SWOT Analysis

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Every company has strengths and weaknesses.  It is valuable for a manager to determine what they are as soon as possible after joining a company, whether they are responsible for a department, or the whole company.  A fast and simple way to do this is with a SWOT analysis.  SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.  Every business student learns this as part of their curriculum.  After determining what the companies (or department's) strengths, weaknesses, opportunities, and threats, the manager can create infrastructure projects to enhance the strengths and mitigate the weaknesses.  By putting together a focused plan, many of the weaknesses can be turned into strengths.  If the team participates in brainstorming the lists for the SWOT analysis, they are more likely to buy into the plan that comes out of exercise.  Sometimes the brainstorming session can be very enlightening for the manager, but sometimes the brainstorm only produces generalities that are hard to act upon.  The following list is provided from many SWOT exercises to give examples of the kinds of things that can go on to the lists.  Most of these items can be worded to be either a strength, weakness, opportunity or threat, depending on its applicability to the specific company or department.  Usually the strength list is considerably shorter than the weakness list.   This is normal, because most managers and employees tend to focus more on what is wrong more than what is right.  Be careful not to ignore the strengths.  Enhancing the strengths is important, particularly in a successful company.  Also it is good to know what the company views as its strengths when marketing to existing and potential customers.  Once the SWOT analysis is completed, the next step is to turn the lists into projects or actions.  Then those projects/actions must be prioritized.  The methodology for prioritizing projects will be the subject of a future blog post.

Here are the examples of strengths, weaknesses, opportunities and threats.  Remember that almost all of them can be reworded to go from a strength to a weakness and vice versa.

Market or Industry
Semiconductor, Lighting, EMS, or other Industry
Have not exploited __________ (ex. Medical, Aerospace,Oil & Gas) industry potential
Too Concentrated in ___________ industry
Not diversified
Global presence
Presence in LCR (Low Cost Region)
Reliance on too few Customers / Industries
__________ Industry is using more, and more complex ______ (ex. Plastics, Ceramics, Castings)
Close to customers geographically
Close to suppliers geographically

Sales
Too much focus on only a few customers
Success in gaining new customers
Effectiveness of Sales effort towards non-industry customers
Low Cost Quote Model - mark up is very competitive

Customers
Good penetration with existing customers
Poor cause/effect understanding of Customer Programs
Flexibility to Customer is Disruptive and costly
We are hard to do business with (communication)
Recognized name with key customers
Loyalty of long term customers
Perceived as flexible and responsive by customers
Strong relationship with primary customer
Ability to adapt to customer needs
Customer Base
Strength of primary customer
Loyalty of Customers - Long Term
Enjoy long term repeat business

Personnel Characteristics
Work ethic of personnel
Stable long term personnel
Dedicated + Hard working work force
Dedicated management + employees
Good Labor Pool – Technicians, Engineers, Programmers, etc.

Human Resources
Ineffective Performance Reviews
Benefits attract talented personnel
High turnover of new hires
Free medical/dental for employees
Low employee turnover w/exceptions
Employee Benefits + HR Support
Inter-Dept conflict Resolution Process
Retention of talent
Lack of Enhancement Training
Lack of Training for required skills
Measurement of training effectiveness

Company & Executive Management
Too Many New Senior Managers
Duplication of functions in more than one department
Financial stability
Recognized name & history
Treatment of employees
Lack of recognition of employee effort
Senior Management skills
Lack of team building
Management Commitment to Quality Products
Communication with employees
Training for required skills
Size of company
Over reaction to customer demands
Prevention of issues
Poor Resource Reallocation Based on Changing Situations
Corporate micro-management
Success in achieving top objectives

Company Culture
Shoot the messenger/blame others/CYA culture
CYA Mentality
I’m OK if my task is complete
I’m OK – You’re not OK
Desire to push tasks/functions on others (Even if it is inappropriate)
High Stress Environment is the Routine
React to issues vs. prevent issues
Minimal bureaucracy
Department silos
Email overload, including abuse of "copy all"

Strategy
Product line too diverse
Poor strategic planning discipline and execution
Lack of Desire for Global Success
No plan to build infrastructure
Strategy for growth
Identity Crisis -
          Examples - Engineering Company
                            Semi-conductor company
                            Technology Leader

