Context, interested parties and risks (part II)

Part I.

ISO 9001:2015 clause 4.1 is about understanding the context of an organization.

What external and internal issues are relevant to the organization’s purpose and strategic direction?  What external and internal issues can affect, either positively or negatively, the organization’s ability to achieve the intended results of its quality management system (QMS).

We saw in Part I that intended results of a QMS is something that is a function of who are chosen as the relevant interested parties. So, we cannot expect to determine internal and external issues correctly without having in mind who are relevant interested parties and what are their relevant needs and expectations.

One of these mornings I read:

"Le scénario se répète pour la quatrième année consécutive. Les défaillances d'entreprises vont continuer d'augmenter en 2020 à l'échelle mon-diale
...
Un zoom géographique montre une prédominance de l'Asie dans les faillites, avec la Chine en première ligne
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Si la France s'en sort mieux que ses voisins européens, 2020 devrait marquer un tournant. C'est la première année depuis 2016 que les défaillances ne baissent pas. Elles devraient stagner, contre une hausse de 3 % en Allemagne et au Royaume-Uni, de 4 % en Italie et de 5 % en Espagne."

And at another one I read:

German exports drop adds to country’s gloomy prospects https://t.co/2Ld8Rr3Mt1

— Financial Times (@FT) January 9, 2020

And then I thought of a number of companies I work or worked with that depend heavily on sales to the German market.

What have I mentally done?

I selected an external event that can't be controlled by and organization and related it to an internal issue a particular organization:

Because of the strategic choices of the organization - bet on export to demanding German customers - one can say that both the external event and the internal issue have a negative connotation.

What will probably happen when we join the external event with that internal vulnerability? We determine a negative risk!

That risk will affect needs and expectations of a relevant interested party: the capital owners of the organization

One can also imagine internal events that can't be controlled by and organization:

Resignation of a critical worker will undermine our ability to respond to development requests, which will undermine our ability to capitalize on a boom in demand for co-created solutions.

In this case we have a positive external trend in motion that clashes with an internal negative event that the organization's top management cannot control.

The product of that clash is another risk - undermining of our ability to capitalize on a boom in demand for co-created solutions.

That risk will affect needs and expectations of different relevant interested parties: the capital owners of the organization and the potential customers searching for competent suppliers of co-created solutions.

These two examples illustrate the exercise I try to do with organizations to determine context-based risks and opportunities, using interested parties needs and expectations as a factor in assessing the importance of risk or opportunity.

What sources do I bring to the table to determine external issues? Normally, I use Political, Economic, Social, Technological, Legal, Environmental analysis (PESTLE) to trigger the brainstorming of external issues.

Those external issues start as neutral issues. Thn they are later analyzed under the light of strategic orientation. Then they can gain a positive or negative connotation. If the connotation is positive I call them Opportunities, if it is negative I call them Threats.

When determining internal issues I ask people things like:

• What issues keep appearing in your internal meetings and reports?
• What issues keep appearing about overall performance of the organization, persons, resources, governance, ...?

Those internal issues start as neutral issues. They are later analyzed in the light of strategic orientation. Then they can gain a positive or negative connotation. If the connotation is positive I call them Strengths, if it is negative I call them Weaknesses.

So, this way we developed the classic SWOT matrix. But in the examples above what we have done was about giving a dynamic twist to the SWOT matrix, something that some call a TOWS matrix:

Each combination is a possible risk or opportunity.

Mongo é o regresso à diversidade, à variedade.

O século XX e Metropolis.
O século XX e Magnitogorsk.
O século XX e Levittown.
O século XX e o grande centrão, o plancton.

Mongo é o oposto, Mongo é o regresso à diversidade, à variedade.

Este artigo é uma metáfora acerca desse regresso:

"According to researcher Ana Mikadze-Chikvaidze, Georgia may be the homeland of cheese ... archaeological evidence hinting that Georgians thousands of years ago may have been the first-known humans to make cheese. Over time, different regions of Georgia developed distinct techniques resulting in a veritable tapestry of cheese varieties.
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Yet, many Georgians today have little knowledge of this history or the country’s unique cheeses due to 70 years spent under an oppressive Soviet-planned economy that limited which cheeses could be produced for general consumption and therefore forced artisanal cheesemaking underground.
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Under the Soviet system between 1921 and 1991, economic planners wanted to create large quantities of Georgian cheese quickly to help feed the people of the USSR. Small-scale, often aged varietals, which took considerable time and effort to produce, didn’t fit these plans, and instead, only four types of simpler Georgian cheeses were made in bulk: imeruli, sulguni, karkhunli (which literally translates to “factory cheese”) and guda (completely unrelated to Dutch gouda).
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The artisanal cheeses were forced underground likely because creating goods outside the Soviet system was frowned upon and many cheesemakers were afraid of being punished for it. And after seven decades in a system where only four types of cheese were readily available, most Georgians today are completely unaware that the country is home to dozens of other cheeses."

Trechos retirados de "The woman saving Georgia's lost cheeses"

Motivação e dinheiro

"The science behind work satisfaction.
Consider a study by Behavioral Economist Dan Ariely (and Lemonade’s Chief Behavioral Officer), where he sent factory workers one of three emails: The first promised workers a free pizza if they get all of their work done, the second promised a rare compliment from their boss, and the last – a cash bonus.
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Which did the best job of motivating employees to get their work done?
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If you thought the cash bonus, you thought wrong. The pizza and thank you note were the strongest motivators.
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While monetary incentives are usually attributed to getting workers’ feet in the door in the first place, cash hardly contributes to an employee’s engagement at work:
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Creating a positive, caring workforce makes for more engaged team members, meaningful workplace relationships, and higher profits for organizations.
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Companies should set aside cash bonuses, and invest in practices that make employees feel cared for. And a pizza party every once in a while wouldn’t hurt either."

Não é nada incomum a liderança das empresas, à medida que elas crescem, estar cega quanto à falta de motivação dos trabalhadores.

Trechos retirados de "The Case for a Caring Work Culture"

O contexto que nos rodeia

Há dias vi uma peça criada pela RTP sobre as previsões para a economia portuguesa em 2020. Na altura fiquei embasbacado ao ver que falavam num crescimento de 2% do PIB. O orçamento de estado para 2020 prevê 1,9%.

