Wednesday, December 30, 2009
‘3 idiots’ at its best
I saw the movie yesterday and it is one of the best movies I have seen in recent times. The movie is based on the book 'Five Point Someone' by Chetan Bhagat (lot of controversy currently going on) and I have not read that book but it does not matter. People go to watch movies for entertainment and believe me you cannot expect anything better than this. I hate comparing movies as each and every movie is special and different so comparing is not a wise job.
I do not rate a movie after going through figures of box office collection and so on...it is only the delight one experiences after leaving the theatre and full marks to the entire team. There is no special message in the movie which we are not aware of...then why we are talking so much about this movie??? If you want to get the answer please rush in to the nearest theatre to watch it. Believe me you will get the answer but I am sure you cannot pen down those reasons...that is why the movie is so special.
ALL IS WELL
(Image source: Filmyfair.com)
Tuesday, December 29, 2009
Mandatory Voting Bill for Healthy Democracy
There is no greater civic responsibility than taking the time to cast a vote whenever the polls are open. Unfortunately in India the story is different. In any democratic country voting is necessary for healthy democracy, but in India, people do not think the same and they should not be blamed also for this perception. They believe that voting is a useless process, because it cannot bring changes in the system. It is the initial set of mind people are having in our country and this is more predominant in the rural areas compare to urban areas.
People in India experienced very little changes in the system even after casting votes at different levels of elections for last so many years and so they prefer to remain at the sidelines during any electoral process.
Then what is the solution???
To me instead of making it mandatory which people may feel it is being forcefully imposed; the government should try to held fruitful discussion with facts and figures and making people understand that their precious vote can bring positive and constructive change in every nook and corner of the country. It is because of people not casting their votes, the deserving candidate is not winning at each and every level and this in turn fails to bring changes in the system. So if they really want to bring changes....then they should come out and caste their votes. I think by creating awareness we can change the mindset of the people.
(Image source: Cmc.rodparsley.com)
Monday, December 28, 2009
Brand language and communication
Brand identity cannot be reduced to a word or a concept. In the advertising campaigns you may see a picture standing out more than the words. The brand might choose to create a way of communication by according itself a combination of spoken and visual language. The power of this language lies in its truth, expressing the brand’s identity. This is a combination of its logo, emblem, pictures and slogans in the advertisings. The language should be international, applicable to all company’s products and services, and stands out in the sense in which every brand should be noticed. Through lack of a personal language, the same words or pictures keep reappearing, so the whole brand message gets clogged.
(Image source: Scoopdog.wordpress.com)
Sunday, December 27, 2009
Michael Schumacher returns to F1
Seven-time world champion Michael Schumacher is to come out of retirement to race for Mercedes GP......great news and I am happy that I will see the CHAMPION back in racing track. Schumacher, who had quit earlier in 2006, will again make his debut with the new team at the Bahrain Grand Prix in the upcoming 2010 season. We all know that he is a TRUE CHAMPION and I am fully confident that he will be able to resume at his familiar level of competitiveness. It is my opinion (which people may disagree) that not everyone will be glad to see Michael Schumacher back in F1 but no one can doubt is the extent of Schumacher's commitment.
A quick look of the numbers that make up his career so spectacular:
Race Starts: 249
Podiums: 154
Career Points: 1369
Poles: 68
Fastest Laps: 76
Wins: 91
World Championships: 7
Such a career like this is certainly worth more than these mere numbers and statistics. Will the history be an indication of things to come? Let’s wait and see....
(Image source: Guardian.co.uk)
Saturday, December 26, 2009
Five Rules for Mastering Leadership
There are countless opinions on how to be an effective leader, but it's important to not forget the basics. Here are five rules for mastering the fundamentals of leadership:
Shape the future - Articulate where your company or division is going and be sure everyone around you understands the direction.
Make things happen - Once you know where you're headed, focus on the how. Again, be sure all of your people know what it takes to execute.
Engage today's talent - Make the most of your people; engage and inspire them to do their best.
Build tomorrow's talent - Find and build the talent you need for future success.
Invest in yourself - You can never be a perfect leader; find ways to continually build your skills and become better.
(Source: Harvard Business Review)
(Image source: Oberlin.edu)
Friday, December 25, 2009
Fortune 100 Social Media Study
During 2009, Twitter surpassed blogging as the social media platform of choice – at least among the Fortune 100. A recent analysis found that the largest 100 companies in terms of revenue as compiled by Fortune Magazine's annual Fortune 500 were active on three key social media: Twitter, Facebook and Blogs.
The study found that 54% of the Fortune 100 were using Twitter to reach out directly to stakeholders, while 32% were using a blogs and 29% were actively using a Facebook Fan Page to engage. Despite the perception that Twitter is the newest kid on the block among the three platforms, 76% of Fortune 100 companies that were using just one social media channel were using Twitter over Facebook and Blogs.
Perhaps not surprisingly each company that was classified in consumer facing industries such as General Merchandisers, Specialty Retailers and Telecommunications are Tweeting. Many companies in each of these categories have multiple Twitter accounts.
The analysis found that about 94% of Fortune 100 Twitter accounts distribute company news updates and announcements while fully 67% are at least partially serving a customer service function.
(Reference: Burson-marsteller.com)
(Image source: Mabasoft.com)
Thursday, December 24, 2009
The workforce as a well planned resource
Organisational resources that offer great prospects for strategic value are often attached with a high cost and/or risk of deployment. This affects everything at the store level. From a cost point of view, commodities such as fixtures, utilities and even most products are in simple terms bought and sold. Truly strategic resources - real estate, supply chain and POS infrastructure, the employee workforce are not acquired, managed and retained quiet easily. When you consider provisions of the value that all these resources offer, there is a likewise trend. Commodity resources are a reality of life. They are vital to business, but they hardly get you apart from your competitors. The effect of strategic resources, such as the employee workforce, extends far beyond maintenance of the sales floor and stockroom. In reality, they influence the entire function, including product availability, quality of customer service and ultimately overall business profitability. Management of strategic resources is further complicated by the scattered nature of the retail enterprise.
Labour costs have always been considered as the retailer's greatest controllable expense and this fact is only exaggerated by today's challenging market environments. The underlying irony is that corporate and production demands do not match with decreasing sales, nor does customer demand decline if department staffing is scaled back.
(Image Source: Usm.edu)
Wednesday, December 23, 2009
The Battle for Customer Loyalty
Despite the sea of changes taking place in the retail sector, some stability has also been observed. Though retailers still have to struggle to out shine their products as compared to their competitors, differentiation strategies that focused on some combination of product offering and price-point are becoming extinct. Increasingly, the only battleground left is the war for customer loyalty. Today's retailers are in a great catch 22 situation where they have to cope with modern retailing. In order to drive customer loyalty one not only requires the right product offering at competitive prices, but also requires increasing customer satisfaction while keeping a control on the operating costs. While retail has always been completely service and customer oriented, the reality is that now profitable retailing revolves around the performance of the retailer's greatest controllable expense and most strategic asset - its employee workforce.
Demand-Driven Workforce Management gives retailers the means to control this strategic asset and increase store profitability. By balancing all the demands that affect the workforce, from corporate headquarters and customers to employee preferences and production requirements, retailers can streamline functions to more closely align labour costs with variability in its demand. Moreover, aligning the workforce more closely with demand is vital for rising customer loyalty and gaining market share over competitors.