Capabilities
Customer Service/order entry errors
Assembly Procedures are out of date
Poor purchasing control
No Cost Reduction Program
Inventory Accuracy
Lack of resources for supplier management
Quality and amount of machinery
Low Cost Product
Availability of technology tools on shop floor
New Product Introduction (NPI) Process
Capacity
Capacity Planning
Ability to ramp/grow
Lead Times are too long:
                                     To customers
                                     From suppliers
                                     From our shop
Manufacturing Processes & Expertise (custom products)
Good work instructions for Operators and Assemblers
Flexibility internally- Perceived as responsive to customer
Ability to find cost reductions
Delays in NPI processes
Supplier management
Effectiveness and efficiency of production planning
Don't always follow good work instructions
Poor shop floor travelers (sequences missing or wrong)
Expansion capability
Customer Service
Capability to produce parts quickly using prototype shop
Quick reaction to customer needs
Flexibility to meet customer needs
Slow to adapt to new customer requirements
Late Deliveries
Planning/Execution of transferring products between sites (mostly between US and Asia)
Availability of tools to do the job in office (phones, laptop)

IT
Good ERP, email and Document Management systems
Availability of information from ERP
Ineffective information systems
Standard Electronic reports are not user Friendly
Email Overload
“Reply to All” is used too often
Poor IT Support
Difficult to obtain IT support
Effective use of ERP system
Automated information system-pc’s availability
Outlook, Eng Software (3D to 2D),

Finance/Accounting/Costs
Internal Audit Program
Profitability
Actual product costs are not Accurate
Ineffective accounting support to factories
High overhead
Low fixed costs

Quality
Timeliness of incoming inspection
Quality of product
Process Control
ISO certified
Field Service Processes
Inadequate testing prior to release
Timely support from QA dept
Incoming Inspection
Poor perception of the value of, and little respect for the Quality Organization

Engineering, R&D, Technical Capability
Diversity of Technical Skills
Good technical resources for customers in engineering and production
R&D capability
Good diversity of technical skills in _______ (ex. Plastics, ceramics, machining, etc.)
Prototype capability
Engineers don’t spend enough time on the shop floor
Document Control
Engineering Change Order (ECO) Process
New product development (DFM/TTM)
Depth of technical knowledge

Ops #5 - My Accountant has a Gun - Part III

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The next day I was contacted by our corporate legal counsel, who insisted that we obtain a restraining order from a local court to make sure that Jim could not return to the company. I learned that a restraining order can only be issued to keep someone away from a person and not a business. As the head of the company, and since the actual threat had been against someone not in the state, the restraining order named me as the person that Jim could not come near. I was really a proxy for the whole company because the actual wording of the order said he couldn’t come within 200 feet of me, my home, and my place of work (it also included my wife and children and their work and schools).


We thought that because Jim lived in another state, he would not appear to contest the restraining order. If the defendant does not appear, the judge will normally issue the order. I went to the court house with a local attorney and our HR manager at the appointed time and was surprised to see Jim in the courtroom. He had returned to California and hired a lawyer to represent him. He intended to fight the restraining order because he feared having this in his record would impact his ability to get consulting work.

I didn’t realize that the appointed date and time was actually a trial date, and that since there was a plaintiff and a defendant present, we immediately commenced a trial. It took about three hours for both sides to present witnesses and cross examine me, the HR manager, and Jim. I testified that Jim was a good employee until this incident and there was no evidence that he actually intended to carry out his threat. I told the judge that it was definitely a bit frightening on the day of the incident. Jim said he was just blowing off steam and had no intention of hurting anyone. I thought the judge would rule that a restraining order was not necessary and that we had over reacted, but he didn’t. He came down firmly on the side of the company and said that with the number of times that employees had actually returned to get revenge for perceived grievances, companies had to take all threats seriously and issued the restraining order for three years.

Yes, this really happened.

Ops #5 - My Accountant has a Gun - Part II

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I called my security officer, who was really the plant maintenance manager with a collateral duty as security officer. We agreed that we would keep an eye on Jim while we decided how to proceed. We found him working alone in his office and did not appear to be agitated any longer. At this point I knew that at the very least we would need to terminate Jim and get him off the premises.

A hastily arranged conference call took place with my boss, Corporate HR, Corporate Counsel, me, my HR Manager, and Security Officer. Everyone was in agreement that Jim’s consulting contract would be terminated immediately for both the threat and having guns on company property, which was against published policy. Here is how we proceeded:

We called the local police and told them what had happened. They were sympathetic to our situation, but told us that they could not react based on a threat only, particularly since it had been directed at someone far away. They did say that they would make a note of the information and would respond immediately if anything more aggressive were to occur. Their advice was that if we were concerned, we should contact a private security company.

