Management and Leadership:Good to Great

Circuit City,Kroger,Pitney Bowes and so on,it's sure that many people have heard of these companies by business news or magazines.They are immensely successful in America.However,do you know why they can achieve such a big success?What kind of leader they have?

  <<Good to Great>>,written by Jim Collins,can show your the secrets of these companies.Collins and his team did the research for 5 years,analyzing why they can become extraordinary despite being failed in the beginning.Of course,in this book,it reveals the valuable results of their research.

There are 6 main factors of a firm becoming constantly successful remarkable under fierce competition.

1.The Level 5 Leadership
  Actually,the concept is very simple. Level 5 leaders consist of 2  main characteristics:Humble and persistent to do the right regardless of the hard situation. Certainlly,there are other characteristics that they have,like hard-work,professional and wise.However,the most important thing is that no matter they get huge success or not,they won't blame for others or be arrogant,they will think that the success is attributed to luck and keep doing their work.That's why their companies become hugely prosperous.

2.Find the right people before making any decision
  It is of great significance to form a extraordinary work team since they can drive the company to a right way though the company is facing big problems.In order to allay their potential.,it is necessary that right positions and workers should be offered to them.

3.Bravely face the cruel reality
  Every corporation faces different problems and challenges(no matter inside or outside of the firm).Despite of this,Holding your brief and confidence is the thing you should do as it will be failure only if you just simply give up or move to other ways.It is quite old-school,isn't it?So,how to do it better?There are 4 rules:
 1.No Bureaucracy-treat everyone as the same
 2.Ask question but no answer-trigger hit debate in company
 3.Review your action,but no blame-scold and moan will just make things worse
 4.Be realistic,not optimistic-embrace the adversity and believe that you can succeed finally.

4.Hedgehot Concept
  There are 3 categories of this concept,see the picture below:

  It is pretty clear to show what should a company look for if they want to become successful.Therefore,spend time to find the answer.once you find the answer,anything will be much easier as you should simply follow it.Strategy,target,brief and stuff like that,should be contributed to the answer.(The great corporations averagely take 4 year to get it)

5.Culture of Discipline
  Once the main 3 categories are found,workers should also focus on them.So,it is advised that the leader should develop a system that requires every employee to follow.Of course,Don't force them to do it.Just make them become willing to do and understand the importance of the system. Remember one thing:NO Dictatorship,which is the worst thing for any company undeniably.

6.Use technology as accelerator
  Technology becomes so advanced nowadays,which provides our human with tons of benefits and convenience.Yet,for a company,it should not be considered as a weapon,but an accelerator.A successful firm will utilize their techniques and machines to make their Hedgehot Concept better.If you put all the resources and effort into new technology,only failure will happen eventually.(That's why many high-tech companies cannot succeed)

The above are the major 6 factors that contribute to a enterprise's success.(if you want to see examples,just read the book😉）However,there is one important concept we should bear in mind:Every remarkable corporation doesn't succeed in one night with a single strategy,they encounter hardship,deal with it , keep doing their work and finally they become successful and famous among people.It is not only for business,but also for our life.

Business Model:Rise of 70 Business Model

   Nowadays,we all have heard that there are so many successful business companies and people in the world.Apple-Steve Jobs,Dell-Michael Dell,Amazon-Jeff Bezos,Alibaba-Jack Ma and so on.Do you know what kind of business model they have?<<Model:Rise of 70 Business Model Innovations>>,written by Koji Mitani,shows different business models that the companies have had today.70 business models,200 companies and 140 successful entrepreneurs and businessmen,will be introduced in this book.If you are interested in business,this book can help you get a better understanding of the history of business models and how they work.

1.Dell(by Michael.S.Dell)

  Dell is one of the most successful and remarkable computer companies in the world. You buy a laptop from Dell and you can get it in a short period of time.How can Dell do it ?It is all about 'Direct Selling'.From order to delivery,it only takes around 36 hours to finish,which is much faster than other competitors.Also,there is only 7-days amount of inventory of finished goods.That means Dell can eliminate the waste of over-production and money(just like TPS).Even better,credit card payment is available in Dell,and thus the speed of fund withdrawing is higher than other firms.That's why Dell can stand out from the crowd and gain high profit per year.