(Image Source: Wholesalefloral.com)
Tuesday, December 22, 2009
Kyoto Protocol
The Kyoto Protocol is an international agreement linked to the United Nations Framework Convention on Climate Change. The major feature of the Kyoto Protocol is that it sets binding targets for 37 industrialized countries and the European community for reducing greenhouse gas (GHG) emissions .These amount to an average of five per cent against 1990 levels over the five-year period 2008-2012.
The Kyoto mechanisms
Under the Treaty, countries must meet their targets primarily through national measures. However, the Kyoto Protocol offers them an additional means of meeting their targets by way of three market-based mechanisms.
The Kyoto mechanisms are:
Emissions trading – known as “the carbon market"
Clean development mechanism (CDM)
Joint implementation (JI)
(Source: United Nations Framework Convention on Climate Change)
(Image source: Cbc.ca)
Monday, December 21, 2009
Climate change talks in Copenhagen
Copenhagen agreement or no, there is one certainty: the negotiations that must carry on into next year will be even tougher than the two years of talks that led up to this landmark -summit. The Copenhagen meeting was intended, when it was decided on two years ago, to produce the world's first truly global agreement on climate change, one that would bind all countries - developed and developing - to take action on their greenhouse gas emissions.
But the fortnight of volatile negotiations in Denmark, and the year of intensive talks that preceded them, have clearly demonstrated the extraordinary complexity of more than 190 countries agreeing on such a difficult long-term issue as climate change. The prospect of continuing this process for several more months and possibly years appalled officials from many countries and the United Nations. What concerns some is that when these negotiations continue next year, many of the fragile alliances built up here will break down again.
The north-south divide at these talks has also been clear. Many developing countries have taken the attitude that climate change is a moral issue, caused by developed countries and it should be solved at their cost. This argument frustrates developed countries.
(Source: The Financial Times Limited)
(Image source: Askehbl.wordpress.com)
Sunday, December 20, 2009
Globalisation and Competitiveness
Michael E Porter discovered a new theory that recommended going above comparative benefit to the competitive gain of a nation. It expressed a productive idea of competition that embraced compartmentalised markets, distinguished products/services, technology variations, and economics of scale. This new idea had gone past cost and justifies why companies from some nations are better than others at creating benefits based on quality, features, market reaction, speed and product improvement.
Because some of the factors of cost benefits, the Indian apparel sector provided relative gain for the low-end price point products. But it could not realise those benefits that could have supplied this sector the necessary competitive lead. A nation can maintain her successful high-income status only by racing with unique, discriminated products or services and that is what helps in creating the image for nation. It is the growing impact of the performance of organizations that promotes the brand image for a country. Moreover, distinguished, contemporary products are less responsive to price rises. Indian textile and apparel sectors were found to expand diversely when it could move its pricing southwards, either due to rise in government financial aids or driven by currency devaluation, which are neither extraordinary nor sustainable.
As far as the international economy remains comparatively open, countries will progressively involve highly focused performance in a worldwide production chain. With a view to choosing specific kinds of products and techniques of doing things, nations are inclined to promote capability in their companies and public institutions.
In the same fashion, with the intention of sourcing and production, creative design houses of Paris, New York and Italy joined hands with Indian apparel production companies having competitive benefit; this could prove profitable for both.
(Image source: Teach-ict.com)
Friday, December 18, 2009
Is credit starting to flow?
Every six weeks, the Mckinsey Quarterly conducts an economic conditions snapshot survey of a panel of executives around the world. For the first time in more than a year, the proportion of respondents who report that their companies have sought external funds has changed significantly—increasing to 41 percent, from 32 percent in October. What’s more, a higher proportion of these companies actually received the money they sought. Their findings may indicate a rising—and apparently well-founded—hope among executives that credit will be available.
(Image source: Professionalcreditsolutions.com)
Wednesday, December 16, 2009
Mind the 3 Cs of Simplicity
Complexity is one of the largest problems plaguing organizations, and most leaders yearn for more simplicity. But don't confuse simple with easy. Ridding your organization, department, or process of unnecessary complexity requires careful attention. Remember these three Cs when trying to restore simplicity:
Collaboration - Silos are the enemy of simplicity. Work across the organization to identify where the complexity is and together improve the way business is done.
Coordination - Smooth coordination is critical to finding simple solutions to the problems you're trying to solve.
Communication - Once you've gotten rid of complexity, you can be sure it will try to find its way back in. Open and regular communication will allow you to identify it before it takes hold.
(Source: Harvard Business Review)
Collaboration - Silos are the enemy of simplicity. Work across the organization to identify where the complexity is and together improve the way business is done.
Coordination - Smooth coordination is critical to finding simple solutions to the problems you're trying to solve.
Communication - Once you've gotten rid of complexity, you can be sure it will try to find its way back in. Open and regular communication will allow you to identify it before it takes hold.
(Source: Harvard Business Review)
Friday, December 4, 2009
Building Customer Delight
Firms misbelieve that forged relationship with the customers will fetch them profit, however people know the intention of company is siphoning their money. The firms must ensure for the appropriate pleasant experience of each transaction in succeeding with CRM Endeavour.
Customer Relationship Management – CRM: Is the fury since firms progressively use techniques of developing relationship with customers. Intention behind is developing clientele, maintain it life long. As thought by companies they could attain it by:
Building Relationship – through various means the firms interact with customers for building their relationship with customers. Such objectives prompt auto makers closing the car deals with telematics equipment and thus nearly 3,500 firms globally initiate email campaigns.
Data Collection – seller believes that data monitor will reflect customer’s idea. Developing the richest possible data the companies seeks the third party records like credit bureau studies with their own customer data.
Customized Offer – the companies design and float various optional offers to their customers from wireless telephone carriers’ custom calling plans to Amazon.com’s book suggestions from time to time.
Customers Don’t Want Relationships: Hypothetically the CRM strategy mimics the way the relationship develops by spending time together for knowing each other and exchange ideas, the resemblance are deceptive. The person to company relationship does not develop strong as compared to person to person interactions, since customers:
Like Secrecy - though a person may willingly share the secrets with friends but never likes to reveal any personal data to the salesperson. According to the recent online research conducted on almost 6000 North American participants, 69 of them expressed their extreme concern about losing secrecy of their personal data.
Follow their own schedules - for unprepared conversation or casual visit, people never approach companies, but they interact to carry out special deals. Hence hardly 3% customers go to consumer packaged goods (CPG) sites for lifestyle content, inspite of remarkable inventory by CPG firms in this area.
Stay Mistrustful - sometimes the companies on way to establish long relationship with customers are trapped with other objectives like meeting quarterly numbers. The customers notice this in company’s hard sell tricks disinclination to replace faulty materials and openly charge fees to terminate contract. Major examples like 1980 junk bond debacle or current Enron scandal strengthens people’s thought of not trusting companies.
CRM Must Focus on Customer Experience: Companies require new CRM focus as the customers reject the corporate relationship advances. As suggested by Forrester, companies develop and maintain their clientele data by recording customer’s experiences at every stage. For success, company should:
Redesign internal processes, not customers: it is possible for company to change operations but it’s rather impossible to change the human nature. A reputed hotelier recently noticed that puzzled clients called the reservation line for tech assistance, and vice versa. The company formed a combined contact center instead of specifying the numbers with instructions that no one would ever read.
