3D Management Revolution

By Mike O'Sullivan

3D is original management philosophy. It questions UK traditional management structures and proposes revolutionary ideas to replace chains of financial and other complex management layers. 3D aims to produce the best Chief Executive for each organisation.

3D does this through 3-layer management structures, using Professional Managers to focus on customers as central to strategy and planning. 3D integrates conventional organisation departments and provides a realistic method for monitoring everything in a single system.

3D Revolution sets out the week by week route to achieve this in a how to do it plan.

The impact of Covid19 has disrupted conventional structures and communications turning organisations upside down and inside out. That has also released creativity and flexibility. Now is the time to take the opportunity to build on this and review convention to improve how we work forever. 3D provides a way of changing for improved ways of doing business to put customers at the centre and provide what they want in a responsive and direct way. 3D shows how.

• Language: English
• Publisher: Mike O'Sullivan
• Release date: Jul 9, 2020
• ISBN: 9781005820138

Mike O'Sullivan

Mike is an Irish novelist and poet, married and living in Herefordshire England. He was born in Dublin and spent his school years in Cork. In primary school Mike needed to get by the eagle-eyed headmaster who looked hard at his long essays designed to hide the words he could not spell. This carried on further up the line when at UCD the Professor of English likened Mike to another who could not spell, George Bernard Shaw. But Mike made the connection, he did not have to be a genius at spelling.He moved to London in his twenties and has worked in a wide range of industries – music and cosmetics, in oil exploration, mining, insurance, catering, City Finance and Management Consultancy. Mike uses that experience in his novels. When he first arrived in London Mike fell in with a group of three other Irishmen debating the philosophical process of making a million or finding a job that was more like pleasure. Mike found the job, but it would take too long to explain his philosophy here. Mike says that in a sense he had a plan for life and so far it has been working out.His novels often start with an individual battling the system but without a plan of how he or she will cope. Mike believes that social systems and institutions are usually rigid when it comes to change or quick decisions and therefore the individual can become trapped. It takes effort, some courage and guile to walk out into the wider world of individual thinking. He shows that an individual can focus enough to even the odds and come out on top. He often uses humour and comedic situations to make his point leaving the reader to consider the underlying philosophy if they wish. A key element of Mike’s writing is the Irish skill of fast paced conversation as Mike’s overall aim is to entertain his readers.

Book preview

Part 1:

FOCUS ON CHANGE AND THE INDIVIDUAL

Chapter 1:

The Way It Is

It is estimated that over 50% of British companies have been sold to foreign owners. This is unique in the western world where most countries have legislation preventing sale of strategic operations. For example, Heathrow and Gatwick airports are in foreign ownership as are most of the significant British ports, as well as energy and utility companies. What is going on?

For years we have grown accustomed to experts and commentators warning us about the dire consequences of abandoning our manufacturing future. We have in turn been quietly confident that the expansion in our service sectors could more than make up for the shortfall in manufacturing output. But which service sectors give us confidence?

The trouble is that when we as managers normally ask ourselves questions, we only pay attention to the questions we find easy to answer. Increasingly these are questions where the answers require figures. Thus, we fudge the questions. The prerequisite to finding the right answers is to ask the right questions. This first chapter is about finding the right questions.

Finding the right questions depends on digging up facts which are in short supply. Analysis of the facts throws up its quota of villains and heroes. And while few things are certain, fudging the questions results in rising to the wrong challenges. There are many challenges, few facts.

The sad facts

In world rankings, Britain since the end of the last century has had the 6th largest Gross Domestic Product (GDP). The people who create the wealth that accounts for this GDP answer to Chief Executives of companies and other producing organisations. These Chief Executives lead British management culture. Britain is unique amongst the wealthier nations in that most of our people who work, work for large organisations. The economic reins are therefore in fewer hands. It’s not quite like a club but not far off. It would not take much of a swing away from reality, bad vision or miss-adventurous leadership, by those few to get things terribly wrong. This is especially true if we burn our bridges as we go. The facts point to our getting things wrong.

In 1960 Britain had the 2nd largest GDP in the world and the 6th highest income per head of the population. By 1994 we had slipped to 6th in the GDP stakes and now we are predicted to slip to 7th by 2023. However, this would be 18th when measured by income per head of the population. Our GDP rate since 1960 has been slipping consistently lower than that of our main trading partners. We are underperforming when compared to the richest nations in the world. Our standard of living is being caught up with and passed by more countries each year. The sad fact is that we are falling further behind year on year.

