The first thing to ask yourself is: what is TCM? TCM © (Total Competitive Management) stands for Total Competitiveness Management. It is both a philosophy and an administration system and method that seeks the greatest absolute and relative competitiveness through the search for the optimal total of the organization as a whole.
1. Introduction
It is therefore about finding the balance between the various functions, areas and processes, as well as between the short and long term. It is also about achieving the best balance between objectives, managerial skills, resources and the environment. It is also about the optimal relationship between logic and rationality, and creativity and innovation.
An organization cannot innovate without creativity, and without innovation there is no possibility of being competitive. Nor can it be exclusively dedicated to innovation, leaving aside the rationality of numbers, which are behind finances, productivity and quality.
Thinking in the short term to quickly achieve benefits is necessary, but doing so leaving aside the improvement in the medium and long term of the various processes is suicide.
Directing implies making decisions, and for this it is necessary to always know how to find the optimum. Thus, if it is about controls, poor control leads to the generation of huge losses due to lack of control or what is the same because of excess lack of control. On the other hand, an excess of control leads to business paralysis, excessive bureaucracy and the high costs associated with them. So we have managers in need of finding the optimal level of control.
In the same way as in the previous case, the need to find the optimal one can be highlighted when automating or robotizing processes, computerizing activities and managing any other activity or resource.
So also when conducting analysis it is necessary to take into account that not everyone behaves rationally. There is both rational and irrational behavior. We are also subject to this reality. We must act rationally, but always bearing in mind that consumers, investors and competitors can, and often do, act irrationally.
2. Its philosophy and evolution
At a time of great changes, of enormous transformations, of radical paradigm alterations, business administration cannot continue as a simple evolution and linear projection of the principles that emerged from Taylor, Fayol and Henry Ford.
The way of doing business is not the same, although some continue to cling to it, not knowing how to change in time can cause their disappearance. New markets, new technologies, new companies and radically different situations make making decisions in the same way as it was a few decades ago no longer possible or convenient.
But between the old and the new you have to have the good sense and the ability to understand what has changed, what will change and what will not change for a long time. This is one of the key points in the development of the new administration of organizations. Hence the momentous importance of properly understanding human nature.
We are living one of the most disturbing and revolutionary times of all that have occurred in the history of humanity. Moments, the current ones, of greater dangers and global risks. Climate change, the disappearance of species, the alteration of the contour of many countries, the enormous movements of human beings, the terrible natural catastrophes, the appearance of new and irrational ideologies, and the successive financial cataclysms, completely change the way of thinking and make decisions by the directors and officials of both public and private organizations.
Now when it comes to making decisions, both ethical factors related to global warming, the danger of species, globalization factors, political and security risks, the change in consumption types and the greater variety and wealth of human resources existing in the environment.
It is no longer a matter of replacing one management system or method with another, but of adopting the most beneficial of each one of them in such a way as to avoid the loss of experiences and capacities.
Wanting to apply a certain methodology dogmatically without taking into account the cultural differences of the company and its environment, nor the existing variations in human and technological resources, as well as the different economic and social realities of the company, does not generate more than defeats and waste in organizations.
So it's time to:
• Avoid dogmatism.
• Systematically seek simplicity.
• Understand that it is not about formulas, but about ways of reasoning and evaluating problems, situations and solutions.
• Try to discover new and complex realities.
• Concentrate maximum efforts in the search for root causes, prevention and continuous improvement.
• Understand that not only rationality governs, but also irrationality in the world of politics, society and business.
• Understand that it is not about putting aside systems, but about adopting the tools most suitable for the organization's needs at each moment and situation.
3. Aspects to always keep in mind
There are items that a manager should never forget, or stop taking into consideration permanently. They are those aspects or issues that make and make the difference. These are:
1. Have a light and flexible organization, quickly adaptable to changes in the market, the economy, technology and society.
2. Continuously train both reactive and proactive behavior and attitude.
3. Permanent search for improvements in each task, activity, process, product and service. Be aware that everything can be improved.
4. Make contingency plans an essential tool.
5. Recognize that what makes success feasible both in the implementation of systems and in the competitiveness of companies is the human factor.
6. Visualize the crucial importance of positive leadership, with all its connotations in terms of ethics and growth.
7. Motivation as a critical and fundamental tool for managing staff.
8. To have critical and fundamental measurements and controls that allow the progress and deviations of the company to be monitored in a timely manner.
9. Implement a System of Systematic Adjustments (SAS) that allows taking current measurements and ratios to those set as objectives.
