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Chapter: Business Science - Managerial Behavior and Effectiveness - Developing the Winning Edge

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Developing the Winning Edge

1 Organisational and Managerial Efforts 2 Self Development 3 Negotiation Skills 4 Development of the Competitive Spirit 5 Knowledge Management

DEVELOPING THE WINNING EDGE

 

1 Organisational and Managerial Efforts

2 Self Development

3 Negotiation Skills

4 Development of the Competitive Spirit

5 Knowledge Management

6 Fostering Creativity and innovation

 

1 Organisational and Managerial Efforts

 

Sustaining success depends on an organization‘s ability to adapt to a changing environment – whether it‘s an external change, such as a transformative technology or a changing economy.

 

Unfortunately, 70% of organizational transformations fail. Why? Because too many crucial elements in the change process are skipped.

 

Sometimes we wrongly assume that change is all about improving financial results – stock price, profitability, sales. We forget that successful transformation also generates ―soft‖ benefits, such as trust, new organizational capabilities, and emotional commitment among employees.

 

But even if we strive for financial and non-financial results, additional perils await: painful emotions that boil up in our workforces whenever we ask people to think or do things differently. Whether it‘s anger, alarm, or confusion, we must ease those feelings by cultivating an environment of trust, involvement and empowerment.

 

Nothing about leading change is easy.

 

 

Urgency-An organizational burning platform exists when maintaining the status quo becomes prohibitively expensive. Major change is always costly, but when the present course of action is even more expensive, a burning-platform situation erupts.

 

Create a sense of urgency based on the company‘s financial performance, competitive situation, market position, technological trends – create a burning platform: What will happen if we don‘t react now?

 

 

Compelling change story-Management need to be able to tell a compelling change story that motivate employees. But before you you get buy-in, people need to feel the problem.

 

People aren‘t going to consider anything until they are convinced there is a problem that truly needs to be addressed.

 

 

Current strategy-When dealing with change management it is often required to have a closer look at the current strategy.

 

 

Vision and values-Successful change is hinged on a picture of a desirable future. Vision can provide both a corporate sense of being and a sense of enduring purpose. Without a sensible vision, change efforts can dissolve into a list of confusing projects that take the organization in the wrong direction. It is important that the vision be easy to communicate. Create a shared vision, values and common directions.

 

 

Communicate-Communicate this information broadly and dramatically, especially with respect to crises, potential crises etc. To successfully implement change initiatives, organizational leaders must identify the need for change and communicate it throughout the organization.

 

 

Create a dialog-Involving employees right from the start, where they have influence in the strategic plan of the organization, tends to reduce employees‘ resistance, which is always a very important factor in the success of any organizational change.

 

 

Culture-All change in organizations is challenging, but perhaps the most daunting is changing culture. Whenever possible use storytelling – storytelling can be a powerful tool when you want to drive organizational change.

 

 

Visualize the ―journey‖-Not only is it easier to communicate something using a picture, but it‘s also much easier for people to remember things that have been communicated to them visually. People remember 10% of what they hear, 20% of what they read and 80% of what they see and do.

 

 

Measure-Measurement should be considered during the planning of change and before any action is undertaken. Measure early and often and tell about it Without measures of success, the organization does not know if it has succeeded in its efforts. Someone once said, ―What gets measured gets improved.‖ Someone else said, ―If you don‘t know where you are going, any road will get you there.‖

 

 

Create wins-It is critical for teams and individuals working on change to achieve small wins regularly.

 

So if you want something to grow, don‘t forget to pour champagne on it.

 

 

Align performance management-Align performance management processes to drive desired behavior changes Lookout for inconsistencies-Continuously lookout for inconsistencies – Deal proactively with resistance

 

2 Self Development

 

Personal development is a lifelong process. It's a way for people to assess their skills and qualities, consider their aims in life and set goals in order to realise and maximise their potential.

 

15 Personal Development Strategy Tips

 

A personal development strategy begins with a simple premise: your development is your responsibility.

