Maybe. Ben Stein worries. (Yes – the Ben Stein from Ferris Beuller’s Day Off – he’s a legitimate economist). Check out this article.

I came across this in a letter by Jim Womack, author of Lean Thinking and, to hear him tell it, one of the developers of the Toyota Way. The graphics are mine – which is why I’m not a graphic designer.

All value created in any organization is the end result of a lengthy sequence of steps – a value stream.

These steps must be conducted properly in the proper sequence at the proper time.

The flow of value toward the customer is horizontal, across the organization.

All organizations … are organized vertically by department … because this is the best way to create and store knowledge and the most practical way to channel careers.

He goes on to say that managers are judged by metrics that apply within their departments. But no one is actually responsible for the horizontal flow of value [toward the customer]. This is the problem big companies face.

So why are small companies better than big ones?
Because you have your hand in everything. YOU (the owner/founder/entrepreneur) are responsible for the horizontal flow of value.

So why are small companies worse than big ones?
Because you have your hand in everything. When the company grows to the point where some organization by department is useful, the owner/founder/entrepreneur is better at building the product than building the company. So emergencies, inefficiencies, and other stuff happens which takes you away from managing the value flow. So you end up with the worst of both worlds. No departmental support and a poorly managed value flow.

Takeaway:

• As your company grows, either learn to become a manager/CEO or hire one.
• Lean Thinking by James P. Womack and Daniel T. Jones is a good read. More of their stuff is here

[tags]Lean Thinking, Small Business, Entrepreneur, Management, CEO Skills[/tags]

I agree with Peter Drucker that this one is overrated when running a company. Skill in management is much more important. Nevertheless, leadership can be a useful skill, and it’s much simpler than you’d believe by reading or listening to the folks who make a living teaching courses in it.

Leadership is the ability to get folks to follow you to a place they wouldn’t go on their own. That’s it. It happens to people with all manner of personalities – from the charismatic to those as boring as wallpaper paste. There is evidence to suggest that less charismatic leaders actually produce better results for their companies over the long term.

Leadership skill involves two things: Vision and Communication.

Vision means you can see where you want the company to be. Someplace different from where it is right now. If you can’t see something different, stop now. You’ve arrived and don’t need to lead anyone anywhere. If you can see something different, describe it.

Communication means telling people where you see the company headed. Tell them how they play a part in taking it there. In the simplest and most concrete terms you can find. This won’t happen automatically. They won’t just “get it” and the right words that are simple and concrete won’t just “come to you.” Spend some time (perhaps with a language coach like Isabel Parlett) describing your vision properly. Then tell your vision to everyone you work with over and over and over and over again. And again. When you start to get bored hearing it tell them again.

Takeaway:

• Constant communication of a simple vision is what all leaders have in common.

[tags]Leadership, Small Business, Entrepreneur, Management, How to be CEO,CEO Skills[/tags]

I’m usually a glass half empty guy for two reasons. I like my surprises to be pleasant, and I figure I’ll get in more trouble if I’m wrong by ignoring a problem than by down playing an opportunity. Kind of like Andy Grove’s book title “Only the Paranoid Survive”.

But this post is written by perhaps the most hopeful man I know of. Read it today. And if you’re in the USA, don’t forget to vote. (If you don’t read it today you’ll have to click here to see it in his archives.)

Opps, I almost left for St. Louis without telling you. HBO is airing Hacking Democracy tomorrow night (Nov 2). I try not to be political unless it directly relates to business but if we can’t trust that our votes aren’t stolen then it seems pretty important.

You probably know about him from his blog. But he’s a keynote speaker at the International Coach Federation conference this Saturday, and before he speaks, I get to do the introduction.

So I’m off to St. Louis. Probably won’t post again till I return next week.

There is no plot, no love story, no car chases. Only one explosion (and you’ve seen that one before). Sounds boring. Why should you see it?
It will captivate you! It’s about your home, why it’s in danger and what you can do about it. And despite being about an impending disaster, it will give you hope.

The trailer is here

Takeaways:

• Learn about the movie and find a theater near you here
• Then see this follow up. It starts off with a stand-up routine that’s surprisingly funny given the comedian, and ends with things you can do to help. But that part won’t make much sense till you’ve seen the movie.

[tags] inconvenient truth, environment, global warming[/tags]

Terry Wilson-Malam

Congratulations Terry. Her email was picked at random and I’ll be sending her A Whole New Mind (the book anyway).

Thanks to all who participated. See you in St. Louis – please tap me on the shoulder and let me know you entered the contest. But note: I don’t have my beard anymore (it’s an old picture).

DON’T

Says Seth Godin. I think he gives a pretty good alternative.

Takeaways:

• Not all VC funding is bad for every company.
• Thinking that funding is always the solution is bad for every company.