Figure 1 acts as a reminder of the overall size and the market of competitor countries.

Gallant Government spokespeople ‘talk up Britain,’ even to the extent of trying to disguise the figures with ambiguous phrases and introducing dubious schemes and programmes. This is a practice more at home in many organisations’ balance sheets, where Monday’s profits surprise Friday’s insolvencies.

Following the recession of the early 1990s, during the latter years of the decade our major organisations including the IOD, CBI and government departments made regular references to the ‘recovery,’ even to ‘a slowing down in recovery.’ We seem to have basically accepted that there was a national economic ‘recovery’ in progress. But what was this based on? When measured against the state of our national balance of payments position over the previous years and our national borrowing requirements, which are after all our collective management experience nationwide, where was the evidence of ‘recovery’? Wasn’t the notion of ‘recovery’ just fantasy? And what damage did it do to our preparedness for the 2008 Crash?

In organisation terms it is the same as ‘talking profits up’ or ‘overloading profits’ so that for example directors can cash in their share options before the inflated price of the stocks is discovered by the Stock Exchange. It is a way of making high financial gains at the expense of the business, other shareholders and employees.

We need to put brakes on our ability to disguise the facts. We do not fool others, only ourselves. All the statistics show a trend towards a poorer place in the world economy for the UK. This is due to the way we manage our businesses. It is a sad fact we can’t get away from.

We are jinxed by finance, especially the ever-present pressure to reduce costs. Most aspects of management are overshadowed by pressure to concentrate far too much on cutting costs. The one exception to this philosophy is that of sales. So putting these two aspects of management together we appear to be going down the competitive road in destructive tension. This road is not paved with gold. India, China, and Eastern Europe have much lower costs than the UK. We can never compete with these countries on costs. But in order to try, some of our larger companies are tempted to move their operations to those expanding countries. In following the cost reduction path to the extent we have, we fail to see training and education as ways of generating innovation and competitive edge.

Each organisation tends to wait for others to do the training and educating so that they can pick up cheap expertise. Getting everything on the cheap has become a way of life for many organisations, but that is not the answer. It is the problem.

Everyday experience can bear witness to the extent of our organisations’ ability to produce what we in the UK want. Our kitchens will reveal much about choice – a coffee machine from Germany, food processor from France, Spanish toaster and saucepans from Hong Kong, cutlery from South Korea, tea and coffee jars from Belgium, coffee mugs from China, Spain and Japan. How can they make profit from trading basic equipment around the globe? Much of our food and drink seem to come from overseas too – strawberries from Morocco or Jordan, flowers from Kenya, fish from Thailand, Dutch butter, Australian wine etc. If we look closely at the products that are made in this country, we find that many are made by foreign owned companies – Nissan, Ford, Kellogg, Heinz, Samsung, Philips for example.

The reason they can sell to us is because their consumers in their home bases expect perfection and perfection is what they get. By the time their goods and services are being sold into the UK, they are far superior to the quality of product we can produce. Their priorities are different. They aim to produce what is needed, at the right price and the best quality.

Customer Tale no 1

Up-market Service

A friend’s rich Canadian cousins came over to visit my friend living in London. The Canadians wanted something typically English for their daughter who was getting married. They had bone china of a particular pattern in mind. My friend took them to a famous London store which she thought would have the range in stock.

Their selected pattern was one of the most expensive but was not on display. They wanted to order a complete dinner service and have it shipped back to Canada.

****

My friend found an assistant and mentioned that her cousins would like to order the dinner service. The assistant told her ‘I don’t have the time to serve you now. I have an important customer.’ My friend pressed her. The assistant just walked away saying ‘I told you I’m busy.’ No sale was made.

As individual consumers we tend to complain to our friends rather than pin down the culprit.

Criticism of our reluctance to change approach usually results in national institutions representing our organisations making calls for sweeping changes in the law, or overnight monetary solutions giving the impression that all we need to do to put things right is to pull a few levers. The much lauded long-lived low interest rates were supposed to signal time for growth but have not resulted in production of better quality goods or services that people want. On the contrary, productivity is reluctantly stagnant with no obvious shift to restructure the economy towards better added value products.

There have been some astute observations made about the way we operate our businesses. These observations go back a long way. So we should have learned something. But compared to what is happening today this is not apparent.

• April 1990. Noble Lowndes, the management consultants and actuaries calculated that executives in a wide range of industries were receiving annual salary increases of 15% and Chief Executives 20%.

