strategy consulting

Learning at Work Week special offer

This year’s Learning at Work week runs from 14th to 20th May.  As a special offer for HR, OD and L&D Directors, we are offering a place on our highly regarded Strategic Leadership Development course which will take place in London during Learning at Work Week from 14th to 18th May.Strategic Leadership Development - Learning at Work Week offer


 

Here is a typical review:

“Let me take this opportunity to congratulate you that all my colleagues- without exception – came back with very positive feedback which I am proud of. They even recommended that others will have to attend this same programme of training in the future.”


This open 5-day course is the public version of our Board Leadership Development programme which is a tailored in-house course for boards and senior management teams.  We recognise it is sometimes difficult to assess something as important as a learning and development event for a senior management team by reading about it.  So, because our open course coincides with Learning at Work Week we are making places available to EU or UK-based Directors of Human Resources, Organisation Development, Learning & Development or equivalent in government organisations, charities, public corporations or private companies that employ more than 250 people.

A place on this programme normally costs £3,795 excluding VAT.  For the May 2018 presentation only, we are making an unprecedented offer.  If you qualify, you can attend the full five days to fully evaluate the course and get a significant contribution to your own continuing professional development for free.


Improvement or optimisation?

Does investing in training deliver a return on investment to your organisation?

Training return on investment or not?

As with most questions like this, there are many schools of thought. The first difference is between those who promote measuring training return on investment and others who argue that trying to measure it is pointless.

The mainstream view holds that measurement can help evaluate some kind of return on investment (RoI), although factions argue about the best way to achieve this. Another perspective accepts that, while evaluating RoI may be training’s holy grail, trying to measure it may be pointless. According to Personnel Today, they argue that trying to measure RoI on learning is not cost-efficient, the formulae aren’t robust and most organisations are not even interested in the topic.
Possibly the best-known mainstream approach to training evaluation is Kirkpatrick’s four levels. Essentially the levels are a sequence of levels of evaluation for training:

1. Reaction – participants views often recorded on simple multi-choice questionnaires (often referred to as “smile sheets” or “happy sheets”) – usually at the end of a course or session.
2. Learning – the increase in knowledge, skills, or competence. This is usually assessed during the course, either in practical work or tests.
3. Behaviour – how well delegates transfer learning to their work. This stage seeks to assess changes in behaviour due to training. It may form part of a wider culture change initiative. This usually happens a few months after the training, possibly by interview but more usually some type of observation.
4. Results – the final outcomes from participation in a training program (usually financial, time or performance-based. Particular industries might focus on specifics such as safety for example)
Some practitioners find it difficult to move beyond Levels 1 and 2 when the most valuable information might exist at the later levels. Kirkpatrick-certified consultants “start with the end in mind,” moving back from Level 4 to start with the desired results before designing and developing the programme.

JJ Phillips proposed the addition of a fifth level, to measure RoI which is achieved by putting a value on the achievements that are found at the fourth level and comparing them to the total cost incurred in providing the training.

A provider’s view

From our point of view, as training providers, those in the second school of thought who think measuring RoI is pointless, might only be interested in how well a training course is received by the trainees, so evaluation will typically be based on questionnaires that ascertain the delegates’ perceptions. The mainstream group, however, may ask a training provider to demonstrate a return by using metrics and formulae that they approve of, and these might be different for each organisation, which is a bigger challenge.

Which school of thought is right?

The answer is probably that both viewpoints are valid to some extent and a more specific answer will depend on a combination of factors that are unique to your organisation; however, let’s consider some of the evidence that is available.
An important issue must be the quality of any training. With mandatory and vocational courses, the content and syllabus will be well established, so any questions of quality will tend to be focused on the method of delivery. Management training is different, however. The delivery is still important, but several authors have argued that the content of management training is influenced by fads, fashions and theories peddled by management gurus that aren’t supported by any evidence that they work. Even top business schools such as Stanford and Harvard have been criticised for teaching pseudo-scientific management models.

Investing in existing talent is a strategic issue for organisations, according to research by the University of Portsmouth on behalf of the Chartered Institute of Personnel and Development. Their report explores both qualitative and quantitative metrics and introduces the idea of moving from measures of return on investment to return on expectation, which could be difficult to define.