Fulfill current goals - don’t rely on loyalty: the companies should try hard anticipating customer’s attitude of expecting more and more by letting go some mistakes. For these companies should introduce Scenario Design like noting the users, their aims and the way they achieve the same and thus developing the customer facing system.
Measure outcome and not activity: customer’s viewpoints must be valued by the company through interactions. The quick but ridiculous reply of an email query may suffice internal awareness but it finally displeases the customer. To curb such event the company must check what matters to the consumer – if any initial problem was solved.
Thursday, December 3, 2009
Dynamic management: Better decisions in uncertain times
Companies can’t predict the future, but they can build organizations that will survive and flourish under just about any possible future.
The economic shock of 2008, and the Great Recession that followed, didn’t just create profound uncertainty over the direction of the global economy. They also shook the confidence of many business leaders in their ability to see the future well enough to take bold action.
It’s not as if we don’t know how to make good decisions under uncertainty. The US Army developed scenario planning and war gaming in the 1950s. And advanced quantitative techniques, complete with decision trees and probability-based net-present-value (NPV) calculations, have been taught to MBA students since the 1960s. These approaches are extraordinarily valuable amid today’s volatility, and many well-run companies have adopted them, over the years, for activities such as capital budgeting.
Here’s the challenge: coping with uncertainty demands more than just the thoughtful analysis generated by these approaches (which, in any event, are rarely employed for all the business decisions where they would be useful). Profound uncertainty also amplifies the importance of making decisions when the time is right—that is to say, at the moment when the fog has lifted enough to make the choice more than a crap shoot, but before things are clear to everyone, including competitors.
Source: McKinsey Quarterly
Wednesday, December 2, 2009
How to Handle Customer Complaints
All organizations depend on customer feedback to make their businesses better and increase customer satisfaction. Yet, customer complaints take up an inordinate amount of time and money, and the complainer doesn't often get what he wants. Here are three tips for expediting the complaint process and keeping customers happy:
Understand the full context - Try to understand as much as you can about the complaint. The more information you have, the easier it is to determine the root of the dissatisfaction.
Propose a resolution - Know what would make the situation better for your customer and propose ways you can solve the problem.
Show respect - Complaining customers are often upset. Train employees receiving complaints to be empathetic and to reframe the harsh criticism they may receive into constructive feedback.
Source: Harvard Business Review
Image source: Smbceo.com
Tuesday, December 1, 2009
Total Productive Maintenance: The way of excellence
Total Productive Maintenance (TPM) is a maintenance program which includes a newly described concept for keeping in up to date conditions of plants and equipment. The goal of any Total Productive Maintenance program is to reduce losses attached to equipment maintenance or, in other words, keep equipment generating only good product, as fast as promising with no unexpected downtime and at the same time, increasing employee morale and job satisfaction.
TPM carries maintenance into a basic and significant role in to the business. It is no longer considered as a non-profit movement. The goal is to hold catastrophe and unplanned maintenance to a lowest level and to confirm the machinery and equipment availability to manufacture products for the end customer. By reducing rework, slow operating equipment and downtime, maximum value is added at the lowest cost. The basic purpose of TPM is to execute ‘perfect manufacturing’.
(Image Source: Iacasia.com)
Monday, November 30, 2009
E-mail Marketing
Search Engine Marketing (SEM) and E-mail Marketing (EMM) is becoming the latest sort out marketing tool for companies because of the increasing cost of print and broadcast marketing. E-Mail Marketing is quickly becoming the in advertising industry a preferred cost effective medium for reaching, targeting, and selling to businesses and consumers. Online advertising companies like Google and Yahoo! have proved this to businesses worldwide, as well as their investors have started utilizing Search Engine Marketing and E-mail marketing thereby generating a healthy profit. Companies and organizations are always in search for a medium to save money and reduce the sale cycle. This objective could be certainly be achieved to a great extent by E-mail marketing as it saves time and resources for retailers by sending electronic messages in a timely order, to their in-house customers.
As other marketing tools, for E-mail marketing also certain strategies have to be followed to ensure its success for a business venture. It is the web site is where sale is made but the email is what that would bring customers to the website.
(Image source: Ccmkt.com)
Sunday, November 29, 2009
Total Quality Management
Total Quality Management (TQM) is an organized approach for quality improvement along together with product and service specifications to customer performance. TQM is applying to target producing these specifications with zero defects. This makes a worthy cycle of constant improvement for production, customer satisfaction and profits.
Total Quality Management (TQM) is not only adopted by a single person or an employee but all employees can become involved (including top management to shop floor management, in other words total or complete involvement, hence, Total) for the continuous improvement of the production of goods and services within the framework of organizations to strive for excellence in everything they do to achieve best quality standards (customer satisfaction to the quality, hence, Quality) by it’s integrated well-managed (quality can and must be managed with best practiced system or tools hence, Management) system of various best practiced principles, methods. In other words, it is a combination of quality and management tools intended for maximizing business, profits and cut down inefficient applications.
Total Quality Management is both a management philosophy and a set of principles that ask for integration of all organizational functions (marketing, finance, design, engineering, and production, customer service, etc, i.e. from top level to bottom line.) to focus on meeting customer needs and organizational objectives.
The simple aim of TQM is "Do the right things, right the first time, every time".
(Image source: Ehow.com)
Friday, November 27, 2009
Dual-class Share Structure
Until recently, corporate governance practices were not considered to have a major impact on a company’s financial performance; as a consequence, they drew little attention from investors. However, recent corporate scandals such have prompted investors to put a greater premium on transparency, accountability, and other sound governance practices. These scandals illustrate how the absence of effective corporate control can put a company and its investors at great risk – a matter of particular importance in Canada, where 46% of the population owns shares, whether directly or indirectly via mutual funds or superannuation funds. Today, higher standards of corporate governance are becoming obligatory for public companies wanting to maintain investor confidence and improve long-term performance.
Broadly, corporate governance systems comprise the framework of rules, relationships, systems and processes an organization has in place for overseeing its direction and management. An important aspect of best practices in corporate governance deals with shareholder rights. This article discusses shareholder rights, focusing on the issues raised by dual-class share structures.
Many company founders wish to avoid the dilution of control that normally accompanies the public issuance of shares. One mechanism at their disposal is to issue different classes of shares that confer different voting rights on the holder. These are known as dual-class share structures, or, alternatively, as restricted- or subordinate-voting share structures. Note that this is substantially different from the situation where one group of shareholders or a single shareholder holds a significantly large share position to control the company. In this latter case, control is proportionate to the financial risk conferred by share ownership. In contrast, dual-class share structures alter the normal 1:1 relationship between cash flow rights and voting rights.
A wide range of dual-class structures exist. In some cases, the superior class allows multiple votes per share; in others, the superior class carries only a single vote per share while the inferior shares are non-voting. Restricted-voting structures that confer special voting rights on the superior-class shareholder, such as the right to elect a certain number of board members or approve executive compensation plans, are also possible. So are various other types of dual-class structures. Essentially, the term covers any structure that confers a disproportionate amount of control on one group of shareholders in relation to their equity participation in the company.
(Source: Parliament of Canada)
(Photo Credit: Andrzej Pobiedzinski)
Thursday, November 26, 2009
Dubai seeks a reprieve on its debts
Investors in Dubai were given an early chance to get into the spirit of things. The emirate’s government asked creditors of Dubai World, one of three big government-backed conglomerates, to agree to a standstill on repayments until May 30th 2010 at the earliest.