I was concerned, and the HR Manager just happened to know someone who worked for a private security company. We called them and they had a large, imposing looking, private security guard in plain clothes on our premises within 45 minutes. He was carrying a licensed concealed weapon. This was not your typical shopping mall security guard. He was a very experienced professional who knew how to handle this type of situation.

The plan was to terminate Jim, but up to now his aggression was directed at my boss, but what about after I terminated him? Would this trigger an angry response? Don’t forget about the guns that we presumed were in the trunk of his car.

I called Jim and asked him to come to my office. This was not unusual, and he wouldn’t suspect what was coming. When he walked into my office he saw there were several people already waiting for him. I had the HR Manager, the Security Guard, and the Security Officer already seated and asked him to sit down next to the security guard. I quickly told him that he had violated company policy by making the threats to Bill and that his contract was being terminated immediately. To my surprise he calmly said he was expecting this since he had left my office earlier. I told him that I had since learned that he did in fact have access to guns that he kept in his car and that was why the security guard was part of the meeting and introduced him. Jim went on to say that he was just mad and blowing off steam and that I was over reacting. I told him that we hoped he was only talking when making the threat, but as a precaution we had brought in the security professional.

I then gave Jim a choice. I told him we were prepared to allow him to go home immediately. I told him that we would buy him a one way ticket home and that the security guard would escort him to his apartment and help him pack up all his belongings and then stay with him until he was safely on board the plane home. We were specific that we would send his guns to him separately using acceptable shipping as long as they were legally owned by him. He asked what would happen if he didn’t go along with this. I told him that if he did not choose this option, we would turn the matter over to the police. He obviously did not know what we knew about how the police had reacted to our earlier call. Faced with the finality of not having a job and being away from home, he accepted this option and left with the security guard. He cooperated fully and left on the plane later that night, with the security guard with him the entire time. They actually hit it off well and had a pleasant evening together.

The story doesn’t end there, but you'll have to come back in three days to get part III.  How would you have handled this differently?

Ops #5 - My Accountant has a Gun - Part I

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I was the Division President of a company in California that was wholly owned by a holding company headquartered in another state. There were several companies owned by the holding company and operated as separate entities, even though they were very similar, so that they could be sold separately if necessary. My boss was in South Carolina.

The holding company uncovered several serious financial irregularities with the company finances, which led to the departure of both my predecessor and the VP of Finance. The holding company sent a consultant to act as the VP of Finance on an interim basis that they had worked with before while we searched for a permanent replacement. I will call him Jim (not his real name). Although Jim was known to tell some tall tales, he was an excellent accountant and did a lot to get the books back in order. Because he was very knowledgeable, both in general accounting principles and the format that headquarters wanted their reports, the accounting staff liked working with him. Jim’s home was in the Midwest and he was living in a corporate apartment nearby during this assignment.

On this particular occasion, we were tasked with pulling together an enormous amount of financial information for some analysis that the holding company was performing. Jim worked nonstop for about three days to compile the information. He was working at least 18 hours a day during this stretch. When the information was complete, we sent it off late at night and went home feeling pretty pleased that what we thought was impossible when we started was actually sent on time and done very well.

When I got to the office the next morning I saw that my boss, who was also a very good accountant, had sent an email to me and copied Jim referencing the reports. Since he was on the east coast, he was able to review the reports that we had sent late the night before and respond to us before we got into the office. As was his nature, he was highly critical of a few minor clerical errors in the reports and completely ignored the herculean effort that Jim had put in to complete the reports on time. I was just about to get up to try to intercept Jim before he saw the reports when he appeared at my door with a red face. I could tell he had already seen the email and invited him in and shut the door.

“I know why you’re here” I said. He started to vent about the email and I just sat quietly because I agreed with him that my boss had been too harsh. Jim deserved a pat on the back and got a kick in the teeth. Jim said “And don’t think I wouldn’t say the same thing to Bill if he were here”. Then he upped the vitriol even further by saying “and if he didn’t like it, I might just have to deck him and don’t think I wouldn’t do it”. I realized that Jim was going too far, but he was just getting started. His voice was getting louder. I tried to calm him down and told him he couldn’t make threats like that and I wouldn’t tolerate them. Then he said “In fact, I just might go out to my car and get my gun and blow his F__ing head off!” At this point I got up and had to almost shout for him to hear me. “Jim, you are way out of line. You need to shut up before it’s too late.” This shocked him into silence. I told him the conversation was over and that he couldn’t say things like that and he needed to leave my office immediately.