The Oxford Handbook of Evidence-Based Management contains a simpler example of how the return on investment of a bank’s leadership development programme was measured. Half of the sample of managers were randomly assigned to receive the leadership development and the remainder was left as a control group with no training. The people who worked for the managers were surveyed and the results showed increases in the charisma, intellectual stimulation and consideration of the managers who were trained compared to those who weren’t.

As suggested at the beginning the answer to whether investing in existing talent improves skills and loyalty is not straightforward, but it becomes clearer by using an evidence-based approach.


This is an update of an article that appeared in the New Statesman magazine in 2014.


CBMSc Knowledge Associates partnership

Adding Knowledge Management to the CBMSc practice

Knowledge Associates and CBMSc announce partnership for an integrated, strategy and knowledge asset management service to accelerate business improvement.

A New Approach that integrates Strategy, Process Design and Knowledge Management at a deeper level to help businesses achieve sustainable results faster, better and at a lower cost

Cambridge, UK 17 April 2018.

Knowledge Associates International Ltd. and Cambridge Management Sciences Ltd today announced a new business performance improvement service. Through a new partnership, they are able to offer an organisational improvement framework to increase productivity from intangible assets and ensure compliance with new developments in international standards.

This partnership uniquely combines the experience and capability of two innovative Cambridge companies.  Together they provide a comprehensive consultancy and development service designed to help organisations achieve, sustain and extend their strategic goals though deeply aligned, optimised and integrated processes, systems, people and knowledge tools.

The importance of formulating the right strategy and being able to deliver it at speed continues to grow.  External changes are outpacing the ability of organisations to innovate quickly enough to keep pace.  Responding effectively to these challenges, combined with the critical need to get the best value from both tangible and intangible assets, is difficult for many organisations.CBMSc Knowledge Associates partnership

This new solution enables clients to achieve strategic alignment with embedded knowledge management so that their business model and strategy can evolve in a sustainable way.  The key elements of the combined offering include:

  • Strategy Evaluation: professionals will assess interested customers’ current corporate and business strategies and recommend ways to improve them.
  • Common Business Components: evaluation of the current design, specification and implementation of the operations plans, process designs, systems architecture and key governance and management responsibilities including risk and performance.
  • Knowledge Asset Management: identifying, developing and managing a strategic portfolio of critical knowledge assets.

“Empirical research shows a clear link between effective knowledge asset management and the achievement of strategic goals,” said Steve McGrady, CBMSc’s Managing Director.  “Through this new partnership with our Cambridge neighbours, we are able to combine their Knowledge Asset Management methodology (KAM) with our Strategy to Results Method (StoRM) to provide even more value to our clients”

Says Ron Young, CEO and CKO of Knowledge Associates Cambridge, “There is no doubt in our minds that those organisations that manage their knowledge assets wisely will dominate the 21stcentury.  This can best be achieved by combining a comprehensive Strategy to Results process with effective Knowledge Management .“

Both organisations declare “We are pleased to be able to extend our capability together as we anticipate the imminent publication of new Global Standards for Knowledge Management and Innovation”

About Knowledge Associates

Over the years, Knowledge Associates have developed much knowledge and expertise to identify, manage, develop and apply valuable intangible knowledge assets to achieve strategic organizational objectives.  Their Knowledge Asset Management Methodology (KAM) is academically accredited by The Lord Ashcroft International Business School, Anglia Ruskin University, Cambridge and Chelmsford, UK.  They have also embedded effective implementation methods and tools in a distributed KNOW-LEDGER Platform, hosted by Google Global Cloud Services and built on Blockchain technologies.

About Cambridge Management Sciences

Cambridge Management Sciences are the UK’s leading proponents of evidence-based practice in Operations Research consultancy, learning and development.  CBMSc uses evidence-led approaches to provide proven, powerful and cost-effective ways to improve business performance.  Their expertise has been used by public and private sector organisations, large and small, across four continents.  They have helped to develop significant strategic advances in a wide range of industries including nuclear and renewable energy, investment banking, and national government.

