Acerca dos monopólios informais (II)

Parte I.

"How does a little monopolist grow its monopoly from a tiny one to a big enough one to be economically survivable, then attractive, then a money machine? It is by delighting its customers. And it isn’t altruistic. It needs more customers to get the economic model to work. And each customer benefits from the attempt to get the next one in order to make the economics work. It is a win-win!

But then the monopolist gets to the point of making the economics work, and beyond there, the monopoly becomes a magnificent profit machine. At that point, another customer would be perfectly nice, but who really cares? The monopolist is rich beyond its wildest dreams.

At that point, unless the monopolist remembers Rule #2, customers go to the back of the line. They just cease to matter. In fact, they become an irritation that gets in the way of self-actualization, which is the thing that really matters to the monopolist. And then the monopolist comes up with clever ways to make more money by abusing them. Sell their data to nasty people. Force them to sign restrictive contracts. Bias search results that they used to count on for their objectivity. It goes on and on. (The analog for businesses with only a small core of monopoly customers is to take those customers completely for granted while making luxurious offers to attract new customers.)

And then the monopolist starts the slow downward spiral. It is a very slow death. Again, the future is already here; it is just not evenly distributed. Customers will appeal to the government for help (ask AT&T, IBM and Microsoft). Or they will use a different device because it doesn’t use the monopoly operating system. Or they will abandon the monopolist’s service just to prove a point. In due course, the economics crater."

Trechos retirados de "The Two Rules that Monopolists Ignore at their Peril" 

Incomodar os incumbentes preguiçosos...

Esta estória é deliciosa. Como um novato, fazendo uso de um diferente modelo de negócio, fazendo uso do marketing, incomodou um incumbente estabelecido e adormecido. 

"Figs Inc. has fashioned itself as the Warby Parker of medical uniforms, using advertising splashed on subways and billboards to sell its form-fitting scrubs directly to nurses and doctors.

...

Careismatic Brands, a leader in medical apparel with brands of scrubs like Cherokee and Dickies, has pursued litigation against Figs since 2019, saying the smaller company has misled health-care workers with boasts about how its products help keep them safe.

Figs’s advertising and social-media presence look more like those of a fashion brand than a medical-apparel maker, including sometimes irreverent videos and images of people wearing Figs while getting out of helicopters, skiing, and skateboarding. Its online-sales model, aimed at selling directly to medical professionals, contrasts with Careismatic’s heavy reliance on bricks-and-mortar retailers. 

Careismatic, previously known as Strategic Partners Inc., has asked a federal judge in Riverside, Calif., to issue an injunction requiring Figs to publicly renounce some marketing claims, including that its scrubs kill bacteria and infection on contact, repel liquids and reduce hospital-acquired infections by 66%.

Startups increasingly have to prepare for legal challenges from the industry they are trying to disrupt, said Arun Sundararajan, a business professor at New York University. Starting with the rise of Uber and Airbnb, “The incumbents chose regulation and litigation to try to push them back,” he said, a strategy that has been replicated.

Los Angeles-based Careismatic, founded in 1995, sells some products directly to consumers but also relies on partnerships with thousands of retail stores, many independently owned. Emails included in Figs’s latest filings show several retail partners emailing Careismatic executives with concerns about Figs’s business model and products.

“We need ‘Figs-like’ material as fast as you can create it,” wrote one Kentucky retailer in February 2018, the filings show.

The global medical-uniform market is worth an estimated $66 billion annually, with $11 billion in the U.S., according to a recent report on Figs from investment bank Piper Sandler. Citing estimates from Forbes, the report put Careismatic’s annual revenue at $700 million and Figs’s at $250 million.

Since filing its first lawsuit in February 2019, Careismatic has amended its claims a number of times and filed similar actions in state and federal court. In addition to challenging the marketing claims, it questions whether Figs donated a pair of scrubs for every pair sold, as it purported to do for many years.

Ms. Spear said she and Ms. Hasson, who has a background in fashion, started Figs because they saw a staid industry with room for innovation. Most health-care professionals have to buy their own uniforms, and most options were boxy, scratchy scrubs sold at medical-supply stores alongside wheelchairs and bedpans, Ms. Spear said. Figs developed a slimmer-fitting version in a range of colors using an antimicrobial fabric, costing about twice as much as some competitors’ scrubs."

Trechos retirados de "Figs Fights Lawsuit Over Scrubs Ads"

2020 vs 2019, 2019 vs 2018, 2018 vs 2017 - exportações

Há um ano publicava o quadro que comparava 2019 com 2018. Agora dá para apreciar 2020:

O quadro que sigo há anos... acho que em 2010 já publicava estes números.

Dá para ver como 2020 foi cruel para as exportações. 

PMEs uma desgraça

Empresas grandes ainda maior desgraça

Escapou a agricultura.

Desde o pico de 2017 o calçado já perdeu quase 500 milhões de euros de exportações.

Vamos mesmo ficar todos bem!