In the financial sector, senior personnel were enjoying rises in basic pay of up to 50% while earnings per share generally fell.

These increases compare with 9.3% to 100,000 railway workers and 8.5% to 74,000 power workers. Inflation was 10%.

• January 1992. Top graduates at Warwick University Business School said that there is a simple way of improving the UK economy – raise the quality of UK managers. Too many mangers come from a narrow financial background. 93% of the MBA’s took the view that lack of skills in strategic planning and communication were the worst failings.

• February 1992. A study by the Low Pay Unit acknowledged that while many executives know that 60-hour weeks wreck marriages and increase the chance of heart attack, it might surprise them to know that the extra hours they put in are not productive and are ineffective. Increased tiredness means that productivity decreases proportionately with every extra hour worked.

• April 1992. IOD’s head of professional development John Harper was reported as saying that the half a million or so company directors in the UK did not go on courses ‘so most don’t realize just how incompetent they are.’

• March 1993. DTI report on British industry said industry was fundamentally weak; beset by inferior management and products and suffering from inadequate investment in new technology. At best, the study says it will take decades to remove the deficit in the Balance of Payments.

• September 1993. Quality management was failing to deliver promised results according to an Institute of Management report, which said that only 8% of managers rated their quality initiative as totally successful. The majority only claim a moderate degree of success or are neutral. The main barriers to quality were a shortage of resources and lack of commitment by top management.

About customers

• July 1990. Robin Buchanan, a management consultant of Bain International, told an IOD conference that US companies were increasing their profitability by between 25% and 100% by retaining a few percent of their customers they might on average have lost. And he went on to say that the average American company would loose between 10% and 30% of customers during that year.

• October 1991. A Which report into banking said that ‘banks are incompetent and arrogant.’ ‘Banks don’t seem to see customers as valued customers or clients but as fair game for arbitrary charges, often imposed without warning which only benefit that bank.’

• October 1992. Wendy Toms of the National Consumer Council said about banks, upon learning that one of the big four was charging a 23-year-old customer 69% interest ‘Its appalling behaviour. People are taking sensible steps to reduce their outgoings and the bank weighs in with a swingeing rate.’ The customer said, ‘I couldn’t believe the bank’s attitude.’

• April 1992. BEM a customer service agency studied a random selection of stores and banks in 16 towns and cities and found that one of their key problems was that they failed to open enough tills at peak times.

• March 1993. According to a survey by the management consultants Price Waterhouse, fewer than 10% of companies measure the number of customers they lose each year, in spite of the huge costs of replacing lost customers. 45% admitted that their sales forces were ill suited to the present needs of their customers.

These examples were set in a time of depression and the need to compete as aggressively as possible for a slowly growing market. Yet they represented a culture where commercial thinking was about getting as much as possible for nothing or as little as possible. Nearly thirty years on we have to ask whether anything has been learnt. For example, while most large supermarket chains overseas look for profits between 1% and 2% while growing their market share, some of our largest supermarkets who in 1993 got together to try to shut out the American competition, still look for profits at levels up to 8%. This is obviously one of the reasons the Americans wanted to get in on the act. By looking for huge profits instead of market share our supermarkets are allowing overseas competition to easily enter the market. Walmart (Asda), Aldi, Lidl, Costco, Nisa and so on.

Not to be outdone and true to their colours, the credit card companies caused the supermarket chains to lodge a formal complaint of unfairness with the Office of Fair Trading because they (the credit card companies) wanted to charge the supermarkets more for their services.

In the City, Lloyds (insurance market) have seen huge loses riding on waves of rumours of insider dealings at the expense of the external Members who remain angry and dismayed at how this 300-year-old British institution has treated them.

During the Financial Crash, banks were found to be exploiting their customers’ potential problems some by setting loan conditions predicated on accepting the bank’s expensive charged consultancy. The banks were eventually called out for sharp practice, but no one has been penalised for that improper use of loan leverage. Indeed, the UK has yet to prosecute any bankers for their shoddy approaches to dealing with the Financial Crash. It seems business continues as usual, with the same old philosophies in place.

Another well-known handicap when trying to overcome the competition in other countries is that so few of us can speak other languages. It is very difficult to sell when you cannot understand what the customer wants.

Customer Service Tale no 2

Show Business

A large Midlands motor company attended all the European car shows with its new models.

The amount of work that goes into preparing for these shows is immense. And of course having got the cars there, showing them off and explaining what they can do is important. It therefore came as a surprise to potential customers to find that all the brochures were printed only in English. Not everyone was disappointed. It must have come as a pleasant surprise to the competition.

