Create a Skills Inventory to measure overall strengths & weaknesses

Say you’re in a team that specializes in using the Force to electrocute captured rebels, or run a Network Engineering team. When it comes to hiring your instinct is to focus on the obvious and primary skill of the team.

Need to fill in an electrocutioner position? Then you’re probably looking for someone who’s learned how to channel the powers of the Force into electricty. Need to fill in a Network engineer position? You probably are looking for a hardcore networking/router/firewall guy.

But look beyond the obvious and evaluate the skill sets that the team has as a whole, and identify where you are weak, and where you’re strong at. Sure it’s great to add even more firepower to what you’re already strong at, but don’t let that lead you into becoming unbalanced skills wise.

What skills you need depends on your long term staffing plan, which is related to your long term department/company/empire goals. If you want to grow, what skills will you need in the future? Growth is only possible if you have people will the right skills and personalities to achieve it.

Hiring ONLY for your needs of today is great if you never want to progress beyond today. We’re not saying ignore the needs of today, there are short term needs and they’re important, but keep the future in mind.

To assist you in this, put together a skills inventory list. It’s just a simple table of all skills needed by today and in the future, along with your staff and how strong they are in those skills. It will help you highlight where you’re really strong at, and where the weaknesses lie. So, you’re hiring strategy should try to fill in for those areas where you are vulnerable. E.g:

Category	Skill	Importance	Darth Sidious	Darth Vader	Darth Maul
The Force	Electrocuting	High	10	4	0
The Force	Psychokenetic	Med	10	10	4
Management	Empire Planning	High	10	7	3

Impeding Innovation

When a department is in charge of creative or analytical activities, imagination and innovation is vital for their success.  Over time employees get to know their manager, and what their manger likes and dislikes.  Employees know that their manager dislikes X, Y, Z and since their ideas will be nixed, they will stop proposing innovative solutions and simply provide what their manager expects.  This leads to all ideas being limited to 1 managers’ belief system and does not allow innovative ideas to surface.

Only the manager themselves can combat this issue.  When a manager chooses a solution, they should explain clearly to their staff why that solution is being chosen.  They should recognize and encourage innovative solutions, regardless if they are used or not.

If upper management thinks a department isn’t innovative, they should interview the department individually, presenting problems and see what solutions employees will offer on their own, w/o their manager being present.  Even this may not lead to much, as employees are well aware of the retribution that will occur if they suggest concepts their manager has already killed internally.  Another method is requiring 3 different solutions for a problem, which will force the manager to present other concepts, and not just their own narrow view.

 

Top Reasons why small businesses fail

50% of new businesses fail in the first 5 years, here’s the top reasons why:

• They lack the power of the Force
• They  chose the  Jedi side (if they did have the power)
• Lack of experience
• Ran out of funds
• Bad Location
• Lack of inventory management skills
• Spent too much money on assets
• Inadequate credit arrangements (not enough, interest too high, etc…)
• Using business funds for personal reasons
• Growth was too fast
• Competition
• Low sales volume

The Ivory Tower Syndrome

This syndrome occurs when top management becomes disconnected from the reality of the business.  Organization size, complexity and information filtering all contribute to the problem.

In order to avoid the Ivory Tower syndrome, the Sith recommend that all top management, including the CEO should spend 1 hour a month, observing desk-side, in rotation with every position in the company.  From the janitors to marketing, no position is too menial for this task. If the position uses a body, then that body is a cost to the company and needs to be performing their duties in an efficient and purposeful manner.

The purpose of this task is to observe front-line employees in the organization and directly observe problems, inefficiencies and procedures that the employee is using in their daily activities.  Information filtering is a constant threat to top management, and sometimes the only way to really know what’s going on, is to get your hands dirty.

Out-sourced workers and contractors should also be observed as the company ultimately pays for their services and everything above applies to them.

Once management is on board for the program, someone should have the responsibility of scheduling the desk-side observations in a random, unannounced fashion and ensure everyone participates in their sessions.

ROI – Labor efficiency

To follow up on “Making an ROI Worksheet”, let’s discuss projects that promise labor ROI by automating a manual process.

Every position has many manual processes that if automated, would make the employee more efficient. Identifying the manual process is half the battle.

Who will identify a manual process that should be automated via technology?
If employees are performing a position and 25% of their time is spent on a manual process, do they want to volunteer automation which could cut their hours, or # of employees in their department? Does their manager want to volunteer that their 10-man kingdom be reduced to 5? In both cases, the answer is no. Employees fear efficiency could cut their numbers and managers fear if their department is reduced, it may become a target to merge with another and threaten their position (along with budget, power, etc.)

