Business Management

When Merriam-Webster announced in July 2007 the twenty new words that had been accepted into the dictionary, I was delighted to hear "ginormous" had made the cut. What a great word! An obvious merger of "gigantic" and "enormous", it far more accurately conveys the sense of hugeness neither of the other words adequately communicates alone.
The word handily describes the humongous untapped innovative potential within any organization - the power of passionate employees working together.
Contrary to conventional wisdom, breakthrough ideas come from collaboration rather than a genius working alone. The light bulb, for example, came from the creative efforts of everyone on Thomas Edison's laboratory team who shared the same vision and passion about creating something brand new.
In a June 2007 U.S. News & World Report article, Keith Sawyer, author of "Group Genius: The Creative Power of Collaboration", was interviewed about his research that spawned the book in which he talked about the need for a shift in current management thinking that would enable the unleashing of this innovative spirit.
Envision, if you can, a culture filled with a brand new vocabulary:
Full autonomy freely given to small groups of talented people and an absolute willingness to accept and embrace the surprising and ingenious outcome of uninhibited collaborations.
Now, consider what might be possible in your organization! A recent study cited in the same US&WR article showed 14 percent of the "substantial innovations" that come out of small groups account for 61 percent of all profits.
What do you think would happen if you were to remove every barrier that prevented employees from forming collaborations on their own to come up with solutions to your most vexing problems and develop new ideas? Do you know what your employees are passionate about? Do you have a clue about what they love and excites them about getting up every morning? If you were to discover employees' passions and connect them to their jobs, you'd have the key to making work effortless joy! I believe you'd have something truly rare and totally... ginormous!

A risk is an uncertain event or condition that, if it occurs, will affect your IT system/project objectives (or targets, or goals) and may have a positive or a negative effect. There are usually far more things that are likely to go wrong with an IT system or project than are likely to go right, so risk management is generally the art of trying to prevent things going wrong.
For most IT systems we can identify at least four objectives:
1. Functionality: the characteristics or performance of the expected system
2. Quality: the level of excellence of the system deliverables
3. Schedule: the dates by which functionality has to be delivered
4. Cost: the budget under which the system has to be delivered
There may also be other objectives, such as:
5. Safety: The system may have to work within a safety regulatory framework, or, at minimum, must be safe to operate
6. Environmental: The system may need to work within an environmental regulatory framework, for example, in a power station or in a gas pipeline
7. Political: There may be a need for the system in avoidance of political embarrassment e.g. a new passport control system to replace a discredited one.
A risk is any future event that would cause your costs or schedule to increase, or would result in reduced functionality or quality of the project deliverables or would impact on any subsidiary deliverables you have identified.
The risk management process can be divided into six operational areas:
1. management planning
2. identification
3. assessment
4. quantification
5. response planning
6. monitoring & control
The job of a risk manager is to manage all these processes. Lets have a look at them in turn:
1. Risk Management Planning
A typical plan will define:
1.1. Activities that are to be carried out. including risk identification, assessment, documentation, customer response, tracking of responses and execution of responses
1.2. Roles and responsibilities
1.3. Timescales and work breakdown of who does what
1.4. Criteria to use when assessing risks eg are we assessing based on cost to the project, or effect on timescales, or both
1.5. Reporting method
1.6. Review timescales
2. Risk Identification
The process of identifying what might go wrong with your project. Identifying risks is a matter of accessing information that is available to you as a corporate body.
Typically this uses:
2.1. Risk Databases: a collection of information derived from experience on previous projects.
2.2. Risk Checklists: a list of areas where you might expect problems to occur.
2.3. Information Gathering Techniques: getting information from a wide range of individuals using techniques including brainstorming, Delphi technique, and interviewing.
2.4. Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis: can identify risks in the client company which might impact on the system..
2.5. Specialized Techniques: such as cause-and-effect diagrams and various forms of flowcharts.These are often used when interviewing people with specialised knowledge of the proposed systems functions eg engineers or accountants
3. Assessment
This means estimating the severity of a risk in order that you can prioritise and deal with the severe risks first.
Risk severity is usually defined in 3 quantities:
3.1 Impact: the effect if it happens
3.2 Likelihood: the possibility of it happening
3.3 Precision: the degree to which the risk is understood
4. Risk Quantification
Risk quantification is the process of measuring the probability of a risk and its impact on project objectives. Unlike risk assessment, risk quantification aims to produce verifiable numerical values. Risk quantification typically uses techniques to:
4.1. Determine how risks will effect the costs and timescales of the project
4.2. Determine probabilities of finishing on time and budget
4.3. Make appropriate amendments to project plans depending on the risk factors quantified
5. Risk Response Planning
There are four ways in which you can respond to any risk:
5.1 Avoidance: Arranging the system ( or the customers business) so the risk is no longer relevant.
5.2 Acceptance: Acceptance means deciding to live with a risk, i.e. accepting it. (Note, if you do this, you MUST document your reasons)
5.3 Mitigation: taking positive action to reduce the severity of a risk either by reducing the likelihood that the risk will occur (risk abatement) or by reducing the impact that a risk will have when it occurs (sensitivity reduction).
5.4 Transfer: the process of transferring the effects of a risk (usually the financial effects) to another party eg by outsourcing support
6. Risk Monitoring and Control
Risk monitoring and control is an on-going process which should last for the life of the project. Its chief requirements are:
6.1. An organized method of monitoring risks.. Typically this is done as a part of regular project meetings
6.2. Individual ownership of risks. Each risk must have a person who will be responsible for keeping the information about that risk up to date, and ensuring that response actions are carried out.
6.3. A risk information system. A standardized reporting system is advisable to help remove subjective interpretations of risk severity. This is usually an on-line database accessible by everybody on the project.
6.4. Periodic risk reviews. Carried out at intervals throughout projects to determine if risks have changes
6.5. Independent risk analysis.. External risk management contractors are often used to obtain an outside view and ensure the risks are being managed objectively.