****

• Our overseas competitors are better educated with 85% of Japanese and USA top Managements holding degrees. In the UK only 20% hold any qualification. By 1988 France had trained 40% if its workers to craft or technical level and Germany 64% compared to the UK’s figure of 24%.

• We are financially orientated while our competitors are marketing orientated. We ask if we can afford it before we know what it is we want to do, while they decide what they want to do and then examine how they can do it.

• Our main competitors if you think about cars and household goods, Japan and Germany have investors who will wait up to 7 years (Japan), 4 years (Germany) for a return on investment, while our investors demand a 60% return within three years.

• We are still producing cheap goods so trying to compete with developing countries and their lower costs structures. Our main competitors in the developed economies produce quality goods relying on technology to achieve high added value where profits are better and more secure.

The Villains

The most important person in an organisation is the leader, the Chief Executive. In the UK by and large the CEO takes the praise when business flourishes and sacks first level workers when things go wrong. For this reason, the Chief Executive cannot be viewed without question as a positive influence on organisations in the UK. Nonetheless the CEO is the number one launch pad for any change. In this book the Chief Executive comes in for much scrutiny.

Having said that, the most villainous group is the one who put an incompetent Chief Executive in charge. Once an incompetent chief executive is in place, everyone including customers, workers, shareholders, and managers start to lose interest in the organisation.

The mid 1980’s produced a politically accepted management philosophy of open self-indulgence with self-preservation at its heart. This developed an insular self-centred management culture which in turn began to ignore much of what they did not understand, including innovation, quality, and customers. The result was a selfish inward looking and self-opinionated management style. Typically, this type of organisation seemed to be run on a mixture of macho hype, secrecy, rumour, innuendo, and bullying. Although the impact of the tech revolution and new start-ups has seen a revolution in style, it is questionable whether there has really been any change in most managements which remain true to their origins and are either blind to the implications or feel powerless to change direction.

Villains and their practices

• Recruiters are gatekeepers, in the main processors rather than experts on the required skills for the job in hand. Therefore the methods of selection are concerned with recruiting people who fit in rather than selecting the best and most accomplished to do the work.

• Finance management is seen as a specialist function and therefore in the hands of people who are unfortunately in the main accountants. This profession, which has come to have such a vice like grip on most organisations’ minds, started their takeover bid for UK management philosophy about the time the Japanese were learning the best ways of doing business from innovative Americans. And while I would not for a moment start to suggest a Japanese conspiracy, I do and will outline the implications of the rise and rise of accountants in UK management.

UK management philosophy stems from, is controlled by, and owes its allegiance to the philosophy of accountants. Accountants are basically ‘registered counters’ (Charles Handy one of the great 50 Thinkers of management philosophy). Accountants have on the whole a pitifully narrow training and management perspective. Yet they often control corporate planning and strategy – the reins of the organisation. How did they ever get to that position? And what if anything can be done to halt or even loosen their hold?

• IT specialists arrive at their influential stage in organisations by default. They have a power base deriving from what is basically a filing system. They do not make the computers and seldom write the software. They adapt both to users’ specifications, onto which they add their own ideas, without in the main understanding the implications. But because top management is frightened of the technology, they are mostly unable to get to grips with the subsequent problems caused by reliance on systems they do not understand. In this case top managers are the villains.

• The City insider network – The 1,600 or so bright but untrained young people, the City analysts who deliver the algorithms to advise speculators on moving their company share investments, and who front the City. They appear regularly on TV and run blogs to advise us on the direction the City is taking from an investment stance. Their views determine top companies’ performance and thus the fate of companies’ chairmen and CEOs. But their work hardly goes hand in hand with the kind of long-term investment our manufacturing base needs. If all investors were to take a long-term view, analysts would be out of a job. They essentially make their money on short-termism.

• The Bank of England, the bankers’ bank, who’s incompetent monitoring of procedures allowed banks to operate in this country when they had been turned down by the US authorities, as in the case of BCCI (Bank of Credit & Commerce International, perpetrators of the biggest bank fraud in international finance history), was enough to inject oceans of suspicion on the UK banking system at a time when confidence was needed. Later after operational independence in 1997 it downgraded the importance of monitoring of financial stability and the Financial Services Authority was allowed to fail in checking the Financial Crash of 2008.

