In a preceding column, I discuss how a simple tool may be more effective when making complicated organic level judgements, in that case that of considering the value of employees. Here I suggest a different tool, one for considering the potential success of a business venture I call PCM.
CPM stands for PEOPLE, CONCEPT, and MONEY, which I submit comprehensively covers the potential success of any venture. Do you have the right PEOPLE to make it happen? Is your CONCEPT valid? How will the MONEY flow?
People are generally the most important factor; a good team with an average idea is generally preferable to a poor team with a great idea.
Nevertheless, a concept must be valid to begin with. For example, a business to represent convicted felons as housesitters is seemingly a failure conceptually. One would certainly think so.
With regard to the money flow, this refers not only to the entity but the capital structure. For example, a business that one might expect, based on the concept and people, to make $1 million in its second year might sound good. However, if you had to invest $5 million for 10% (making your portion of these earnings owned $100,000) it then makes the flow of money to you not so great. Thus the flow of money is meant to refer not only to operationally, at the entity level, but to the person considering any participation. Considering money flow at only the operational level is more of a consideration of the probability of ongoing viability than to how well one might individually do with a participation.
I've used this to quickly consider a number of business opportunities, sometimes finding the answer is a resounding yes, but other times finding that one of the three pillars, P,C, or M, has a weakness. I believe this methodoloy has made me a bit more effective at quickly considering business opportunities.
Wednesday, September 2, 2009
The Success Vortex - A Better Way to Consider a Company's Divisions
As a multi-faceted entreprenuer involved in various ventures and activities, I found myself increasinly uncomfortable with the traditional/typical bracketed system showing divisions with activities or subdivisons underneath them. I have found that different parts of a company support each other. For example, without good operations one has nothing to market, and without good marketing their are no operations.
To illustatrate this, I developed the concept of a Success Vortex. At the center, in the case of seemingly any company, is "PEOPLE," as this is the key to any successful organization. Around this is different divisions or activities, each with an arrow pointing to one side of the middle in a manner to appear as to push the core. Behind these are other sub-activities or divisions, in their case with an arrow point to one side of the middle of the divions they support in a manner such as to rotate them (the divisions they support) in the same direction.
Behind all of this, in the back 4 corners, are the 4 winds of success, each pointing as if to provide a back wind to the rotation of the Success Vortex. These are ATTITUDE, WISDOM, EFFORT, and, of course, LUCK. Luck never hurts.
I've found this to be more conceptually comfortable as it more accurately portrays the mutual effort to drive the business, while not completely ignoring the distinct contributions.
Copyright James Hawkins 2009
To illustatrate this, I developed the concept of a Success Vortex. At the center, in the case of seemingly any company, is "PEOPLE," as this is the key to any successful organization. Around this is different divisions or activities, each with an arrow pointing to one side of the middle in a manner to appear as to push the core. Behind these are other sub-activities or divisions, in their case with an arrow point to one side of the middle of the divions they support in a manner such as to rotate them (the divisions they support) in the same direction.
Behind all of this, in the back 4 corners, are the 4 winds of success, each pointing as if to provide a back wind to the rotation of the Success Vortex. These are ATTITUDE, WISDOM, EFFORT, and, of course, LUCK. Luck never hurts.
I've found this to be more conceptually comfortable as it more accurately portrays the mutual effort to drive the business, while not completely ignoring the distinct contributions.
Copyright James Hawkins 2009
ARC - A Simple Formula for Management Success
Putting together a solid management team is no easy feat. It is more of an organism as opposed to an object, and thus is difficult to consider in a more quantitative manner.
Given this, I've come to the conclusion that a simple tool can be more useful in making managment evaluations. This allows ones powerful mechanisms, whether you want to call it intuition or unconscious thought, to make less clouded, and hopefully better, judgments.
The tools we have developoed, and which we use regularly, is ARC, which stands for Attitude, Reliability, and Competency. We submit that different forms of these characteristics, with different expectation levels for different positions, in combination are one way to consider the value of an individual to an organization.
Attitude is simply a subjective measure of how positive the individual is. Reliability is simply a subjective measure of whether you can count on the employee. Finally, competency is a subjective measure of how well an individual performs his duties. Note that competency is not general, but job specific, thus a competent janitor may not be a competent controller, and vice versa.
We have used this so much we tend to refer to people's ARC score with an organization wide understanding of its meaning. For example, "he's a 10-9-9" would mean his attitude is a 10, his reliability is a 9, and his competency is a 9. One's ARC quickly comes up when we discuss an employees prospects with the company, and is an integral part of our weekly comprehensive strategy meeting.
I know it is simple, but believe me, it works. Again, I submit that keeping it simple gets the tool out of the way of the truly powerful tool that we all have - our brains.
Copyright James Hawkins 2009
Given this, I've come to the conclusion that a simple tool can be more useful in making managment evaluations. This allows ones powerful mechanisms, whether you want to call it intuition or unconscious thought, to make less clouded, and hopefully better, judgments.
The tools we have developoed, and which we use regularly, is ARC, which stands for Attitude, Reliability, and Competency. We submit that different forms of these characteristics, with different expectation levels for different positions, in combination are one way to consider the value of an individual to an organization.
Attitude is simply a subjective measure of how positive the individual is. Reliability is simply a subjective measure of whether you can count on the employee. Finally, competency is a subjective measure of how well an individual performs his duties. Note that competency is not general, but job specific, thus a competent janitor may not be a competent controller, and vice versa.
We have used this so much we tend to refer to people's ARC score with an organization wide understanding of its meaning. For example, "he's a 10-9-9" would mean his attitude is a 10, his reliability is a 9, and his competency is a 9. One's ARC quickly comes up when we discuss an employees prospects with the company, and is an integral part of our weekly comprehensive strategy meeting.
I know it is simple, but believe me, it works. Again, I submit that keeping it simple gets the tool out of the way of the truly powerful tool that we all have - our brains.
Copyright James Hawkins 2009
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