10. Train for teamwork, and not only with a functional, departmental, or process character, but with the organization as a whole.
11. Unlearn and learn with increasing speed.
12. Continuous monitoring of the business environment.
4. The fourteen fundamental rules of TCM
1. Search for the global optimum or the optimum of the system.
2. Permanently look for the sixteen zeros.
3. Prevent and try to avoid strategic changes.
4. Act rationally but keep in mind that others don't always do it.
5. Make your business and processes flexible.
6. Follow the Strategy Chart closely.
7. Constantly apply the Strategy Matrix.
8. Encourage teamwork.
9. Keep up-to-date statistics on all the key points or aspects for your business, both internal and external.
10. Keep everything in order and under control.
11. Take the lead or else hire a manager.
12. Follow closely and never forget the cycles of the economy.
13. Keep in mind the Fosbury Effect. Discover your paradigms, as well as that of your competitors and consumers.
14. Promote an ethical, competitive, innovative and continuous improvement culture.
5. Search for the optimum of the system
An example is worth a thousand words. It will be of no use to the company that the Sales Sector tries to maximize them if the Production Sector cannot cope with said sales; This will only lead to unhappy customers and a bad image of the company, in addition to all the bottlenecks that will be generated.
Another way to see the optimum of the system is with an example given above regarding the levels of control, the absence of control leads to an excess of costs due to losses, and the excess of controls leads to a new excess of bureaucratic costs and loss of business. There is an optimum, and that is the job of a good manager, knowing how to find it.
In conclusion, seeking the optimum implies reaching effectiveness with maximum efficiency.
6. Search permanently and systematically for sixteen zeros
This search is based on the idea that the best way to increase profits is by systematically eliminating waste and waste.
What are these sixteen zeros?
I. Zero faults or defects.
II. Zero stationeries (bureaucracy).
III. Zero waiting times.
IV. Zero accidents.
V. Zero contamination.
SAW. Zero occupational diseases.
VII. Zero breakdowns.
VIII. Zero inventories.
IX. Zero employee and customer turnover.
X. Zero delinquent and uncollectible.
XI. Zero levels of customer and employee dissatisfaction.
XII. Zero fraud.
XIII. Zero misinformation.
XIV. Zero unproductivities.
XV. Zero repetitive activities (duplications).
XVI. Zero incommunications.
Becoming aware of each of these problems, assigning and delegating responsibilities for their monitoring and prevention, and defining forms of measurement and analysis, will lead to a very significant increase in profits for the company and, correspondingly, in its profitability without the need for major investments.
7. Prevent strategic moves
Strategic changes have to do with quality in decision-making, fundamentally on the part of managers and officials, and have to do with:
• The generation of incorrect and / or late information.
• Blur.
• Lack of systematicity in problem solving and decision making.
• Incorrect management of human resources.
• Incorrect management of material resources.
• Incorrect brand management.
• Incorrect management of computer resources.
• Existence of conflicting objectives between different areas, sectors or individuals in relation to the organizational objectives.
• Communicational failures.
Taking due account of waste caused by mistakes when making key decisions for the organization is critically important. They are issues or aspects on which you must continually be attentive, and in relation to which managers must think both individually and collectively.
8. Act rationally but be aware that others don't always do it
Anyone who believes that having a good product, at a good price and with good credit conditions, will win the battle, is lost, since most buyers, even at an industrial level, tend to make decisions on irrational bases, such as guided by emotional factors.
In the same way, it is not enough to give an order and explain why, waiting in such a way for the immediate compliance of the workers, because they too often not only react to rational proposals, but emotional, fears and fears have a high coefficient of implication when acting.
Therefore, making plans only based on rationality while ignoring the way individuals behave is a serious mistake. That is why it is becoming increasingly important to study the behavior of consumers, the organization, competitors and investors.
9. Make your business and processes have maximum flexibility
Faced with a globalized economy, with competitors from all over the world, with business opportunities in every corner of the planet, having the ability to vary both the quantity and the type of production is critical. The one who best knows how to adapt quickly to market changes, the better able to survive in the medium and long term. As in the theory of evolution, only organizations that have the capacity to adapt quickly to new conditions will survive. And we all know very well how fast these conditions are changing.
10. Keep a close eye on the Strategy Chart
The Strategic Framework is made up of four fundamental points:
• The objectives set.
• The ability to direct.
• The resources available to the company.
• The environment.