Your business relies on technology and computing systems that are becoming more complex by the second. Trusting mission-critical systems to simple backups and upgrades is no longer enough. Many small to medium-sized businesses are finding themselves in need of a solid IT firm to manage their technology needs rather than relying on their "friend of a friend", or part-time computer technician. Here are some tips to greatly increase the odds you choose the right IT consulting firm for your business.
Determine your company's high-level technology needs. Do you have any specific wants or needs, such as email, a website, or a server? Are you concerned about data security or disaster recovery plan? What is it about your significant business processes that can be improved on by technology? What kind of growth do you expect in the next 1-3 years and how will your current technology solution handle it? Is someone even helping you plan for this growth? These are the types of overarching questions you should consider before you consult with an IT firm. Having a list created is key to relating your desires to the IT firm and also provides good basis for a conversation that can be elaborated on. You may not be familiar with your technical options that exist so let your IT firm help you. The IT firm with which you contract should provide a technical assessment that identifies the current state of your technology and learns how it interacts with your day-to-day business functions. How can an IT firm support you in a cost effective manner if they are not familiar with your specific setup?
Make sure the IT firm you select has adequate resources. Your business probably needs 24/7, 365 day support. What does the IT firm have in place to accommodate this level of service? Do they proactively monitor? Do they have offer expedited service? Computers crash at the most inopportune times and your computing needs often do not take holidays. If you contract with a sole proprietor you will be putting your business operations and data at risk by relying on a single individual that can become ill, be out of town, etc. Making sure they are an established firm with a good track record of service to numerous clients is an invaluable, mandatory step in choosing your IT service provider.
Ask IT firms about their processes. Like any business, an IT firm should have established business processes and procedures on how they operate on a daily basis. If these core processes are non-existent then how will the IT firm bring any type of order to your chaos? During the initial meeting, a IT firm should be able to quickly describe their maintenance, repair, service, and support processes and show examples of documentation. Ask about their company's philosophy, mission statement, and examples on how they practice that mission statement every day.
Check references and certifications. Ask potential IT companies for at least 3 corporate references and speak to them. Trust is a difficult asset to hand out to a new IT firm, so speak with someone who has already made the leap. You can also ask for a list of certifications such as Microsoft's Gold-Certified program which assure the company has been through intensive training and quality control programs.
Evaluate the personalities. Ask to meet the folks in the company with whom you will have the most interaction. Are they condescending tech geeks or friendly and approachable professionals in whom you can trust. Remember these folks will have access to all your company data - choose carefully. You are looking to create a trusting relationship so make sure you like them!

