Venture Management and Leadership

1. Venture Management and Leadership

2. Basic Management Skills • Analytical • Decision-making • Communication • Conceptual • Team building

3. Decision-Making Skills • What is the difficulty in decision making in new companies?

4. Communication Skills • Elevator Pitch • What is unique • How can it be exciting • Keep it simple • Write it down – practice • Practice • Practice • Practice

5. Team Building Skills • Team members vs Team players • Tools for teams

6. Leadership vs Management

7. Leaders Doing Right Things Ineffective Effective Death (fast) Success Effective Managers Doing Things Right Death (slow) Survival Ineffective Effectiveness and Efficiency

8. Innovation & Change • Change • Alteration of status quo • Innovation • new idea applied to initiating or improving a process • Incremental Improvements (Kaizen) • Breakthrough Thinking\ • Characteristics • Uncertainty • Knowledge Intensive • Controversial • Crosses Organizational Boundaries

9. Kaizen vs. Innovation • Innovation • Western Management deals with innovation which deals with large, short-term changes • Innovative technologies are not magical cure • Kaizen • Japanese philosophy which subsumes all business activities • small, frequent, gradual improvements over a long term • use of statistically based tools for problem solving

10. Class Exercise • You are to work in teams of 3-5 and identify some of the key changes occurring in industry. What are some of the external and internal forces motivating these changes?

11. Class Exercise (Response)

12. Forces for Change • External Forces • demographics • health consiousness affect on fast foods • Internal Forces • quality improvement • Tech Quality Plan

13. Dysfunctional Consequences • Curtailed Innovation • Scapegoating • Resistance to Change • Turnover • Conflict

14. Deming’s Seven Deadly Diseases • Lack of constancy of purpose • Emphasis on short-term profits • Evaluation of performance, merit rating, or annual review of performance • Mobility of management • Running a company on visible figures alone • Excessive medical costs for employee health care • Excessive costs of warranty, fueled by lawyers who work on the basis of contingency fees

15. Tech R&D Mrktng Customer Production Products and Services • 80% of new products fail during introduction • Reasons for Success • Better understanding of customer needs • More effective use of outside technology • Top management support • Horizontal Linkage Model

16. Time • McKinsey & Co., 1990 • 6 months late, on budget 33% less profit • On time, over budget 4% less profit • Thomas Group, Dallas Consulting • 60-90% of Cycle time occurs outside of manuf. • Illinois Inst. Technology • Blue collar productivity 80% • White collar productivity 40% • Japanese Philosophy

17. Time • Automation • Solid Modeling Capability • Paperless Factory • Process Documentation • Streamline Communication • Employee Empowerment • Team-based Problem Solving • Flexibility • Training

18. Case Study; General Elect. • Problem: Speed up or die • Solution: • 6 plants 1 plant • 28,000 parts 1,275 parts (40,000 options) • Salesmen enter orders directly into PC • Results: • 2 month backlog 2day backlog • Delivery Time 3 weeks 3 days • Manufacturing Costs 30% • ROI = 20%

19. Case Study; National Steel • Problem: 85-86 losses of $148 million • Solution: • Reduced Job Classifications to 16 • Increased Worker responsibility • Cost: • 320 hrs classroom training @ $21,000 / tech. • Result: • 5.5 hrs/ton 4.5 hrs/ton • failed specs 33% • 88 profits of $55 million

20. Case Study; Motorola • Training: • Abolished ½ dozen pay categories • Pay raise for each new skill added • Result: • Defect rate 77%

21. Benefits; Time Response • Benefits • Capture Market Share • Define Market • Premium Price • Inventory Levels • Quality • Productivity • Morale

22. Strategy & Structure • Structural (administrative) changes easier to make in a mechanistic organization • MBO • TQM • Re-engineering • Systems • Learning Organizations • ABET

23. Class Exercise • You are to work in teams of 3-5. Suppose your firm has decided to reorganize into smaller enterprise management teams. What are likely to be some of key areas of resistance (concerns) that must be overcome in order to implement this change?

24. Class Exercise (Response)

25. Resistance to Change • Self-Interest • Misunderstanding and lack of Trust • Different Assessments of the virtues of change Change must be in the right direction for the right reasons • Low Tolerance for change

26. Class Exercise • You are to work in teams of 3-5. Suppose your firm has decided to reorganize into smaller enterprise management teams. As a manager, how might you go about organizing for this change to overcome the inherent organizational resistance?

27. Class Exercise (Response)

28. Overcoming Resistance • 3-Step Process (Kurt Lewin) 1. Unfreezing - awareness of need for change 2. Changing - focus on new behaviors 3. Refreezing - reinforcing new behaviors

29. Unfreezing • Education & Communication • Participation & Involvement • Facilitation & Support • Negotiation & Agreement • Manipulation & Co-optation • Explicit & Implicit Coercion

30. Vision Skills Incentives Resources Action Plan Skills Incentives Resources Action Plan Vision Incentives Resources Action Plan Vision Skills Resources Action Plan Vision Skills Incentives ActionPlan Vision Skills Incentives Resources Managing Complex Change Change Confusion Anxiety Gradual Change Frustration False Starts

31. Challenges of Organizational Change • Commitment of Senior Leadership • Written Description of Changed Organization • Awareness of Need to Deal with Resistance • Adequate Resources to Support Change • Balance Between Managing Change / Stability • Conviction that Change must be tried • Appropriate Reward & Recognition System Communicate, Communicate, Communicate

32. Don’t Try to Mandate Change Avoiding Disaster During Change • Involve People in Planning Changes • Plan Change from Solid Conceptual Base • Build Support Among Like-Minded People • Don’t Ignore those Who Oppose Change • Know the Territory • Avoid Future Shock