For a manager, firing an employee is never an easy task. It is an emotionally draining activity. In India losing a job has emotional connotations far beyond the financial implications. Losing a job could be a result of broad layoffs, a result of poor performance or a result of career stagnation. The last one is the toughest for a person to handle.
One could lose a job as a result of the entire group getting retrenched. This is witnessed during the economic downturn when the company takes such actions to keep its financial scorecard healthy. In such a case the employee becomes a victim for no fault of his. He could draw solace from the fact that he is not alone. When the job market improves he is sure to find another job.
One could lose a job as a result of bad performance. In this case the employee is not caught unawares. Typically an organization as part of the performance appraisal system would have given the feedback of poor performance to the employee. Most often the managers are reluctant to let go the lowest performer unless that employee exhibits serious attitude issues that could impact the team. While this may seem humane, in reality the manager’s inaction negatively affects the employee. Being at the bottom of the organization the employee’s compensation is affected year on year. Letting him go may benefit him. He may be able to find a better paying job where his skills are more valuable than in the current organization. But before letting him go, the employee should be given feedback for improvement. Good organizations does this well. They also put the employee through “Performance Improvement Program” to give him a choice to improve. Despite all these actions if the employee’s performance does not improve, the organization may have to let go the person. The employee is mentally prepared as he has been given due feedback and an opportunity to improve.
The third case when one could lose the job is when the person adds less value to the organization compared to his experience. He may not be a poor performer. Typically this case occurs at senior levels. The person through his past experience and accomplishments would have grown to be a middle level manager. In this process he may have gone away from being “hands-on” employee. If this person does not have the right leadership skill to grow further, he gets stuck at the middle level managerial position. Over time the junior employees develop skills and are better in their accomplishment s than this person. Neither growing as a leader nor being as technical/handson as the juniors this person gets stuck. The risk of losing the job for this person is low if he is part of a big organization. However for smaller organization he becomes an overhead. Sooner than later this person comes into the radar screen of the management. His tenure in the organization depends on the results of the organization and the relationship this person has with the management. If the management is fair, then it would help find a suitable role for him in other organization that values his skill. If it cannot find such a role then it would give sufficient time and even a voluntary retirement package for the person to find a job elsewhere. However at such high experience level without good leadership skills it will be difficult to find a suitable job elsewhere.
To keep the job, one has to constantly improve their performance at work and develop the leadership skills.
Happy Reading,
Ram
Sunday, October 24, 2010
Sunday, October 17, 2010
Trust
Trust takes months or years to build, but can be destroyed in an instant. Trust among the members of the team, between the team members and their manager is very critical for the success of the organization. For successful execution of projects in an organization, emphasis is laid on the tangible metrics like on-time schedule, quality and process compliance. But without a high level of trust in the team - the intangible metric, the organization can fall short of meeting the above mentioned tangible metrics.
When you trust someone – whether it’s your boss, a co-worker – life feels good. When trust levels are high, you feel relaxed and accepted; you can be yourself. When trust levels are low, you feel uncomfortable and on the defensive; you can’t be yourself. Co-workers with high levels of trust enjoy working and tend to be more productive. Lack of trust can cause people to feel angry, hurt, or disappointed with each another. Teams with low levels of trust have trouble working together and reaching agreements.
Lack of trust in the team is like a speed-breaker. It is a counter-productive force that slows down the progress of the team. Being intangible in nature it is not a visible force. When the trust in the team goes missing, the common purpose of the organization is lost. People compete and argue and fail to reach a consensus thereby slowing down the progress. Every decision made gets questioned. The management has to spend more time to convince the team on the decisions it made.Instead of cooperating and collectively addressing the challenges of the projects, the lack of trust causes the organization to spend more time “inward looking” to get the team aligned on the common purpose.
Lack of trust also makes people reactive. Instead of taking proactive measures to help the progress of the project, people wait to be told. People may not come forward and help others in the team. They may not pour their hearts into meeting the objectives of the team. Lack of trust goes beyond the realms of project execution. Left unaddressed, it can become the cause of attrition.
In the book “Speed of Trust” Steven M.R Covey talks about the economics of trust. When the trust goes down, speed will also go down and costs will go up. He gives an example of how peoples' trust in flying within the US went down dramatically after the 9/11 terrorist attacks. The robust procedures and system put in place after 9/11, increased safety and trust in flying. But it required the passengers to arrive two to three hours before an international flight. They also had to pay a new 9/11 security tax with every ticket. So, as trust went down, speed also went down and cost went up.
