little quality management activities that are already underway in your organization.

Why We Need Quality Police November 10, 2013

Posted by Tim Rodgers in Management & leadership, Organizational dynamics, Process engineering, Quality.
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I’ve said it myself many times: the quality department shouldn’t be the quality police. We tell ourselves that everyone is responsible for quality, and we therefore ask people to police their own behavior and make the right choices. This sounds good and noble, and it’s certainly more cost-effective than relying on a separate functional group to keep an eye on things.

And yet: it seems to be the only way. We need quality police.

When we’re left on our own, we tend to look for the fastest and easiest way to complete our assignments. We don’t spend much time thinking about the priorities or needs of other groups, or how decisions have future consequences. To eliminate chaos, businesses establish work standards and processes to enable coordinated activities and a smooth flow of information. Certainly we want our work processes to be effective, but what matters most are the consistent results that are achieved when everyone follows the process.

Somebody has to keep en eye on all this, to check for process conformance and process improvement opportunities. Managers can monitor the performance of their assigned teams, but a manager will tend to optimize within their team according to their objectives. Second-level or higher managers have a broader (and possibly cross-functional) perspective, but they probably lack the deeper understanding of the work processes.

If you have a quality team, this is their job. They’re the ones who pull together all the processes into a corporate quality management system (QMS). They’re the ones who train and audit the QMS, not just to make sure it’s being followed, but also to make sure it’s meeting the needs of the business. They’re the ones who monitor the performance of the processes to identify opportunities for improvement. And, if you care about ISO 9001 certification, they’re the ones who make sure you “document what you do, and do what you’ve documented.”

This isn’t the quality police looking for “process offenders” and punishing them. This is standardizing processes, reducing variability, and eliminating waste. Doesn’t every business want that?

Firing Customers For Profit November 7, 2013

Posted by Tim Rodgers in Management & leadership, strategy, Supply chain.
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Businesses large and small generally work diligently to satisfy customers, and they’re frequently reminded that the cost of acquiring a new customer is much greater than the cost of retaining an existing one. Unfortunately many of those businesses fail to appreciate that each customer has an incremental cost, not just to acquire, but also to manage. It’s possible that an organization can spend more money to support a customer than what they get in return, which is obviously an undesirable situation.

Early stage companies are particularly susceptible to this kind of trap. In their eagerness to turn their ideas into revenue, they will often incur hidden costs in order to customize products and services for each potential customer. Any customer who is willing to pay looks like a good customer. Geoffrey Moore writes about this in his excellent book “Crossing the Chasm” (HarperBusiness, 1991). The danger is that the company loses economies of scale, leverage and re-use efficiencies, and ultimately the focus that defined the unique profit opportunity in the first place.

Unprofitable customers or segments can be hard to detect. It’s easy to add up the direct material cost of a single product configuration, but you also need to understand how much time your sales and support staff spend with a customer. Does your purchasing team have to manage unique suppliers? Does your quality team perform special tests or inspections? Your indirect labor may be spending a disproportionate amount of time dealing with requirements and requests from customers who squeak.

Unprofitable customers are not necessarily bad for the business. Moore writes about segments with “bowling pin potential” that may be a net loss today, but enable the firm to establish foundational processes, move up the learning curve, and leverage and grow in the future. These loss-leaders have long-term strategic value, but it’s important to understand and assess the investment in order to ensure the expected return.

Actually refusing to do business with a customer is extreme and could hurt your reputation, but consider ways to reduce the cost to manage a customer that isn’t currently providing a net profit or enables future profitability. The firm that fails to understand their “cost to serve” may find itself out of business despite many happy customers.

What Kind of Leadership Do You Want For This Job? January 11, 2013

Posted by Tim Rodgers in job search, Management & leadership, strategy.
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A few weeks ago I listened to an excellent podcast from Harvard Business Review’s HBR IdeaCast about leadership (http://blogs.hbr.org/ideacast/2012/11/the-indispensable-unlikely-lea.html), featuring Gautam Makunda, author of “Indispensible: When Leaders Really Matter.” Professor Makunda uses historical examples to illustrate the importance of context in determining how effective a leader will be. While Abraham Lincoln and Winston Churchill were certainly extraordinary leaders, the circumstances helped define their greatness. Different leaders may not have been nearly as effective in those times, but those same leaders might not be effective in different times.