Acerca dos monopólios informais (I)

Consideremos aqui o Facebook, a Apple como exemplo de monopólios. Basta atentarem no cabeçalho deste blog para lerem "monopólios informais":

"there is a huge incentive to attack the luxurious market of an existing monopolist — and innumerable companies do so. The monopolist must understand that these insurgents can’t help themselves: the opportunity is too attractive.

But taking on the monopolist at the heart of its business is rarely their approach. The dominant approach is to chip away at the edges of the monopoly. Think of the monopolist’s business as a circular disk. At the center is the perfect customer who thinks the monopolist’s offer is perfect. As you move away from the center, the offering is ever less perfect to those customers. And that is where insurgents attack: not at the center but at the fringes. And they win fringe customers.

When MCI and Sprint attacked AT&T’s monopoly, they didn’t attack the core of middle-American residential customers. They went after large businesses, who were being vastly overcharged relative to cost to serve, in order for AT&T to subsidize undercharged rural customers. Facebook’s insurgents aren’t attacking the core of its business. They are picking off customers who are hyper-sensitive to privacy issues (MT Social) or hyper-sensitive to ads (MeWe) or want to get credit for their participation (Minds) or they are searching for ideas/inspiration (Pinterest). If successful, that insurgent becomes the new monopolist for that niche — some of which are too small to be profitable, others not.

But the result is that the original monopolist’s territory becomes ever smaller as it is dynamically segmented around the edges. Ironically, the same thing happens in due course to the new entrants’ monopolies. So, dynamically over time, markets keep segmenting and segmenting into shrinking monopolies. It is inexorable."

Trechos retirados de "The Two Rules that Monopolists Ignore at their Peril" 

Every visit customers have to make ...

"Efficiency with people is ineffective. With people, fast is slow and slow is fast." - Stephen R. Covey #Efficiency #Effectiveness #7Habits #QOTD pic.twitter.com/0tFMw7eENd

— Stephen R. Covey (@StephenRCovey) February 9, 2021

Sim, segunda metade dos anos 90, aprendi esta lição com este senhor. Influenciou postais como:

• Small is better (Abril de 2010) 
• "aposta noutro mindset" (Julho de 2015)
• "the connection economy is all about being human" (Maio de 2016)

E fez-me criticar esta nota desde a primeira vez que a vi:

"Quem não aposta no "cheaper" e no "cost", aposta na interacção, aposta na co-criação, aposta noutro mindset... eu diria, "Every visit customers have to make are an opportunity for interaction and co-creation"

Nunca esquecer, Golias pode apostar e ganhar com a automação porque está no seu ADN; contudo, David não tem qualquer vantagem em seguir esse caminho, tem muito mais a perder do que os euros que poupa."

Diferenciação focada

Em sectores de bens ou serviços transaccionáveis, costumo encontrar PMEs com estratégias sustentáveis naqueles dois quadrantes de âmbito estreito.

Custo focado ou Diferenciação focada. Ambas assentam na escolha de um segmento de mercado limitado, um nicho. No entanto, as duas abordagens para satisfazer clientes são bem distintas. 

Todas as estratégias são transitórias, como aprendi há anos a estabilidade é uma ilusão. No entanto, penso que a estratégia baseada no Custo focado é menos defensável. Por isso, o seu sucesso dura menos. A Diferenciação focada, se bem trabalhada, se acompanhar o desenvolvimento dos clientes-alvo, pode durar muito mais tempo.

A Diferenciação focada não representa um grupo homogéneo. Tanto temos o "Made in Switzerland" como temos o "Made in Portugal", para nichos bem diferentes.

Onde é que a sua empresa se enquadra?

 

"how to shape the future"

 

 "The future is not about prediction but about shaping the future with agile experimentation on what works and what does not work

Regardless of how much you plan, you will not predict the future because neither customers nor companies can anticipate what is possible. The only way to push for radical innovation is to accept the uncertainty and thereby accepting that with more traditional planning we can not predict the future.

By saying so, I do not mean that we need no planning or management anymore. We even need it more than ever, but with a different aim. The aim should not be to predict the future but to plan a creative process how to shape the future."

Recordar o pensamento baseado no risco que a ISO 9001 propõe: o que pode correr mal? 

Recordar os rinocerontes cinzentos e os fragilistas:

A 2 de Janeiro de 2016 escrevi em "O não-fragilista prepara-se para os problemas":

"Os fragilistas partem do princípio que o pior não vai acontecer e, por isso, desenham planos que acabam por ser irrealistas ou pouco resilientes. Depois, quando as coisas acontecem, chega a hora de culpar os outros pelos problemas que não souberam prever, não quiseram prever, ou que ajudaram a criar."

Em Julho do mesmo ano em "O fragilismo" escrevi:

"O fragilismo espera sempre o melhor do futuro, não prevê sobressaltos. Acredita que os astros se vão alinhar em nosso favor, não vê necessidade de precaução, just in case."

Trecho retirado de "The missing part for business model innovation: The process" 

Não esquecer

 

“Research shows that when people are resistant to change, it helps to reinforce what will stay the same. Visions for change are more compelling when they include visions of continuity. Although our strategy might evolve, our identity will endure.”