 

At heart we probably know this to be the case, yet how often do we sit back waiting for that development to be put on a plate for us. For a lucky few things might fall into place easily, but for most of us that will not be the case.

 

So why not decide that you‘re going to make your own development a priority, rather than leaving things to chance.

 

Here we suggest 15 tips to help you think about your own personal development strategy. In doing so we propose that you think more widely about how you‘d like to develop. Don‘t limit your thinking to just the work you‘re currently doing.

 

For a happy manager, development is much wider than job specific training, it should be about you career and about your life.

 

Here are 15 tips to help you develop your own personal development strategy:

 

1.     Make your own development your number 1 priority.

 

2.     Spend more time developing as a person than developing as a manager.

 

3.     Imagine you had to make the case to yourself regarding the development you need. What would it take to convince you to invest?

 

4.     Give yourself a self-appraisal. (see our article: self-performance appraisal for some useful questions to ask yourself)

 

5.     Choose how you want to develop, rather than conform to whatever an organization might tell you to do. In some cases they may be one and the same – but the difference is that you choose to do it!

 

6.     Spend much more time on getting better at what you‘re good at, than struggling to improve your weaknesses.

 

7.     Identify some specific strengths you have and commit to getting even better at them.

 

8.     What do you aspire to do/be?

 

9.     Make the ―ordinary‖ part of your development – what happens in your normal day‘s work that can help you to develop?

 

10.                        Choose something you do, then try to do it to the best of your ability.

 

11.                        Take real pride in something that you do.

 

12.                        Take on an ordinary project and find something extra-ordinary in it – try to make a real impact.

 

13.                        Vary your learning diet. Experience bite-size learning, the small learning snacks just when you need them. But make sure you also experience the breadth of learning from a longer, more measured, ―learning‖ meal taken regularly.

 

14.                        Cultivate a healthy dissatisfaction with how things are. If you are to improve you need to have some dissatisfaction with your current abilities. Be careful that your motive here is to improve, not to become frustrated or cynical.

 

15.                        Learn more about what you really enjoy doing.

 

3 Negotiation Skills

 

Negotiation is a method by which people settle differences - explore the stages of negotiation and learn how to improve your negotiating skills.

 

These skills include:

 

§    Effective verbal communication. See our pages: Verbal Communication and Effective Speaking.

 

§    Listening. ...

 

§    Reducing misunderstandings is a key part of effective negotiation. ...

 

§    Rapport Building. ...

 

§    Problem Solving. ...

 

§    Decision Making. ...

 

§    Assertiveness. ...

 

§    Dealing with Difficult Situations.

 

Problem Analysis

 

Effective negotiators must have the skills to analyze a problem to determine the interests of each party in the negotiation. A detailed problem analysis identifies the issue, the interested parties and the outcome goals. For example, in an employer and employee contract negotiation, the problem or area where the parties disagree may be in salary or benefits. Identifying the issues for both sides can help to find a compromise for all parties.

 

Preparation

 

Before entering a bargaining meeting, the skilled negotiator prepares for the meeting. Preparation includes determining goals, areas for trade and alternatives to the stated goals. In addition, negotiators study the history of the relationship between the two parties and past negotiations to find areas of agreement and common goals. Past precedents and outcomes can set the tone for current negotiations.

 

Active Listening

 

Negotiators have the skills to listen actively to the other party during the debate. Active listening involves the ability to read body language as well as verbal communication. It is important to listen to the other party to find areas for compromise during the meeting. Instead of spending the bulk of the time in negotiation expounding the virtues of his viewpoint, the skilled negotiator will spend more time listening to the other party.

 

Emotional Control

 

It is vital that a negotiator have the ability to keep his emotions in check during the negotiation. While a negotiation on contentious issues can be frustrating, allowing emotions to take control during the meeting can lead to unfavorable results. For example, a manager frustrated with the lack of progress during a salary negotiation may concede more than is acceptable to the organization in an attempt to end the frustration. On the other hand, employees negotiating a pay raise may become too emotionally involved to accept a compromise with management and take an all or nothing approach, which breaks down the communication between the two parties.