"Le scénario se répète pour la quatrième année consécutive. Les défaillances d'en-treprises vont continuer d'augmenter en 2020 à l'échelle mon-diale, prévoit le leader de l'assurance-crédit Euler Flermes dans son baromètre annuel publié jeudi. Certes à un rythme moins soutenu - la hausse anticipée est de 6 %, après 9 % l'an dernier -, mais plus global. Sur les 44 pays couverts par l'étude - qui représentent 87 % du PEB mondial - quatre sur cinq vont subir une degradation. La raison principale tient « au ralentissement de la croissance mondiale, déjà observé en 2019 et l'effet de la guerre commerciale », explique Maxime Lemerle, directeur de la recherche sectorielle. « Les entreprises sont confrontées à une baisse de la demande et à plus de compétition qui se ressent sur leurs marges, en particulier dans les secteurs industriels », poursuit-il.
...
Un zoom géographique montre une prédominance de l'Asie dans les faillites, avec la Chine en première ligne
...
Si la France s'en sort mieux que ses voisins européens, 2020 devrait marquer un tournant. C'est la première année depuis 2016 que les défaillances ne baissent pas. Elles devraient stagner, contre une hausse de 3 % en Allemagne et au Royaume-Uni, de 4 % en Italie et de 5 % en Espagne."

Esta semana tive oportunidade de ver em primeira mão o impacte da travagem alemã. Empresas portuguesas sem encomendas, aumento tremendo dos prazos de recebimento entre fornecedores e subcontratados portugueses.

Estar atento ao contexto (oportunidades e ameaças) para não contar com o ovo no cú da galinha.

Trechos retirados de "Les défaillances d'entreprises dans le monde vont continuer à se multiplier en 2020" publicado no Le Figaro de ontem.

Exportações YTD - tendências

Olhando para a minha paleta do acumulado das exportações do ano passado até Novembro:

• Mobiliário a crescer
• Metalomecânica continua recuperar
• Aeronaves e Óptica continuam a crescer a taxas muito, muito altas
• Agricultura continua a crescer
• Têxtil e calçado continuam com a evolução negativa. Calçado reforçou a tendência negativa face à 1 ano
• Exportações de produtos farmacêuticos a evoluir a bom ritmo
• Impressionante o andamento dos automóveis. Anos e anos a crescer a ritmos alucinantes.

O paradoxo dos peritos

“The more credentials somebody has, the more assumptions they make, the less they test them, the more likely they are to fail”

Um tema clássico neste blogue o paradoxo dos peritos.

“Expertise is powerful—until it gets in the way of innovation. One of the sobering lessons of the great transformations in business, leadership, and society in the last few decades is that the people and organizations with the most experience, knowledge, and resources in a particular field are often the last ones to see and seize opportunities for something dramatically new.
...
All too often, what we know limits what we can imagine.
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Too many companies and leaders, often the best companies and the most successful leaders, struggle with what she calls the “paradox of expertise”—the frustrating reality that the more deeply immersed you are in a market, a product category, or a technology, the harder it becomes to open your mind to new business models that may reshape that market or promising ways to leapfrog that technology. Past results may not be the enemy of subsequent breakthroughs, but they can constrain the capacity to grasp the future.
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“When it comes to innovation,” she argues, “the same hard-won experience, best practices, and processes that are the cornerstones of an organization’s success may be more like millstones that threaten to sink it. Said another way, the weight of what we know, especially what we collectively ‘know,’ kills innovation. . . . Why can knowledge and experience be so lethal to innovation? Because when we become expert, we often trade our ‘what if’ flights of fancy for the grounded reality of ‘what is.’” ”

Recordo sempre:

• O suíço que entrou no mundo do azeite;
• Os gurus que influenciam (um festival de 28 cromos);
• Zapatero; e 
• Gary Klein

"nós não vemos através dos nossos olhos mas através das nossas experiências", e "as nossas experiências produzem modelos mentais", modelos mentais que nos ajudam a perceber e a actuar sobre a realidade. A experiência é uma vantagem até... deixar de ser.
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E quando é que a experiência deixa de ser uma vantagem?
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Quando a realidade muda!"

Trechos retirados de “Simply Brilliant: How Great Organizations Do Ordinary Things in Extraordinary Ways” de  William C. Taylor.

Azeite e Trás-Os-Montes

Este blogue acompanha o tema do azeite há alguns anos. Apresento no fim uma lista não exaustiva de postais sobre a produção e comercialização de azeite.

No ano passado comecei a ter consciência plena dos impactes ambientais da produção e colheita no olival superintensivo alentejano. Assim, em Junho de 2019, sem planear, simplesmente aconteceu o que relato em "E sem intenção, e sem querer, apareceu na minha mente a decisão de pôr de lado o azeite alentejano".

No Sábado passado fui às compras ao mesmo sítio, ao mesmo corredor, onde tinha tido dificuldade de encontrar um azeite expressamente transmontano, seis meses antes (situação que descrevo na hiperligação anterior), e tive uma forte surpresa. No dia seguinte escrevi no Twitter:

Entretanto, na passada terça-feira fui a um supermercado da rede Coviran, especialista em verduras, perto de minha casa, e não resisti a trazer para experimentar, apesar da garrafa de plástico:

Entretanto, ontem ao final da tarde tive oportunidade de ler "Do market prices correspond with consumer demands? Combining market valuation and consumer utility for extra virgin olive oil quality attributes in a traditional producing country" de Petjon Ballco e Azucena Gracia, publicado por Journal of Retailing and Consumer Services.