Searching the details of a person can be an easy task. Pay a few dollars and within a few days time you will receive all the background check results of that person. There have to be some laws to protect people and their privacies and the way the background checks are used.
This is where the background check laws were created. A long list of laws have been crated under various categories, some of the laws have been listed below.
Running background checks for fun cannot be done; you must have a permissible logic or reason behind conducting these background checks. A guarantee must be given from your side. The guarantee must state the purpose of the check and that the reports will not be used for any other purpose.
The background check may come out with negative results in such case you must inform the candidate in advance of the actions which maybe harsh that will be taken against them. If you will cancel their credit or credit card etc it must be informed in advance so that they can think and then take a decision.
When you run a background check before employment certain steps have to be followed. The candidate should be aware that a background check will be run on him. A proper background check authorization in written form and duly signed by him must be acquired. Both these above mentioned actions to be conveyed to the background checking company and a copy of the report must be provided to the would be employee as well.
Asking for a medical background check for the purpose of a job is not permissible. Incase you are keen then you can run a medical background check only after getting the consent of the candidate. This is also known as medical background check authorization form and it should be filled by the candidate and signed by him under no pressure.
Many people run businesses on background checks. They conduct the check and then sell it to others. In this case there are few laws to be followed. The reason the final buyer is buying the background check to be informed to the investigating agency. The name and address of the final buyer also to be informed. If there are more buyers then all their details should also be filed.
There are many more laws which you must abide by when you want to get a background check done. These laws are very simple to follow and an absolute must too.

People talk about the 80/20 rule quite a bit.
20% of your customers produce 80% of your profits.
80% of your problems come from 20% of the customers.
20% of your activities produce 80% of your results.
Let's talk about this in regard to how you're spending your time. Since 80% of your activities only produce 20% of your results, and the other 20% of your activities are producing 80% of your results...wouldn't you be better off concentrating only the 20%?
Let's say someone works 12 hour days. It's almost unbelievable to me that people work that much, but I've spoken with MANY who do so. Sure I could understand and have done a 12 hour day right before a vacation or on the last day of finishing a project. But working that long every single day? That's the surefire recipe for a breakdown, both physically and mentally.
Applying the 80/20 rule to their 12 hour days means the 80% is 9.6 hours and the 20% is 2.4 hours. If we cut out the 80% that isn't producing very well for them, we would only have 2.4 hour days. Now there's a schedule I like.
Something I often suggest to my coaching clients is to make an activity log for the next week. Every day, simply list all the activities for the day and how long it took you to do them. At the end of the week rate each of those activities by how well it is building your business.
You're going to find you're wasting way too long on certain activities.
You may find like many of my clients these activities include:
- Reading too many blogs (Limit the number you subscribe to)
- Subscribing to Internet marketing newsletters that only sell without providing good quality content.
- Answering Email All Day (no more than twice per day and shoot for once per day or less)
- Surfing the Forums (I can't think of a bigger waste of time if you're not there for the purpose of generating traffic by participating)
- Calling Someone Without a Specific Plan in mind (you can waste an hour with no results - keep it short and planned)
All of the above are activities people do to make them FEEL like they're working instead of doing any real work. They also consume your day.
What are you personally doing that is wasting your time? What do you do to replace the real work of your business?
Usually these are activities that consume much of your day...and don't show any real results at the end. They are part of the 80% producing only 20% of the results.
Next ask yourself which activities really bring in the cash.
For example, for me, these cash producers include:
#1 - Writing (used for the blog, new products, and article submissions)
#2 - Copywriting (sales copy for my sites, tests, and emails)
#3 - Product Development (recording videos and doing interviews to create products)
#4 - Business Development (creating systems for others to do the work - could also be listed as the real #1 cash producer but I love the writing part the best)
Where do I waste my time?
I asked myself this question lately and had to answer I had slacked on following my own email rule (answering no more than twice per day max which I do for the coaching clients). So I'm pushing myself strictly back to this.
I've also allowed myself to check the comments on my blog too often. So for the time being I'm turning off blog comments. For me they are part of the 80% that's not really producing the results.
Be honest with yourself...and figure out where you waste your time. What parts of your business are the 20% producing 80% of the results? Which parts are the 80% only producing 20% of the results? What can you eliminate or outsource immediately?