Dubai’s debts are heavy, amounting to about $80 billion including the government and the conglomerates it controls. Investors had half-expected Dubai World to seek forbearance from its bankers, asking them to extend their loans. But they felt sure the emirate would make good on publicly traded instruments, and in particular Nakheel’s sukuk (Islamic bond), rather than suffer further damage to its financial reputation.
Credit-rating agencies quickly downgraded all government-related debt. Whether the standstill counts as a default depends on whether Dubai is asking investors to defer their claims or telling them to. If push comes to shove, the emirate surely has the means to satisfy many of them. It raised $10 billion from Abu Dhabi, its wealthier neighbour, in February. And hours before it requested a standstill, it said it had raised another $5 billion from two Abu Dhabi banks, although only a portion of that was available immediately.
These bail-out funds flow to the Dubai Financial Support Fund, a committee which is overseeing the restructuring of Dubai’s indebted companies. Dubai has to borrow to finance its future. As the recovery takes hold, it will make money again from its property, tourism, trade and financial industries.
(From The Economist)
Customers have the Power
Today’s consumers have more buying power then ever before and are generally less tolerant because of the increased time pressure inherent in today’s lifestyles.
They are more aware of environmental and human rights issues and have higher quality expectations. They demand greater variety and more frequent changes in the choices available to them, and they expect instant availability of the exact matching set of garments and accessories in the desired color and size combinations in the same store.
Retailers are first in line in terms of meeting consumer demands, but all companies in the supply chain are driven by the necessity to anticipate and meet the needs of their customers. From design through production to the final sale, all members of the supply chain need to ensure that stores are stocked with the right goods when the consumer wants to buy!
The companies that are responsive to customer demands are those that will remain profitable in an environment of fierce global competition and escalating material and operational costs.
Tuesday, November 24, 2009
Do grades reflect true ability of an individual?
I feel that grades do not actually reveal the true ability of any individual. Grades are one of the ways of testing the knowledge but not a complete and correct way of deciding the capability of the students.
Though I highly respect those who score high and work towards good scores; I wonder if scores / grades truly reflect one’s full potential in profession or life! I’m not saying it’s a ‘must have’ and I’m not saying it’s a ‘nice to have’; my point is that it’s just one of those minimum requirements and should be treated as just like that!
Our exams are like the ODI games in cricket. We know that all the players have the ability and the potential, but not all the players perform well in a given day. Does this mean that the players who do not perform do not have the ability? So I want you all to share your thoughts on this...
Monday, November 23, 2009
Stop Innovating......Start Minnovating
If we want more entrepreneurs, stop worrying about jumpstarting innovation. Focus on "minnovation." That is what some of the experts are saying which I saw in a recent article. So if you do not agree with the statement....no problem as these are not my words. But I believe whatever is mentioned in that article and that's why I am posting it in my blog.
In reality, the vast majority of real-life entrepreneurs around the world aren't innovators. They're minnovators — mixing small parts of novelty and creativity with huge helpings of flexibility scrappiness and a generous portion of hard-driving execution.
Public officials from Colombia to New Zealand are hoping to create the next Silicon Valley by building modern "innovation centers" for entrepreneurs. But that tactic may unwittingly backfire: overemphasis on innovation as the pillar of entrepreneurship could actually stunt entrepreneurial growth. Some potential entrepreneurs, who think entrepreneurship is only about innovation, don't even bother trying because they know their chances of being the next Bill Gates or Steve Jobs are nil.
You don't need to have a Ph.D., a team of engineers, a wall of patents, or even the proverbial garage. More often than not you need that little twist on an existing idea, the tweak of the business model, the minor product adaptation, or even just the ability to put together and lead a fantastic team that is supremely resourceful in overcoming obstacles and driving the tweaked idea to market.
It's time for a generation of minnovators to emerge.
Sunday, November 22, 2009
Simplifying Financial Regulation
Unfortunately, over the past year the financial regulatory system has been extremely visible, and not in a good way. As the post-mortems on the economic downturn continue, regulatory bodies are being put in the spotlight. Why didn't they prevent the crisis or at least send early warning signals? How did the examiners allow institutions such as Lehman Brothers, AIG, Bear Stearns, and Citibank to assume so much risk? How did various Ponzi schemers slip through the regulatory nets for so many years?
Even at the Securities Industry and Financial Markets Association's annual conference in New York, the head of the SEC, Mary Schapiro, said, "the right questions were not asked...to mitigate the risk before we coasted to the brink."
Given the chorus of criticisms, momentum is building to fix or change the financial regulatory framework. Many are calling for new regulations and new regulatory bodies, such as a consumer protection agency. Others are suggesting that all of the regulatory agencies be combined into some sort of "super regulator." Another suggestion is to give new powers to existing bodies to fill some of the gaps in regulating hedge funds or new financial products. There's also a movement afoot to create a "systemic regulator" that will look at issues that cut across the entire financial system.
Clearly not all of these reform proposals will be developed or enacted. But before rushing into any of them, it may be useful to step back and think about simplifying the system, rather than just reforming it.
(From Harvard Business Review)
Friday, November 20, 2009
Food Inflation
Riding on the back of rising prices of staple items like potatoes, onions and pulses, food inflation rose to 14.55 per cent in the first week of November in India. In what could give a sense of sky rocketing of food prices, there is no item on the list considered in the data that has shown a declining trend on a yearly basis. I think now the governments need to do two things: invest in the productive capacity of agriculture and improve the operation of food markets. So far they have done one but not the other and this is the need of the hour to check food prices going up.
In a recent article published in 'The Economist' on ‘How to feed the world’, it has been mentioned that it may be too late to avoid another bout of price rises. Despite a global recession and the largest grain harvest on record in 2008, food prices are heading up again. Boosting world food production without gobbling up land and water will also require technology to play a larger role in the coming years. Between now and 2050 the world’s population will rise by a third, but demand for agricultural goods will rise by 70%. But this will have to happen without farmers clearing large amounts of new land as there is very little scope for expansion.
So now it is the time to rethink!!!
Thursday, November 19, 2009
A yuan-sided argument
Why China resists foreign demands to revalue its currency? An interesting point which I am sure must be waving around in everybody’s mind. There is an article published recently in ‘The Economist’ which I am posting below. Lot of arguments and counter arguments on the issue are covered in the article. But after reading the article, I am in a fix to decide what or who is RIGHT….I want you to post your comments after reading it. Enjoy reading.
PRESIDENT Barack Obama, on his first visit to China, urged the government to allow its currency to rise. President Hu Jintao politely chose to ignore him. In recent weeks Jean-Claude Trichet, the president of the European Central Bank, and Dominique Strauss-Kahn, the managing director of the International Monetary Fund, have also called for a stronger yuan. But China will adjust its currency only when it sees fit, not in response to foreign pressure.
China allowed the yuan to rise by 21% against the dollar in the three years to July 2008, but since then it has more or less kept the rate fixed. As a result, the yuan’s trade-weighted value has been dragged down this year by the sickly dollar, while many other currencies have soared. Since March the Brazilian real and the South Korean won have gained 42% and 36% respectively against the yuan, seriously eroding those countries’ competitiveness.
Speculation about a change in China’s currency policy increased in the week before Mr Obama’s visit, after the People’s Bank of China tweaked the usual wording in its quarterly monetary-policy report. It dropped a phrase about keeping the yuan “basically stable” and added that foreign-exchange policy will take into account “international capital flows and changes in major currencies”. But exchange-rate policy is decided by the State Council, not the central bank. And many policymakers, notably in the Ministry of Commerce, do not favour a revaluation right now.