"At the beginning of the 21st century, the law of demand in food production supplanted the law of supply. [Moi ici: Um tema interessante. O mundo muda quando a oferta é maior do que a procura, aquilo a que desde 2010 chamo "bolha azeiteira", nessa altura há que fugir da ideia de que se vende uma commodity] Agricultural organisations and the agri-food industry must adapt to consumers’ highly diversified expectations. In addition, consumers expect to be fully informed about the products they purchase. They demand healthy products that taste good and take into consideration social, ethical and environmental issues in terms of production practices and traditional production methods. Under this framework, the agro-food sector must continually seek strategic orientations to differentiate products, not only in the sense of increasing production but rather towards diversifying food supply by promoting attributes that are valued by consumers. Olive oil is an example of a product where greater differentiation has been associated with increased production and consumption worldwide.
...
preferences between consumers from the traditionally producing countries and those from the emerging markets have significantly changed. While in non-producing countries the consumption of olive oil has increased enormously from low levels, Mediterranean countries, where consumption was relatively high, are now facing a shift towards the consumption of higher quality olive oils and, more specifically, extra virgin olive oils (EVOOs). [Moi ici: O artigo cita 21 artigos publicados nos últimos 5 anos sobre preferências de consumo de azeite]
...
the results from the marginal WTP estimates indicated that, on average, consumers were willing to pay an additional price premium of 2.13€/L for an EVOO that carried the PDO certification compared to one without this indication. In the same way, participants were willing to pay an additional premium of 1.51€/L for an EVOO that was produced in the county, and 1.27€/L for an EVOO produced in the region relative to an EVOO from the rest of Spain. [Moi ici: O estudo foi feito em Saragoça]
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The positive premium that the indication of olive variety had on price provides evidence that the EVOO sector has indeed increased in differentiation. Consumers’ knowledge has also increased, because depending on the olive variety (Arbequina, Picual, Hojiblanca) consumers can form expectations regarding the taste of the EVOO (i.e., fruity, pungent, etc.). This result is in line with Cabrera et al. (2015) who illustrated the importance given to the olive variety in Spain. In terms of container materials, results show that a plastic container was valued negatively in comparison to a glass container, which received a premium price.
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Although there were relatively few organic olive oils in the Spanish market, results showed that this certification was an important quality cue that positively affected EVOO market prices.
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Unexpectedly, the European PDO quality certification did not affect the market prices of EVOOs in Spain. This result is in line with previous research by Carbone et al. (2018) in Italy who found negative effects on price for olive oils with PDO, and Cabrera et al., 2015 in Spain who found no influence on price for EVOOs with PDO. Contrary to the PDO quality certification, the presence of production origin on the label had a positive influence on EVOO prices. As extensively shown by other authors, the origin of production is one of the most important aspects for many consumers of EVOOs
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while we maintain that PDO certification is an important attribute that helps consumers differentiate the quality of an EVOO, at a regional level where the local producers are well known, this attribute does not add any value to the prices of EVOOs in the market. This result is in line with Cabrera et al. (2015) for EVOO in Spain, who showed that the local origin of production label had positive effects on prices in comparison to PDO certification which did not affect the price. In addition, this result was also highlighted by Marcoz et al. (2016), who suggested that PDO quality certification has higher value the further the consumer is from the area of production.
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Consumer behavior for a typical product, such as an EVOO that is consumed on a regular basis, appears to be stable but, in reality, faces constant changes in differentiation. The most influential attributes in terms of utility and WTP estimates found were the origin of production (i.e., county and region) for EVOOs, and PDO quality certification. In the market, the attributes that influenced EVOO prices were labels that indicate the olive variety, organic certification, origin of production, sold in glass containers and in establishments with a high variety of leading brands.
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those producers who want to gain competitive advantages, should not be satisfied by just offering products to the market, but should strive to create value for each customer specifically.The more distinctive and inimitable a product is, the more likely the company is to gain loyal customers. Furthermore, consumer awareness about olive variety and clear identification of production origin should encourage producers to develop new products based on single olive varieties characterized by different sensory attributes."

Interessante a repetida referência a: "production methods; production processes; sustainability; e organic production"

• O toque anti-Midas (Fevereiro de 2008) (sobre a aposta em nichos - sublinho "o azeite de denominação de origem protegida (DOP) da Beira Interior pode ser vendido a um preço 150 por cento superior ao de um azeite extra virgem corrente e, consciente desse valor acrescentado, admite ser possível ir mais longe, apostando num DOP monovarietal, apenas recorrendo à azeitona galega.")
• Mentes livres de mapas cognitivos castradores (Março de 2009) (sobre a aposta em nichos - sublinho "uma produção que apostasse no acompanhamento permanente do olival, que respeitasse árvores centenárias e que conseguisse competir com a concorrência dos grandes azeites italianos. Este azeite competiu e ganhou. O Risca Grande Virgem Extra venceu o primeiro prémio do Concurso de Azeites Biológicos da BIOFACH 2009 em Nuremberga, na Alemanha.”")
• Mais tarde ou mais cedo... (Maio de 2010) (sobre a previsão de uma futura bolha azeiteira e a aposta em nichos)
• Lições de uma ida às compras (Dezembro de 2010) (de onde sublinho "Os azeites têm de começar a ser tratados como os vinhos, tal é a variedade e diversidade."")
• Mais uma previsão acertada (Dezembro de 2010) (primeira notícia sobre a bolha azeiteira) (segunda, de Janeiro de 2011, aqui)
• As bolhas azeiteiras como mais uma manifestação do socialismo na economia (Março de 2011) (socialismo ou crony capitalismo, são irmãos gémeos. Apoia-se a plantação de oliveiras, a produção explode... há que pedir a Bruxelas que encareça o azeite)
• Azeite...Azeite... (Julho de 2011)
• Seguir o caminho menos percorrido!!! (Outubro de 2011) (a primeira reacção ao azeite de produção superintensiva "Não vendam azeite!!! Vendam tradição, vendam localização, vendam o contrário, o antónimo, o oposto de "produção superintensiva de azeite", vendam sabor, vendam escassez, vendam prazer, acarinhem uma marca que distinga!")
• Outra previsão acertada (Novembro de 2011) (perante uma bolha azeiteira... corrijo. Perante qualquer bolha qual é a primeira reacção numa sociedade socialista/cronysta? Criar barreiras burocráticas para eliminar os mais fracos)
• Bolha azeiteira em força, em perspectiva? (Setembro de 2012)
• Um bom exemplo (Julho de 2014) (os anos da troika foram anos que levaram à aposta na exportação)
• A prioridade (Julho de 2016)
• Quem vê (Fevereiro de 2017)
• Muito para aprender (parte III) (Junho de 2017)
• "E sem intenção, e sem querer, apareceu na minha mente a decisão de pôr de lado o azeite alentejano" (Junho de 2019)
• Azeite, estratégia e valor (Julho de 2019)
• Contexto, estratégia e bolha azeiteira (Dezembro de 2019)

ISO 9001 - Video V - A useful quality policy and objectives, not mumbo-jumbo (part II)

Part I.