2.Zara(by Amarcio Ortega)

  Have you ever noticed that you go to Zara frequently when you go shopping every time(if you like fashion)?Actually,it is Zara that makes you have such an behaviour. Zara has done a very brave and unique action--Mass production without prediction.Ortega believes that trend prediction is almost impossible in fashion industry since it changes too quickly.As a result,Zara just focus on making new products and make the production time shorter(2 weeks for one new product).Also,Regardless of being popular or not,each product's shelf time is 4 weeks.That's the reason for people going to Zara frequently due to the fear of missing the clothes they like.

3 .Rakuten(by Hiroshi Mikitani)

   Rakuten is  a Japanese electronic commerce and Internet company and found in 1997.It is similar to Amazon.However,in the past,Amazon in Japan was much more popular than Rakuten. How can Rakuten survive in such a severe situation?The answer is Exaggerating its business services.Of course,not only about online shopping,Rakuten offers a wide range of services like auction,securities and travel booking etc,which achieve OSS(one stop shopping) system.In addition,the company launch the'Super Point' strategy--people can use the points got from A store in B store when they go shopping online,which attracts more customers,therefore,it is considered as The Amazon of Japan nowadays.

If you want to buy this book,you can go to amazon.com for Japanese version and books.com.tw and taobao.com for Chinese version.(no English version 😔)

Management:Toyota Production System

 Toyota Production System(TPS) is one of the most famous management systems in the world."JIT "(Just In Time) is definitely the most popular term that every businessman has heard about it.However,what does that mean?What other elements that contribute to Toyota's big success?The book-<<Toyota Production System>> can give you the answer and is written by Taiichi Ohno,the vice director of Toyota in 1973 and is considered as "the father of TPS"


  The foundation of TPS

Elimination of any waste is the fundamental brief of TPS. But,how to achieve that?There are two major components:(a) JIT  and  (b)  autonomation. With these two components,they can help the firm eradicate any waste in industries and thus,"Zero stockpile" can be reached.

  (a) JIT

Basically,this concept is quite simple:offer necessary and specific amount of materials to the next process within specific period of time.With this concept in mind,it can be separated  into two ways to do it: Standardized production and Board:

1.Standardized Production
let's look at an example:
A company need to manufacture 1000 products per month.
working hour of a person is 8 hour per day,
which means that he needs to produce 1 product within 12 minutes
and after 25 days,it finished.
But,of course,the crucial part is constant producing.

2.Board
actually,it is very similar to "Instruction Sheet'.Every production line has this kind of board that shows how much materials is needed,how much time is allowed,how many workers are needed etc.Managers and workers have to obey it completely.

  (b) Automomation

It is known that machines can provide us with huge convenience in many areas of life.Yet,from Taiichi Ohno's point of view,it is partially incorrect.It is inevitable that a machine will generate some 'by-products' or 'degraded products'.If we allow them to run continuously,waste will just accumulate. Autonomation(human+machine) can solve this problem.Each person manages more than 2 machines and once degraded products are formed,they can stop and fix them immediately.As a result,waste can be eliminated.

  7 Types of Waste

In my opinion,this is certainly the most important part of this book because you will find any waste in your company if you look at the following "Waste Check List":

1. Waste of over-production
2. Waste of idle workersb
3. Waste of delivery
4. Waste of process
5. Waste if stockpile
6. Waste of action
7. Waste of degraded product

This is definitely one of the best books about management since it is quite easy to read and it conveys powerful concepts.Also,we can see Taiichi Ohno's wisdom and ambition in this book

If you are interested in this book,just go to amazon.com or bookdepository.com for English Version and taobao.com for Chinese Version.

Recommendation:Life Without Limits by Jay Abraham

《Life without Limits》is written by Jay Abraham,one of the top five executive coaches in the US.The book mainly talks about the early life of Jay Abraham ,how he cope with adversities and become successful eventually. It seems that this book is quite normal and considered as 'chicken soup'.However,the book also reveals several business wisdom that encourage people to follow it if they want to succeed in not only their business,but also their life.


The early life of Jay Abraham

  Actually,when Jay Abraham was young(around 18 years old),his life was a total  mess at all.He just completed a high school degree and had ti take care of his girlfriend as she got pregnant.Also,his family is poor.Abraham,with no college degree and work experience,had to find a job in order to earn money for his family and wife.Of course,like many people,he failed lots of interviews.Yet,he never gave himself up and kept improving himself by reading tons of books,finding chances to talk with successful people and so on,With his great persistence,he finally could live a better life.After a few decades,now,he became one of the most successful business coaches in America with 9.4 billions net worth,which is definitely a miracle for everyone.