 

Verbal Communication

 

Negotiators must have the ability to communicate clearly and effectively to the other side during the negotiation. Misunderstandings can occur if the negotiator does not state his case clearly. During a bargaining meeting, an effective negotiator must have the skills to state his desired outcome as well as his reasoning.

 

Collaboration and Teamwork

 

Negotiation is not necessarily a one side against another arrangement. Effective negotiators must have the skills to work together as a team and foster a collaborative atmosphere during negotiations. Those involved in a negotiation on both sides of the issue must work together to reach an agreeable solution.

 

Problem Solving

 

Individuals with negotiation skills have the ability to seek a variety of solutions to problems. Instead of focusing on his ultimate goal for the negotiation, the individual with skills can focus on solving the problem, which may be a breakdown in communication, to benefit both sides of the issue.

 

Decision Making Ability

 

Leaders with negotiation skills have the ability to act decisively during a negotiation. It may be necessary during a bargaining arrangement to agree to a compromise quickly to end a stalemate.

 

Interpersonal Skills

 

Effective negotiators have the interpersonal skills to maintain a good working relationship with those involved in the negotiation. Negotiators with patience and the ability to persuade others without using manipulation can maintain a positive atmosphere during a difficult negotiation.

 

Ethics and Reliability

 

Ethical standards and reliability in an effective negotiator promote a trusting environment for negotiations. Both sides in a negotiation must trust that the other party will follow through on promises and agreements. A negotiator must have the skills to execute on his promises after bargaining ends.

 

4 Development of the Competitive Spirit

 

In today‘s fast-paced economy competition is an issue of services and products. Much attention has been directed to a better service and the best product and how this can be achieved through utilizing the human resources. This research paper identifies the competitive advantage concepts and models, competitive strategies and the main human resource practices that have a

 

significant impact on the employee‘s performance. Understanding sources of competitive advantage has become a major area of research in the field of strategic management. Finally a summary of practical criteria of best practice for competitive advantage is presented and a general discussion and recommendations have been drawn.

 

When a firm is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors, then we can say the firm has a Competitive advantage. And when a firm is implementing a value creating strategy not simultaneously being implemented by any current or potential competitors and when these other firms are unable to duplicate the benefits of this strategy, then we can say the firm has a sustained competitive advantage (Barney 1991). There are two major models that have to be considered. The first one is the position or environmental model and the second one is the resource-based view model.

 

The Position or Environmental Model.

 

In order to achieve a competitive advantage, the firm is required to make a choice about the type of competitive advantage it seeks to attain and the scope within which it will attain it. Choosing the competitive scope or the range of the firm‘s activities can play a powerful role in determining competitive advantage because it aims to establish a profitable and sustainable position against the forces that determine your industry competition.

 

Porter 1985 defines the competitive strategy as the positioning of a company in its competitive environment. Also Porter has posed two important questions:

 

1.     What is the structure or the attractiveness of the industry which the company is in?

2.     What is the company‘s position in its competitive environment?

 

 

To answer the first question a company, as an organization, should analyze their industry by focusing on the following points (industrial analysis):

 

·        Begin with understanding your industry.

·        Focus attention on significant force.

·        Watch out for industry change.

To answer the second question (competitive position), the following question should be asked:

 

·        How does a company achieve superior performance?

 

To be a superior performer in the engineering industry or any industry, the company must have a sustainable competitive advantage which its rival cannot copy or duplicate.

 

The competitive advantage can be sustained in one of the two ways (Porter 1985):-

 

1.  Either the company can be lucky enough to come up with something that its rivals cannot copy which is very rare, or

 

2. The company is improving so fast that its rivals can not catch up.

 

Porter shows that there are five competitive forces which play a major role in the company success or failure

 

1.     The entry of new competitors,

2.     The threat of substitutes,

3.     The bargaining power of suppliers,

4.     The bargaining power of buyers, and

 

 

5. The rivalry among the existing competitors.

 

 

The collective strength of these five competitive forces determines the ability of firms in an industry to earn on average, a rate of return on investment in excess of the cost of the capital.

