Leadership Best Practices

Best Practices in Leadership

Leadership is defined as the abilities and the activities of the leaders in the company to inspire a culture of Business Excellence in achieving the objectives of the company.

Some leadership best practices in leadership that are clearly visible:

  • Rewarding performers not only on their financial results, but various other factors. To assess performance, many companies used the Balanced ScoreCard method, developed by Kaplan and Norton
  • Top management meet often to discuss methods to improve their business performance
  • Meetings and surveys are conducted at regular intervals to include employees in decision-making for company strategy and policies
  • Understanding that recognition by peers is an important motivation, the best leaders showed recognition to their performing employees through different methods, such as commendation letters, putting their names on the company’s intranet newsletters, commending in the presence of people respected by the performers and giving small gifts. Formal procedures were also in place in some companies for such assessment and rewarding of performance
  • Putting in place a system that allows employees to work on improvement besides providing them the needed resources. In addition facilitators who work with the employees on personal improvement programmes were engaged
  • Involvement of top management in setting up Customer Relationship management as well as Supplier Relationship Managements through initiatives such as interactive meetings, two-way visits between the company and the suppliers and customers. The Efficient Consumer Response (ECR) approach was introduced by top-notch companies to build a closer relationship throughout the entire supply chain.

Wal-Mart’s Supply Chain Management Practices

Wal-Mart’s Supply Chain Management Practices

Managing the Supply Chain
Wal-Mart has been able to achieve respectable leadership in the retail industry because of its focus on supply chain management. The use of innovative information technology tools had benefited Wal-Mart’s supply chain management.

Procurement and Distribution

Logistics Management

Inventory Management

Additional Reading

  1. “Cross docking: The move from supply to demand”, by Christine Rowat
  2. “Cross Docking and Cross Docking Network Design”, www.tli.isye.gatech.edu
  3. “Warehouse Evolution: High Tech Developments Get Industry Cooking”, Plants, sites and parks magazine, www.bizsites.com
  4. “Cross-docking in the U.K,” Siemens Dematic, www.siemensdematic.com.au, 2001.
  5. Cross docking delivers for Retail”, www.spscommerce.com
  6. “Value Chain Report- Warehouse Management Systems Add Value,” www.industryweek.com, www.iwvaluechain.com
  7. “Digital Age warehousing,” Penton Media, www.industryweek.com
  8. “Distribution strategies, Supply Chain analysis at Volkswagen of America,” www.eng.auburn.edu
  9. “It’s not only the retail side, Wal-Mart Distribution”, www.Wal-Martwatch.com
  10. “Stauffer V Wal-Mart stores, Inc., www.oalj.dol.gov
  11. “The Management of Business Logistics: A Supply Chain Prospective,” www.house.gov
  12. “Thrify Wal-Mart Partner for Flat Rate Rental Plan,” Auto Rental News, www.autorentalnews.com
  13. “Trans-loading, Cross docking,” www.commoditylogistics.com
  14. “Wal-Mart.com: The Physical giant goes Virtual,” Red Herring Magazine, www.redherring.com
  15. “Voluntary retail chains and the threats and opportunities of European Integration,” www.snee.org
  16. “What is cross docking?, The Warehouse Word, www.colofwhousing.com.au
  17. “Wholesale Distribution, Managing complex supply chain requirements in the foodservice industry,” wholesaledistribution.services.ibm.com
  18. “Supply Chain Management the Wal-Mart Way,” Supply Chain and Logistics Journal, www.infochain.org

Wal-Mart and The Salvation Army Partner

Will Wal-Mart be able to sustain its supply chain advantage? Download Case Study on Wal-Mart’s Supply Chain Practices in PDF format.

Backsourcing – JPMorgan and IBM – Outsourcing

Backsourcing – JPMorgan and IBM – Outsourcing

Have a backsourcing plan before outsourcing

When JPMorgan Chase signed a seven year USD 5 billion outsourcing contract with IBM in December 2002, it was touted as the largest outsourcing arrangement ever made. JP Morgan was the second largest financial services company in the US at that time in terms of net assets. The arrangement was to shift a major part of JPMorgan’s IT services infrastructure which included data centers, help desks and data and voice networks to IBM. Part of the arrangement was also to transfer 4000 IT employees to IBM. JPMorgan wanted to utilise IBM’s OnDemand capability.

Preliminary transfer started in April 2003 and was completed in January 2004. It was estimated that the major work on securing data centers, improving hardware and setting up a common networking infrastructure would take minimum two years to complete.

However, by July 2004, JPMorgan merged with consumer banking business leader, Bank One. Total combined assets of the merged entity were valued at USD 1.1 trillion. The deal was aimed at reducing JPMorgan’s dependence on investment banking.