Press Contacts

Ron Young

Knowledge Associates International Ltd.

ronyoung@knowledge-associates.com

+44 (0)1223 421290

knowledge-associates.com

 

Loraine Smith

Cambridge Management Sciences

loraine.smith@cbmsc.com

+44 (0)1223 422171

cbmsc.com

Download the press release here: CBMSc KA partnership

in-house professional training development

What does good professional training and development look like?

Professional Training and Development in Context

A simple way of thinking about professional training and development in the workplace is in support of formal learning, while some ‘learning to learn’ skills may also help with informal learning which happens in normal daily life. Developing knowledge in an organisation requires formal and informal learning approaches to be integrated because neither will enable knowledge to be acquired if it is the only approach taken.  Therefore, the first conclusion is that formal corporate training and development should consider informal learning as both a predecessor to and successor of any formal intervention.

Formal learning

Formal learning activities have the goal and process of learning defined by the organisation. Also, it occurs in the work context to develop peoples’ skills and knowledge through a structured programme of lectures, discussions, simulations, role plays and other instructional activities.  The training is planned and directed by a professional trainer, which might seem a good thing, but a key criticism of this formality is that it occurs outside the context of daily practice.

Informal learning

Informal learning is the most prevalent form of workplace learning, integrated with daily work routines, triggered by an internal or external stimulus, maybe unconsciously, and can be both haphazard and influenced by chance.  More strictly, it is an inductive process of reflection and action linked to learning with others.

in-house business process mapping training workshop

CBMSc in-house process mapping

Formal professional training and development

Another important factor in professional training is that it applies to an adult audience. However, the literature is not complete or consistent in defining good practice.

A partial list includes:

  • Sensory stimulation theory
  • Reinforcement theory
  • Cognitive-Gestalt approaches
  • Holistic learning theory
  • Facilitation theory
  • Experiential learning
  • Action learning
  • Adult learning (Andragogy)

Current practice in much professional training and development draws on many of these areas.  For example, facilitation theory underpins much of the corporate training in developed economies by proposing that learning occurs through the trainer acting as a facilitator, establishing an atmosphere in which learners feel comfortable considering new ideas, recognising there is often resistance to changing currently held ideas, assumptions and preferences.  Reinforcement theory supports the common practice of awarding certificates of completion.  The evidence base for learning styles is not solid, but most professional training involves a mixture of activities that address preferences for learning based on Kolb’s research findings that adults learn in four ways through:

  • experience
  • observation and reflection
  • abstract conceptualisation
  • active experimentation

This post doesn’t have the space to discuss the ideas around learners emotional responses, but the influence of external factors on learners emotional states is important and their experiences will shape their openness or hostility to different learning activities.  For example, while some people enjoy role plays, others find them incredibly stressful and disturbing.

Research base

Some of the research in the field is low quality, so there is more work to do.  However, reputable sources do exist and they offer some guidelines that can be applied.  Consequently, we use these in designing and developing CBMSc training services.

For example, there are five key principles for adult training that say it should be:

  • immediately useful
  • relevant
  • welcoming
  • engaging
  • respectful

Knowles has done most in recent years to highlight the importance of understanding how adult learning differs from approaches for children.  His ideas support the five principles above by suggesting that adults:

  • Bring a lot of experience that trainers can use as a resource.
  • Expect to influence what they learn, how they are educated, and how they will be evaluated.
  • Respond to active participation, which should be included in the design and delivery of education.
  • Need to be able to see applications for new learning.
  • Need their responses to be acted upon when asked for feedback.

Conclusion

There is more to learn about the most effective methods for professional training and development.  However, for now, some key points to consider are:

  • Formal training and development is only ever a brief interruption to a constant process of informal learning and try to integrate with this.
  • There should be a clear goal and process
  • Trainers should act as facilitators more than teachers
  • Development should contain a mix of approaches leading to relevant, practical and actionable results
  • Treat everyone with respect

And finally, the main omission from the literature, from our perspective, is the importance of evidence-based content.  There have been some promising initiatives in the airline industry which seems to be taking a lead in upgrading their training to be more evidence-based, and the CIPD is also showing leadership in this area.  We need more safety-critical industries to follow the air transport industry lead, as well as other professional institutions to emulate CIPD.

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Improvement or optimisation?

What’s the difference between improvement and optimisation?