I recalled the template I use for writing an organization's quality policy when reading this excerpt:

“This is not about what we do, it’s about who we are,” ... “When you know who you are, then all of the decisions you have to make become a lot easier. When decisions are easier to make, things get better faster. Nothing clarifies like clarity.”(1)

This another one too:

“the more time I spend with market-making innovators and high-performing companies, the more I appreciate that leaders also have to “talk the walk.” They must be able to explain, in language that is unique to their field and compelling to their colleagues and customers, why what they do matters and how they expect to win”(1)

BTW, about that " I appreciate that leaders ... explain, in language that is unique to their field and compelling to their colleagues and customers, why what they do matters and how they expect to win" consider:

"Leaders who connect employees with end users motivate higher performance, measured in terms of revenue as well as supervisors’ ratings. Research shows that when leaders are the sole source of inspiring messages, employees often question whether the messages are true. End users, in contrast, are seen as credible sources who can deliver convincing testimonials of their experiences with a company’s offerings.
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Customers, clients, patients, and others who benefit from a company’s products and services motivate employees by serving as tangible proof of the impact of their work, expressing appreciation for their contributions, and eliciting empathy, which helps employees develop a deeper understanding of customers’ needs.
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Leaders can “outsource inspiration” to end users (both past and present) by collecting their stories, inviting them to the organization, introducing them to employees, and recognizing employees who make a difference in customers’ lives.
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A growing body of research shows that end users—customers, clients, patients, and others who benefit from a company’s products and services—are surprisingly effective in motivating people to work harder, smarter, and more productively."(2)

Excerpts from “Simply Brilliant: How Great Organizations Do Ordinary Things in Extraordinary Ways”(1) from  William C. Taylor and "How Customers Can Rally Your Troops"(2)

O eterno retorno

A evolução do retalho é um tema recorrente neste blogue há vários anos.

Todos estamos cientes do crescimento das vendas online e do declinio das vendas no retalho físico. Escrevo isto e recordo imagens de lojas na antiga Nacional Nº 1 em São João da Madeira, estávamos em 2011 e as lojas tinham parado em 1988(?). Recordo também imagens no programa "País, País" na terça-feira de Carnaval de 2005, de lojas em Vila Real a protestar contra a abertura de um centro comercial. As imagens retratavam lojas paradas em 1973(?).

Ontem, sem procurar, vieram ter comigo os seguintes artigos:

• The Year Ahead: Neighbourhood Stores Return
• In 2020, retail is moving back to Main Street

"Going where people already are is ultimately better for brands, because it means that foot traffic is not entirely dependent on them. Their storefronts will exist in an ecosystem along with restaurants, workout studios, and cultural spots, and someone who makes a trip out to visit any one of these venues will pass by, and perhaps pop into, adjacent ones."

"Given that many people still like to touch, feel and try fashion items before they buy, the industry is well placed to benefit from this theme. We expect fashion retailers to ramp up their presence in neighbourhoods and new districts beyond traditional commercial zones, with stores that reflect the local community and focus on service and experience." 

O eterno retorno...

Context, interested parties and risks

I have a commitment to publish a video about context, interested parties and risks, according to ISO 9001:2015, during this month. So, I'm starting to gather raw material to that video.

Let us start with ISO 9000:2015 risk definition.

risk = effect of uncertainty

It's important to higlight the word "uncertainty". Something that we cannot control, something that it is outside of our level of control.

And an effect is a deviation from the expected — positive or negative.

So, one can say that risk is a deviation from the expected (positive or negative) resulting from a trigger event that we cannot control. BTW, the ability to control the trigger event is what separates a positive risk from an improvement opportunity.

What are we talking about when we talk about "the expected"?
Let us keep the conversation here at a strategic level.

Expected results are the results we want the organization as a whole to achieve.

Who expects these results?

The capital owners. 

So, the capital owners are an interested party of this organization. 

We started with expected results and connected those expected results to an interested party. Normally, things go in the opposite direction. Because we have an interested party with should work for some expected results.

Let us consider another example. 

Making money in a sustainable way has a funny particularity, we cannot elect that objective as a first order objective, we should consider that kind of objectives as an indirect consequence of other objectives (something that I learned to call obliquity)

To get a profit an organization must be able to sell a service to a set of target customers at a price above the cost. Why would a set of target customers decide to buy the service to a particular supplier?

Let us consider those target customers as another interested party for this organization.

So, we have here another set of expected results.

A risk would be a consequence, an impact that could afect negatively the ability of an organization to meet an expected result.

An opportunity would be a consequence, an impact that could afect positively the ability of an organization to meet an expected result.

When we think about expected results we can immediately realize that although we work for expected results, because the outside world and the organization are complex entities we can get undesired results that affect our ability to serve interested parties.

We started this text with the risk definition and keep coming to interested parties. Why are interested parties so relevant for managing risks and opportunities?

Interest parties are relevant at two levels.

Level 1 - relevant needs and expectations of relevant interested parties determine expected and undesired results.

Events that we can't control can act together to make our organization get an undesired result (no-compliance with legal requirements)

Level 2 - relevant needs and expectations of relevant interested parties can be used as a basis for determining the importance of each risk and opportunity.

This figure has the three topics that I want to include in the video:

Clause 4.1 (context) gives us a potential trigger event (internal ou external) that reacts with another Clause 4.1 (context) issue, an internal strength or vulnerability. The consequence of that reaction (risk - Clause 6.1) is evaluated against the requirements of interested parties (Clause 4.2).

 If the consequences are significant an action plan should be developed in order to minimize the risk or take advantage of the opportunity.

What is becoming more and more clear to me is the relevance of the expectations and needs of the interested parties in determining the risks and opportunities and their relevance.

Next topic will be focused on the events (Clause 4.1)

A economia real é heterogénea

"Janeiro de 2019: no lugar da antiga Texmin mora atualmente uma empresa que emprega mais de 200 pessoas e que mais que triplicou a sua faturação, em meia dúzia de anos, para cerca de 16 milhões de euros, tendo crescido no último exercício "mais de 10%" em relação ao ano anterior, garante a Cottonanswer, em comunicado.
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"Contrariando as adversidades e ultrapassando o Brexit, em 2020 vamos continuar a crescer na ordem dos dois dígitos, alicerçando a estratégia no desenvolvimento de dois pilares: o técnico e o criativo - os dois estão intimamente ligados", enfatiza o empresário."

