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changechangechangeWe came across a good article recently on the difficulties of “organizational change management” – and what to do about them.  It’s an issue every company faces at one time or another, and although the author (Eric Kimberling of Panorama Consulting) normally opines about most things ERP, his comments are apropos of most any organization that is challenged by change.  We’ll share those thoughts here today.

Speaking specifically of ERP software projects (but really, of any structural organizational change), Kimberling notes that change resistance can come from every level of the organization.  Executives may fear that the change does not align with their goals and objectives.  Others may feel their voices were not heard.  End-users may resist because they don’t understand why change is even necessary (or worse, we might add, the dreaded “… but we’ve always done it this way.”)

Once you’ve identified root causes of the resistance, Kimberling suggests four strategies to help employees accept change:

  1. Understand objections. Too often, the importance of listening is overlooked.  Employees generally care, often a lot – and simply want (and need) to be heard.  Readiness assessments, surveys and focus groups can help.  But don’t discount the value of simply asking, listening and communicating thoughtfully.
  2. Encourage employee engagement. As Kimberling states: “By involving employees in key decisions, they will be more likely to support organizational changes.”  Employers should strive to help employees understand how the change relates to them specifically, if they want to create a sense of ownership.
  3. Communicate organizational goals. Directly communicate with employees about the changes, the impact, the effects on them, and the reasons behind the change initiative.  Talk about tangible goals, other examples or past successes.  Focus on outcomes in order to create a desire for change.
  4. Finally, don’t give up. Any employee can become an advocate for change, but it takes time.  Don’t lose hope in your team.  Instead, he suggests, “focus on converting the strongest, loudest dissenters so they can use their energy for good.”

The most effective change management strategies require planning and communication well beyond the bullet points on a memo.  Take your time, plan, and communicate constantly.  As many business owners will tell you, change is about the hardest thing to master in business.

The Myth of Going Viral

going-viralEvery blogger, web poster and Twitter or Facebook aficionado dreams of the day one of their posts goes viral.  (We wrote of our own brief brush with viral fame back in 2010 with a post on multi-tasking that reached  2,500 hits – still trivial by internet viral-ity standards.)

But as it turns out, going viral is usually not what it appears to be.  When we see a Facebook post with thousands of shares, or a YouTube video with millions of hits, we’re inclined to think that’s the result of countless ‘personal’ shares, “like infected individuals passing along the flu,” as Derek Thomson, author of Hit Makers: The Science of Popularity in an Age of Distraction, noted in a recent article for Time.

Apparently, for a long time no one really knew whether a popular idea or product was truly viral.  It was hard to track precise word-of-mouth buzz.  But online, scientists have been busily studying information as it pings around the Internet, and in 2012 researchers at Yahoo studied the spread of messages on Twitter.

Their conclusion: nothing really ever goes viral.

Thompson notes that more than 90% of messages did not ‘diffuse’ at all.  About 95% of what we see on Twitter comes directly from its source, or from one degree of separation.

Thompson writes: “Popularity on the Internet is still driven by the biggest broadcasters – not by a million 1-to-1 shares, but rather by a handful of 1-to-1 million shares.”  They come from a wide range of blast points –not just the legacy TV companies like NBC, CBS or Fox, but from places like Reddit or, yes, the Kardashians.

While the viral myth is enchanting to writers because it feels so uplifting, promising small-time writers, photographers, artists and videographers a shot at widespread artistic fame, alas, it rings mostly false.  While it might feel good to think of the Internet as a bastion of democracy where anybody can become a star by making something interesting or good enough, it’s not really the case.

In the end, as Derek Thompson says, “virality is a David myth obscuring the fact that the Internet is still run by Goliaths.”

 

code-schoolThey’re called Code Schools.  Scattered now across the U.S. is a growing number of usually short-term (i.e., 12-week) intensive training programs aimed at providing core skills to a growing army of tomorrow’s workers: coders, aka programmers.  These may well be the bricklayers of the 21st century.