Background

“What’s the difference between improvement and optimisation?”.  This is a question I was asked by a Six Sigma Master Black Belt during a recent Business Process Improvement course. They said their managers seemed to use the words ‘improve’ and ‘optimise’ (or ‘optimize’ for our U.S. friends) to mean the same thing.

It is a good question. One of the common problems in organisations is the misuse of language. For example, a simple idea, tactic or plan can sound much more impressive if you describe it as a ‘strategy’.

Here’s the answer I gave, and it seemed to satisfy the questioner, but please feel free to challenge in the comments. I hope there may be better answers:

Improvement or Optimisation?

Improvement generally refers to trying to make something better. It is an action of some sort, either a single initiative in the form of a project, or it can refer to the continuous improvement of a process.

Within any improvement, there will be choices.  For example, if you are working on sales processes, an aim may be to increase revenue. In a not-for-profit organisation, the equivalent goal might be to achieve an increase in funding.  However, in order to do that it may become apparent that it requires an increase in cost.  In this case, the better aim might be to maximise profit.  In doing so, the work might reveal an optimum cost level for any given revenue that will deliver this.  So, improvement can deliver optimisation, as either an immediate output or maybe a long-term outcome. The improvement activity delivers the optimisation.  Therefore, the terms are not equivalent.

For most organisations, an important aim is usually to increase revenue (or funding).  This is often a target for Sales teams,  for example, but it is not a great choice of goal.    If you step back and consider the bigger picture, the reason for wanting to increase revenue is normally to increase profit. and, therefore, increase the return on investment (ROI).  Increasing profit and ROI result from increasing revenue at a faster rate than the associated costs.

The problem is that most revenue increases require higher related costs.  Typically these will be ‘costs of sale’ or variable costs, but in some cases, this will also require an increase in fixed costs.  So, a better aim might be to increase revenue with a minimum cost increase.  As a result, the profit and, therefore, the ROI will increase as much as possible. An increase in revenue that causes an associated reduction in profit, profit margin, or return on investment, is clearly an increase that is not worth pursuing.

Improvement or optimisation?

More than 100%

This leads on to settings the right goals and targets, which is a bigger topic that we will cover in a separate post.  In theory, the sales example is quite simple.  To greatest return, sales targets should be based on net profit.  However, most organisations use the revenue.  Why is this?  In some cases, it will be because of precedent which is an aspect of the “that is how we have always done it” mindset.  However, there are organisations that have tried to move from revenue-based sales targets to using profit, but it isn’t simple.  Revenue is fairly easy to establish.  It is usually defined in the sales agreement.  However, profit is more complex.  While direct costs may be relatively easy to identify, variable costs might not become clear until time has passed.  There are also debates about the best way to allocate overheads.

In this sales example, it may be that the best compromise might be to use analytics to try to identify some correlation between eventual profit and another variable such as the specific product, service or market involved.  Once the relationship has been identified, the compensation can be varied even though it is still linked directly to revenue.

Conclusion

An increase in revenue, funding, or delivery is only an improvement if the associated costs increase at a lower rate.  Delivering the maximum increase for the lowest associated cost is the definition of optimisation.  Understanding the difference between improvement and optimisation is important in many areas, not just operations management.  Being clear about this distinction plus what your real goals are can also help with choosing the right measures and setting the right targets.  The goals, measures and targets that managers use to assess performance will drive behaviours. Driving maximisation when what is needed is optimisation can lead to bad results.

Improvement or optimisation?

LinkedIn and Bad Science

Bad Science

I’m more aware of bad science than ever since reading Ben Goldacre’s book of the same name a few years ago. Familiarity bias and proximity bias no doubt!.  So, another day, and another LinkedIn post from a well-meaning consultant using “science” to support their argument. This post links to a YouTube video about business leadership.  It makes a perfectly reasonable point about how much interconnectedness there is in the world. The author could support their argument using ideas from Systems Thinking, for example.  However, they invoke, and then mangle, the idea of entanglement from quantum mechanics; a favourite subject for purveyors of woo.