Our first urge when trust breaks down is not to trust the other person again – to “write the person off”. However this is counter-productive and exactly what you shouldn’t do, especially if the relationship is important to you. When trust breaks down, it is important to repair it and that requires three things:
• A willingness and desire to get beyond the problem, breakdown, or misunderstanding.
• A willingness to talk with the other person to resolve the problem
• A willingness to look inside yourself and take responsibility for your past and future actions.
There are many things we can do to build trust. When someone confides in you or shares personal information, keep it confidential. Keep your promises and follow through with commitments. To build trusting relationships,learn to forgive others and move on. Try to let go of old arguments, resentments and issues from the past. Realise that trust is up to you. You are responsible for how much – or how little – people trust you. Build credibility by committing to being truthful and by admitting when you are wrong. Communicate openly and honestly. Talk with the person whom you let down. Don’t wait. The longer you wait to talk about a problem, the bigger the misunderstanding becomes. Don’t be afraid to apologise. Remember, trust takes months or years to build, but can be destroyed in an instant.
“Trust is the highest form of human motivation. It brings out the very best in people” - Steven R Covey
Happy Reading,
Ram
p.s A short book on “Building Trust” brought out by Ceridian delves into all aspects of trust – why it is important, what happens when trust breaks down and how to build trust. This blog uses parts of the book.
When you trust someone – whether it’s your boss, a co-worker – life feels good. When trust levels are high, you feel relaxed and accepted; you can be yourself. When trust levels are low, you feel uncomfortable and on the defensive; you can’t be yourself. Co-workers with high levels of trust enjoy working and tend to be more productive. Lack of trust can cause people to feel angry, hurt, or disappointed with each another. Teams with low levels of trust have trouble working together and reaching agreements.
Lack of trust in the team is like a speed-breaker. It is a counter-productive force that slows down the progress of the team. Being intangible in nature it is not a visible force. When the trust in the team goes missing, the common purpose of the organization is lost. People compete and argue and fail to reach a consensus thereby slowing down the progress. Every decision made gets questioned. The management has to spend more time to convince the team on the decisions it made.Instead of cooperating and collectively addressing the challenges of the projects, the lack of trust causes the organization to spend more time “inward looking” to get the team aligned on the common purpose.
Lack of trust also makes people reactive. Instead of taking proactive measures to help the progress of the project, people wait to be told. People may not come forward and help others in the team. They may not pour their hearts into meeting the objectives of the team. Lack of trust goes beyond the realms of project execution. Left unaddressed, it can become the cause of attrition.
In the book “Speed of Trust” Steven M.R Covey talks about the economics of trust. When the trust goes down, speed will also go down and costs will go up. He gives an example of how peoples' trust in flying within the US went down dramatically after the 9/11 terrorist attacks. The robust procedures and system put in place after 9/11, increased safety and trust in flying. But it required the passengers to arrive two to three hours before an international flight. They also had to pay a new 9/11 security tax with every ticket. So, as trust went down, speed also went down and cost went up.
Our first urge when trust breaks down is not to trust the other person again – to “write the person off”. However this is counter-productive and exactly what you shouldn’t do, especially if the relationship is important to you. When trust breaks down, it is important to repair it and that requires three things:
• A willingness and desire to get beyond the problem, breakdown, or misunderstanding.
• A willingness to talk with the other person to resolve the problem
• A willingness to look inside yourself and take responsibility for your past and future actions.
There are many things we can do to build trust. When someone confides in you or shares personal information, keep it confidential. Keep your promises and follow through with commitments. To build trusting relationships,learn to forgive others and move on. Try to let go of old arguments, resentments and issues from the past. Realise that trust is up to you. You are responsible for how much – or how little – people trust you. Build credibility by committing to being truthful and by admitting when you are wrong. Communicate openly and honestly. Talk with the person whom you let down. Don’t wait. The longer you wait to talk about a problem, the bigger the misunderstanding becomes. Don’t be afraid to apologise. Remember, trust takes months or years to build, but can be destroyed in an instant.
“Trust is the highest form of human motivation. It brings out the very best in people” - Steven R Covey
Happy Reading,
Ram
p.s A short book on “Building Trust” brought out by Ceridian delves into all aspects of trust – why it is important, what happens when trust breaks down and how to build trust. This blog uses parts of the book.
Sunday, June 27, 2010
Micro Management
The team is facing an issue. The members are not taking any proactive measures to address it. The manager suggests actions and asks the team member to act on it. Is the manager micro-managing? The team plans the project, taking into account the realistic scenarios. The team still fails to meet their milestones. The manager, during the status meeting, asks the team the reasons for the slip. He gets into the root cause of the slip. Is the manager micro-managing? Scenarios like these set me thinking – Is it wrong for the manager to “micro manage”, when the team is not meeting the expectation?