 

Porter also notes that a business can develop a sustainable competitive advantage by following two strategies; cost leadership strategy or differentiation strategy.

 

Cost Leadership Strategy: the primary focus of a cost leadership strategy is to achieve low costs relative to competitors. Lowering costs lead to lowering prices, which can increase demand for products or services, but if the product or services cannot be produced at a lower cost it also reduces profit margins. To compete based on cost, managers must address labour, materials, overheads, and other costs, and to design a system that lowers the cost per unit of the product or service. Often, lowering costs requires additional investment in automated facilities, equipment and employees skill.

 

Differentiation Strategy: the primary focus of a differentiation strategy is

 

Creating uniqueness such that the organization‘s goods and services are clearly

 

Distinguished from those of its competitors. In other words the focus is on creativity and innovation which have long been recognized as necessary for bringing the required

 

change to obtain the competitive advantage

 

Schuler and Jackson 1987 have emerged from Porter discussion of competitive advantage three competitive advantage strategies that organizations can use to gain competitive advantage:

 

Innovation strategy: the primary focus here is developing products or services different from those of competitors or offering something new and different. A vital component of any innovation strategy is getting employees to broaden their skills.

 

Quality enhancement strategy: the primary focus here is enhancing the product and/or services. Quality enhancement often means changing the processes of production in ways that require workers to be more involved and more flexible.

 

Cost reduction strategy: firms typically attempt to gain competitive advantage by being the lowest cost producer.

 

The question is who brings the innovation, quality and the cost reduction strategy to the firm? It comes from the right employee who is motivated by the right human resources practices. In the next sections we will deal with the issues of how the right employee is employed and motivated.

 

Competitive Advantage through Job Analysis, Job Description and Job Evaluation

 

Job Analysis

 

The job analysis looks at the behavioral needs of a particular competitive strategy (cost leadership or differentiation) role peculiar to the culture and organization of the company. It is like performing a Personal Profile Analysis on an imaginary person. The goal is to define the ideal individual for the job position from the perspective of the company and the employees that the successful applicant will work with. Job analysis is the process of collecting information and making judgments about a specific job. From the stand point of researchers, that competitive advantage only occur when employee‘s knowledge, skills and ability can add value to the firm, are rare, cannot be imitated and are not sustainable. In order to target employees with the requisite knowledge, skills and ability, the job has to be carefully defined. The HRM literature promotes careful job definition in the belief that it will have two effects. First, it is commonly believed to assist targeting and attraction of potential recruits. Second, job analysis helps potential recruits to make up their own minds about whether to apply or not.

 

Job Description

 

The job description is generally used to identify the responsibilities, the objectives associated with each specific task and the reward that associated with good performance. In order to accomplish the employment relationship effectively, work has to be designed, programmed, costed, organized and co-coordinated. In other words detailed job description, otherwise can be used by an employee to define what s/he is not prepared to (―that‘s not part of my job‖ or I‘m not paid to do that‖). In a dynamic environment it is impossible to have a good job description because anticipating the environment changes in advance is impossible. But that does not mean we should not describe the job as detailed as possible.

 

Job Evaluation

 

Once jobs have been analyzed and described, the job evaluation began by considering several job factors such as: working conditions, necessary technical KSA (Knowledge, Skills and Ability) and behavior, salaries and required managerial skills. A rating of each factor is made on a standard scale, and the total rating points can be used to rank jobs hierarchically. The recruiting and selection model appendix A can be used in the rating process by using different criteria and weights such as the above-mentioned job factors.

 

5 Knowledge Management

 

Knowledge management (KM) is the process of capturing, developing, sharing, and effectively using organizational knowledge. It refers to a multi-disciplined approach to achieving organisational objectives by making the best use of knowledge.

