Ford went from losing $13B are making $6B this year - the one difference is that the CEO is different. the new CEO knows how to MAKE decision and EXECUTE on them - he knew the how of decision making. The growing complexity of companies have moved companies into poorer decision making ability. An organization is defined as the ability to make and execute decisions.
4 aspects of decision making:
- Quality of decision
- Speed of decision - faster than competitors
- Yield - how often are decisions executed as intended
- Effort - the amount of energy devoted to executing the decision
To gauge quality they asked - what percentage of the time do you choose the right action
To gauge speed they asked - do you make decisions faster or slower than your competitors
To gauge time they asked how often are decisions executed as intended
To gauge effort Do you put the right amount of effort into making and executing decisions
In various objective success measures those with high QSY-E scores were 13-15% better than those with low scores. There was a 96% correlation in the score vs the objective measures. Making small changes in Quality, Speed or Yield = large changes in performance.
10 elements of organizational health:
You must know the following to make a decision:
- What is the decision you are trying to make - is it the root cause decision or something peripheral to the problem.
- Who are the roles in the decision using RAPID
- R - Recommend a decision or action
- A - Agree on what decision is made
- P - perform the decision
- I - who provides input on the decision
- D - who is the decision maker
- determine the decision approach:
- Criteria (what are the criteria that dictate a successful decision)
- Facts (always look at facts not opinions and agree on what facts are needed)
- Alternatives (explicitly look at alternatives)
- Critical meetings/committees
- Closure and commitment
- Feedback loops
- Determine for each decision a specific deadline to decide, and another to deliver
- Create a calendar for each decision and track progress
- Evaluate the calendar of each decision at each decision making event
For more information check out http://www.decide-deliver.com/
Next up was Bill Molloy on "Strategic Speed, mobilizing people, and accelerate execution". Objective was to answer 3 questions:
- Why is speed important?
- How do leaders achieve speed?
- How do we use speed to attract and retain talent?
- H&M stores can take a design to hanger of a fashion design in 20 days - industry average is 200
- Southwest Airlines planes spend an average of 20 minutes on the ground
- ICICI bank in India has the 3rd most active online trading product in the world. They built it in 90 days
Three people factors:
- At Fender Guitars - every person's name badge has the vision statement on the back
- People have a shared understanding of our strategy at a detailed level
- People focus their efforts on a few critical priorities
- Our strategy has been translated into concrete and achievable goals
- At Wells Fargo when they merged w/Wachovia - they spent over a year planning, integrating and choosing the best of both systems to transition to a new system - cross functional collaboration
- We have commitment at all levels to the success of our strategy
- We staff strategic initiatives with team members who are capable and dedicate sufficient time
- A spirit of teamwork and cross boundary collaboration is evident throughout the organization
- People stay open and flexible in the way goals are met
- People maintain a bias for action while correcting course as needed
- People capture and communicate what they learn from initiatives and projects
Our final panel was to discuss the future of finance skills.with Ken Sanginario - manager of corporate finance for Northstar, Arun Dhingra, search consultant for Egon Zehnder International, David Greene Professor of accounting for Indiana University, and Kristi Matus - EVP and CFO for USAA.
The panel started out with a statement that the CFO skills of 10 years ago have become commoditized. CFOs are no longer just bookkeepers, but are now key partners in a companies financial success. CFOs of the future will need to be a generalist and understand more different company roles will be the more flexible and hireable capabilities. David recommended the following books for career advancement: David: In career success skills, he recommends "How to be a star at work" by Robert Kelly & "The Platinum Rule" by Tony Allesandra. Kristi stated that you need to be a lifelong learner to succeed in business. All the panelists agreed that strategic thinking rather than just thinking numbers is the important key to success.
And that wraps up Day 3 of the conference - I will post a summary of learnings and how it all applies to you as an entrepreneur as a separate post.