Trecho retirado de “The Power of Knowing What You Don't Know” de Adam Grant.

Estratégia e identidade

Na sequência deste artigo "O ano do "Great Reset"" descobri Suzie Scott. 

Ao ler o que ela escreve sobre os humanos, não pude deixar de pensar na transposição para as empresas, enquanto ressoava na minha cabeça uma velha frase de Porter retirada do clássico "What is Strategy?":

"As we return to the question, What is strategy? we see that trade-offs add a new dimension to the answer. Strategy is making trade-offs in competing. The essence of strategy is choosing what not to do. Without trade-offs, there would be no need for choice and thus no need for strategy. Any good idea could and would be quickly imitated. Again, performance would once again depend wholly on operational effectiveness. 

...

Strategy renders choices about what not to do as important as choices about what to do."

Vamos ao que li de Suzie Scott:

"Social identities are formed not only by what we are in life but also by what we are not. The infinite array of selves we cannot be, have never been and cannot imagine becoming form a vast, expansive landscape from which our actual selves emerge. [Moi ici: Isto também faz recordar o espaço de Minkowski - As escolhas que fizemos no passado limitam as escolhas que podemos fazer no futuro.] This is a residual category of nothing: the matter left behind after we carve out defining shapes. It is the scraps of cookie dough thrown in the waste bin; the discarded fabric from which our outfits have been cut. Phenomenologically, this represents the world of lost potential: the bracketed irrelevance of ‘everything else’ that recedes behind those objects that shine forth. Yet this contextual background gives greater meaning to the selves we do become, its negative space emphasising and accentuating their boundaries and contours. It plays a subtle but important role in supporting the construction of identity and enhancing its performance: like a theatrical understudy, its invisible labour is essential to the smooth execution of the show. Just as figures stand out clearly against contrasting backgrounds, so do positive identities comes into sharper focus when defined in negative relational contrast. I know who I am by what I am not, or refuse to be."

Todas as empresas têm uma estratégia, mesmo as que nunca deliberaram sobre ela. Uma estratégia pode ser deliberada, pode ser algo criado, ou pode ser algo que emerge do conjunto das decisões tomadas quotidianamente. Estratégias deliberadas talvez contribuam para uma maior noção de identidade: "Yet this contextual background gives greater meaning to the selves we do become, its negative space emphasising and accentuating their boundaries and contours. It plays a subtle but important role in supporting the construction of identity and enhancing its performance"

Trecho retirado de "The Social Life of Nothing"

How can we use the process approach (part III b)

Part I and part II e part IIIa.

4.2.5 Step 5 – The main processes

We will use the example of a public works company, civil construction, as a basis for modeling an organization. A public works company is an organization that lives based on construction works, each construction works is put out to tender by the owners of the projects, so in an organization of this type the main steps may be:

These main steps represent the core processes of the organization (I call them the Cristiano Ronaldo of the business), those that are triggered by a customer's need and aim to satisfy that need, thus serving the customer. What happens between those two customer states? What actions, what activities do you do when going from one extreme into the other?

In this way, the main processes necessary to complete the change in the status of customers are identified.

4.2.6 Step 6 – The supporting processes

Once the core processes are identified, the support processes that allow the customer service vector to continue to function in the long term must be identified. These are processes that are not directly related to an order, or work, in particular, but necessary to deal with various orders or other types of requests. These are processes normally associated with resources (materials, services, people, machines, financial, ...). 

The process "Supply equipment" ensures that the works have the appropriate equipment to run without equipment shortages, and also ensures preventive and curative maintenance.

The process "Supply material and service" ensures the adequate and timely supply of materials and services essential to the development of the work, it also ensures the qualification, selection, performance evaluation, classification, and re-evaluation of suppliers and subcontractors.

Some organizations linked to construction and public works, with which we have worked in the past, given the particularities of their market, have chosen processes to support financial management (which included credit insurance, collections, payments) we will not do it here to keep the model simple.

The process "Train people" converts potential employees selected from the job market, into employees of the organization. It improves the skills of employees by receiving, analyzing, and closing gaps in the profile of people who occupy the various functions.

4.2.7 Step 7 – The leading process

Finally, the last process, the process "Lead the organization", a process where top management sets direction, sets objectives, and analyzes the performance of the organization, which evaluates the degree of fulfillment of the purpose, its raison d'être, and proposes new performance challenges and proposes changes in processes in order to leverage the organization to higher levels of performance. 

4.3 - Final remarks

Why do I use here these egg fried shapes to represent processes, instead of well-ordered squares like in the figure below?

In doing so, I intend to emphasize and awaken a spirit of humility, our models are not descriptions of reality full of certainties. We look at the world, at reality and we see complexity, mystery, confusion, disorder and problems, challenges of various kinds, and what we do is to organize our exploration of that world based on theories, on simplified approximations of reality, approaches that they make it possible to analyze the world and issue attempts to explain what exists, reality, performance, results and outline plans for the future, in order to influence behavior and induce future results for this part of the reality that interests us.