Churchill is a particularly interesting example. Although he had been in government service in senior leadership positions for most of his adult life, and was respected as a brilliant and hard-working minister, he was never seriously considered a leading candidate to become Prime Minister before World War II. He was essentially a last resort after other highly-regarded, experienced, and well-qualified politicians resigned or refused the position.

As it turned out, Churchill’s charisma and iconic presence in the months after Dunkirk and during the Battle of Britain was exactly what was needed and certainly helped save the day. However, in the elections immediately following the war Churchill was defeated, and although he would return as PM in the early 1950s he was less effective managing domestic affairs during a period of imperial decline.

Professor Makunda suggests that there are lessons here for companies who are considering candidates for leadership positions. Some positions should be filled by a “safe choice,” a person with deep expertise who came up through the ranks, has accumulated all the “right” experiences, and has been thoroughly vetted in the selection process. The interesting thing about a position that can be filled by a safe choice is that it really doesn’t matter much who you choose from the pool of candidates because they’re all essentially equally qualified. That’s OK when the circumstances are not exceptional or demanding and there’s little downside to choosing the “wrong” person.

However, the safe choice with a conventional background is far less likely to have a significant impact on the organization (positive or negative), particularly during periods of transition, ambiguity, or turmoil. This is when companies might benefit from the perspective of an outsider with new or unconventional ideas, or what Professor Makunda would call an “extreme leader.” The risk is greater because the experience of an extreme leader may not be directly applicable to the open position, but the potential gain is also greater. The company must decide if they’re willing to take that chance.

Starting a Product Development Team November 12, 2012

Posted by Tim Rodgers in Management & leadership, Product design, Project management, Quality.
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A few weeks ago I interviewed for a job with a local company that decided they wanted to bring product development in-house and transition out of a contract engineering partnership. I didn’t get the job, but that experience got me thinking about how I would create a product development team from scratch, specifically how to organize the team and what skills are required.

In this case the firm had an established product line with suppliers and a contract manufacturing partner, so the general “make vs. buy” decisions had already been made. Regardless of the status quo, it’s a good idea to review those decisions from the standpoint of the firm’s expected source of competitive advantage. In other words, how does the firm plan to differentiate itself in the market? What are the critical-to-function or critical-to-performance characteristics of its products? Can these be reliably sourced from external suppliers today, and can those suppliers keep up with the anticipated trends in technology to maintain that advantage? If not, then those design elements and product characteristics should be developed internally.

In order to keep the internal staff at a small and manageable size, this suggests three distinct (but possibly overlapping) functions within the product development team:

1. Specialized engineering with domain expertise in the critical design functions that must be developed in-house. These are the people who have deep technical understanding and design experience with the key parts and sub-assemblies. The skills needed here are engineering expertise in the target areas of differentiation.

2. System-level design architects and product integration engineering. These are the people with responsibility for high-level product design and system integration issues. This could include overall project management for the entire product development effort.

3. External supplier and partner management. This isn’t necessarily the same thing as traditional supply chain management because it requires technical oversight to the designs and other deliveries from the suppliers. The skills needed here include remote management and communication.

Two other considerations are the lead time for any invention or innovation required for new products (possibly leading to a dedicated concept or research team); and the expectations for ongoing support or upgrades for products already sold (possibly leading to a dedicated sustaining engineering team).

My inclination is to avoid separate teams for these purposes, unless the expected volume of work in either area is significant. Without morale-boosting attention from management, sustaining engineering teams tend to suffer from an inferiority complex, working within design constraints and fixing problems created by others. I’d rather assign product maintenance to the same team that designed the product, which also avoids the need for knowledge transfer. Similarly, a dedicated research team that doesn’t have ultimate responsibility for product development may underestimate sourcing limitations, integration issues, and production ramp snags. In order to have value, technology must be successfully implemented within cost, schedule, and quality margins, and not just thrown over the wall to a development team.

That’s the framework that I would use to build a new product development team, or analyze an existing team for skill gaps. The next step would be to perform a process and development lifecycle assessment, but that might better addressed in a future blog post. At minimum there should be separate phases for product design, factory prototyping, and production ramp, with phase gate review meetings and quantitative go/no-go criteria. I’ve written about lifecycle considerations in earlier posts (see for example Ramp Readiness Indicators for Product Development). Of course standard project management processes such as early stakeholder alignment, issue tracking, change management, and end-of-project reviews should also be in-place.

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