 

"Knowledge management is the process of capturing, distributing, and effectively using knowledge."

 

This definition has the virtue of being simple, stark, and to the point. A few years later, the Gartner Group created another second definition of KM, which is perhaps the most frequently cited one (Duhon, 1998):

 

"Knowledge management is a discipline that promotes an integrated approach to identifying, capturing, evaluating, retrieving, and sharing all of an enterprise's information assets. These assets may include databases, documents, policies, procedures, and previously un-captured expertise and experience in individual workers."

 

Both definitions share a very organizational, a very corporate orientation. KM, historically at least, is primarily about managing the knowledge of and in organizations.

 

The operational origin of KM, as the term is understood today, arose within the consulting community and from there the principles of KM were rather rapidly spread by the consulting organizations to other disciplines. The consulting firms quickly realized the potential of the Intranet flavor of the Internet for linking together their own geographically dispersed and knowledge-based organizations. Once having gained expertise in how to take advantage of intranets to connect across their organizations and to share and manage information and knowledge, they then understood that the expertise they had gained was a product that could be sold to other organizations. A new product of course needed a name, and the name chosen, or at least arrived at, was Knowledge Management. The timing was propitious, as the enthusiasm for intellectual capital in the 1980s, had primed the pump for the recognition of information and knowledge as essential assets for any organization.

 

Perhaps the most central thrust in KM is to capture and make available, so it can be used by others in the organization, the information and knowledge that is in people's heads as it were, and that has never been explicitly set down.

 

What is still probably the best graphic to try to set forth what KM is constituted of, is the graphic developed by IBM for the use of their KM consultants, based on the distinction between collecting stuff (content) and connecting people, presented here with minor modifications (the marvelous C, E, and H mnemonics are entirely IBM's):


 

Another way to view and define KM is to describe KM as the movement to replicate the information environment known to be conducive to successful R&D—rich, deep, and open communication and information access—and deploy it broadly across the firm. It is almost trite now to observe that we are in the post-industrial information age and that an increasingly large proportion of the working population consists of information workers. The role of the researcher, considered the quintessential information worker, has been studied in depth with a focus on identifying environmental aspects that lead to successful research (Koenig, 1990, 1992), and the strongest relationship by far is with information and knowledge access and communication. It is quite logical then to attempt to apply those same successful environmental aspects to knowledge workers at large, and that is what in fact KM attempts to do.

 

The Stages of Development of KM

 

Looking at KM historically through the stages of its development tells us not only about the history of KM, but it also reveals a great deal about what constitutes KM.

 

First Stage of KM: Information Technology

 

The initial stage of KM was driven primarily by IT, information technology. That first stage has been described using an equestrian metaphor as ―by the internet out of intellectual capital‖. The concept of intellectual capital provided the justification and the framework, the seed, and the availability of the internet provided the tool. As described above, the consulting community jumped at the new capabilities provided by the Internet, using it first for themselves, realizing that if they shared knowledge across their organization more effectively, then they could avoid reinventing the wheel, underbid their competitors, and make more profit. The first use of the term Knowledge Management in the new context appears to have been at McKinsey. They realized quickly that they had a compelling new product. Ernst and Young organized the first conference on KM in 1992 in Boston (Prusak, 1999). The salient point is that the first stage of KM was about how to deploy that new technology to accomplish more effective use of information and knowledge.

 

The first stage might be described as the ―If only Texas Instruments knew what Texas Instruments knew‖ stage, to revisit a much quoted aphorism. The hallmark phrase of Stage 1 was first ―best practices,‖ to be replaced by the more politic ―lessons learned.‖

 

Second Stage of KM: HR and Corporate Culture

 

The second stage of KM emerged when it became apparent that simply deploying new technology was not sufficient to effectively enable information and knowledge sharing. Human and cultural dimensions needed to be addressed. The second stage might be described as the ― ‗If you build it they will come‘ is a fallacy‖ stage—the recognition that ―If you build it they will come‖ is a recipe that can easily lead to quick and embarrassing failure if human factors are not sufficiently taken into account.