Quantum confusion

Entanglement states that the way sub-atomic particles interact means their quantum state cannot be described independently regardless of physical location. In other words, a change in the spin of one entangled particle will be replicated in the other no matter how many light years separate them.    Now, this might be OK if the entanglement of quantum theory was limited to an analogy, but we are urged to believe that this long-distance connection between sub-atomic particles explains some mystical connection between all humans.  Why? Well, according to the author it is because, of course, we are all made of atoms!

Logically, this is the equivalent of stating that humans must be born from clouds because we mostly consist of water and, you guessed it, water comes from clouds too!

Scientific method

The principles of the scientific method are to test hypotheses to find out if they stand up.  The assumption is that most hypotheses will be replaced by better ones as we learn more. Sometimes they withstand testing and experiment sufficiently well to become a theory that provides a robust explanation of something significant.  A good example is the theory of evolution.  Non-Scientists often misunderstand the meaning of the word theory in a scientific context.  The misunderstanding is given away by statements such as: “Evolution? It’s only a theory”.

Free speech is important so, by all means, everyone should be free to post any idea that crosses their mind.   However, if you don’t understand the science you want to cite, please remember the quote from Chris Morris’s excellent “Brass Eye” TV series: “…there’s no evidence for it, but it’s a scientific fact”.  At least then we’d know you were only joking even if you are unaware yourself.

 

Commission on the Future of Management and Leadership

The Commission on the Future of Management and Leadership

 

Background

The UK Commission on the Future of Management and Leadership was set up by the All-Party Parliamentary Group on management in conjunction with the Chartered Management Institute (CMI). The creation of a parliamentary commission indicates that the UK government believe that high-quality management and leadership in the private and public sectors are important for the future prosperity of the country.

Today they publish their report: “MANAGEMENT 2020: Leadership For Long-Term Growth” which provides the basis for a new campaign for a Better Managed Britain, which Cambridge Management Sciences are happy to support and promote.

Open letter

The Commission has published an open letter to the press expressing their support for the CMI campaign for a Better Managed Britain:

“Dear Sirs
Over recent months, the need to rebuild trust in business and public services has been widely discussed. But a core debate which too often gets overlooked is the quality of UK’s leadership and management.
Are UK’s managers short-sighted and too focused on the near-term, or long-term, growth visionaries? As the Commission on the Future of Management and Leadership makes clear, we are at a tipping point.
We need to raise our sights to a longer-term global agenda.
Those who cut costs and overheads seem to earn more respect for such hard-nosed decisions than those who take the riskier, more innovative paths that lead to growth in revenue, jobs and profits. This approach infects the public sector and social enterprises too when financial targets are put before service delivery and creating social value.
Whilst cost and profit are important we need management to create value for all stakeholders: shareholders, society and staff alike. Our future prosperity and global competitiveness depend on this. So today, we are supporting the launch of CMI’s campaign for a Better Managed Britain.
For a Better Managed Britain, organisations need to focus on three critical areas: Purpose, People, and
Potential.
Boards must refocus on their organisation’s longer-term purpose, beyond just making money or meeting targets – and to set measurable commitments to customers, suppliers, employees, communities, and the environment, as well as to investors.
We need managers who inspire and support their teams to succeed. Managers who are recruited not only
because of technical skills but because they have the right attitudes, values and ethics. Managers who are assessed and paid not only on their results but on how they got them.
We need to focus on the long-term over the urgent distractions of the short-term. We must build for the future,
by supporting our education system through providing access to the world of work, by training, mentoring and nurturing new managers and leaders.
Today we are calling on those responsible for leading businesses, public services and third sector enterprises
to start with an honest self-appraisal of their Purpose, People and Potential, identify where they could make improvements, and take action to do so.
Together we will create a better Managed Britain with long-term sustainable growth for the benefit of all.

<Ends>

Steve McGrady, Managing Director of Cambridge Management Sciences (CBMSc), and a Fellow of the Chartered Management Institute is a co-signatory of the open letter.  “I am pleased to be able to demonstrate our support for this campaign”, said Mr McGrady, “it is important to highlight that organisations should focus on their long-term commitments to all stakeholders and move away from over-emphasising cutting costs to increase profits and shareholder returns.”  CBMSc provide training and consultancy to help organisations increase their effectiveness and efficiency through the application of evidence-based methods and tools.