The amoeba shape, to the detriment of the rectangle, reminds us that our theories are just that, theories, hypotheses, representations, and have no ontological substance of their own, they are not palpable realities, they are nothing but artifices of the human intellect, and as such, they are not definitive can always be improved. Learning takes place through conscious comparison between the organization, as we perceive it, and the organization as we interpret it with theoretical models, our models are like artificial islands that we create, and we have geographically strategically available to cross an ocean of complexity and disorganization. 

The central arrow is the heart of the organization – these are the main processes, everybody should be working to support these processes because they serve clients. That is the job and purpose of the supporting processes, they exist to serve the main processes. You know that winter sport called curling? Like in curling everybody in the organization should be mopping the floor to reduce friction, to easy, to facilitate customer service through the main processes.

The leading process is the brain of the organization, it is here that direction is set, objectives are set, performance is monitored and decisions made.

In the next part, we will relate processes and strategy.

"How do firms respond effectively to a crisis?" (parte II)

Parte I.

""In 1 995, Brazilian president Fernando Henrique Cardoso decided to privatize Brazil's railroads.

...

A private firm, GP Investimentos Limited, decided to bid for the branch known as the "southern line," which ran through Brazil's three southernmost states. GP was a high bidder in the auction on December 1 996. After an interim period of management, the firm put one of its own executives, Alexandre Behring, in charge of the company, which was later renamed America Latina Logistica (ALL). When Behring took charge, he was in his early 30s-just four years out of business school.

Behring didn't have much to work with. ALL had only 30 million Brazilian reals in cash on its balance sheet. At one of Behring's first meetings, a mid-level manager beseeched him for 5 million reals to repair a single bridge. Though sympathetic, Behring knew that fixing everything that was broken would require hundreds of millions of reals. The needs were profound, but he faced an unyielding constraint: ALLS depleted bank account.

The railroad purchased by GP was in chaos, and when Behring and his team took charge, with new personnel and new priorities, more chaos was whipped into the preexisting chaos. The resulting decision paralysis should have been inescapable. And it likely would have been if Behring hadn't made clear exactly what needed to be done.

His top priority was to lift ALL out of its precarious, cash-strapped financial state. To accomplish this, he and his 35-year old CFO, Duilio Calciolari, developed four rules to govern the company's investments:

Rule 1: Money would be invested only in projects that would allow ALL to earn more revenue in the short term. 

Rule 2: The best solution to any problem was the one that would cost the least money up front--even if it ended up costing more in the long term, and even if it was a lower-quality solution. 

Rule 3: Options that would fix a problem quickly were preferred to slower options that would provide superior long-term fixes. 

Rule 4: Reusing or recycling existing materials was better than acquiring new materials.

The four rules were clear: (1) Unblock revenue. (2) Minimize up-front cash. (3) Faster is better than best. (4) Use what you've got. These rules, taken together, ensured that cash wouldn't be consumed unless it was being used as bait for more cash. Spend a little, make a little more."

Trechos retirados de "Switch: How to Change Things When Change Is Hard"

"o meu problema é a atitude"

Teodora Cardoso: 

 "O OE 2021 não previu nada. Ou melhor, previu que realmente era previsto que o muito curto prazo era preciso gastar à vontade e depois logo se vê. Este Orçamento foi um espetáculo triste. Aquela aprovação na especialidade, com não sei quantas mil alterações, tiveram de estar a aprovar medida que nem devem ter tido tempo para ler… Isto numa situação crítica que em termos de economia e orçamentais é de facto muito grave. Não era possível prever em outubro ou novembro [o novo confinamento]. Ainda agora é impossível prever tudo o que se vai passar em 2021, quanto mais nessa altura. O meu problema não é esse, o meu problema é a atitude: não vi que existisse, fosse de quem fosse, a perceção de que estamos a passar por uma crise que vai ter consequências.

...

É muito pior apresentar expectativas positivas que passado uma semana são postas em causa. Não há nada pior para afetar a confiança do que isso. Vemos nos países onde isso não é feito, em que há mais cuidado a olhar realisticamente e prudentemente para o futuro, que há maior confiança. Somos dos países onde há menor confiança, e uma das razões provavelmente tem a ver com isso, essa necessidade de estar constantemente a criar expectativas positivas que depois são defraudadas."

Como não regressar a Maio de 2009:

"Comparem a linguagem do ministro das Finanças, qual personagem do filme "Os 3 amigos", com a linguagem de "carroceiro" e de desmancha-prazeres de Belmiro de Azevedo "“Ele diz as coisas que são politicamente correctas. Ele não assina nenhum cheque para fazer que as coisas aconteçam. Os empresários é que têm a obrigação de dizer as coisas com mais clareza. Não há nenhuma actividade que eu conheça que esteja em retoma. Há uns é a aguentar-se”

Façam uma sondagem e perguntem ao povo da rua quem é que estará mais próximo da realidade sentida e vivida pelas pessoas.