Six Sigma-The Best Management Improvement Tool
Every business unit aims at reducing defects and maximizing quality. Six Sigma helps greatly in this regard by eliminating the defects in a work process by a series of methods. Thus, delivering the end-user or customer a high performance, reliable and valuable product.
Theory Of Constraints- A Theory With Substance
The biggest advantage of the theory of constraints is that it not only helps to manage a complex system but also determines the root cause of any problem as well. The very first thing that a business unit must consider before implementing Six Sigma, is whether the chosen project is feasible enough or not. Often, it so happens that on the account of choosing wrong projects, the quality and productivity no doubt increases, but the net profit of the organization remains unaffected as before. This is a major constraint and the theory of constraint works along these lines.
The theory emphasizes five points. They are:
Step 1-Identify System Constraints
First look for the constraints or hindrances in the system of the organization.
Step 2-Decide How To Exploit The System's Constraint
Once you have identified the constraints, then search for a Six Sigma project that will minimize the waste of the constraints by exploiting the constraint itself.
For example, if machinery is proving a constraint in the work process, then apply a Six Sigma solution that concentrates on reducing defects by reducing setup time, eliminating scrap as much as possible and keeping the machine in optimal condition for as long as possible.
Step 3-Subordinating Everything Else To The Decision Made
Next make certain that no other aspect of the system interferes with the throughput (output in a specified time period) of the constraint.
Step 4-Elevating The Constraint
The fourth step entails that the constraints should be lifted or elevated by the way of acquiring additional capability or offloading some load onto other resources within the system.
In machine constraint, elevation of the constraint can be done by purchasing additional equipment or employing workers who possess additional skills in operating the machine.
Step 5-A Constraint Has Been Broken
If a constraint is broken in any of the previous step and another element of the system is now becoming a constraint or a limiting factor for our chosen constraint, then go back to the first step and rethink the strategy.
Theory Of Constraints And Six Sigma-A Winning Combination
The theory of constraints is one of the best TQM techniques because it saves a lot of time and effort. Project selection, the very first step of theory of constraint, helps a Six Sigma team to choose the right project because wasting Six Sigma resources on already strong links of a unit will yield nothing. On the other hand, choosing a weak link for implementing a Six Sigma project will further help in reducing your defect level, thus maximizing quality.
Secondly, the theory by recognizing the constraining element in the very beginning saves a lot of waste of the output of the constraint. Additionally, the Six Sigma team also comes to know about the tools and techniques that can replace the existing constraint and the ones which are functioning well and are not to be touched. However, replacement must be avoided at all cost, unless it is absolutely necessary to do so, because replacements again result in the waste of the constraint. It has been established time and again that, when the theory of constraints is applied with Six Sigma techniques, the results truly provide an efficient, bottom-line improvement.

DMAIC stands for Define, Measure, Analyze, Improve and Control. Here we analyze how these steps can streamline the business planning process.
Define
This is the phase that requires attention to VOC, which is 'voice of the customer'. Here you are the customer since the business plan is meant to serve you. There are other minor customers, such the government, partners and shareholders etc., and all have an interest in the business. Here you define what you wish to achieve with your business in the near and foreseeable future.
Measure
The purpose for measurement is to set the targets to be achieved. The baseline for measurements is the previous year's budget and accounts. For making a business plan, the previous year's gross margin and profit in dollar terms would serve as parameters to determine the projected targets that need to be achieved.
Analyze
This is the stage that requires you as the business owner to put in the maximum effort, as it is here that you will critically examine your business to identify areas for improvement. As overall business objectives are achieved through a variety of actions, it is necessary to break down the entire process into different activities, depending upon what exactly your business does. However, there are some activities that are common to most businesses that are helpful in understanding the process.
For example, if your objective is to achieve one million dollars in profit with a gross margin of 15 percent, all activities to support this objective will need to be mapped out. This can be easily done with the help of a fishbone diagram, which is a simple graphical tool used to create a structure that would delineate the interrelationships between the different aspects of the business. Using some other analysis techniques along with this will help you gain an in-depth understanding of the more complicated aspects of the business.
Improve
Once you have completed the analysis, it is time to initiate improvement-oriented actions. If you have decided to make improvements to sales through a marketing campaign, the improvement stage is where you determine the modalities.
The entire action plan for overall improvement would be a collection of small, individual activities but each would be tied into the fishbone diagram reflecting support to the overall objective.
This would serve as a reference document to identify the message, targets, timing and vehicle; which would actually detail the who, what, how and when -keeping you focused.
Control
This is the monitoring stage. Here you would list the activities that you would undertake to ensure that you are keeping track of progress, and taking whatever corrective action is required for putting things in order if they go off track.
This may involve some sort of periodical reporting connected to lead conversion, production, sales, cost reporting or service delivery.