In a recent article in the Wall Street Journal Christopher Mims points out one such enterprise in Akron, Ohio, that charges about $14,000 for its three month course of study.  Graduates include Alex Mathis who said “If you’d told me several years ago that I was going to be a computer programmer and working for a software company I wouldn’t have believed you.”  Mathis went from being a shipping manager to a higher-paid programmer upon graduation.

As Mims notes, “Across the U.S., change is coming for the ecosystem of employers, educational institutions and job seekers who confront the increasingly software-driven nature of work.  A potent combination – a yawning skills gap, stagnant middle-class wages and diminished career prospects for millennials – is bringing about a rapid shift in the labor market for coders and other technical professionals.”

Mind you, these code schools aren’t necessarily creating rock stars.  These aren’t the top of the food chain programmers who end up at Google or Facebook.  These schools, rather, are designed to turn out the junior developers and apprentices that will later be dropped into teams of other, more experienced programmers, to ply their craft at today’s industrial and knowledge companies, while furthering their educations there.

Most are engaged in the truly productive work of transferring and translating business processes into code, or mining data for business advantage, or maintaining and upgrading legacy systems.  In short, they’re doing the work that stokes the American business engine.  Critical infrastructure work designed to help companies grow.

On a personal note, firms like ours can perhaps be allowed a touch of pride for providing exactly that sort of work for clients (for, in our case, these past three decades).  In this blog we’ve bemoaned the dearth of effective programs for training the next generation of productive workers for this economy.  We’ve noted the successes of Germany and Japan in realizing that not every student was meant to go to college, and so have built apprentice programs and guilds that help ease young people from the realm of highs school students into the professionally employed – especially in manufacturing.

And so we can only nod approvingly when Mims concludes his piece as follows:

“U.S. manufacturers have spent decades developing guilds, vocational training programs and in-house retraining efforts to keep workers up to date… What is happening now with code schools is very much the reinvention of that system, but for professionals who work with bits, rather than widgets.”

 

NAV LOGO 2016Users of Microsoft Dynamics NAV software know what we learned ourselves about 15 years ago: that they’re fortunate to own about the best all-around ERP software on the planet.  As resellers, we have choices about what to sell (we offer two today, as we long have, NAV being one of them).  And after extensive research some time ago we eliminated a wide range of options to settle on NAV – before, incidentally, it was even owned by Microsoft.

Fifteen years later, our opinion has not changed much – though NAV itself has.  It’s grown and matured and opened even further into realms of deeper functionality and interoperability with lots of other software and add-ins, like most software today.  But it’s retained its extensive flexibility, modifiability, customizability and extensibility – now across multiple platforms – and allowed deeper analysis in the hands of those who know to handle it, than probably anything out there today.  It does this in large measure because at its core it was developed, years ago (in Denmark) as a world-class platform by some world-class programmers, who in hindsight were ahead of their time.

Because it’s been around a while, folks running older versions of NAV occasionally need to consider the question of upgrading what they have, which means stepping through the various subsequent versions if they have not stayed up to date… or taking another look at their business through the lens of NAV today, with all its new features, capabilities and cross-functionality with add-in products, and deciding whether they should consider re-implementing with the new version.  This could mean moving away from old modifications because the new software may now innately support the desired functionality, or simply because the old workflows can be replaced by NAV’s new and improved workflow capabilities.

For example, if you’re on NAV 2009 (or prior), your business is probably different from back then.  As NAV blogger Duncan Kerr asks of that situation in a recent post at MSDynamicsWorld.com, “If we were doing this now, how could we make it even better? Are those old databases and modifications worth hanging on to?”

Often, old customizations become new “features” of newer NAV versions.  For example, he notes, item attributes that were previously a customization are now standard, and there are better ways to link dimensions today through standard functionality.