BTW, acham que as empresas de Belmiro de Azevedo, por causa da sua linguagem realista e crua estão a viver um momento de descalabro moral, de desânimo, revoltadas com o discurso da tanga do seu líder? Acham mesmo?

Não estarão antes, cientes da realidade, a fazer das tripas coração, a pensar em alternativas, a tentar criar um amanhã melhor? Qual das duas linguagem promove mais facilmente o cerrar de fileiras?

Se Belmiro de Azevedo replicasse a linguagem do ministro nas suas empresas iria gerar o veneno mais corrosivo das organizações, IMHO, o cinismo."

Teodora Cardoso:  

"Deve ter ouvido aquela definição de economia que estuda a aplicação de recursos escassos. Em Portugal nunca se consideram os recursos como escassos. Sempre dizemos que o financiamento há de vir de qualquer lado, portanto, aplica-se de qualquer maneira. Onde se vê que há uma má aplicação de recursos é, por exemplo, no aumento da dívida sem o aumentar do crescimento da economia capaz de sustentar essa dívida. [Moi ici: Por estes dias já é cão que morde homem, "Dívida pública fecha 2020 com recorde de 270,4 mil milhões de euros"] É um sinal de má colocação de recursos. Hoje pode-se ver em muito mais coisas, mas a nível macroeconómico este é um indicador irrefutável.

...

Avaliam-se as despesas ou a dotação, nunca se avaliam as despesas pelo resultado que se quer alcançar e muito menos se avaliam depois se eles foram alcançados ou não."[Moi ici: Ui!!! Esta é uma velha guerra deste blogue. Aquilo a que chamo os monumentos à treta. Os Planos de Actividade dos organismo da Administração Pública. Por exemplo: Junho de 2007, Maio de 2008]

Trechos retirados de "Teodora Cardoso avisa que “situação está mais complicada” e que empresas já não têm pé de meia"

Assar sardinhas com fósforos

 

Em cada vez mais sectores de actividade produzir é o mais fácil. Ao longo dos anos fui escrevendo:

• Ainda a produtividade (Outubro de 2006)
• Leituras de 2007 (Dezembro de 2007)
• Para mim é claro (Dezembro de 2009)
• Produzir é o mais fácil (Maio de 2010)
• A diversidade é o melhor seguro para a sociedade (Junho de 2011)
• Fugir à abordagem eficientista (parte II) (Janeiro de 2012)
• Há ainda um enorme esforço de missionação por fazer (Outubro de 2012)
• Nunca esquecer, produzir é o mais fácil (Maio de 2013)
• Vai ser lindo... schadenfreude (Janeiro de 2019)

Ontem encontrei um delirio de quem não torra dinheiro seu:

"Na reabertura da oficina de Guifões, em janeiro de 2020, o primeiro-ministro e o ministro das Infraestruturas estiveram de acordo no sonho de pôr Portugal no clube dos produtores de comboios no futuro, à imagem do que fez o país com a indústria automóvel nas últimas décadas. [Moi ici: Acham que a indústria automóvel assenta em empresas portuguesas? Pensamento infantil!]

.

A ambição de António Costa e de Pedro Nuno Santos pode ganhar um novo impulso nos próximos anos graças à bazuca europeia, desejou esta terça-feira o presidente da CP, Nuno Freitas, durante um debate remoto da conferência da Plataforma Ferroviária Portuguesa. [Moi ici: Portanto, dinheiro da bazuca para torrar num sonho... um sonho que durará o tempo que durar o dinheiro. Assar sardinhas com fósforos]

.

"Portugal tem todas as capacidades para fabricar comboios. Há negócio e temos mão-de-obra mais barata do que na Europa Central", salientou o gestor ferroviário. [Moi ici: Com que então fabricar comboios é mão-de-obra barata. Fabricar comboios é produzir... E organização? E eficiência? E competitividade? E ganhar concursos internacionais para fornecer a CP? Acham que o dinheiro da bazuca serve para produzir para uma reserva protegida da concorrência exterior? Acham que reconstruir carruagens com 80 ou 50 anos é o mesmo que fabricar comboios?]

...

O argumento financeiro também pode jogar a favor de uma fábrica de comboios portuguesa. Portugal precisa de comprar mais de 250 comboios nos próximos 20 anos "só para manter a oferta atual". Isto corresponde a mais de 1000 carruagens. [Moi ici: Acham que na União Europeia a compra de comboios pode ser feita impedindo concorrentes profissonais de concorrer?]

...

"A grande dificuldade é integrar este investimento nas atuais regras comunitárias, que são muito limitadas a nível da concorrência, e que limitam o investimento público e privado."" [Moi ici: Pois... Se não fosse tão grave este delírio com a torrefacção de dinheiro a assar sardinhas com fósforos até me ria. Gente que torra dinheiro sem skin-in-the-game é perigosa. Imaginam o que está por trás daquele... "que são muito limitadas a nível da concorrência"]

Lembram-se dos 2,5 milhões de euros despejados na CEiia para desenvolver um ventilador? Tão espertos, nem sabiam que os dispositivos médicos têm de ser certificados!!! Engonharam qualquer coisa, confiaram em qualquer coisa!!! Desviaram para canto!!!