To be competitive, we must set objectives according to the characteristics of the environment at a given time, taking into account the resources we have and the ability to direct or lead the company. Setting objectives for which there is neither experience nor sufficient resources in terms of quality and / or quantity, or whose business environment is not the most suitable for that business under the current circumstances not only will it not allow to achieve such objectives, but also endangers the loss of the company's assets, as well as the time factor.
Due to the aforementioned, and because the situation is always changing, it is necessary to closely monitor the environment to properly adapt the objectives and recognize the management and resource needs that this entails.
11. Apply the Strategic Business Matrix ©
Continuously and systematically monitoring your business from a strategic point of view is essential. In this matrix there are both absolute and relative factors, and they must be weighted. Then it corresponds to periodically qualify each factor, and monitor the score by factor and global in order to verify the competitive capacity of the company over time, also looking for new business possibilities.
A relative factor, for example, is the necessary capital, as it will depend on the capacity of the investor or entrepreneur who is carrying out the analysis. Instead the seasonality of the product is an absolute factor.
12. Encourage teamwork
Teamwork is necessary not only at the level of departments, functions or processes, but of the organization or company as a whole. This is not achieved with mere talks or speeches, but it is necessary a continuous work making each person or area see their error in this matter.
Teamwork must be encouraged, empowered and coached on a constant basis. In the struggle to survive and be highly competitive there is no room for individualistic attitudes. A company must work as a team supporting each other the different areas and the individuals within each one of them. The objective is clear and precise, to beat the competition to meet the market demand.
13. Have up-to-date statistics and analyze them
A manager without statistical data (measurements and controls) is like a motorist who does not know how much fuel he has, nor what state is the level of oil, water and other elements or components of the car.
An entrepreneur needs to constantly monitor both internal and external variables. You must closely monitor their levels of quality, cost, productivity, satisfaction among many others (see the Sixteen Zeros).
However, having such data is not enough, it is necessary to see their evolution over time, interpret the relationships between the various internal indicators and of these with the external ones, analyzing their reason for being, in order to adopt the appropriate decisions. (Strategic Chart, Strategic Business Matrix, Contingency Plans and proactive attitude).
Within the statistical analysis, it is essential to have Statistical Process Control, which will allow to recognize the capacity of the system to generate results, to know when a variation responds to random reasons (specific to the system) and when it is a consequence of special reasons (and should Act accordingly).
14. Keep everything in order and under control
Ordering, knowing where each element is or should be, knowing how much they owe us and by whom, and since when. Know how much we owe, to whom and since when and why. How many supplies do we have and where are they in the Warehouse. These and many other issues need to be closely monitored and up to date. Computer systems have come to make such control feasible.
Controlling the order in which orders have been received and in the order in which they will be fulfilled. Have information on orders to suppliers and the order in which they will arrive. All of this is critical when scheduling and planning the different activities.
The mere fact of ordering and putting everything under control allows to reduce response times, reduce inventory levels, improve the use of financial resources, increase control over cash flows, reduce production cycles, motivate staff to through performance information and increase productivity and profitability levels.
15. Take the lead or hire a manager with a leadership aptitude and attitude
Every company and every work team requires a leader who establishes the direction and the path through which it has to travel. This leader must possess both technical, moral and spiritual qualities that make him an authentic and true leader. Officials and workers require someone to trust, especially in stormy times and of great change.
The leader must be like the captain of a ship on the high seas. If there is a storm and the captain is afraid and does not know what to do, the entire crew will doubt him and his own future on the ship (that is, his own luck and fortune). In a company, and especially at times like the ones we are going through, a very good captain is required on board. From a leader whose words are credible, from a captain who is respected and loved. Without these qualities, both the boat and the organization are lost.
Therefore, if the owner does not have the capabilities, it would be better for him to stay on dry land and leave the command of the ship to an expert with skills and attitudes for command.
16. Follow closely and never forget the cycles of the economy
Many believe that business cycles are not their business until they hit them. Do not allow this to happen to you and follow personally and through the help of competent external advisors the evolution of the various indicators that will affect your company.
Follow inflation rates, the behavior of various currencies, GDP growth in both your country and the global economy, interest rates, the evolution of the price of raw materials, unemployment levels. All of this will contribute to improving the use of the Strategic Chart in terms of its environment, and as a consequence of it in the other variables of said chart. They will also have an effect on your analysis of the Strategic Business Matrix. Today more than ever financial advice is necessary when making decisions.
Always have a Contingency Plan prepared, both to take advantage of positive opportunities and to avoid or prevent negative ones.
