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Half-Time : ICMS – Success is NOT Logical
Half-Time
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17 August 2013 - 22:50, by , in Activity-Based Cost Management, No comments

One of the traits of a successful football team is its ability to change the game plan at halftime. NFL football teams are given 12 minutes between halves to analyze the 1st half results, devise an improved strategy for the 2nd half and communicate the revised plan to the team.

For example, here’s a breakdown of what the Dallas Cowboys do at halftime:

First 7 minutes

  • Players rest and treat injuries
  • Assistant coaches draw each of the opponent’s formation on a chalkboard.
  • The quarterback coach lists each successful offensive play from the 1st half to repeat plus a list of recommended new plays for the 2nd half.
  • The defensive backs and defensive line coaches, with help from the Quality Control assistant coach (Yes, the Cowboys have QC!), list opponent’s plays that penetrated the defense in the 1st half.
  • Offensive and defensive coaches then meet to formulate a 2nd half strategy.

Next 4 minutes

  • Offensive coaches communicate 2nd half game plan adjustments to the offensive players.
  • Defensive coaches communicate 2nd half game plan adjustments to the defensive players.
  • Players acknowledge agreement or disagreement with the revised plan.

Final minute

  • Coaches head for the press box or field.
  • The head coach addresses the team.
  • The team returns to the field of play

Most of us start out with a pretty basic game plan when it comes to implementing Activity Based Management (ABM). But toward the end of the first year, we begin to realize that our organization (team) can’t play this way for the entire game and expect to win. The NFL provides us a template to use for an “ABM Halftime”:

“ABM Halftime”:

Step 1: Disengage

Separate yourself from as many distractions as possible so that you can rest, reflect, read and recover. Bob Buford says in his book Game Plan“The transition from success to significance takes time and requires some distance between you and your first-half hyperactivity.”

For example, if you have just completed your ABM/ABC Pilot Project, hold an offsite Halftime Retreat. Invite the Project Leader, Implementation Team, senior management sponsors and a knowledgeable ABM facilitator. Or if you have completed a year of ABM, invite the key people who maintain and use the system along with representative from senior management. At the retreat, consider the following activities:

  • Individually reflect on the 1st half ABM/ABC experience by re-reading the findings and reports. Record your thoughts, questions and recommendations.
  • Meet in small groups to discuss and list what ABM activities should be repeated and what should be eliminated.
  • Invite a mentor, e.g. someone who has more ABM/ABC experience than you. That person could be from one of your suppliers or customers. Alternatively, they might be from an organization in your community. Ask them to share their best practices and experiences.
  • Then, as a complete group, develop a consensus 2nd strategy.

Step 2: Disseminate

To win the game, it is of utmost importance to communicate the 2nd half strategy and best practice techniques to the entire team, e.g. employees. Communication should be two-way. Coaches to the players and players to the coaches.

Here are some ideas to consider:

  • Peter Drucker says“everyone ought to be able to fit their mission statement on a T-shirt.”Make sure that you spend time explaining to all employees how ABM/ABC supports your organization’s mission statement.
  • Communicate the 2nd half strategy to all employees using a Balanced Scorecard approach. For example, let’s assume a portion of the strategy developed at the retreat is “Use ABC and ABM as tools to reduce product cost by 10% to maintain our lead as the low cost producer in our market.” To be achieved, that strategy must be disseminated to each affected cost center as a specific activity cost improvement goal.
  • Train all employees “how to” read, interpret and use activity accounting reports. Nothing is more intimidating to an employee than being measured by a method they do not understand. Purchase each employee a copy of the “Using ABM for Continuous Improvement” workbook.

Step 3: Deliver

The last activity of halftime is for the head coach to inspire the team to go out and deliver the desired results on the playing field. While the person and process you use to inspire should fit your organization’s culture, we can look to best practices of other organizations for ideas:

  • Define activity performance consequences. There must be a positive and negative consequence attached to each activity performance goal. If an employee or team achieves the goal, something positive should occur for them, e.g. recognition, bonus, prize, etc. There are some great ideas in the book “1001 Ways to Reward Employees”. Conversely, define a negative consequence if they do not achieve the goal.
  • Measure activity cost performance at least quarterly. Repetition of reports reaps results. Lack of measurement sends a signal that ABM/ABC is not important.
  • Celebrate the win! But also recognize that ABM is not an event. Instead, ABM is the measurement system for continuous improvement.

“The first-half paradigm for identity is external – we define ourselves chiefly by our work, our possessions, our busyness, even our children. For the second half, seek to identify yourself by internal standards: your character, your values, your beliefs, your contribution, your mission.”

While Bob Buford wrote these words for us to apply personally, I feel it also applies to us professionally. Many organizations focus on the external when first implementing ABM and ABC; e.g. we need to do it because our competition has done it. But at halftime, we need to make ABM an internal implementation, e.g. make ABM work for me instead of me working for ABM. I look forward to seeing you in the winner’s locker room.

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