Entretanto. E recuo a Janeiro de 2013.

Trechos retirados de "Portugal tem todas as capacidades para fabricar comboios"

How can we use the process approach (part III a)

 Part I and part II.

In the last part, I wrote that this part would be about processes and strategy. However, let me make a small change and first address the modeling of an organization, based on the process approach, before relating processes to strategy.

4. Modelling an organization – mapping processes

ISO 9001:2015 clause 4.4.1 states that an:

Organization shall determine the processes needed for a quality management system. 

How can that be done?

We need to develop a model of how the organization works having as its building blocks what we call processes.

4.1 What is a model?

“A model is an external and explicit representation of part of reality, as seen by people who want to use the model to understand, to change, to manage and control that part of reality”

 Michael Pidd in “Tools for thinking - Modeling in Management Science” 

Remember, we don't draw a model to answer ISO 9001:2015 requirements, and please auditors. We draw them because we want to understand, to change, to manage, and control our organization's present and future.

Models are always a simplification and an approximate representation of some aspects of reality, models reduce complexity, simplify the original or the future to be built, to reduce the noise produced by reality, and thus highlight, distinguish the critical factors, for the object of study concerned. The model does not show all the attributes of the original, it only illustrates those attributes that are relevant, or suitable for the observer/creator/user of the model to manipulate. Models do not need to be accurate to be useful, models are simplifications, and their usefulness lies precisely in that approach.

The task of the observer/creator/user of the model is to collect the visions, the perceptions, even if ill-defined and implicit of reality, and to shape them in a sufficiently well-defined way to be understood and discussed by other people. A model is a representation of reality. 

With Deming I learned:

All models are wrong, some are useful!

The reality is composed of a set of objects that constitute a system, at a conceptual level we design a model capable of illustrating the system, the reality. Armed with the model as a work unit, we can perform simulations to perceive reality and influence it, the simulation uses the model to perceive and anticipate the dynamics and behavior of the system.

4.2 Modeling an organization as a set of processes

To build a model of an organization, it is necessary to have a clear definition of its purpose, now an organization exists only because there are customers, they are its raison d'être! 

An organization, the organization object of our study, is an entity, it is a system, which transforms, that converts “potential customers with needs” into “customers served”. 

4.2.1 Step 1 - Identify the different types of customers 

Customers are not all the same, it is possible to identify and isolate different types of customers, this activity is important because different types of customers may require, different processes and may mobilize different actors, may involve different inputs and different outputs. 

4.2.2 Step 2 - List the inputs and outputs of the model

Distinguish the different states of the customers and identify all interactions (inputs and outputs) between the organization and its customers! How do we get in contact with potential customers? How do we collect information to develop new products and services? How do we receive orders or requests for proposals? How do we deliver our products and services? 

4.2.3 Step 3 – Determine the core, the heart of the model

Let us track the route, from inputs into outputs. Let us zoom in on the organization. Let us open the black box! 

For the purposes of this blogpost, we select a certain type of customers and then start to dive inside the organization  (for someone implementing a quality management system for certification, this could be a management system scope option)

I gather a set of people that know the organization, each from a different perspective and give them sticky notes and markers. Then, I post two sticky notes that represent the responsible for major input in the system and the receiver of the major output of the system.

I ask; what actions, what activities do you do when going from one extreme into the other? People use sticky notes to write things that they remember. I set a rule: one sticky note must have one verb and one noun like “Receive Request For Proposal”, like “Write Proposal”, like “Budget Proposal”, like “Present proposal”, like “Negotiate proposal”.

After that kind of brainstorming one can start to aggregate sticky notes that belong to a flow of activities. For example, I can replace these 5 sticky notes above by saying that they belong to the same process called “Win order”. Repeating the technique for other sticky notes we develop the central sequence of processes.

When designing the road from the inputs into the outputs, do not dive into to much detail! 

Let us look at a high level of abstraction and consider 3 to 6 entities (each entity represents a process, a set of activities) And let's number the processes sequentially! 

We can do a mental exercise: "If we were riding an order, what would we see from the reception to its delivery?" Do not register departments or functions, but state changes, the main tasks! ”

4.2.4 Step 4 – Name each process

 

Designate each entity (each process)! Start with a verb that illustrates the transformation that takes place inside! Avoid references to departments, to avoid confusion remember:

• processes are not departments, 
• the organization chart is not a process map, 
• the vertical and horizontal views of an organization are very different.

I like to designate a process by relating its name to the main output of that process. 

While certain processes seem to be clearly determined, based on a physical flow (production, logistics, distribution, transport) or a flow of information (design/development, closing accounts, invoicing, payment), certain activities of an administrative nature seem difficult to integrate into a “process” view. 