17. Keep in mind the Fosbury Effect
Not only is it enough to improve or perfect processes and products, a new competitor can always appear with processes and products or services that contradict the valid paradigms until then. Let's think about what happened to the Encyclopaedia Britannica against Encarta or Swiss watchmaking against the Japanese.
Always keep in mind that quantitative changes are valid up to a certain point, beyond a certain point it is necessary to make paradigm changes (qualitative changes). If you don't, someone else will do it for you.
Find out which are the paradigms that have you anchored to a certain type of behavior and modify them. Change paradigms before it's too late. Listen to what your supervisees, colleagues, competitors, consumers and other experts have to say.
18. Foster a competitive, participatory, ethical, innovative and continuous improvement culture
Do not settle for just meeting the requirements, establish a pattern of constant improvement in each and every aspect of your organization, from improving processes, activities, products and services, to costs, quality, productivity and customer satisfaction.
Never forget that there is no commitment without participation, so encourage a fully participatory culture in your organization.
Promoting ethics in all its senses, from the personal and social, through the ethics of quality and productivity, and that of continuous improvement, has to make your organization a more livable entity and will increase the quality of working life.
If there is something that distinguishes organizations and that is impossible to copy, it is their culture. And if that culture is embodied in competitiveness and innovation (3M, General Electric, Motorota, Samsung, Toyota, Nissan, Canon, McGraw Hill, Rolex, Casio, Panasonic, American Expres, Gillette, BMW, Audi, Honda, Electrolux, Toshiba, Nokia, Ikea, Bayer, among others) the strength and ability to face new challenges will be real and plausible.
A small and medium-sized company can also create a high-performance culture, it is only necessary to take into account each point described above and put them into practice with discipline and dedication.
19. Conclusions
This new century requires new paradigms. The way the entrepreneur sees his company and business is a paradigm. For this paradigm not to be a map that indicates a false path, it is necessary to adopt new and better ways of thinking and analyzing business. TCM © intends to fill this need, showing new ways of facing the processes and activities of the organization. It is not about inventing something new, but about knowing how to appreciate it in a different way.
TCM © tries to show something different and help the quantitative and qualitative improvement of organizations.
What is really important for an organization? It is neither ISO norms nor computer science. It was, it is, and it will always be its people, its way of thinking and doing things. His way of deciding and improving. His work ethic and the desire to want to be more competitive every day. What makes Toyota, Casio, Honda, Nissan or 3M different are these factors. Nobody asks Toyota or Nissan for their ISO standards, Honda, 3M or Gillette are not what they are for their computer systems. All of them are what they are because of their work cultures, their management philosophies, their leaders and the high level of human relations among the members that make them up. Deep down it is a way of thinking and feeling. This is what distinguishes those who create new paths from those who only walk it.
This is an era for new adventures, and you can train for them.
Bibliography
• Strategy in the XXI century. Various authors. Editorial Deusto. 2008.
• The new financial vision. Various authors. Editorial Deusto. 2008.
• Performance Management. Gary Cokins. Editorial Gestión 2000. 2004.
• Profit-Centered Accounting. C. Lynn Northrup. Editorial Deusto. 2006.
• The keys to Toyota's success. Jeffrey Liker. Editorial Gestión 2000. 2004.
• World-Class Industry Data System. Brian Maskell. Productivity. 1991.
• Business Think. Marcum - Smith and Mahan Khalsa. Editorial Deusto. 2003.
• The sixteen zeros - Mauricio Lefcovich - www.gestiopolis.com - 2007
• The strategic changes - Mauricio Lefcovich - www.gestiopolis.com - 2007
• Quality, Environmental and Occupational Risk Prevention Management Systems. Fernandez Garcia. Editorial Club Universitario. 2005.
• Work methods applied to the social sciences. Bòria Reverter and García González. Editorial University of Barcelona. 2006.
• The camouflaged economist. Tim Hardford. Today's Issues Editions. 2007.
• Swim. David Meca and Jaime Tomás. Bresca Editorial. 2007.
• Psychology of the stock investor. Álvarez González. Editorial Pyramid. 2001.
• Is there luck? Nassim Nicholas Taleb. Thomson Publishing. 2006.
• Heal your business on time. Koontz Traversa. Bloomberg Press. 2003.
• Administration of Production Systems. Velasquez Mastretta. Editorial Limusa. 2004.
• Kaizen. Mauricio Lefcovich. www.monographies.com - 2003
• Small businesses and the cause of their failures. Mauricio Lefcovich - www.degerencia.com - 2004
• Traditional Companies versus New Competitive Companies - Mauricio Lefcovich - www.degerencia.com - 2004.
