On the Outside Looking In
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17 August 2013 - 22:37, by , in People Issues, No comments

Outsiders offer at least one indispensable asset: their ignorance. Outsiders have not yet learned what works in your business and what doesn’t. They haven’t learned why your business uses one set of processes instead of another. And they don’t know why you view a particular activity as value-added, when someone with less information might think it’s a waste of time.

The value of an outsider reflects a basic truth: The closer we get to something, the less clearly we can see it. An outsider holds the page at arm’s length, and sees it as the world or your marketplace would see it. The letters get clearer. And the reader knows what he’s reading, rather than what the author intended to convey.

I am reminded of Hans Christian Andersen’s “The Emperor’s New Clothes”, a fable about the value of involving an honest outsider. The emperor was fooled into parading naked through the streets, believing himself to be dressed in magical new finery. The town elders, not wanting to embarrass the emperor, proclaimed the nonexistent clothes as beautiful. But then a young boy who had never observed an emperor before exclaimed, “The Emperor is naked.” The boy reacted honestly because he was uninhibited by experience and familiarity.

Activity Based Management (ABM) provides managers a fresh, new perspective of the “inside” cost, processes and products of their organization. But when coupled with an “outside” perspective, ABM’s value is greatly enhanced. Here are seven “outside” perspectives to consider:

  • Consider employee’s perspectives.Managers should not keep ABM/ABC software reports to themselves. Teach employees the basic principles of ABM. Ask them for their honest opinions, continuous improvement ideas and product line perspectives.
  • Consider other manager’s perspectives.Managers should exchange activity accounting reports. Ask each other for opinions, observations and constructive criticism. Benchmark with each other.
  • Consider a consultant’s perspectives.ABM/ABC consultants have seen many, many implementations. Ask a seasoned consultant for his/her evaluation of your findings. Don’t be defensive.
  • Consider a professor’s perspectives.Because most colleges now teach ABM/ABC, there are many in the academic community with ABM/ABC knowledge and perspectives. Invite a knowledgeable professor to evaluate your software model, findings and plans.
  • Consider another ABM’ers perspectives.There are literally thousands of companies worldwide that have implemented ABM/ABC. Seek out and invite one or more to evaluate your findings, system and plans.
  • Consider a supplier’s perspectives.Many industries have launched supply chain improvement initiatives in recent years. Most have selected ABM as the common language to identify and measure waste. Use your ABM business process reports to initiate a constructive dialogue of mutually beneficial improvements with your suppliers.
  • Consider a customer’s perspectives.Your customers may have a different perspective about which activities you provide they consider value-added. Use a Bill of Activity to find out if an activity you think your customer “wants” is in fact what they define as a “need”.

One of my favorite Bible verses is Proverbs 27:6 “Wounds of a friend can be trusted”. In the fable, the Emperor was wounded by the young boy’s remark. But instead of admitting his mistake and taking corrective action, the emperor found it easier to continue his naked procession through the streets under the illusion that anyone who couldn’t see his “clothes” was incompetent. Don’t repeat the emperor’s mistake. Instead, ask a trusted friend for constructive criticism, sort through their comments and then act on their advice.

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Tom Pryor
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