There may then be a strong temptation to group them by function analogy and to baptize these groupings as “human resource process” (in which recruitment, training, communication, payment of wages, contract management will be mixed) work, social dialogue, without the slightest logical link or the tangible outputs that characterize such a process appearing), “accounting and financial process”, etc. Performing more or less arbitrary functional groupings is of no interest from the point of view of process management, because it will be difficult to draw interesting conclusions as to the coordination and chaining modes. 

In the next part, we will continue with the modeling of the public works company as a basis for modeling an organization. 

"How do firms respond effectively to a crisis?"

 

"How do firms respond effectively to a crisis? As the current spread of the coronavirus COVID-19 is expected to have devastating economic and societal repercussions, this question raises growing interest among strategy scholars and practitioners alike. Our overview of select articles published in the SMS journals points to four strategic responses to crisis: Retrenchment, persevering, innovating, and exit.

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Retrenchment refers to cost-cutting measures that potentially reduce the scope of a firm‘s business activities. As prior research shows, this strategic response may help firms survive a crisis in the short run, as it partially offsets lost revenues. However, evidence on the long-term viability of retrenchment measures is mixed at best: While some studies position retrenchment as a necessary precursor to strategic renewal and firm recovery, other studies warn of the irrecoverable damages such as the loss of synergies that retrenchment measures entail.

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Persevering relates to the preservation of the status quo of a firm‘s business activities in times of crisis, e.g., through debt financing and the consumption of available slack resources. Prior studies suggest that persevering can be a viable strategic response to the crisis in the medium run. Specifically, the value of conducting strategic renewal ― "too early" in times of crisis may be eroded by constant and unforeseeable changes in the business landscape, thus leaving firms that persevere better off. However, when crises last for longer periods of time, the sources of internal and external slack may dry up at some point. Then, it might be ― "too late" to conduct strategic renewal in order to tap into alternative sources of revenue, as this process often requires slack resources as well. Thus, in the long run, persevering may threaten firm survival.

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Innovating refers to conducting strategic renewal in response to a crisis. As prior studies show, crises open up opportunities for strategic renewal—even for firms that rigidly stick to their strategy under business-as-usual conditions. This is so because crises trigger a mode of reflection that allows managers and employees to transcend the boundaries of what they believe is thinkable and feasible. Given that especially long-lasting crises leave irrevocable traces in the business landscape that render a return to the previous order impossible, innovating is an important, if not unavoidable strategic response to the crisis for sustaining firm survival in the long run.

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Exit refers to the discontinuation of a firm‘s business activities. While a firm‘s exit is conventionally viewed as a forced outcome of conducting an unprofitable business, it can also be a strategic response to the crisis. Specifically, exits free up committed resources that can, then, be reused for pursuing crisis-induced business opportunities. In this sense, an exit is not necessarily a manifestation of business failure per se, and it is not necessarily the last resort when the other strategic responses to crisis fail. Instead, a business exit may be a valuable strategic response to a crisis at any time."

Trechos retirados de "Strategic responses to crisis" 

How can we use the process approach (part II)

Part I.

3. The process approach – a quality management principle

The process approach is one of the seven quality management principles included in ISO 9000:2015. Let us see the statement of that principle:

Consistent and predictable results are achieved more effectively and efficiently when activities are understood and managed as interrelated processes that function as a coherent system.

It is easy to relate those “Consistent and predictable results” with the objectives referred to in the definition of a management system. 

And what does the same ISO 9000: 2015 say about what a process is? 

set of interrelated or interacting activities that use inputs to deliver an intended result

So, we may see an organization as a coherent system made of a set of interrelated or interacting elements called processes, and it is through those processes that an organization achieves its intended results, its objectives.

At a first glance, we have: 

The intended results may be: 

Now, let us zoom the organization to find out which processes are present and how they interrelate.

 For example, the processes may be:

 

When this organization wins a new project, they have to start ordering resources needed to provide the service. At the same time, winning a new project means developing a new service, new resources need will be determined, and service preparation may start. Then, at an agreed date the service provider may start.

Let us go back to the management system definition:

System to establish policies and objectives, and processes to achieve those objectives

Now, our system is our set of interrelated processes, and it through those processes that you try to meet intended results. Processes are like variables in a mathematical equation that we operate in order to meet our intended results: 

Let us go back again to ISO 9000:2015, clause 2.4.1.3, where we can read:

These processes interact to deliver results consistent with the organization’s objectives and cross functional boundaries. Some processes can be critical while others are not.

When we model how an organization works, we include in the model a set of processes. Those processes are needed, but not all processes have the same impact or influence in meeting each objective or intended result.

Just as an example, let us consider this matrix that relates processes and objectives:

 Processes are where the rubber meets the road. Whatever an objective the management wants an organization to achieve, it is only a dream if one or more processes of the organization are not mobilized and changed to that. In the matrix above, meeting objective “Better sales” requires working on the process “Win project”. Meeting objective “Less complaints” requires working on processes “Prepare service” and “Provide the service”. Meeting objective “More satisfied customers” requires working on processes “Develop a new service”, “Prepare service” and “Provide service”. 