Then too, we’ve seen folks with modifications that in hindsight they may not have needed once they discover the full capabilities of NAV.  Kerr points out the power of “workflows” in the latest NAV 2017:

“The redesign of the Dynamics NAV workflow engine means you can very quickly and easily introduce a workflow that allows you to control your business, and solve business problems. There is now an internal NAV workflow engine – but also the wider Microsoft Flow within Office365. In the past you would find yourself saying “The costs on that item were wrong, now my inventory’s wrong,” or “The customer wasn’t credit checked and we just found out he’s a bad risk.” Now you have out-of-the-box workflows to review those things before they’re used.”

Kerr summarizes his thoughts about upgrades and re-implementations by noting that “The point of an upgrade or reimplementation isn’t simply about functionality; it’s also about moving to a platform that allows using a wider range of technology, like Office 365 and Power BI. The technology feels fresher and more modern, and you’ve got staff coming in who expect to see the latest and greatest.”

NAV users who remain current on maintenance have the good fortune of knowing that those benefits are within their grasp, and often worth pursuing.  They already own their software, so it’s really just a matter of the time-costs required to do the upgrade, and not starting over – as so many older ‘legacy’ ERP and accounting system users are finding themselves doing today.  In other words, upgrading, even re-implementing, become another way to extend your business software ROI.

 

 

jack-welchA recent article in the Wall Street Journal “C-Suite Strategies” Report by Dr. Peter Cappelli, Director of the Center for Human Resources at Wharton, delves into our rather natural tendencies to put people into categories – especially in business.  We do it, he points, because it’s useful, providing managers with an easy way of thinking about people.  At work, we typically put them into boxes: The A players, who perform well, the C players, who perform poorly, and the rest, the B players stuck in the middle.

But Cappelli suggests this does companies and employees a lot more harm than good.

For starters, he notes, the boxes are just plain wrong.  Broad categories miss a lot of subtleties and “people’s true talents and strengths often get ignored.”  The notion that good players are always good creates a ‘halo effect’ in the mistaken belief that if you’re an A player in one thing, you will be an A player in another.  And these prophecies too often become self-fulfilling, if misguided.  When we give stars more opportunities to succeed, we risk denying those chances to those we expect to fail.

Former GE CEO Jack Welch abided by this tack with his famous “vitality curve” describing differences in employee performance and used as justification for forced ranking systems in which the bottom 10%, relative to other employees were usually shown the door.

And of course, once workers are labeled as the C player, they are usually shunted aside, or as in the GE case, out the door – even though on the next assignment, or with a little help, they may well improve in the next period.  Meanwhile, players labeled A-level are assumed to have more ability and get designated as high potentials.  “Research shows that when employees believe their current performance isn’t recognized, they are stuck with a B player label even if their performance shoots up… incentives no longer motivate them, so they give up trying.”

How do we shake off the natural inclination to put employees into boxes then?

Among Cappelli’s suggestions:

  • Respond to employees’ performance more quickly, reflecting on how variable that performance actually is. This might mean paying an excellent bonus for superb performance in one period or project, and perhaps none for lesser work on another project.
  • Monitor performance. Where possible, take people out of high-potential programs and slot in people whose performance is surging.
  • Create new performance categories based on the actual tasks people have to perform. Who is good at managing projects, negotiating agreements, running meetings?  “Knowing such things breaks down the tendency to rely on a simple good/bad employee classification.”
  • Finally, supervisors should be “active about managing subordinates.” Cappelli notes that “the evidence is overwhelming that it does matter how we set expectations, assign projects, hold people accountable for performance, provide feedback and so forth.

Finally, this: Surveyed HR leaders say their number one employee-potential assessment method is “management judgment” followed by “performance-review results.”  Nothing else even came close.

multiplierBeing that we are providers of business software and consulting solutions predominantly to manufacturers and distributors throughout the Midwest, we have a presumed (and accurately so) bias towards manufacturing.

For that reason we are pleased to reprise a few comments made recently by Forbes Magazine “Editor at Large / Global Futurist” Rich Karlgaard, in his column “Innovation Rules.”  In an article criticizing the high cost of regulation to business, he cites current administration proposed reforms that he believes will greatly – disproportionately, even, and “quite intentionally” – help the manufacturing sector, which as noted in our article title he says has “the best wealth- and job- multiplier effect.

