40 Principles of Business Management Code

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In a visit to Israeli, I met a gentleman, Mr. Gennady Retseptor who has, I observed, deep knowledge about quality management. During my stay, we had the opportunity to know each other, and disscussed about quality management issues though we had limited time. In between our discussion, Gennady introduced me some interesting possible applications of TRIZ.

In the literature, TRIZ is  defined as a problem-solving, analysis and forecasting tool derived by Genrich Altshuller, starting from 1946,  from the study of patterns of invention in the global patent literature.  (Altshuller is a Soviet inventor and science fiction author). The English the name is  “the theory of inventive problem solving“, and occasionally goes by the English acronym TIPS.

Gennady examined TRIZ very well, and issued  several articles on the application of TRIZ in non-technical areas.  I asked his permission to translate some of those articles and put on my blog. Just after my departure from Jerusalem, Gennady sent me two of  his already published articles on the Internet. With his kind permission of Gennady, I re-publish one of these, here in my blog without translating, knowing that followers of my blog have adequate level of English. It is an interesting article.

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40 PRINCIPLES of BUSINESS MANAGEMENT CODE

by

Gennady Retseptor

How can a new business enterprise survive in a modern world of total globalization?
What are the main principles it must follow? Which of them possess the highest priority and may be defined as imperatives for business management?

Bearing on his experience in research, development, engineering and quality management, the author has made an attempt to formulate the most essential principles of Business Management Code.

The author has used the 40 Inventive Principles of TRIZ, which are successfully applied not only in technical fields, but also in non-technical areas, such as business management [1], social relations [2], quality management [3], marketing [4,5] and others.

The imperatives are divided to several categories according to their assumed hierarchy: Priorities, Research and Development, Competitors, Customers and Suppliers.

The author hopes that his interpretation of Business Management Code will be useful for management of start-up and growing companies.

PRIORITIES

Principle No. 1

Set right priorities. Your top priority is the Research and Development (R&D). Competitors, Customers, Suppliers, Employees, Shareholders and other interested parties – each will get its priority afterward.
Cura nihil aliud nisi ut valeas – “Take care of nothing except that you do well” (Cicero).

Principle No. 2

The supreme goal of your business is never-ending introduction to market of new products, which possess unique features and provide significant advantage over your competitors.
Avoid “Seven Deadly Diseases that Management Must Care” (W.E. Deming).

Principle No. 3

Search niches for creation of new products inside existing market segments.

Principle No. 4

Be aware of S-curve in evolution stages of product life: “Problematic child”, “Star”, “Milky Cow”, “Outsider”. A new “Star” must timely replace the current “Milky Cow”.

Principle No. 5

Establish appropriate back-ups for business interruption contingency planning.

R&D

Principle No. 6

Choose for R&D the outstanding, highly creative, multi-skilled, “Renaissance” [2] people. Select the best of the best.
Multi sunt vocati, pauci vero electi – “Many are called, but a few chosen” (Vulgate Bible).

Principle No. 7

Outstanding scientists, designers, technologists, which are properly selected and nominated to the right positions in R&D, are vital for your business. Without these individuals the business will not survive.
“Vital few and trivial many” (J.M. Juran).

Principle No. 8

You need people which are not only idea generators by themselves, but can hijack on ideas of each other, amplifying tremendously their creativity power and bringing about breakthrough know-hows and inventions.

Principle No. 9

Periodically revise R&D activity and make enthusiasm injections.

Principle No. 10

Dismiss persons, which become non-effective, replacing them by better candidates, and thus recovering and preserving R&D capability to create new products.

Principle No. 11

Institute self-benchmarking and internal competing in R&D.

Principle No. 12

Invest to continual education, knowledge, and skills renewal of the R&D personnel.
Expose key designers to external events: conferences, exhibitions, lectures, seminars, etc.
Let designers learn from customers, suppliers, business partners, and organizations from the same or other fields.

Principle No. 13

Provide key R&D personnel with the best possible employment contract conditions: salary, insurance program and other benefits.
Reddite ergo quae sunt Caesaris, Caesari – “Give Caesar what’s Caesar’s” (Vulgate Bible).
Encourage every new breakthrough solution, know-how, patent grant for invention by appropriate award: bonus, promotion, status elevation, etc.
Foster self-esteem of R&D employees.
Thoroughly protect the intellectual propriety rights of inventors.
Share with inventors the profit received from their inventions.
Suum cuique – “To each what he deserves” (Cicero).