A economia real é heterogénea.

Quantos anúncios de insolvências em empresas têxteis já apanhou este ano?

Como evoluíram as exportações têxteis em 2019?

Rechos retirados de "No lugar da falida Texmin foram criados 200 empregos e mais de 100 países clientes"

Plumbers vs poets

Mal vi este tweet no Domingo guardei-o.

Spot on. As the late organizational theorist James March put it,"Neither success nor change requires dramatic action...[they mostly] require ordinary people to do ordinary things in a competent way." March also asserted that success requires competent "plumbers" not just "poets" https://t.co/43ig7WFydX

— Bob Sutton (@work_matters) January 5, 2020

Depois, ontem ao final da tarde, enquanto tinha uma inesperada conversa telefónica, aquelas palavras, "March also asserted that success requires competent "plumbers" not just "poets"", invadiram-me a mente.

Depois, recordei um outro texto no FT do final do ano passado, "Against the Cult of Innovation":

"The problem here is not just the equation of youth with innovation. It is the worship of innovation itself. What we used to understand as a neutral thing, sometimes life-improving, sometimes destructive, often neither, has been reframed in this century as an unambiguous virtue. Perhaps the virtue.
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The vast majority of human labour is devoted to the quotidian business of keeping things going.
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The premise of innovation is that the fundamentals are already in place. At that point, the eking out of extra gains though ingenuity really does make sense. It is less urgent when the fundamentals are the problem. I have seen well-meaning politicians fall for this mug’s game at close quarters. Governments that struggled to enforce basic standards in education or to tend to vital infrastructure have lost themselves in innovation task forces and the like, as though they were Finland, soundly run and just eager to keep their edge.
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The lesson is for organisations far beyond. A “cult of maintenance” is an unglamorous notion, and no less essential for that."

Então, resolvi mergulhar no texto que gerou o tweet inicial "The Surprising Value of Obvious Insights":

"I was wrong to place such a high premium on the unexpected. Findings don’t have to be
earth-shattering to be useful. In fact, I’ve come to believe that in many workplaces,obvious insights are the most powerful forces for change.
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Obvious insights can motivate us to close the knowing-doing gap. Common sense is rarely common practice.
...
My favorite way to make obvious effects interesting is to quantify the big impact of small changes. Is it obvious that you’ll be more productive if your desk is near a high performer? Probably. But would you have guessed that sitting near a single star appears to boost your productivity by 15%? Probably not. Is it obvious that you’ll be more motivated if you find out how your work benefits others? Sure. But until I ran a series of experiments, I would never have predicted that meeting a single person who benefited from your work could be enough to double your effort and triple your productivity. [Moi ici: Um tema que os empresários podiam agarrar com ambas as mãos] Is it obvious that managers should have a one-on-one meeting with new hires in the first week? Definitely. But did you anticipate that when managers did that at Microsoft, within the next 90 days those new hires became twice as central in their networks and spent triple the amount of time collaborating?...
Ultimately, the beauty of leading with obvious insights is that you gain legitimacy. Your data don’t always have to say something new if they say something true. People start to trust your research, and then they’re more likely to give you the benefit of the doubt — which opens the door to doing and disseminating more groundbreaking work.
.
So don’t be afraid of obvious insights. They’re the Trojan horse you sometimes need to smuggle in your more startling results. On that note, I would still love to see some evidence about when it’s a bad idea to meet your new hires on their first day."

Prioridades? Que prioridades? (parte II)

Parte I.

Enquanto escrevia a parte I recordava uma manhã em que desembarquei em Coimbra-B e a pé cheguei ao centro da cidade. Na Fernão Magalhães (acho que é assim que se chama) junto a um quiosque parei para apreciar a capa do Diário Económico. No dia anterior, o então presidente Jorge Sampaio tinha anunciado ao país uma lista interminável de prioridades. (BTW, julgo que foi nesse dia que no jornal Público li a decisão no parlamento sobre a instituição do que gerou o défice tarifário, no tempo de Pina Moura como ministro das Finanças. Lembro-me de me fartar de rir com os comentários dos colegas parlamentares à entrada de Maria Carrilho no parlamento com fato e calças brancas: "É o vendedor de gelados")

Entretanto, no último Domingo encontrei:

"There are, however, some things about success that are universally true, priorities and execution being the two most fundamental. These two factors are also the defining difference between those who succeed and those who struggle.
.
Your Priorities Define Your Success.
However you define success, doing so creates an intention to achieve something, to close some perceived gap.
...
When you know what you want, you can prioritize what you do with your time and energy, the first being your single, finite, non-renewable resource, and the second being another resource with limits. Without priorities, you can spend your days, weeks, months, and years wasting your time and energy on things that are of no real consequence.
.
Priorities provide boundaries. You draw a line in the sand by establishing what is most important, deciding some result is more important than some other outcome, based on what it is that you want and how you define success. When you establish priorities, you cut yourself off from the distraction of all the options available to you, especially those that would move you further away from your goals.
...
What priorities provide is the ability to make a plan to achieve the results you want to make up your life. You can’t execute a goal or an outcome. You can only execute your plan to achieve it. Execution is the variable, accounting for much of the difference between those who make their goals and those who struggle.
...
Saying yes to what’s most important means saying no to things that are not a priority. When you say yes to the small stuff, you are saying no to bigger things. Those who create their version of success say no to small things, limiting distractions so they can execute their plans.
...
In the end, there are only priorities and execution. If you want your version of success, you must decide what is good and right and true for you, establishing your priorities."

Quais são as prioridades da sua empresa? São claras? Estão alinhadas com a estratégia? Estão restritas ao que é mesmo, mesmo essencial?

Trechos retirados de "Your Success Is Found in Priorities and Execution"

Your Right Customer Isn't Only Yours (parte III)

Parte I e parte II.

"Your Right Customer Isn't Only Yours
Just as you have more than one "right" customer, you very well may not be your customer's only answer. Price, convenience, desperation, necessity, your inability to meet all your customer's needs (or their unwillingness to rely on only one service provider, which is often good business practice) means you not only have competition for their business but you are being compared, perhaps unfairly, to other servioce providers."