Bank One believed it could manage technology in-house and was well experienced at integrating systems from acquired businesses. As a result, in August 2004, the agreement with IBM was called off citing that it could manage it mission critical technological infrastructure better with its improved capabilities, tools and processes now. A decision to rehire all 4000 employees was also taken. JPMorgan in all likelihood had to pay IBM millions for terminating the deal.

Such bringing of IT functions back in-house after they have been outsourced is known as BackSourcing. The backsourcing decision had negative consequences. There was poor morale and the loss of employee trust. Most experts felt that bringing IT back in-house was a good decision. Nevertheless, it was a costly and complex move. The time spent in first preparing the organisation for the outsourcing and then restructuring again to bring the IT work back in-house was a colossal waste. Most IT related projects and day-to-day activities almost came to a standstill. Lack of IT services was a serious problem. Technology was not updated and new projects were not scheduled. JPMorgan’s management gave the same reasons for the backsourcing decision that they had given when signing the outsourcing deal with IBM. This made some employees confused and resentful. Morale was at an all time low.

If outsourcing is a complex decision to make, most organisations fear taking a backsourcing decision for its disruptions. A recent survey by Deloitte indicates that more than 25 percent of companies are unhappy with their outsourcing decisions and have considered backsouring. Seventy percent of top executives interviewed expressed negative experiences with outsourcing. However, organisations should plan and assess how they will be able to take back their IT operations or other outsourced services beforehand. Even before outsourcing them in the first place. JPMorgan’s saga with IBM is an example for any organisation contemplating an outsourcing deal. The following set of best practices will make the outsourcing or backsourcing journey much easier.

Best Practices to BackSourcing

Inform beforehand

When the backsourcing course of action is decided upon, the outsourcer should be alerted beforehand. This helps promote a cooperative atmosphere as well as conform to any contractual commitments as well.

Adequate documentation

Documenting operational audits and requirements analysis helps avoid any failure to meet the expectations and results in the best outsourcing scenario.

Plan and Schedule

A sound backsourcing plan and schedule should:
• Incorporate clauses to make sure that all assets are returned properly
• Ensure support to the company staff for a specific time period until the company can reassume full operational control to its satisfaction.

Quick Reassignment of employees

Promptly decide upon employee reassignment and responsibilities. This minimises uncertainty and associated productivity and motivation concerns.

Security Policy and Procedures

To protect key information relevant security procedures need to be established. For example, password protection and new software installation procedures can be documented. Any annoyed former employee should not be able to access crucial data or cause system shutdown.

Business Continuity

The course of action for any unforeseen occurrences during the switch should be planned for and be included as part of the backsourcing plan.

Ask the following questions before making the decision.

• What particular state of affairs or likely events will be responsible for ending a relationship?
• What are the penalties for termination? Which parties will incur them?
• How will the companies manage the backsourced operations?

Some outsourcers charge customers for services previously not defined in the contract. The contract between JPMorgan and IBM also was ambiguous. IBM could charge for something that was not previously being done within the bank before the deal began. If the customer is unwilling to pay, such extra but often essential improvements can have an adverse impact on IT. Such outsourcing deals can be bad in terms of IT innovation and efficiency. Such considerations must be accounted for.

JPMorgan’s and IBM’s experience stands out as an example to any organisation contemplating an outsourcing or backsourcing possibilities. Even with JPMorgan’s earlier claim on the value of backsourcing, the bank does more offshore outsourcing in India. I hope that it has planned better this time and will in future.

Lenovo Globalization Strategy

Lenovo Globalization Strategy

Slow and steady no longer wins the race. Globalization teaches Lenovo to embrace risk and leave a lumbering legacy behind.To go global Lenovo, the leading PC manufacturer in china took various steps like:

Lenovo – globalization plans

  • Lenovo is sponsoring the 2008 Olympic Games
  • Lenovo acquired IBM’s PC unit
  • Lenovo changed its corporate name from Legend to Lenovo

Keywords

Lenovo Legend Group Globalization Plans Global Branding Brand Consolidation Business Diversification IBM’s PC Unit Acquisition Globalization Challenges Cultural Clashes

Lenovo Facts

Lenovo founded in 1984
Lenovo was originally called Legend Beijing
Lenovo was by Chuanzhi along with ten colleagues at the Computer Technology Institute of the Chinese Academy of Sciences (CAS)

Lenovo controls 25 % of the Asian computer market, largely due to its ability to sell computers cheaply and China’s high tariffs on imports. Lenovo paid 1.25 billion United States dollars to IBM, of which $650M were paid in cash and $600M were in Lenovo stock.

Lenovo manufacturing
Lenovo has manufactured 4.5 million PCs including laptops and desktops

Lenovo Diversification
Lenovo has also diversified into other business areas including handheld devices and IT.