Indeed, Chinese officials have become bolder in standing up to Washington. “We don’t think that it’s good for the world economic recovery, and it is also unfair, that you ask others to appreciate while you depreciate your own currency,” said a spokesman for the Ministry of Commerce on November 16th. The previous day Liu Mingkang, China’s chief banking regulator, blasted Washington for its low interest rates and for the falling dollar, which, he claimed, was encouraging a dollar carry trade and global asset-price bubbles. He strangely ignored the fact that China’s own overly lax monetary policy, partly the result of its fixed exchange rate, is fuelling bubbles in shares and property.
Foreigners argue that a stronger yuan would not only help reduce global imbalances, such as America’s trade deficit, but would also benefit China. It would help China regain control of its monetary policy. By pegging to the dollar, it is, in effect, importing America’s monetary policy, which is too loose for China’s fast growing economy. A stronger yuan would also help rebalance China’s economy, making it less dependent on exports, putting future growth on a more sustainable path.
If a stronger exchange rate is in China’s own interest, why does it resist? Beijing rejects the accusation that its exchange-rate policy has given it an unfair advantage. It is true that other emerging-market currencies have risen sharply this year, but this ignores the full picture. Last year China held its currency steady against the dollar throughout the global financial crisis, while others tumbled. Since the start of 2008, the yuan has actually risen against every currency except the yen.
Beijing also argues that it has done a lot to help global rebalancing. Thanks to its monetary and fiscal stimulus, domestic demand has contributed an incredible 12 percentage points to GDP growth this year, while net exports subtracted almost four percentage points. Its current-account surplus has almost halved to around 6% of GDP from 11% in 2007. Chinese policymakers accept that the yuan needs to appreciate over the longer term, but say now is the wrong time, because exports are still falling, by 14% over the past 12 months.
Another reason for hesitation is that the theory that revaluing the yuan will allow Beijing to tighten its monetary policy is too simplistic. China’s experience since 2005 shows that a gradual rise encourages investors to bet on further appreciation; hot-money inflows then swell domestic liquidity. A large one-off increase might work, as it would stem expectations of a further rise. But the sort of increase required—perhaps 25%—is politically unacceptable because it would put many exporters out of business overnight.
Some Chinese economists warn that the benefits to America from yuan revaluation are much exaggerated. In particular, a stronger yuan would not significantly reduce America’s trade deficit. There is little overlap between American and Chinese production, so American goods cannot replace Chinese imports. Instead, consumers would simply end up paying more for imports either from China or other producers, such as Vietnam. This would be like imposing a tax on American consumers.
These arguments help explain why China is dragging its feet. Nevertheless, in the long run, a stronger yuan would benefit China’s economy—and the world’s—by helping shift growth from investment and exports towards consumption. It would boost consumers’ purchasing power and squeeze corporate profits, which have accounted for most of the increase in China’s excessive domestic saving in recent years. China will probably allow the yuan to start rising again early next year. This will not be the result of foreign lobbying—indeed, China is more likely to change its policy if foreign policymakers shut up. But by early next year China’s exports should be growing again, its year-on-year GDP growth could be close to 10%, and its inflation rate will have turned positive. The arguments in favour of revaluation will then loom much larger.
Wednesday, November 18, 2009
SWOT Analysis
SWOT is a handy mnemonic to help corporate planners think about strategy. It stands for Strengths, Weaknesses, Opportunities and Threats. What are an organisation’s SWOTs? How can it manage them in a way that will optimise its performance? A second four-letter acronym is sometimes brought into play here: USED. How can the Strengths be Used; the Weaknesses be Stopped, the Opportunities be Exploited; and the Threats be Defended against?
The process starts by listing a firm’s attributes under the four headings; a particular strength, for example, might be a dedicated workforce or some currently valuable patent. These are then given scores according to what is seen as likely to be the company’s business environment over the next few years. If a recession is beginning and employees have to be laid off, a dedicated workforce might be a weakness. If a boom is about to begin, however, it will be a strength.
The four features can be divided along two main dimensions:
• Internal/external - The internal features are the company’s own strengths and weaknesses. Analysing them is a matter of analysing the state of the company. They are things that already exist. The external features are the organisation’s opportunities and the threats to its future performance. These exist only on the horizon, and they are less easy to assess and measure. They arise from things like changes in technology, demography or government policy.
• Positive/negative - The positive things are the strengths and opportunities; the negative ones are the threats and weaknesses.
A SWOT analysis can be applied to different aspects of a company’s business, such as its it capability or its skills. The simplicity and intuitive wholeness of the framework have helped to make it extremely popular with both corporations and governments. An analysis of the competitive advantages and disadvantages of Germany in 1999 found that the country’s strengths lay in its educated and skilled workforce. Among its weaknesses were its high labour and social costs.
Nevertheless, there has been no shortage of critics. One of the main criticisms is that, in the end, such an analysis invariably relies on subjective judgments. Objective measures of all the ingredients in the balance simply do not exist. Some say that this does not matter, because the process of doing the analysis is more important and revealing than the results of the analysis themselves. The journey is more important than the destination.
(From The Economist)
Tuesday, November 17, 2009
Strategic Alliance
Alliances are often said to be like marriages
A strategic alliance is a relationship between two or more organisations that falls somewhere between the extremes of an arm’s-length sourcing arrangement on the one hand, and a full-blown acquisition on the other. It embraces things such as franchising, licensing and joint ventures.
Booz Allen & Hamilton, a firm of management consultants and an acknowledged expert in the field, defines a strategic alliance as:
A cooperative arrangement between two or more companies in which:
• A common strategy is developed in unison and a win-win attitude is adopted by all parties;
• The relationship is reciprocal, with each partner prepared to share specific strengths with the other, thus lending power to the enterprise;
• A pooling of resources, investment and risks occurs for mutual gain;
In general, there are two types of strategic alliance: a bilateral alliance (between two organisations) and a network alliance (between several organisations). Strategic alliances have many advantages: they require little immediate financial commitment; they allow companies to put their toes into new markets before they get soaked; and they offer a quiet retreat should a venture not work out as the partners had hoped. However, going into something knowing that it is (literally) not a big deal, and that there is a face-saving exit route, may not be the best way to make those charged with running it hungry for success.
The most popular use for alliances is as a means to try out a foreign market. Not surprisingly, therefore, there are more alliances in Europe and Asia (where there are more foreign markets nearby) than in the United States. In some cases, alliances are used by companies because other means of entering a market are closed to them. Hence there have been many in the airline industry, where governments are sensitive about domestic carriers falling into foreign hands.
One thing crucial to a successful alliance is a degree of cultural compatibility. Companies are advised, for example, to pick on someone their own size. Alliances between the very big and the very small are hard to operate not least because of the different significance that the alliance assumes in each organisation’s scale of things.
Alliances are often said to be like marriages. The partners have to understand each other’s expectations, be sensitive to each other’s changes of mood and not be too surprised if their partnership ends in divorce. Indeed, many companies build into their alliances a sort of prenuptial contract, an agreement as to what is to happen to their joint property in the event of a subsequent divorce.