Duas empresas bem diferentes, podem desenhar dois serviços completamernte diferentes, para dois tipos de clientes-alvo bem diferentes, mas não necessariamente para duas perssoas diferentes. A pessoa pode ser a mesma, mas em momentos ou circunstâncias diferentes. Por exemplo:

• comprar um vinho para oferecer vs comprar um vinho para consumo corrente;
• comprar uma série de artigos baratos (pão, peixe, congelados, ...) vs comprar frutas e legumes frescos (variedade, qualidade e frescura).

Esta dualidade na personalidade dos clientes tem o potencial para criar dois tipos de problemas a uma empresa.

"One is making a mistake about who your competitor is.
...
The second and graver danger: working too hard to accede to the wishes of a customer who is unprofitable or otherwise wrong for you. There is something worse than losing a customer, and that is bending over backward to keep one who loses you money. Any service design needs a degree of flexibility after all, each perfect customer is different. But once you start doing things that conflict with your brand, your strategy, and what you are designed to deliver, your attempt to not disappoint customers will inevitably mean you will disappoint yourself." 

Em Agosto de 2008 aprendi:

"the most important orders are 

the ones to which a company says 'no'."

"There are customers you have to say no to. Let's start with the ones you do not want: customers or clients who want what you are not prepared to deliver. Not what you cannot; what you won't. ... Cannot is about capability; won't is about strategy. In most cases, saying no to a potential customer is easier than saying goodbye to a current one, because a current customer was, at some point, your right one.
...
Deciding to part ways with a current client is about acknowledging that something has changed: their needs, your strategy, the chemistry of the parties involved. The more personal the nature of the service or the more direct the interaction is between you and the customers, the harder it is, because, well, it feels and is personal. When you are thinking about saying no, look at why:
Are you saying no because it is something you haven't done or do not want to?
If you haven't done it, why not? Is it resistance to change or genuinely a question of strategy? Is it something you do not do well enough, but could with training, practice, or judicious addition of capabilities or staff?"

Trechos retirados de "Woo, Wow and Win" de Thomas Stewart e Patricia O'Connel.

Por que será que isto acontece?

Uma das ferramentas que uso há muitos anos no meu trabalho com as empresas é a dinâmica de sistemas. Quando em 1999, em San Francisco, numa daquelas lojas de aeroporto, comprei o livro "The Fifth Discipline" de Peter Senge, nunca pensei que viria a ser tão importante.

Há dias, por causa de um artigo no Jornal de Notícias publiquei este tweet:

que isto é uma treta!
Qualquer estudioso de dinâmica de sistemas sabe que quanto mais melhorarem as vias mais carros aparecerão e mais o sistema se comprometerá

— Carlos P da Cruz (@ccz1) January 4, 2020

É um desafio há muito documentado e representado nos textos sobre dinâmica de sistemas:

Entretanto, ontem no Público, foi bublicado este artigo "Por uma nova travessia do Tejo".

Isto faz-me lembrar aquela revista do grupo Impresa que, número sim número não, traz artigos sobre viagens e férias em paraísos tropicais, e número não número sim, traz artigos sobre o aquecimento global e o apocalipse climático.

Estes jornais alternam entre a emergência climática e a expansão da pressão do automóvel. 

Por que será que isto acontece?

Serviços e a abordagem por processos (parte II)

Parte I.

"Here’s a step-by-step guide to process improvement,
...
1. Identify problems .
First, you need to find the problems.
...
Problems can’t be solved if nobody acknowledges they exist, and research shows that the longer problems linger, the harder they are to fix
...
2. Establish the backlog.
Next, ask people to write down as many processes as they can think of that are plaguing them, one issue per Post-It Note. ... Duplicates were stacked on top of each other to make it clear that several people thought it was a pressing issue.
...
The backlog made problematic processes less nebulous,
...
3. Load up the queue.
Decide what processes you are going to improve, and in what order.
...
Early phases of process improvement should focus on low-hanging fruit, or small changes that are relatively easy to implement.
...
4. Map the current process.
For the first process, make your work visual by drawing a map of the entire process, from beginning to end, on a whiteboard.
.
Employees should avoid mapping the process as they think it should be, Norton said, and be sure to truthfully outline the current state of things.
...
5. Identify one small change.
As a team, identify one small way to improve the process. It is best to address areas with ambiguous hand-offs, misaligned incentives, or based on “we’ve always done it this way” mentality, Norton and Kimball said.
.
Suggested changes are best coming from those directly involved in a process. “If leadership pushes solutions onto the team, they may be misaligned and nobody’s going to carry them out,” Kimball said. “Let the people doing the work give it a try, and see what they organically come up with.”
.
Small, incremental changes are a key to the process. “We’re big believers [that it is] much better to do successful small projects and build momentum rather than try to change everything at once,” Repenning said. “If we can do a quick-win project, we get some confidence, we’re heading in the right direction … Because maybe we generated some small result, but also in that little project you learned an enormous amount that will make you more productive in the second one.”
.
6. Do the experiment.
Implement the proposed change and see it through for five iterations.
...
7. Look back and celebrate success.
After the experiment had been completed five times, gather to determine if the experiment was successful.
...
No matter the outcome, Norton and Kimball said teams should celebrate with things like a celebratory lunch or small giveaways after their first process improvement attempt.
.
8. Repeat.
After celebrating success, it’s time to move on to the next process in the queue. Process improvement isn’t a one-time thing, the researchers said, and instead represents a cultural shift."

Trechos retirados de "An 8-step guide for improving workplace processes". 

Prioridades? Que prioridades?

"One common problem I see in my consulting work with senior leadership teams is that their priority lists are often too long. Yes, leaders may want to signal they have their arms around the business and are fully aware of all the areas that need work. But it can be hard to move the needle on anything if you have more than three or four key areas of focus. As Jim Collins has written, “If you have more than three priorities, you don’t have any.”"

Como não recordar a comunicação de fim de ano do presidente da república:

"O Presidente da República definiu quais as prioridades que quer ver o Governo a dar atenção em 2020 e por uma ordem que não é aleatória: a saúde é a primeira, depois a segurança, em terceiro lugar a coesão e inclusão social, seguida do conhecimento e só por último o investimento." 