In the article, Karlgaard quotes economists Mark and Nicole Crain that “The costs of federal regulations fall disproportionately on manufacturers…[who] pay $19,564 per employee on average to comply with federal regulations, or nearly double the $9,991 per employee costs borne by all firms as a whole.”

Since the era of globalization, notes Karlgaard, “manufacturing as a percentage of the labor force has steadily fallen from a peak of 22% in 1977 to about 8% today.”

And lest one think that’s due solely to automation, he points out that Germany and Japan, both world leaders in robotics and among the most technologically advanced economies in the world still retain healthy percentages of their respective populations in the manufacturing sector – 20% of Germany’s workforce and about 17% of Japan’s work in manufacturing.

And that’s not just T-shirts and plastic toys – we’re talking about high tech manufacturing from autos and chemicals to robots and aerospace, 3-D printing, shipbuilding and the like.

The bottom line: manufacturing still matters.  A lot.  And it could matter even more, as resources are focused, training programs expand and regulations are judiciously refined.

And a final postscript to our manufacturing comments…

Just today, as we write, the Institute for Supply Management published results showing that “U.S. factory activity grew at the fastest pace in 2-1/2 years in February as new orders and production advanced.”  Their supplier indicator showed that manufacturing was in a state of “expansion.”  Their report goes on to state that “17 out of 18 manufacturing sectors reported growth” in the month just ended.  It notes that the economy overall grew for the 93rd consecutive month.

 

startupthecityTonight in South Bend, Indiana, a student group that I’ve been proud to be associated with for the past two years will be hosting a grand event that’s been months in the planning – and it’s already a sell-out.

StJoeCEO is a group of over 30 high school seniors (and one junior) from seven area high schools in its second year, with a mission of developing tomorrow’s young entrepreneurs.  For several months now the students have been building support for their big event at the Palais Royale in downtown South Bend.

(Disclosure: I am a board member and the CFO of StJoeCEO, but much more interesting and importantly to me, an occasional in-class volunteer and a mentor to several of these bright and enthusiastic students.)

If you ever despair of the future, given all the divisiveness surrounding us today, just find a group like this to turn your head around.

Tonight’s event, Startup The City is a celebration of the entrepreneurial spirit, and of the tremendous strides that the city of South Bend has made in just the last couple of years.  The event features “Venture Valley” and “Innovation Way” that will showcase local entrepreneurs… “Panel in the Park,” a panel discussion including South Bend Mayor Pete Buttigieg, Chamber CEO (and former area mayor) Jeff Rea, and a host of local business dignitaries… and showcase presentations by area start-ups.

For the students, it’s an opportunity to put into motion what they’ve been learning the past few months about business, innovation, strategic thinking, finance and emotional intelligence, not to mention marketing, sales, pitching, record-keeping and flat-out entrepreneurial thinking.  Program Director Iris Hammel and her co-teacher Bethany Hartley have been tireless in their efforts to set a high bar for these kids – and they appear to be exceeding.

Collectively, the StJoeCEO team has already raised around $80,000 in event funding, half of which will later go to fund the students’ own start-up businesses, which each will be diligently working on as soon as Startup ends tonight.  In the coming weeks, each will give a ‘Shark Tank’-like presentation to a panel of local business and investment professionals, and will ultimately share in funds that will help them launch their own local businesses.

What a great way to learn about entrepreneurship and the many benefits of their hometown community.  I am excited to attend this evening along with about 300 other folks, and look forward to working with these students the rest of the year.

You can learn more about StJoeCEO here.  They’re currently accepting applications for a few spots in next year’s classes, and are in the process of adding a college level program and an Elkhart area class as well.  I encourage anyone who knows of a bright young high school junior to check them out.

And by the way, local business community… investors are ALWAYS welcome!