Since Jim was a bit of a talker, I really didn’t think he was serious, but I knew I had to address the situation and I couldn’t have a person around that would make threats like that. The good news was that the person he had threatened was 2,000 miles away and in no danger. I had my HR Manager come to my office to get her take on how to handle Jim’s threat. To my surprise, she said “Oh yeah, I’ve seen the guns he has in the trunk of his car. He showed them to me the other day”. My feeling that Jim was a harmless talker evaporated and I became very concerned over what he might do. The fact that we had a potentially unstable character and guns in close proximity was weighing on my mind.





That’s where I’d like to end part I. Think about what you would do in this situation, then read again in three days to see how we handled it in real life.  Yes, this really happened.

Targeted Cross Training

Frank's note on this post:  I prepared this post with Excel spreadsheet tables inserted into the word document as examples of the concepts presented.  Unfortunately, Blogger cannot accept imported tables without complicated HTML instructions that are beyond the typical blogger.  I did the best I could to describe the examples.

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Every manager must continue to get things done, even when critical members of their team are missing. This could be for a single day when a person is sick, or away from the office on business, to permanently gone suddenly from accident, firing, or defection to another company. It is better to be prepared for these situations rather than simply reacting to them, and it doesn’t have to be painful.

Many companies institute a cross training program by designating a backup for many functions or positions. This is better than nothing, but as people leave the organization, their back up is identified and carries the ball for a time, but most companies forget to consider who the departing employee was backing up. This creates the all too often situation where a person leaves and the manager discovers that the backup has already left. Sometimes there is an experienced person who has the skills to cover several functions and does so regularly. This makes the organization extremely exposed when this experienced person leaves.

Another situation to consider is when there are several people who perform the same or very similar functions. What if they perform the same function, but for different customers? How many people should have an understanding of the unique aspects of a specific customer?


Why is cross training important?
1. To accomplish both routine and critical functions when personnel are absent.
2. To develop the expertise of personnel beyond their usual functions.
3. Introduce people to new business areas.
4. Improve communication and coordination within the organization.


What is Targeted Cross Training?
Targeted Cross Training is a methodology for identifying specific knowledge or skill areas and how many people are needed to have that skill or knowledge. By definition, the method not only lets the manager know when there are not enough people who have a skill or knowledge and therefore more need to be trained, but also highlights when more cross training would be a waste of time and resources.

Here is an example that every office struggles with – the receptionist. Usually there is only one receptionist, but someone needs to greet visitors and answer the phone (when the automated system is not adequate) during breaks and absences. The first thing to do is to determine the minimum number of trained people needed in addition to the person who holds the position. Let’s say the minimum number of trained people is four (receptionist plus three others). The next thing to do is to identify the “ideal” number. Let’s say that is six. Now evaluate the training level as holds position, fully trained, or in training. Then list the individuals by name.  Create a simple table in Excel to track the personnel.  Unfortunately, a table can't be displayed in blogger (maybe a programmer could do it), so I cannot show an example.  Just pretend your listening on the radio instead of watching TV and I'll describe it below.
Create a table with 6 columns and label them: Function, Minimum, Ideal, Actual, Need, People.  Then just fill out the table based on the manager's judgement of how many people are needed to have the skill or knowledge associated with each function.  The only trick is to put a note in superscript for each person listed to denote whether they are in the position, fully trained but working elsewhere, or still in training for the function.
Function:    Receptionist
Minimum:  4
Ideal:         6
Actual:       3
Need:        1
People:      Martha (superscript 1 - in position), Bob (superscript 2 - Fully trained), Jan (superscript 3 -                In training)

In this receptionist example, it shows that the minimum number is not satisfied. The need number can be based on the minimum, or the ideal, whichever is more meaningful.  In this case, one more person must be trained to meet the minimum requirement and three must be trained if the ideal level is to be reached. It is relatively easy to design a spreadsheet that automatically updates whenever someone leaves the group. If Bob is fully trained in three positions and in training in two others when he leaves the group, the spreadsheet would reflect those loses in all of the positions and the manager could easily see where any problems were created and take action to get others trained.

Here are some other office functions used with this method: Buyer, Website maintenance, Export Paperwork, Computer Backup, Vacation Processing, PC Troubleshooting, Data Entry, Customer Service, Payroll Submission, Scheduler, Cost Accounting, Expediter, etc.  Basically any function needed can be included.

This method has been used successfully for office personnel, where the skills were primarily administrative as well as in manufacturing floor personnel where the skills were primarily technical.