Recordar ainda "Para mim, um simples anónimo engenheiro da província"

1º texto retirado de "Start the New Year with a simplification month"
2º texto retirado de "Presidente marca prioridades para 2020 e a saúde é a primeira"

"Who is your right customer"

“Remember, Your focus determines your reality.”
                        (Qui-Gon Jinn em "The Phantom Menace")

After "Why the Customer Isn't Always Right"

"Who is your right customer.
The right customer is one you are prepared to serve in every sense. It is the one you are targeting—not the other way around. You have the capability, you understand what the customer wants and needs, this is the customer around whom you have proactively designed your service offering, and a customer whose business you can realistically win—that is, win and serve profitably.
"Design is about decisions and trade-offs and therefore everything is designed.
...
"Positioning is the art of sacrifice, and it goes for selecting customers as well as defining brands." Selecting customers, like so many things, is both art and science. It is easier to define the customer experience—that is, the one you want your customer to have—than it is to define the customer, because odds are you have more than one right customer.
.
And it is easier to define your wrong customer than it is your right one: By definition. the customer who you are not designed to serve profitably is wrong for you.
...
One way to determine your right customer is to examine your most valuable customers.
...
The stats on retention are compelling: clearly, keeping customers matters. But there's a premise hidden behind those stats, and it might not be true: that all those customers are equally worth retaining.
...
companies focus too much on customer retention rather than deriving maximum value from the right customers."

I recall three criteria for defining target customers in "Quem são os clientes-alvo?" and a warning in "If you don’t know the difference between the right and wrong customers ..."

"It is really important to understand who your valuable customers are, to find ways to enhance their value, extract it for your shareholders, and find more like them," he says. "Given that magical extra dollar, I want to spend it on acquiring great customers—premium customers  [Moi ici: Never the power of Marn e Rosiello's numbers]—and keeping them happy. It is always tougher to change customer behavior than to find new customers similar to your misting top-buyer profiles." 

Keeping nonpremium customers happy is fine as long as they remain profitable,  [Moi ici: Never forget Stobachoof curve] but that is not where you should focus your efforts. There is a natural tension between staying focused on that sweet spot—the groups of customers for whom you are perfect and who am perfect for you—and the pursuit of growth. By focusing on customers with the greatest potential in terms of repeat purchases and large average transactions, marketing and customer service efforts (and costs) can be allocated where they matter most. Growth focused solely on building a larger customer base may be the wrong strategy.  [Moi ici: I never forget my 2006 lesson]

Volume is Vanity

Profit is Sanity

Trechos retirados de "Woo, Wow and Win" de Thomas Stewart e Patricia O'Connel.

Serviços e a abordagem por processos

Em Novembro de 2008 aqui no blogue escrevi:

"A abordagem por processos é uma ferramenta excepcional, por exemplo, transformamos um serviço, algo de difuso, algo de escorregadio, numa realidade semelhante a um processo industrial, muito mais fácil de analisar."

Agora, em "An 8-step guide for improving workplace processes":

"“It's easy to get caught up in a situation where you're doing so much firefighting that you don't ever have time to put out the fire permanently,”
...
“You don't have time to make things better. All you're doing is just getting up every day and trying to avoid disaster.”
...
This is a common scenario for knowledge-based workers. It’s difficult for workers to even acknowledge they are struggling, let alone find and fix the source of the problem.
...
Visualizing work processes with tools like Post-it notes leads to efficiency...
“Most knowledge work processes have hardly been designed at all. People just start doing them and then they make ad hoc changes as they go.”
.
“For managers, the huge potential there is to start looking at their knowledge work processes with the same level of systematization or rigor that you would with the physical work.”

"be the only one who does what you do"

“For companies and brands that aspire to do something truly extraordinary, what you believe has become as important as what you sell. The job of leadership today, the essence of strategy and competition, is about more than introducing marginally superior products or providing better-than-average service. It is about developing a set of deeply held principles that challenge received wisdom, and helping your organization get to the future first.
...
But the most important trait, the distinction that separates high-impact entrepreneurs from those who don’t make such a big difference, is less about what they do and more about what they believe and how they behave.
...
mercenaries are motivated by “drive,” while missionaries are motivated by “passion.” What’s the difference? “Passion and drive are not the same at all,
...
Drive, he says, “pushes you toward something you feel compelled or obligated to do.” Passion “pulls you toward something you cannot
...
As a company or as an individual, the goal is no longer to be the best at what lots of other people do. It’s to be the only one who does what you do.[Moi ici: Mongo passa por isto, por um mundo de weird people, quer do lado da oferta quer do lado da procura]
...
You don’t have to be in a cutting-edge business to develop some edgy ideas on how to compete and win.
...
I have a lot of respect for average,” he told the group. “In most industries, it is not easy to be average. But we choose to be extraordinary. And it is a choice. The world will not demand it of you. You have to fight for it. Every day, people have to ask themselves, ‘What am I willing to do that the ordinary leader is not willing to do?’ The world will not force you to be extraordinary. You must demand it of yourselves.”

Trechos retirados de “Simply Brilliant: How Great Organizations Do Ordinary Things in Extraordinary Ways” de William C. Taylor.

"That's our edge!"

Interessante, "AI 'outperforms' doctors diagnosing breast cancer", com base neste artigo "International evaluation of an AI system for breast cancer screening".

Acredito que em muitas áreas a Inteligência Artificial poderá substituir com vantagem os humanos. No entanto, nunca esqueço as palavras de Kasparov acerca do trabalho conjunto entre humanos e inteligência artificial.

"relatively weak computers working alongside human players will wipe the floor with the most advanced supercomputers. Collaborative rather than oppositional thinking has yielded radical advances in chess theory, and opened up whole new areas of play." (fonte)

"humans and machines will work together, and we, as customers, will be allowed, once more, to lazily beg for help" (fonte) 

Nunca esqueço:

- That's our edge! (fonte) 

ISO 9001 - Video V - A useful quality policy and objectives, not mumbo-jumbo

My experience about quality policies is very negative. I see a lot of trivia and mumbo-jumbo and not many alignment with any strategic orientation.

I prepared a video with a template that I use to write useful quality policies, aligned with strategy and target customers.

Deixem as empresas morrer!