Board room table

Corporate governance reform needed

Corporate governance has been reformed and improved, but recent evidence suggests there is more still  to do.

Financial Services

As Standard Chartered Bank and HSBC join Barclays in the rogues gallery of banks that have suffered severe failures of corporate governance, the reputation of commercial banks can, surely, only be recovered through fundamental reform of corporate governance rules, and the associated regulatory bodies for the financial services industry.

Other industries

Today’s revelation that Oracle Software will pay $2m (£1.27m) to settle federal civil charges of failing to prevent secret payments in its Indian sales operation and the recent fiasco here in the UK surrounding the inability of G4S to fulfil its contractual obligations to give security for the Olympic Games suggests that corporate governance issues extend to businesses in other industries beyond financial services.

Corporate governance regulation and culture

There have been number of actions in recent years that should have improved things. In the UK, for example, there have been changes to the regulatory bodies responsible for financial services, but the evidence suggests that there are too many cases of the FSA having to ‘cure’ problems and not having prevented the problems in the first place.
Our consulting experience tells us that, in many cases of systems failure, the cause can be attributed to lack of commitment of people to, in this case, the regulatory regime and, therefore, the principles underpinning it.
Cleaning up the behaviour of people inside businesses requires significant change to the culture of many corporations. The culture is informed by the values which, in young, small firms are set by the founder and in large, more mature corporations are set by the Board. In both cases, the existence of a culture that allows, or in extreme cases, condones bad practice is a failure of leadership.
Reinforcement of the standards expected by society can be addressed, at least partly, by fines and regulation. In this case, the failure of regulation could also be a failure of leadership which, in this case, means political leadership. However, as the financial and political strength of corporations grows alongside their international reach, political failings aren’t always attributable to political leaders. In many countries the ability of national regulation to control global businesses is severely limited.  This is often due to the relative political and economic weakness of small nation states relative to large, global corporations.
If we take banking as a defined segment of the financial services market, it might be time for national governments to recognise that co-operation towards a unified international corporate governance framework of principles, regulation and enforcement backed up by co-ordinated action from national governments is overdue.

Sustainable profit

Tim Cook told climate-change denying investors to sell their Apple stock

In the same week that Apple CEO Tim Cook told climate-change denying investors to sell their Apple stock, strategic advisors lavery/pennell publish an interesting, and challenging, report.  They suggest that a new, sustainable profit model for industry has emerged.  The report estimates it to be worth €100bn in additional profits for European companies. This approach also has the potential benefit of creating 168,000 new jobs and, most importantly, a 14.6% reduction in greenhouse gas emissions.

Sustainable profit model

The new model is a response to today’s business challenges involving three stages:

1) Improve non-labour resource efficiency.
2) Reinvest some of these efficiency savings in sustainable inputs (materials & renewable energy).
3) Develop innovative new products and grow market share.

The report cites a carpet tile manufacturer (Interface) as evidence of the success of this approach. The company has cut its energy use by 40 percent since 1996. They also recycle 43 percent of their raw materials.  It has reduced its emissions of carbon dioxide by 90 percent, sends zero waste to landfill, and recycles all its water. As a result, Interface is now the largest carpet tile company in the world, with revenues of $1 billion.

Strategic implications

Large corporations, such as Unilever, are also pursuing a goal of delivering sustainable profit, but there seems to be a long way to go.  Our strategy courses explore Richard Rumelt’s contention that ‘bad strategy’ is often no more than a set of, what he describes as, vaporous goals.  Our strategy consulting practice builds on his ideas to help organisations focus and coordinate their policies and actions on their biggest challenge, which is a good way of developing ‘good strategy’.  Organisations that are serious about achieving sustainable profit must put this goal above all others if they want to succeed.

Intuitively, this kind of approach makes sense, but intuition is a bad guide when faced with important decisions.  This report is a valuable contribution to building an evidence base.  It helps demonstrate the value that well-planned and executed ‘green’ initiatives can have.  The benefits will be felt by people and the environment.  The interesting incentive is that they might also build business models that can deliver sustainable profit.  This is an area that needs more evidence to help inform public policy as governments struggle to reconcile the need for long-term investments with demands for immediate fixes.