Simple,but powerful marketing techniques

  Jay Abraham just reveals some techniques in the book.There are 3 simple techniques that can easily apply to boost the growth of firms

 1.Break down into small pieces

There are 3 basic rules for increasing sales:Number of buyers,Amount of business and frequency of purchase.Let's take an example,suppose there is a firm with 1000 buyers each year.The average amount of business of each buyer is $1000.Each of them will purchase your product twice per year.

1000 people * $1000*2=$2,000,000 per year 

so if each domain is increased by 10%,

1100 people*$1100*2.2=$2,662,000 per year

which is increased by $662,000 total profit.

If we can analyse each part of a company accurately and have a small change,we get a huge benefit.

2.Send Email/Letter 

It seems that this idea is so foolish that many people don't want to do it.However,they are wrong.We should understand one significant thought of customers---They like being cared,not being sold.Establishing a good connection with your customers can not only gain large profit,but also improve your firm's image and goodwill.Just think about it,if one customer can give you $100 profit,the cost of sending email,letter or even phoning is negligible,let's say $40,you still get $60 net profit if you attract one customers.

3.No tunnel vision

Many people are not willing to try something new since they are afraid of being failed or are too stubborn,But,once you widen your horizons and change your mindset,big gift will come to you.For instance,you have the unique and extraordinary techniques of making cake,but your bakery is declining and losing money.You can just create the lesson that teach your competitors or others how to cook a cake well.By monetizing your professional techniques,even the lesson fee is high,there are still tons of people participating in and you can get large amount of income as well.


At the end,there is one vital element that contributes to any success in our life:Brief. With a great and steadfast brief,you can get success in long term and will nerve vanish. Remember one thing,Business is not about making money,is about making friends with customers.  😃

Strategy:Competitive Strategy as a narrative Story

 

《Competitive Strategy as a narrative Story》is a Japanese business book written by Kusunoki Ken.It is definitely a great book for people who are totally beginners of strategy.But,you have to takes your much time to read  (around 525 papes),it is quite hard to finish it if you are busy usually.However,the following are the main ideas of the book and hope you can acquire something from it.

1.Basic structures of competitiveness

  

 How to sharpen the competitive edge of a company?Well,to put it more simply,there are 2 major elements that are related to that:Strategy positioning and Organisational ability.

  Strategic positioning(SP):As a leader,you have to consider what kinds of action you take and what you don't.In other words,you have to sacrifice one thing from these two elements--Cost and Profit,in which they cannot exist mutually for long-term prospects(short term is fine)

  Organisational capability(OC):basically,it is a foundation of a company.Work culture,atmosphere,value chain,management,sources and so on,are immensely crucial to the competitiveness and most significantly,it makes your strategies that are difficult to follow for other companies.

  SP+OC=Difference,which is the most fundamental to competitive strategy.

  (Note:competitiveness structure in industries,basically,is about depending on the thrive of a industry if you want to succeed)

2.Different levels of competitiveness

  the picture shows that there are 5 levels of competitiveness.We just focus on Level 3 and Level 4

  Level 3 strategy story:just like the above mentioned,it consists of SP and OC. Also,we should pay attention to the story's length(long term), width(value chain) and consistency.

 Level 4 Core:it is a bit similar to the concept of destructive innovation-take unreasonable action,ohers feel abnormal,eventually get success.Just take StarBucks as an example.We all know that the "third space" is the major attribution to StarBucks' big success.There are several components of the "third space"：atmosphere,location,operation and workers'attitude.Most people think that atmosphere and location contribute the most to the success.Yes,at the first glance,it is pretty obvious and normal.People follow it but many of them failed at the end.Why?Because of Operation.they got the wrong things.

  StarBucks stores are mostly regular chains-managed and invested by the headquarters in different places.It looks quit weird and unreasonable at the first glance since such a pattern will not only add extra pressure on the headquarters（ increase workload）,but also cost much more money(No cost leadership strategy at all）.Yet,such a business pattern,can let more workers(baristas) get the understanding of the concept of "the third space",They have to follow the rules given by the headquarters and nurture it by themselves.As a result, due to this abnormal behaviour,it contributes the biggest part of success to StarBucks as no competitor are willing to follow it.

The following picture can show that why competitors will fail even they try to copy the strategies from successful firms:

Of course,the book gives other examples like Amazon,Book-Off and Mabuchi Motor to illustrate different concepts of strategy.I am sure you will become more familiar with strategy after finishing this book .😎😎

 Some Images from Google