Em "Só o penitente passará", do meu candidato ao Parlamento Europeu, sublinho:

"As empresas portuguesas, como as suas congéneres europeias, beneficiariam de maior qualidade de gestão. Mas beneficiariam ainda mais da sua incorporação em sectores de maior valor acrescentado. Esta incorporação está relacionada com a qualidade de gestão, mas uma e outra não constituem exactamente a mesma coisa.
.
É possível ter boa qualidade de gestão e, apesar de tudo, continuar num segmento de baixo valor acrescentado. [Moi ici: Come on! O que é que é característico de um segmento de baixo valor acrescentado? Um produto básico, um produto standard, um produto commoditizado. Um produto destinado ao centrão, ao segmento mais populoso. Se a isto juntarmos boa qualidade de gestão, temos o MacDonalds, temos a IKEA, temos a Amazon. Margem curta, mas uma rotação dos activos muito elevada. Como escrevo aqui, talvez desde 2007, o negócio do preço baixo é legítimo, é honrado, e pode dar muito dinheiro se for aplicado por quem pode, não por quem quer, e a uma escala cada vez maior] É o que tem sucedido em alguns segmentos de serviços nos últimos anos, sobretudo aqueles relacionados com o turismo e viagens. E também é possível estar num segmento de alto valor acrescentado, de grande visão estratégica, mas sem qualidade de gestão e em condições precárias.[Moi ici: Acho difícil estar num segmento de alto valor acrescentado de forma sustentada, sem ter qualidade de gestão. Sem qualidade de gestão, sem visão estratégica, confia-se que o passado continue a assegurar o futuro e num mundo VUCA isso é a morte do artista. As estratégias são como os iogurtes, têm prazo de validade. Recordo o antigo presidente do Vitória e a sua frase-assinatura "O que é verdade hoje, amanhã é mentira"]
.
Assim, para facilitar a evolução para níveis superiores de valor acrescentado, a par de uma maior qualidade de gestão, há na minha opinião três domínios de base que terão de melhorar."[Moi ici: Acho os três domínios apresentados demasiado genéricos e desligados da realidade do país. Em linha com o meu reminder para 2020 - cuidado com as soluções off the shelf. Para mim só há um caminho - Deixem as empresas morrer, ponto. Baixem as barreiras à saída. Recordar a quantidade de empresas-zombie e a facilidade com que o politicamente correcto se gera para as proteger.]

For frequent future use - a reminder that predictability is for suckers

The economy is a complex system.

A complex system is anything but linear.

It is not because we change an input, or because we change something within the system, that we can get or modify an output to get a desired result.

When acting on a system you can never guess what the result will be. In my country we have a saying that goes like this: “Hell is full of good intentions”

That's why I wrote some days ago:

“You know how scared I am of the fragilistas, the naive interventionistas. You know how I learned to appreciate the Via Negativa: first, do no harm!
You know how scared I am of social engineers who want to change the world.
...
With biology, innovation has to go with small experiments”

It is so easy to forget this.

So easy.

So easy to delude ourselves with ideas about our power, our predictability powers ...

The truth is that when we dive into the complex system we have this:

This blogpost, written on this day, is for me to be able to come back to it regularly for a bath of humility, for a good and sound slap in the face - in the style of Templar initiation.

Beware of system interventions, beware of the illusion of power and predictability.

2019 gave me an excellent slap in the face when I realized once again that a complex system does not think. A complex system does not pursue goals. A complex system is like a river, it runs away from constraints. When actors in a system act on it, they alter the set of existing constraints, and what they hoped to achieve is often torpedoed by the system, which ultimately found an easier alternative.

Remember what the first settlers of Australia did? They introduced rabbits to maintain their English hunting tradition. Rabbits discovered a habitat where they had no predators and multiplied exponentially. So the settlers decided to introduce foxes, traditional rabbit predators. But foxes, once introduced to Australia, discovered a whole panoply of prey much easier to hunt than rabbits.

For years I believed that the demographic evolution in Portugal, and the continued expansion of the emigration of people of value who do not want to live in a socialist-extractivist country, would bring a time when companies would be forced to raise wages beyond productivity in order to capture workers, a precious resource. Raising wages beyond productivity is a dangerous policy. This policy would have two consequences: shutting down the less competitive companies, and forcing companies to move up the value ladder to compensate for the rising cost of people. Therefore, I have long devalued the issue of the national minimum wage because companies would have lack of people as the most important constraint.

And 2019 ended my theory !!!

By the way, this theory I was hoping for, based on demography, is the same as that followed by the current Portuguese government and the left wing parties, with a small-big detail, while my driving force was demography, theirs is the national minimum wage.

How did 2019 destroy this theory of mine?

The day I realized that it is so easy for a company to import people and get around the national minimum wage. For example, on the last day of 2019 when I visited a certain small company, I watched in amazement at a conversation about the virtues of importing Brazilian versus Colombian versus Venezuelan workers.

You will tell me that they will have to pay the national minimum wage to these workers. No, that's the big slap trick I got. I already had as a neighbor of my office a company that hired Portuguese carpenters for construction works in Belgium and the Netherlands. These carpenters were paid at 12 € per hour (2016 values). They made a contract with this Portuguese company in Portugal, received their wage in Portugal, but worked in Belgium or the Netherlands. How much will a Portuguese carpenter recruited in the Netherlands receive to work in the Netherlands? What I heard in the corridor of the offices where my company was based is being done with workers from Asia and Latin America. The workers are here, they work here, but they are not employees of the company where they work, so they do not receive the Portuguese national minimum wage, they come to provide a service to the Bangladeshi company, their real employer.

I who detest eucalyptus trees and their associated DDTs (Portuguese initials for Owners Of This All, big companies with huge power and benefitting from special "services" from the government), sometimes marvel and tip my hat at eucalyptus trees because they seem to have the will and thought, they seem to have goals just as nature, evolution has prepared them to take advantage of their apparent weakness before fire.

We know nothing about complex systems, stop. We can only be conservative, be pragmatic, do a little experimentation, and observe results. Then back off when things go wrong, or less well, or keep going when things go in the right direction.

Blogposts list on the theme in 2019:

• Uma bofetada que recebo como um aviso (August)
•  Bofetadas e locus de controlo - produtividade é que não. (November) 
•  Mais bofetadas e a turbulência em curso (November)
• And the american source behind this series of blogposts Curiosidade do dia - comunismo e Chega (parte III) (December)

Evolução das patentes

A ascensão da Ásia é impressionante, assim como o arrefecimento Europeu.