Now, look into the process “Maintain equipment”. It must exist but does not contribute directly to any overall objective. These processes are tricky. If you are excellent in these kinds of processes, they will be expensive but will not contribute to customer satisfaction, but if you make a mistake in these processes, they can contribute to customer un-satisfaction. 

No one says: we are very satisfied with our electrical power supplier because at the end of the day there were no power failures. We say, it is the minimum someone can expect, no failures 

Next: Process and strategy

How can we use the process approach (part I)

 1. Management system definition

Let us start with the management system definition.

Do you know what is the ISO 9000:2015 management system definition?

set of interrelated or interacting elements of an organization to establish policies and objectives, and processes to achieve those objectives

Let us substitute “set of interrelated or interacting elements of an organization” with the word “system”. According to ISO 9000:2015, a system is a “set of interrelated or interacting elements”. So, a management system is:

A system to establish policies and objectives, and processes to achieve those objectives

Have you ever looked at this definition of a management system? Seriously, have you ever looked at this definition with eyes to see? I confess, for years and years I looked at it and never gave it importance, until one day I read it again and I was shocked ... I have been working with ISO 9001 since the 1980s. At that time, I was trained in another view on quality systems, very focused on procedures and quality control. 

Now, I was looking at the definition of a management system and saw something I had never seen before. A management system is a system that establishes a policy, that is, a strategic orientation, a set of priorities, translates that policy into a set of objectives aligned with the policy, the objectives are concrete challenges to be achieved, and then, start working systematically to achieve these objectives. 

2. Systemic thinking

An organization is a system. A system generates results and these results do not happen by chance, they are a perfectly normal product resulting from the system, the way people work, their culture. Thus, the current system generates the current results. If an organization wants to achieve different results in the future, it will have to transform, it will have to stop being the current organization to become the organization of the future. 

When we look into the current organization, the one generating the current results, we can discover a network of loops, a network of practices, that reinforce desired or undesired results:

Parts of these loops are intentional design, but others have evolved without a central command. To achieve the desired objectives for the future, it is necessary to act on these loop networks. 

Back to the definition of a management system. In a management system, the focus must be on the work to be carried out systematically to modify an organization, so that it can achieve objectives aligned with strategic priorities. I would almost say that everything else is noise. 

Next: Process approach definition

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Vamos lá testar a veracidade disto.

Postal criado a 17.12.2020

Torrar dinheiro

 

"You’ve got to hand it to the Italians. Rome is better than anyone at creating political crises that hold a mirror up to everyone else. Witness the latest kerfuffle over the latest collapse of the latest Italian government. 

...

The proximate cause for this turn is a feud between Mr. Conte and his predecessor Matteo Renzi (now leading his own micro party) over how to spend some €209 billion in European Union coronavirus aid. Mr. Conte mostly wants to seize personal control of the disbursement of those funds, via a committee of technocrats he handpicks to oversee spending. Mr. Renzi wants Parliament to get a say in the coming bonanza, and who can blame him? Throwing money at constituents is at the heart of politics, and it’s terribly unfair of Mr. Conte to deprive his colleagues of the opportunity to do that for which they were created.

Yet there are deeper forces at work in Rome. Messrs. Conte and Renzi are fighting a battle over who can lay claim to the political legitimacy to spend so much money—while squeezing out the one politician who actually has it."

Trechos retirados de "Italy’s Question Is Ours, Too: WhoWill Spend the Covid Cash?"

A emoção como fundação da estratégia

Ao longo dos anos tenho escrito aqui no blogue sobre Mongo, a metáfora que uso para designar um mundo pleno de variedade e de tribos apaixonadas. Aliás, por aqui tem-se escrito sobre:

"hiperentusiastas tem tudo a ver com a assimetria das tribos apaixonadas e "tu não és meu irmão de sangue""

Assim, faz todo o sentido sublinhar:

"it’s perhaps time to reassess our approach to strategy. At the risk of being viewed as a heretic, let me suggest that the successful strategies going forward will be strongly rooted in addressing the emotions of participants, rather than simply relying on facts and figures. [Moi ici: Como não recordar esta imagem ...]

[Moi ici: ... como não recordar a diferença entre os outputs e os inputs que são processados para gerar outcomes]

...

The opportunity for strategy

The opportunity for strategy in the next decade and beyond is to unleash ways to deliver more and more value with fewer and fewer resources.

...

In the industrial age that brought us to where we are today, unmet needs were largely defined in material terms – what products and services could address our material needs, 

...

Certainly, there are still large segments of the population with significant material needs, especially in trying times like this pandemic. But the mounting performance pressure of the Big Shift is also generating unmet needs at the emotional level. More and more of us are becoming consumed with the emotion of fear

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Focusing on unmet emotional needs

The successful strategies of the next decade will begin with cultivating a deep understanding of these unmet emotional needs and then developing unique approaches that are effective in addressing these emotional needs. 

...

The strategies that will succeed in the future are those that focus on the emotions of the participants and find ways to cultivate deep, long-term, and trust-based relationships among a growing array of participants by meeting their deepest emotional needs. "

Trechos retirados de "Emotion as the Foundation of Strategy"