(From The Economist)
Energize Your Customers Online
Competing for your customers' attention online can be tough, especially when you're up against dancing banner ads and all of the daily emails customers get. Here are three tips to cut through the clutter and capture your customers' attention in this crowded space:
Create a sense of urgency - Send out a coupon that needs to be used by midnight or offer a free product to the first 50 respondents.
Energize your customers to tell their friends - Word of mouth is incredibly powerful and valuable, especially on the internet. Give your customers something exciting that they'll want to share with their friends.
Make it fun - Whatever the interaction is, keep it simple, fresh, and engaging.
Friday, November 13, 2009
Is really the economy improving?
There are now lots of news in the air about economic improvements. How far it is true? We should take a very close look to understand if it is really improving or not. Recently I came across an interesting article in 'Business Recorder' which I have mentioned below and after reading this I want you to take the decision - 'Is really the economy improving?'
On the global economic and financial front, China, the world s third largest economy is in fact booming while other Asian and Far Eastern countries like Hong Kong, South Korea, Australia and several other countries are also following the trail. However, there are fears that this progress is essentially stimulus based as the national treasuries of several countries are fearfully prodigal and are lavishing large sums of monies to prop up their economies beyond normal rationale.
Besides possibly breeding inflation, there is a perceived tendency for the banks to lend monies for investment in equity markets which appear to be moving up without being in sync with the ground realities pertaining to economic growth or rehabilitation. Thus there are fears that asset creation may have been achieved by liberal and often unwarranted and unchecked lending to investors who are not really investing in productive ventures but may be just speculating.
In this context, World Bank president Robert Zoellick has said in a defining statement that already asset bubbles are forming in certain economies and property prices are also rising which should make us more cautious about the future course of economic functioning and restitution around the globe.
Therefore, it would now be reasonable to think that further financial stimuli by the leading economies of the world may create undesirable or harmful liquidity while several countries have already mortgaged the future of its citizens by lending out extravagantly.
Thursday, November 12, 2009
Leadership
What Makes a Leader?
(By Daniel Goleman)
When asked to define the ideal leader, many would emphasize traits such as intelligence, toughness, determination, and vision — the qualities traditionally associated with leadership. Often left off the list are softer, more personal qualities — but they are also essential. Although a certain degree of analytical and technical skill is a minimum requirement for success, studies indicate that emotional intelligence may be the key attribute that distinguishes outstanding performers from those who are merely adequate.
What Leaders Really Do?
(By John P. Kotter)
Most corporations today are overmanaged and underled. They need to develop their capacity to exercise leadership. Successful corporations don't wait for leaders to come along. They actively seek out people with leadership potential and expose them to career experiences designed to develop that potential.
The Work of Leadership
(By Ronald A. Heifetz and Donald K. Laurie)
More and more companies today are facing adaptive challenges: Changes in societies, markets, and technologies around the globe constantly force businesses to clarify their values, develop new strategies, and learn new ways to operate. The most important task for leaders in the face of such challenges is mobilizing people throughout their organizations to do adaptive work.
Why Should Anyone Be Led by You?
(By Rob Goffee and Gareth Jones)
We all know that leaders need vision and energy, but after an exhaustive review of the most influential theories on leadership — as well as workshops with thousands of leaders and aspiring leaders — it is learned that great leaders also share some unexpected qualities.
Crucibles of Leadership
(By Warren G. Bennis and Robert J. Thomas)
What makes a great leader? Why do some people appear to know instinctively how to inspire employees — bringing out their confidence, loyalty, and dedication — whereas others flounder again and again? No simple formula can explain how great leaders come to be, but Bennis and Thomas believe it has something to do with the ways people handle adversity. Research suggests that one of the most reliable indicators and predictors of true leadership is the ability to learn from even the most negative experiences.
Wednesday, November 11, 2009
Segmentation
The idea of segmentation has spread beyond its consumer origins
Segmentation is the process of slicing a market for a particular product or service into a number of different segments. The segments are usually based on factors such as demographics, beliefs or the occasion of use of the product. One segment of the market for video cameras, for instance, might be the group of people who have new-born babies. Another could be the group of people visiting relatives who live abroad.
Once different segments of a market have been identified, suppliers to that market can target their advertising and promotional efforts more accurately and more profitably. Different segments can be reached through the most appropriate channel: parents of new-borns through ante-natal clinics, for instance, and foreign travellers through airlines’ websites.
Each market segment represents a group of potential customers with common characteristics. In consumer markets, segmentation is usually based on the following:
• Demographic factors - Gender, age, family size, and so on.
• Geography - In most countries there are marked differences in the consumer preferences of different regions. The consumption of wine in the north of England, for example, is very different from that in the south.
• Social factors - One classic segmentation is by income and occupation, but this is proving to be less and less useful. There are a lot of extremely wealthy people who do not spend much, and vice versa. So the focus is shifting to lifestyle. In recent years, marketers have become more interested in categorising consumers as “generation Xers” or “the millennial generation” rather than by the size of their bank accounts. Consumers are thought to have more in common with people from the same generation than with any other grouping.
Industrial markets have been notoriously more difficult to segment than consumer markets. Firms find it hard to decide which factors are most useful for categorising their corporate clients. Should it be size, industry sector, or geography? Computer-maker Hewlett-Packard segmented its big industrial customers into five categories based on the value of their purchases and the complexity of their IT systems.
Segmentation was in part a reaction against the mass-marketing tactics sparked off by Henry Ford when he said that customers could buy his Model T car “in any colour as long as it’s black”. Many of its classifications, however, have proved to be of little use. Baby boomers have been found to have little more in common than their defining characteristic: a birthdate in the years following the second world war. John Forsyth, a consultant, wrote in McKinsey Quarterly in 1999.
The internet promises to provide new opportunities for segmentation. It offers continuous opportunities to capture information about customer behaviour. Consumers identify themselves and their characteristics by their electronic participation in particular interest groups, and by their general online behaviour.
(The Economist)
Tuesday, November 10, 2009
Key point for Communication
Let’s start with the famous quote - "Great Communicators Are Great Explainers" by John Baldoni.
Good communicators know they need to use energy and enthusiasm to persuade their audience. Great communicators know they also need to explain what all the excitement is about. Next time you need to share something important, be sure you convey enthusiasm, but also clearly explain what is at stake and answer the question "What does it mean?" Lay out what the issue, initiative, or problem is — and be clear about what it isn't. Use metaphors only if they are helpful to your point and share details that support your claims. Then, define what you want people to do by establishing clear expectations. Don't lose or confuse your audience with too many details, though — save those for written communications.
Monday, November 9, 2009
Pleasing Wall Street is a Poor Excuse
(From Harvard Business Review)
Outsourcing, in and of itself, isn't responsible for the erosion of America's high tech infrastructure. The short-term thinking that led to a lot of bad outsourcing decisions is the root cause. And short-term thinking isn't a problem confined to the executive suite.
Managers who focus on maximizing short-term profits end up driving out things that generate long-term value — like R&D. They use all sorts of excuses when they make those decisions, including the need to please Wall Street and create shareholder value. But they're just excuses for poor thinking.
There is a need of business leaders who have a respect for technical issues even if they don't have technical backgrounds. Technical understanding should be a core competency of any company.
Friday, November 6, 2009
Align Employee and Company Priorities
Lucky managers find that their employees' interests naturally align with company priorities. If you're not one of the lucky ones, here are three ways to line up what your employees care about with what your company needs to get done:
Know your employees' priorities - Don't wait for review time. Regularly ask your employees what they care most about. As a manager, you need to know what drives them.