• Other incidence of confidence sapping judgements – the many pensions scandals over the decades from the Maxwell Brothers at Mirror Group to Sir Philip Green at British Homestores, who used company financial regulations to increase their own personal wealth through what most people would judge unethical exploitation.

• High street banks like the Royal Bank of Scotland who penalised small businesses for the bank’s own mistakes by increasing interest borrowing rates without adequate notice.

• Villains include lobbying organisations like the IOD and the CBI whose special pleading and advice to government has done more to throw the government into confusion than any other source except the City.

• Finally, the CEO, who is after all the leader, becomes a villain when s/he allows the financial director’s voice more prominence than any other director.

The Heroes

All Chief Executives should be heroes.

There is today in the UK an underappreciated manager who dares to raise his/ her head above the parapet, while everyone else is stuck firmly in the trenches, heads down. This manager has ability, potential, is qualified, competent and believes in helping the organisation to go forward as an organisation. Because s/he in effect carries a team philosophy, s/he tends to question the status quo. This makes others feel threatened either because they feel challenged in their ambitions, or because they might have to step out of their comfort zone of business as usual. For this reason, standing out can mean being highlighted as a candidate to be jettisoned, thrown out as a troublemaker. Yet this manager is one of the key people in any successful organisation. Although any person should be able to stand out in an organisation, in these days of ‘heads down’, only heroes stand out.

People are our most important assets. We have heard it said often enough. But in business we in the UK, do not treat people as assets. We actually treat them as costs, as liabilities on the balance sheet. The only time we put people first is when we look to cut costs, i.e. reduce the workforce.

As long as we treat people as liabilities, they will not be heroes. So the questions are:

• How did we get to treat people as liabilities or costs?

• How did the villains get the power and the influence and,

• how can we replace villains with heroes?

Chapter 2:

The Wake-Up Scenario

In this chapter: -

Change to a more flexible organisation

• Structure

Allow real talent to succeed, drop bureaucratic management framework, set up communication access across all levels.

• Culture

Change to customer orientation, listen/ask rather than demand, plan rather than bulldoze

• Practice

Allow easy flow of information, encourage easier communication, plan cross-function understanding

Dissolve bad management influences

• Institutions

make information relevant, screen-out useless information, influence judgements and decisions.

• Professions

integrate into the organisation, spread their knowledge, question automatic promotions

• Functions

integrate functions, change defensive stances, pool knowledge.

Motivate the individual

• Challenge

support potential of the individual, allow the individual to fail, show appreciation.

• Monitor

expose them to themselves, build confidence and skills, integrate.

• Reward

reward innovation, reward good performance, recognise achievements publicly.

The wake-up scenario rings alarm bells everywhere at once. Since no one person and no organisation can operate in isolation, though some try hard enough, an unexplained change in one part of the organisation sends questioning ripples to other areas. If the change is not managed the questioning ripples grow and take over. Therefore in the UK, in the sort of economic climate in which we found ourselves in the financial crises of the 1990’s and then the 2008 Financial Crash, and now the EU exit crisis , all with major economic threat and huge change in trading regimes, it might be better for complete organisation change.

If such a change is perceived by the organisation’s employees as fair, logical, forward looking and well planned, an extremely difficult proposition but nevertheless necessary in most organisations, there is a greater chance that it will be successful. In any organisation the most important resource it uses are individuals. This must be reflected in any change.

Change to a more flexible organisation

Most organisations will only consider change when change is forced upon them by market forces. The reactive mood can be very disturbing. Deep mistrust grows easily. Desperation management measures are seen as panic by individuals who resign themselves to a fate which is out of their control. That is why alarm bells should ring far in advance and before disturbing ripples take on more importance.

Organisations employing well explained long term strategies which are understood and accepted by its personnel, change a little all the time without fuss. Change can be planned, and continual change can be built into organisations’ structure, culture and practice.

Structure change

Organisation life is changing rapidly. The conventional working week is getting shorter and the people who work it more diverse in how they work. There are more freelancers, self-employed, part-timers, job sharers, people working from home, contracted workers, and interim workers than ever before. Added to that many work under zero hours contracts. While all these options offer a degree of flexibility for the workforce, they also indicate that employers want to have fewer responsibilities towards workers. We have become used to big businesses contracting work overseas, manufacturing, fashion and clerical work including customer service. Where customers fit into these patterns is anyone’s guess as they are rarely considered in the move to cut costs.

And now we have to think about our organisations on a global scale. Other organisations, some in countries we cannot place on a map, some in areas of