A variation of this method is to ignore the people actually holding the positions and count the minimum and ideal numbers only from personnel not holding the position. In this variation the receptionist example above would show 3 minimum, 5 ideal, and only Bob and Jan would be listed as backups. This makes sense when there are many people holding the same position. If there are 10 people in customer service, and there is a need for five people holding other jobs in the company to be backups, listing the ten primaries is not necessary.

Cliche #10 - The Value of a Plan

Frank's management cliche #10:

“The real value of a plan is not in stating what to do, but in defining the universe of what not to do”

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Explanation:

I have always been a big fan of planning. In fact, every organization I’ve been responsible for in the last twenty years has written and executed a plan. Some plans encompassed whole companies. Maybe some managers who have written them over the years will comment. Here is my favorite example of how plans go wrong if not managed closely and “the universe of what not to do” creeps into a manager’s world.

We had recently completed a comprehensive plan for the entire company when I received a call from Mary, our controller. “Hi Frank, We’re (the accounting department) meeting with a software vendor today at lunch to talk about new time keeping system and they’re bringing in lunch, do you want to join us?” I was busy at lunch and I thanked her for asking and declined. After I hung up I continued thinking about her request and called her back. “Hi Mary, I was just wondering why you are meeting with this software company since new timekeeping software isn’t in the very comprehensive plan you gave me last week for your department that covers at least 12 months of activity”. She objected saying that our timekeeping software had never worked well. “Then why wasn’t it in your plan?” I continued, “Not only that, but the IT group also has a comprehensive plan for the next year that doesn’t include researching and installing new time keeping software. The manufacturing group, which would take the brunt of the disruption in learning to use a new timekeeping methodology, also has a comprehensive plan that doesn’t include new timekeeping software. And last, but not least, the maintenance department, which would have to install the new timekeeping hardware does not have this in their plan”. “That’s the reason we wrote a plan and coordinated the activities of all the departments so that their respective resources wouldn’t get pulled in whatever direction some other department dictated. So now I’m wondering why you would waste your department’s time and the vendor’s time exploring a project that has zero chance of moving forward for at least a year. If new timekeeping software really is a critical need for the company, you should propose it in next year’s plan and if it survives the planning process, all the other departments will also have it in their plans. If that happens, then it would be a good idea to start meeting with potential vendors. Remember my cliché, “Decide what is important and then call vendors, not the other way around”.

I think Mary actually carried through with meeting the software company since it was already arranged, but I didn’t hear another word about installing a new timekeeping system. It was a good teaching moment for Mary where she learned that one of the main reasons for writing a plan is to define what we weren’t going to work on that year.

That's what I think.  Tell me what you think.

Ops #4 - Phone Sex

I was swapping business stories with a friend the other day and after about the fourth one they suggested I include them in my blog.  She said "you have a hundred of these stories and other people would enjoy hearing them, especially if they illustrate a point you are making in another posting".  So here is the first one.  I don't think it illustrates any particular point, but it is kind of amusing.  Yes, each story related actually happened and is accurate as best I can remember.

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In the mid 1990's, I was the GM for a plant of a building products company located in a southern state.  I was sitting at my desk when the HR Manager asked to speak with me.  She wanted to let me know that an employee had let her know that our new receptionist of about two months, who was young and attractive, was having what the employee called "phone sex" with customers.  "Wow, that is a pretty serious accusation" I said. 

The receptionist sits behind a window to the lobby where there were frequently visitors waiting for someone in the company, or filling out an employment application.  The receptionist reported to the HR Manager.

I asked the HR Manager to look into the complaint and let me know what she found.  She came back an hour later and told me the following.  "I stood in the hallway outside the door to the reception area where she couldn't see me and listened to her taking phone calls.  After a few that were uneventful, I got an ear full of very graphic language between her and the person on the other end of the line that went on for several minutes.  I'm sure anyone in the lobby could hear it too."  The HR Manager then went on to detail how she had confronted the receptionist, and learned that the person on the other end of the line was a married distributor of our products, who was "just having some fun".  It turned out that he wasn't the only person who was having this type of fun with the receptionist, although it never went further than conversations on the phone.

So I asked the HR Manager how she wanted to handle the situation, since the receptionist reported to her.  She thought about it for a few seconds and said "I'll talk to her about it".  To this I responded, "good idea, and while your talking about it with her, make sure the words "your fired" come out of your mouth".

 Yes, this really happened.  How would you have handled it differently?  What factors would you consider in making a decision on how to respond to this situation?