Communicate company priorities - Tell employees what the company needs to achieve in the next week, month, and year. Be clear and consistent, and do this often.
Align interests to responsibilities - Now that both agendas are clear, try as much as possible to channel employees' interests into relevant company priorities.
Thursday, November 5, 2009
Economic Round-up
America’s Federal Reserve kept interest rates at a level close to zero. The Fed’s accompanying statement, which markets were keenly awaiting for any sign of a shift in policy, reiterated its intent to keep rates “exceptionally low” for an “extended period”.
The Bank of England decided to inject a further £25 billion ($42 billion) into the British economy through its quantitative easing programme, raising the cumulative total to £200 billion. The extra asset purchases will be made over the next three months, a slower rate than before.
At a conference in London several leading bankers criticised new proposals for regulating banks that are “too big to fail”. Josef Ackermann, head of Deutsche Bank and chairman of the Institute of International Finance, defended large banks as the “most efficient” means of providing financial services to multinationals.
In an effort to diversify its foreign reserves, India bought 200 tons of gold from the IMF during October, which will nudge the country into the top ten gold-holders worldwide. The news sent the price of gold to another high.
UBS made an unexpected loss in the third quarter, as net outflows from clients mounted in its private-banking business. The Swiss bank earlier this year reached a settlement with American authorities over “secret” accounts.
CIT, a lender to small businesses, filed for bankruptcy protection under a reorganisation plan that had been accepted by most of its bondholders. The move was widely anticipated as CIT struggled with $30 billion in debt, which its restructuring will reduce by a third. The company received a $2.3 billion bail-out last year—money that is now unlikely to be returned to taxpayers.
(From The Economist)
Wednesday, November 4, 2009
US Dollar Index – USDX
The USD Index measures the performance of the U.S. dollar against a basket of currencies: EUR, JPY, GBP, CAD, CHF and SEK. A measure of the value of the U.S. dollar relative to majority of its most significant trading partners. This index is similar to other trade-weighted indexes, which also use the exchange rates from the same major currencies. Currently, this index is calculated by factoring in the exchange rates of six major world currencies: the euro, Japanese yen, Canadian dollar, British pound, Swedish krona and Swiss franc.
It is a weighted geometric mean of the dollar's value compared only with:
. Euro (EUR), 57.6% weight
. Japanese yen (JPY), 13.6% weight
. Pound sterling (GBP), 11.9% weight
. Canadian dollar (CAD), 9.1% weight
. Swedish krona (SEK), 4.2% weight and
. Swiss franc (CHF) 3.6% weight.
The makeup of the "basket" has been altered only once, when several European currencies were subsumed by the Euro at the start of 1999. This index started in 1973 with a base of 100 and is relative to this base. This means that a value of 120 would suggest that the U.S. dollar experienced a 20% increase in value over the time period. It is possible to incorporate futures or options strategies on the USDX. These financial products currently trade on the New York Board Of Trade.
Monday, November 2, 2009
Twitter's Business Model
An interesting article recently published in 'Harvard Business Review' about Twitter's business model by David L. Smith who is the is the CEO of Mediasmith. I think everyone will like to go through it as anyone and everyone is talking about Twitter now.
It has become a popular game, even among investors who should know better, to dismiss Twitter based on lack of a business model. But there is a difference between not generating income and lack of a business model. I believe that, in just a few short months, Twitter will show the world that not only do they have a business model, but that theirs is the most sophisticated around. As the founders have admitted, they did not necessarily plan out their success. But the result of their outside funding and considerable valuation is that they have been free to watch and learn what might be possible.
Most publishers talk about the two common monetization streams — advertising and subscribers — as though there are no other options. As many have seen over the last year, dependence upon advertising is a slippery slope in a downturn.
Last week, Microsoft's Bing and Google announced "search deals" with Twitter, with Bing also making a deal with Facebook, allowing the search engines to show results related to "what is going on right now". They tried to build this and still may, but paying Twitter and Facebook is logical for now as they are rapidly becoming major referral engines to many sites.
In fact, these are traffic deals. Until now Google has been the only company on the planet to make major money by driving traffic to other sites. These deals are Twitter's first steps toward doing the same.
Friday, October 30, 2009
A better way to cut costs
According to a recent McKinsey Quarterly survey, 79 percent of all companies have cut costs in response to the global economic crisis—but only 53 percent of executives think that doing so has helped their companies weather it. Yet organizations continue to cut. Cost reductions often go wrong, and experts suggested that they can be done in a better way.
In the heat of a financial crisis, companies must focus on their financial viability, but they tend to cut about equally everywhere—without considering their strategic needs—because that seems more straightforward, and in some senses more fair, to all executives concerned. A second problem, with longer-term consequences, is that quick head count reductions often come at a price: missing the opportunities that crises can create to improve business systems or to strengthen parts of an organization selectively.
First, companies should start any cost-cutting initiative by thinking through whether they could restructure the business to take advantage of current and projected marketplace trends (for instance, by exiting relatively low-profit or low-growth businesses) or to mitigate threats, such as consolidating competitors. An important part of the analysis is to understand a company’s financial situation and the range of potential outcomes under a number of different external economic scenarios. Second, within the resulting strategy, take time to understand which activities drive value—in the public and nonprofit sectors, a good proxy might be mandated outcomes, such as the number of workers, health metrics, or school performance—and which activities do or could make the organization competitively distinctive. Organizations should invest in value-creating activities and cut costs in others while meeting clear financial goals in a set time frame.
Intelligent cost cutting need not reduce the overall scale of the savings that organizations can achieve. But by shifting the focus from organizational structure to current and future strategic needs, it makes for smarter savings, even at companies that have already started down another path.
Matrix Management
Matrix management is a structure for running those companies that have both a diversity of products and a diversity of markets. In a matrix structure, responsibility for the products goes up and down one dimension and responsibility for the markets goes up and down another. This leaves most managers with a dual reporting line: to the head of their product division on the one hand, and to the head of their geographical market on the other.
The matrix management had been part of an attempt by companies to create complicated structures that matched their increasingly complicated strategies. But it focused only on the anatomy of the organisation. It ignored the physiology (the systems that allow information to flow in and around the organisation) and the psychology (the “shared norms, values and beliefs” of the organisation’s managers).
The matrix management had been part of an attempt by companies to create complicated structures that matched their increasingly complicated strategies. But it focused only on the anatomy of the organisation. It ignored the physiology (the systems that allow information to flow in and around the organisation) and the psychology (the “shared norms, values and beliefs” of the organisation’s managers).
Thursday, October 29, 2009
Making Better Decisions
In recent years decision makers in both the public and private sectors have made an astounding number of poor calls. The list of examples will be never ending if anyone starts to pen down those examples. So let’s not waste time in citing examples. Let’s get into the core issue as being carried in a recent article published in 'Harvard Business Review'.
Why this decision-making disorder? First, because decisions have generally been viewed as the prerogative of individuals—usually senior executives. The process employed, the information used, the logic relied on, have been left up to them, in something of a black box. Information goes in, decisions come out—and who knows what happens in between? (The black box deserves some unpacking). Second, unlike other business processes, decision making has rarely been the focus of systematic analysis inside the firm. Very few organizations have “reengineered” their decisions. Yet there are just as many opportunities to improve decision making as to improve any other process. Recent popular business books address a host of decision-making alternatives.