COMPETITORS

Principle No. 14

Take measures in order to early detect and prevent R&D personnel defection to competitors.

Principle No. 15

Inversely, strive to employ prominent specialists from competitors’ R&D.

Principle No. 16

Make appropriate protection of R&D activity from competitors’ intelligence.
Utilize proprietary rights protection means (patents, licenses, trademarks, copyrights, etc).

Principle No. 17

Introduce smoke-screen misinformation to disguise confidential R&D activities.

Principle No. 18

Get intelligence and inverse engineering on competitors’ products in order to anticipate their future activities and elaborate counter-measures.

Principle No. 19

Build entrance barriers for competitors by enhancement of your product advantages.

Principle No. 20

Promptly learn lessons and derive conclusions from each defeat in competition.

Principle No. 21

Use the competitors’ success as a benchmarking, which provide a stimulus for re-gaining primary position in the market.

CUSTOMERS

Principle No. 22

Never give your customers to get supremacy over you. The customers depend on your business in the same way as you depend on theirs.

Principle No. 23

Having unique product, you acquire a great market power and may dictate your terms to customers. Actually, you become a monopoly producer. Nevertheless, you must preserve parity and partnership relations with your customers. The price will be great – their loyalty and retention.

Principle No. 24

Strive for greater diversity of products offering due to increased level of customers’ expectations.

Principle No. 25

Make designers “Would be the customers”.

Principle No. 26

Cooperate with customers in creation of new products with unique features.

Principle No. 27

Enlist customers into R&D activity loop.

Principle No. 28

Run b-Site customer pilots to gather information on high-risk new products prior to distribution to general market.

Principle No. 29

Use customers’ complaints and field failures as a valuable feedback and opportunities for improvement.

Principle No. 30

Be wary of rare customer complaints. This could indicate a lack of customer candor and unwillingness to share information.

Principle No. 31

Strive to achieve design-wins at brand name customers. They can provide lift for promotion of your product.

Principle No. 32

Establish long-term business alliance with key customers.

Principle No. 33

Provide product with unanticipated extra features that bring about surprising (“Wow!”) effect by exceeding customers’ expectations.

Principle No. 34

Get customers excited about the product by providing them with a sense of advantage, gained over their competitors.

Principle No. 35

Let customers advertise your product.

Principle No. 36

Anticipate and nurture future customers’ needs.

SUPPLIERS

Principle No. 37

Transfer non-core activities to best in class subcontractors.

Principle No. 38

Avoid suppliers which become a monopoly and dictate you their terms.

Principle No. 39

Your unique product cannot survive in the market if you rely on a single source supplier for critical parts or materials.

Principle No. 40

If you fail to find a second source or an alternative design solution, the best way is to merge with a single source supplier.

FORTUNE

Audaces fortuna iuvat – “Fortune favors the brave” (Virgil).

Good luck !

 

References

1. Mann, D., Domb, E., “40 Inventive (Business) Principles with Examples”, The TRIZ Journal, September 1999.
2. Terninko, J., “40 Inventive Principles with Social Examples”, The TRIZ Journal, June 2001.
3. Retseptor, G., “40 Inventive Principles in Quality Management”, The TRIZ Journal, March 2003.
4. Retseptor, G., “40 Inventive Principles in Marketing, Sales and Advertising”, The TRIZ Journal, April 2005.
5. Retseptor, G., “40 Inventive Principles in Customer Satisfaction Enhancement”, The TRIZ Journal, January 2007.
6. Retseptor, G., “40 Inventive Principles in Latin Phrases”, The TRIZ Journal, January 2008.

About the author:

Gennady Retseptor is the Quality Manager of AVX Israel Ltd, Thin Film Operation Plant of AVX Corporation, Kyocera Group Company. Gennady Retseptor has received the Master degree with honors in Microelectronics from the Moscow Steel andAlloysUniversity. He is the inventor of miniature SMD capacitors for RF applications. Gennady Retseptor is the ASQ Certified Manager of Quality/Organizational Excellence since 1999.