30 December 2010

Sun Zi Art of War-3: Health Check with 7 Measures

What is well known and yet need to be repeated often about management? Measurement. If you don't have a measure, then you are out of control. You become and get what you measure. Without measure, you don't know how you are progressing. Without targets, you can't tell whether you have arrived.  Because measure affects behavior, what and how you measure and what you do with the measured result had great impact on the behavior of people, it could be good or bad. So the measurement system itself need to be reviewed regularly. Here is Sun Zi's proposed Seven Measures explained in mind-map format:


  1. Top Leadership (The King) commitment to the Mission & Values
    1. Does the top embrace and practice the mission and values and thereby gain the following and commitment of his men, such that the men are willing to die for the cause (Factor 1 of 5 Warfare Factors). (Dao by itself could be translated as whether the Top has character that follows the righteous Ways. But in context, we had use Mission and Values instead.
    2. A lot of top leaders just talk and don't walk their talk and wonder why people are not following or trusting them. 
    3. It is common for consultants to find that their clients staff generally could not tell the mission and values of their companies that are written and published on their website and manual.
    4. How do we measure this? Not by measuring the Top leader's attributes but by measuring the outcome desired! Hence measures like employee satisfaction, staff turnover rates, ranking in top companies to work for, employees recommending others to join their companies, etc are the better to use.
    5. Personally, I feel that Top Leadership is responsible for the culture of the company. Hence, measures on culture and values are useful too.
  2.  Commanders - Capabilities
    1. Sun Zi tell us to measure this. For the measures, please see Sun Zi Art of War-6: Leadership Skills and Creating HPO.
    2. Capabilities required may be classified into general soft skill and specific domain skill needed for the jobs. Different strategic jobs need different skill sets, so we must come out with our system of measurements.
  3. Timing & Position
    1. These two factors are rated together. 
    2. Again, we must use output and outcome measures. So we could use measures like cycle-times, delays (with respect to plan, with respect to competitors).
    3. Right position and timing should produces good revenues for us and hence such financial measures are useful too. Cost savings or over-runs are useful as well.
  4. Laws (Policies) Implemented?
    1. Implemented can be measured in stages:Drafting, Written, Communicated, Enforced. 
    2. We can measure the content (quality and depth of the laws) and also the extend or how widespread in the organization, are they being enforced.
  5. Work-Force Strength
    1. Strength can be measured in Capability Level and Size (no of people).
    2. A good measure is Readiness Measure - the number and type of skills have divided by the number and type of skills required.
    3. Work-force's productivity is enabled by the productive assets like machines, methods, materials, environment, and measurement(instrumentation) (6M). Hence, I included them here.
  6. Work-Force Training
    1. Are the work-force skills set being continuously improved. Is there a program to ensure this is so. How many and what are the scope of the exercises that are carried out by the men? Exercises are reviewed and improved. Our soldiers do that regularly so what about our employees.
    2. Training need not be formal. It is best to create a Learning Organization for self-learning to ensure the man and the organization learn over time.
  7. Rewards & Punishments
    1. Are there rewards and punishments systems? 
    2. Do they support the enforcement of the Laws/Policies or do they go against them?
    3. Are the system clearly understood by the workforce?
    4. Are they fairly and transparently enforced? Do the workforce trust the system? Untrusted incentives system create suspicion, fear and cheating. 
    5. Most people are very suspicious of measurement system, especially when they are used for incentive systems. There are proper way to do them.
What are Missing?
What do you think are the Measures that are missing from Sun Zi's Art of War? Take a look at the Singapore Quality Award System Business Excellence Framework fig 1. It covers Leadership(Driver), System of Planning, Information, Processes, People, Customers, and Outcome of Results, in an environment of Learning & Innovation. 


In the mind map I listed down weapons and other assets and customers. Assets could be included in the workforce strength. A key element missing is CUSTOMERS. One can argued that it is included in the Timing and Positioning. That is so because I change terrain to positioning with creates the concept of marketing position with reference to the customers and to the competitors. This missing is because Sun Zi is about Warfare whereas business is a Love-affair with Customers that I stated in the post of this Sun Zi Series. 


For the seven measures, six are internal and only one Timing and Positioning is external. In the war, timing is about weather, seasons and positioning is about terrain. In business, we will extend it to mean customers desires/satisfaction, market trends, relative positioning to competitors and the macro factors PESTLE (Politics, Economic, Social, Technology, Environmental and Legal)


Got Strength or NOT?
Our strength or lack of, should be measured in the eyes of the customers, relative to our competitors'. Hence, Sun Zi is emphasizing that we need to know both, our competitors and ourselves in order to ensure success. Knowing oneself alone has a 50% chance of success. Not knowing either is sure to fail.


What is Your Company's Health?

1. Can you come out with 7-10 measures for your organization (Remember to include one for CUSTOMERS). 
  • For customers, to just measure satisfaction only. Studies show that satisfied customers behavior just like unsatisfied customers; only those are highly satisfied will be loyal. So it is better to measure Net Promoter Score. 
2. What is Your Score? What are the areas of strength and weaknesses?
3. Pick a key Competitor, do one about him, or better, ask your customers to do one about him.
4. How do you compare against him?
5. What actions should you be taking? About your strengths and not just about fixing weaknesses.

Update 2 May 2013
A typical error in quoting Sun Zi is "知己知彼,百战百胜".
The phrase in 3:6 and 10:5 is "知彼知己, 百战不殆;知天知地,胜乃可全。”
There are 3 key errors:
  1. Order. Know our enemy first and then we can compare ours against the enemy. Most people look  at themselves to claim their strengths and weaknesses. That is incorrect. Our strengths or weaknesses can only be determined in comparison with the enemies that we are going to fight with and with respect to the theater and timing of our operations. Strengths and weaknesses should be determined from the external. In business, the external are competitors and customers, the markets, industries, and locations that we operate in.
  2. Not Win every time but Not Loose every time. It is a secured position but need another two factors to ensure a win every time.
  3. The Two More Factors: Know the Heaven & Earth - i.e. The Right Timing and the Right Terrain to take advantage of.
Next post: Sun Zi Art of War-4: Appraisal & Prediction


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