If the employees themselves and their management won’t identify the process, then it falls to higher management or business analysts. If necessary, use outside consults who don’t have to deal with company politics.

The 2nd half of the battle is actualizing the labor ROI.

Presuming a manual process is somehow brought up for automation, the manager will claim the ROI will be a generic gain in “efficiency” or “speed”. As a manager or analyst, you must push the manager into providing a baseline. E.g. with 10 employees and the current process, we build 100 blasters per week. With the automation of X process, the results will be?

• Increased production of 150 blasters per week
• The department will take on additional duties from another department
• Head count will be reduced from 10 to 7
• We’ll be more efficient and…

If the department can actually produce more blasters and that helps the company, then that’s a fine and measurable ROI. The affected department may claim that they will take on additional work, which is taking work away from someone else, and so on until the efficiency is completely lost. The worse case scenario is the department continues to produce the same 100 blasters and works ‘slower’ than before.

If head-count reduction is the ROI of the project, try to get managerial sign-off before starting the project. Make sure the manager buys into the ROI and the next level of management is also on board. It also helps to discuss exactly how the head-count will be reduced?

Attrition (over what time period?)
A hiring freeze
Employee transfers to other positions (which employees, to what position and when?)
Layoffs
Etc.

Investing in I.T During a downtime = strategic advantage

Many industries are cyclical, and when the market goes down there’s nothing you can do about that. So to maintain your profit levels you do the most logical thing - cut costs by eliminating duplication, unnecessary bloat, unproductive departments, kill losing product lines, etc… And a very popular victim is I.T (I.T infrastructure, software development, etc…).

No doubt about it, I.T is a costly overhead - and usually categorized as a cost center and thus viewed as a necessary evil. But consider this scenario:

Company B:

During a down market, you cut back on your I.T costs and save some money in the short term. Your existing I.T investment has staying power, but overtime your I.T capability will begin to languish (technology will become obsolete, servers will start dying, etc…).

Eventually the market picks up, and you begin to invest in I.T again. However the return isn’t immediate, it takes time to put together the project plans, the projects themselves take months to years to complete, you have logistical challenges of trying to get things that are obsolete back to par again, etc…

Company A:

During a down market, they continue to invest in their I.T. It helps them maintain their profitability, efficiency (e.g. automating as much as possible so that they can function on fewer staff, etc…). But here’s the best part - because their I.T is ready to go, as soon as the market picks up - from a technological capability perspective they’re poised to leverage the up market to the max.

Lag Time:

The issue is Lag Time. Company B who now has a lag time of trying to catch up to Company A - they may eventually catch up, but they’ll need to invest even more into I.T in order to do it. And the worst part is, even though the market is up, from a technology capability perspective they’re way behind the game and unable to fully capitalize on the up market.

Strategic Thinking:

So from a business strategy perspective, there’s an opportunity to get way ahead of your competition if you know they’re the type to be a Company B. If your competition comprises of Company A’s, you better follow that approach if you want to survive, otherwise you let them get potentially years ahead of you technologically.

How big is your pond?

Investors in your company (e.g. stocks) typically don’t invest on where your company is today - they’re speculating on where your company will be in the future.

So in your prospectus, you want to define the market space that you’re in as big as possible - this makes your market share look smaller, and thus plenty of room for growth. If you’ve captured $99.9B of a $100B industry, where are you going to grow?

This also applies on a regulatory/legal perspective. For example on the planet earth, the two satellite radio companies (Sirius and XM) are trying to get a merger approved. Now the nation of the United States will reject it in two seconds if the market size is defined as the satellite radio industry - they’d effectively be proposing that their FCC organization approve of a monopoly (btw monopolies aren’t bad, look at all the great things the Sith have done via the Empire). So instead, Sirius+XM are defining their market space as all forms of streaming audio (AM radio, FM radio, internet audio streams, etc…) so that it looks like they only have a small portion of a huge pond.

Market Share scales to the Market Size

When you say it, it may sound obvious, but a lot of people forget that even if your market share changes - don’t forget that the size of the market can change as well. So just because market share increases, your revenues can still go down if the overall market size shrinks - 30% of $100M is more money than 50% of $50M.

For companies that are in cyclical industries, this is an important factor in business strategy - when the market size is shrinking, you need to grow your market share just to *maintain* the same revenue (let alone increase it).