However, although businesspeople are clearly buying and reading these books, few companies have actually adopted their recommendations. The consequences of this inattention are becoming ever more severe. Organizations must help their managers employ better decision-making processes. Better processes won’t guarantee better decisions, of course, but they can make them more likely. One can improve decision making in following steps:
Identification - Managers should begin by listing the decisions that must be made and deciding which are most important. For example, “the top 10 decisions required to execute our strategy” or “the top 10 decisions that have to go well if we are to meet our financial goals.” Some decisions will be rare and highly strategic. Without some prioritization, all decisions will be treated as equal—which probably means that the important ones won’t be analyzed with sufficient care.
Inventory - In addition to identifying key decisions, you should assess the factors that go into each of them. Who plays what role in the decision? How often does it occur? What information is available to support it? How well is the decision typically made? Such an examination helps an organization understand which decisions need improvement and what processes might make them more effective, while establishing a common language for discussing decision making.
Intervention - Having narrowed down your list of decisions and examined what’s involved in making each, you can design the roles, processes, systems, and behaviors your organization should be using to make them. The key to effective decision interventions is a broad, inclusive approach that considers all methods of improvement and addresses all aspects of the decision process—including execution of the decision, which is often overlooked.
Why this decision-making disorder? First, because decisions have generally been viewed as the prerogative of individuals—usually senior executives. The process employed, the information used, the logic relied on, have been left up to them, in something of a black box. Information goes in, decisions come out—and who knows what happens in between? (The black box deserves some unpacking). Second, unlike other business processes, decision making has rarely been the focus of systematic analysis inside the firm. Very few organizations have “reengineered” their decisions. Yet there are just as many opportunities to improve decision making as to improve any other process. Recent popular business books address a host of decision-making alternatives.
However, although businesspeople are clearly buying and reading these books, few companies have actually adopted their recommendations. The consequences of this inattention are becoming ever more severe. Organizations must help their managers employ better decision-making processes. Better processes won’t guarantee better decisions, of course, but they can make them more likely. One can improve decision making in following steps:
Identification - Managers should begin by listing the decisions that must be made and deciding which are most important. For example, “the top 10 decisions required to execute our strategy” or “the top 10 decisions that have to go well if we are to meet our financial goals.” Some decisions will be rare and highly strategic. Without some prioritization, all decisions will be treated as equal—which probably means that the important ones won’t be analyzed with sufficient care.
Inventory - In addition to identifying key decisions, you should assess the factors that go into each of them. Who plays what role in the decision? How often does it occur? What information is available to support it? How well is the decision typically made? Such an examination helps an organization understand which decisions need improvement and what processes might make them more effective, while establishing a common language for discussing decision making.
Intervention - Having narrowed down your list of decisions and examined what’s involved in making each, you can design the roles, processes, systems, and behaviors your organization should be using to make them. The key to effective decision interventions is a broad, inclusive approach that considers all methods of improvement and addresses all aspects of the decision process—including execution of the decision, which is often overlooked.
Wednesday, October 28, 2009
Prioritize Value over Volume
Recently I came across an article from Harvard Business Review and the subject is very close to my heart as I have several arguments on this and today I am happy that my thought process was right. Research has shown that multitasking results in mediocre outcomes. By giving too little attention to too many things, you fail to do anything well. However, the answer isn't single-tasking either. Single-tasking is far too slow to help you succeed in today's fast-paced world. Instead, identify the tasks that will create the most value and focus on those. By prioritizing value over volume and sharpening your focus on the things that truly matter, you'll increase the quality of your work, and ultimately, the value you provide. What to do with all those tasks that didn't make the high value list? Put them on a "do later" list. If they fail to make it to the high value list over and over again, ask yourself: why do them at all?
Friday, October 23, 2009
The diminishing dollar
One of the few calamities that has not befallen the world economy during the past two years is a dollar crash. Between September 2008 (when Lehman Brothers failed) and March 2009 (when America’s stock markets hit bottom), the dollar rose by almost 13% on a trade-weighted basis. For the past six months the greenback has been sinking steadily, hitting a 14-month low against a basket of leading currencies. A weaker dollar should also assist global economic rebalancing by helping to reorient America’s economy towards exports. So in general, it should help rather than hinder the global recovery. Is it the end of America’s status as the world’s reserve currency?
(From The Economist)
(From The Economist)
Thursday, October 22, 2009
Strategy Has Never Been More Important
In today's business environment, strategy execution is critical to any company's performance. Becoming a strategy-focused organization (SFO) involves five key phases, governing representing the final one. Governing encompasses all the management systems and processes by which strategy execution is carried out and should, therefore, be ongoing in an organization's life as an SFO.
Learn Best Practices of Strategy Focused Organizations
We can all learn from our mistakes, but with something as complicated as managing performance and executing strategy, it is better to learn from the winners than doing experimentation as it is costly, both in human and financial terms.
Managing Innovation
We all know that without execution, strategy is worthless. But innovation without execution is arguably worse. It's costly, both in human and financial terms. Consider the opportunities for value creation — from controlling design and development costs to reducing time to market — that come with getting things right the first time. It's no surprise that companies are looking at improving the way they manage both the efficiency and effectiveness of their various innovation activities.
Leadership and Change
Among the most important things a leader must do is make the case for change.
Learn Best Practices of Strategy Focused Organizations
We can all learn from our mistakes, but with something as complicated as managing performance and executing strategy, it is better to learn from the winners than doing experimentation as it is costly, both in human and financial terms.
Managing Innovation
We all know that without execution, strategy is worthless. But innovation without execution is arguably worse. It's costly, both in human and financial terms. Consider the opportunities for value creation — from controlling design and development costs to reducing time to market — that come with getting things right the first time. It's no surprise that companies are looking at improving the way they manage both the efficiency and effectiveness of their various innovation activities.
Leadership and Change
Among the most important things a leader must do is make the case for change.
Identify Your Employees' Hidden Talents
Please find the highlights of an interesting article from HARVARD BUSINESS REVIEW....it is a must read article for all those who are heading teams.
In today's economy, finding external talent to fill your company's needs isn't always possible. Nor is it always necessary. By paying attention and asking the right questions, you will likely discover many hidden talents among your existing employees:
Turn a compliment into an interview:
When congratulating an employee on a job well done, ask exactly what helped her succeed. By better understanding her process, you may uncover an unseen strength.
Ask why employees prefer certain tasks or projects:
Preferences can be a view into someone's talents. An employee might enjoy a project because it involves a product she cares about or because it gave her a chance to design surveys. Knowing which will possibly uncover talents.
Inquire about dreams:
Ask your employees what they would do if they had their career to do over again. Peoples' dreams often include an aspect of themselves they don't regularly share.
In today's economy, finding external talent to fill your company's needs isn't always possible. Nor is it always necessary. By paying attention and asking the right questions, you will likely discover many hidden talents among your existing employees:
Turn a compliment into an interview:
When congratulating an employee on a job well done, ask exactly what helped her succeed. By better understanding her process, you may uncover an unseen strength.
Ask why employees prefer certain tasks or projects:
Preferences can be a view into someone's talents. An employee might enjoy a project because it involves a product she cares about or because it gave her a chance to design surveys. Knowing which will possibly uncover talents.
Inquire about dreams:
Ask your employees what they would do if they had their career to do over again. Peoples' dreams often include an aspect of themselves they don't regularly share.
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