 

It became clear that KM implementation would involve changes in the corporate culture, in many cases rather significant changes. Consider the case above of the new pediatric medicine and the discovery of the efficacy of adding orange juice to the recipe. Pharmaceutical sales reps are compensated primarily not by salary, but by bonuses based on sales results. What is in it for that sales rep to share her new discovery when the most likely result is that next year her bonus would be substantially reduced? The changes in corporate culture needed to facilitate and encourage information and knowledge sharing can be major and profound. KM therefore extends far beyond just structuring information and knowledge and making it more accessible.

 

As this recognition unfolded, two major themes from the business literature were brought into the KM fold. The first was Senge‘s work on the learning organization (Senge, Peter M., 1990 The Fifth Discipline: The Art and Practice of the Learning Organization.) The second was Nonaka‘s work on ―tacit‖ knowledge and how to discover and cultivate it (Nonaka, Ikujiro & Takeuchi, Hirotaka, 1995 The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation.) Both were not only about the human factors of KM implementation and use; they were also about knowledge creation as well as knowledge sharing and communication. The hallmark phrase of Stage 2 was ―communities of practice.‖ A good marker of the shift from the first to the second stage of KM is that for the 1998 Conference Board conference on KM, there was for the first time a noticeable contingent of attendees from HR, human resources, departments, and by the next year, 1999, HR was the largest single group, displacing IT attendees from first place.

 

Third Stage of KM: Taxonomy and Content Management

 

The third stage developed from the awareness of the importance of content, and in particular the awareness of the importance of the retrievability of content, and therefore of the importance of the arrangement, description, and structure of that content. Since a good alternative description for the second stage of KM is the ―it‘s no good if they don‘t use it‖ stage, then in that vein, perhaps the best description for the new third stage is the ―it‘s no good if they try to use it but can‘t find it‖ stage. Another bellwether is that TFPL‘s report of their October 2001 CKO (Chief Knowledge Officer)

 

Summit reported that for the first time taxonomies emerged as a topic, and it emerged full blown as a major topic (TFPL, 2001 Knowledge Strategies – Corporate Strategies.) The hallmark phrases emerging for the third stage are content management (or enterprise content management) and taxonomies.. At KMWorld 2000 a track on Content Management appeared for the first time, and by the 2001 KMWorld Conference, Content Management had become the dominant track. In 2006, KMWorld added a two-day workshop entitled Taxonomy Boot Camp, which still exists today. The hallmark terms for the third stage of KM are taxonomy and content.

 

Other KM Issues

 

One issue is the need to retain the knowledge of retirees. Of course the fact that the baby boomer bulge is now reaching retirement age is making this issue particularly salient. KM techniques are very relevant to this issue. One technique is the application of the lessons learned idea—just treat the retiree‘s career as a long project that is coming to its end and create an after action report, a massive data dump. This idea seems obvious, but only in special cases is it likely to be very useful.

 

Much more likely to be useful is to keep the retiree involved, maintain him or her in the CoPs and findable through expertise locater systems. The real utility is likely to be found not directly in the information that the retiree leaves behind, but in new knowledge created by the interaction of the retiree with current employees. The retiree says "it occurs to me that ..." and elicits a response something like ―yes, but here ...,‖ a discussion unfolds, the retiree contributes some of the needed expertise, and a solution is generated. The solution arises not directly from the retiree‘s knowledge but rather from the interaction.

 

Another major development is the expansion of KM beyond the 20th century vision of KM as the organization‘s knowledge as described in the Gartner Group definition of KM. Increasingly KM is seen as ideally encompassing the whole bandwidth of information and knowledge likely to be useful to an organization, including knowledge external to the organization—knowledge emanating from vendors, suppliers, customers, etc., and knowledge originating in the scientific and scholarly community, the traditional domain of the library world. Looked at in this light, KM extends into environmental scanning and competitive intelligence.

 

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