Lenovo Revenues
51.5% – corporate segment
33.5% – consumer segment
8.8% – handheld devices
3.8% – contract manufacturing and
2.4% – IT services

Nokia Business Strategy India

Nokia Business Strategy India

What is Nokia’s Business Strategy and Expansion Strategy in India is an interesting discussion.

Nokia India,Indian Mobile Phones Industry, CDMA, GSM, Marketing Strategy, Marketing Mix

Nokia Headquarters: Finland
Industry: Telecommunications

Nokia Businesses and Products
home satellite systems
wireless switching equipment
wireless systemsmobile gaming devices
set-top boxes
wireless data and voice devices

Nokia Facts

  • Nokia was founded in 1865 as a wood-pulp mill
  • Nokia was founded by Fredrik Idestam.
  • The name Nokia originated from the river which flowed through the town of the same name (Nokia).

Download [pdf format] Case Study: Nokia’s Business Strategy in India

Daimler Chrysler Merger

Daimler Chrysler Merger

Culture Issues in the merger between Daimler and Chrysler is a very interesting case.

The case ‘Daimler-Chrysler Merger’ gives an overview of the merger between Daimler-Benz of Germany and Chrysler Corp. of the US.

Related Reading:

Daimler/Chrysler Merger: The Culture Clash Pays Off : An article from: Automotive Industries

GM e-Business Strategy

GM e-Business Supply Chain Strategy

  • e-business strategy of General Motors (GM) the world’s largest automobile manufacturer.
  • GM’s need to adopt e-business in its manufacturing supply chain operations.
  • Supply chain and demand chain
  • Dis-advantages of GM’s e-business strategy.

GM facts
GM brands include
Buick, Cadillac, Chevrolet, Daewoo, GMC, Holden, Hummer, Opel, Pontiac, Saturn, Saab, and Vauxhall.

General Motors GM was founded in 1908 as a holding company for Buick.

GM and e-Business Inititatives in Supply Chain

e-Business Initiative
General Motors Acceptance Corp. (GMAC) BuyPower
Retail.com/ Auto Centric
Onstar
The GM Owner Centre
DealerWorld
GMAC SmartAuction
Covisint
GM SupplyPower
Shared “Virtual Factory” Tools
Joint Product Design

E-business particularly facilitated supplier and customer collaborations into early design programmes and product conceptualisation stages. Business process reengineering led to increased process efficiency. Advantages were self-evident. GM trimmed down new vehicle launch time to mere 18 months, a significant reduction from three years earlier. With revenues touching almost USD 600 million per year, GM invested to revamp existing infrastructure. For example, LAN bandwidth was increased by 10 times, old legacy systems gave way to modern standardised systems.

A Guide to Case Study Writing

A Guide to Student-Written, Instructor-Facilitated Case Writing
by Paul Michael Swiercz, Ph.D. The George Washington University

Student-Written, Instructor-Facilitated (SWIF) case study writing is a powerful tool for helping both students and instructors redefine their roles. The guide is divided into two sections. The first section provides background information on the case-study-writing process and answers the most commonly asked questions about case study writing. The second section provides a guide to data resources and some tools for evaluating the case study. New library technologies and computerized databases offer an extraordinarily rich array of information resources. In fact, the resources are so rich and growing so rapidly that it is impossible to summarize them in a document of this size, so this second section is meant to be only a starting point. The guidelines provided and the resources identified will help the new case study writer prepare a clear, concise, and illustrative case study.

What is a Case Study ?

Managing Innovation profitably- Xerox PARC?

Case in point- Innovation without Profit –XEROX PARC –Managing Innovation
PARC was established in 1970 as the research division of Xerox Corp. Its goal – to invent the technology of the future. Till it was incorporated as a Xerox subsidiary in 2002, it spanned over 30 years.

Notwithstanding its technical excellence, Xerox PARC failed to take competitive advantage with its innovations. PARC innovated on a number of products which transformed the computer industry like the PC prototype, LAN, GUI interface, mouse, page description languages, laser printers, etc. There was much commercial potential in most of its innovations. Reasons attributed for failure to capitalize on its innovations were the relaxed and flexible culture that prevailed at its Palo Alto Research Centre. Though flexibility is good, it made its employees to practice ventures of their interest with no alarm for commercial importance. Another reason attributed was the distance between PARC and its corporate headquarters. This remoteness cut it off from the competition of the corporate world. Another theory of thought was that there was a basic disparity between the goals and functioning methods of PARC researchers and the employees at the corporate/ management office.

By the beginning of the 21st century, PARC was spun-off as an autonomous subsidiary of Xerox. Xerox had also set up some subsidiaries to help commercialize the inventions that came out of PARC.

Point to note: Paradoxical structure and culture elements involved are essential to manage innovation profitably. Every organization needs to promote original thinking to foster innovative ideas and products, coupled with ensuring control to commercialize the ideas and products effectively.

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