Merriam-Webster's Online Dictionary defines micromanagement as "manage[ment] especially with excessive control or attention to details". The two phrases “excessive control” and “attention to details” requires elaboration.
If the manager wants to exercise more control, even when his leaders are meeting or exceeding the expectation of their jobs, then yes - the manager is culpable of micro-managing. A manager is said to be micro-managing: when he does not allow his leaders to do their job because he feels it is more efficient for him to do it; when he does not allow the team members to learn from their mistakes; when he gets irritated if the team member makes decisions without consulting him; when he does not allow them to take initiative; etc.,
However, if the leaders do not meet the expectation, asking them to act on issues is not micro-management. If deadlines are missed, a manager needs to be more involved in the details and help solve the problem. If a project is not going as planned, a manager needs the details in order to develop contingency plans. If a team member is not willing to perform, a manager needs to monitor their performance closely in order to motivate or discipline them accordingly. If a manager has to report on progress, he needs a detailed understanding of the processes and procedures of the organisation. In all these cases the actions of a manager cannot be termed as micro-management. Sometimes these managerial responsibilities can appear intrusive or controlling to staff – particularly to those who are under-performing and require more supervision. It is only when a manager’s oversight or input is excessive or unnecessary that he/she can be reasonably termed a “micromanager”.
The second part of the definition of micromanagement talks about “attention to details”.The word micro is broadly synonymous to the details. A manager is not expected to get into the details of the day to day activities of his team members. His leaders are expected to work with the team members on the details. If this does not give the expected results, then instead of getting to the micro details, he should put a framework in place that addresses this issue. If he observes lack of details in the management of the projects, then he should work with his leaders and develop a framework that highlights critical milestones. Tracking these milestones gives the necessary details without the need for micromanagement.
To avoid micro management, develop leaders who are proactive and accountable. Empower them. Set clear expectations for leaders and ensure that they do the same for their reportees. Hold everyone accountable for their results. Develop the culture of pro-activeness in the organization. Develop trust with the leaders. This will go a long way to ensure manager does not need to micromanage.
Merriam-Webster's Online Dictionary defines micromanagement as "manage[ment] especially with excessive control or attention to details". The two phrases “excessive control” and “attention to details” requires elaboration.
If the manager wants to exercise more control, even when his leaders are meeting or exceeding the expectation of their jobs, then yes - the manager is culpable of micro-managing. A manager is said to be micro-managing: when he does not allow his leaders to do their job because he feels it is more efficient for him to do it; when he does not allow the team members to learn from their mistakes; when he gets irritated if the team member makes decisions without consulting him; when he does not allow them to take initiative; etc.,
However, if the leaders do not meet the expectation, asking them to act on issues is not micro-management. If deadlines are missed, a manager needs to be more involved in the details and help solve the problem. If a project is not going as planned, a manager needs the details in order to develop contingency plans. If a team member is not willing to perform, a manager needs to monitor their performance closely in order to motivate or discipline them accordingly. If a manager has to report on progress, he needs a detailed understanding of the processes and procedures of the organisation. In all these cases the actions of a manager cannot be termed as micro-management. Sometimes these managerial responsibilities can appear intrusive or controlling to staff – particularly to those who are under-performing and require more supervision. It is only when a manager’s oversight or input is excessive or unnecessary that he/she can be reasonably termed a “micromanager”.
The second part of the definition of micromanagement talks about “attention to details”.The word micro is broadly synonymous to the details. A manager is not expected to get into the details of the day to day activities of his team members. His leaders are expected to work with the team members on the details. If this does not give the expected results, then instead of getting to the micro details, he should put a framework in place that addresses this issue. If he observes lack of details in the management of the projects, then he should work with his leaders and develop a framework that highlights critical milestones. Tracking these milestones gives the necessary details without the need for micromanagement.
To avoid micro management, develop leaders who are proactive and accountable. Empower them. Set clear expectations for leaders and ensure that they do the same for their reportees. Hold everyone accountable for their results. Develop the culture of pro-activeness in the organization. Develop trust with the leaders. This will go a long way to ensure manager does not need to micromanage.
Sunday, June 20, 2010
Poorly Made in China
This blog is an excerpt from the book “Poorly Made in China” by Paul Midler. It reveals business and cultural challenges, and exposes the dangerous cat- and-mouse games that take place between Chinese companies and their foreign counterparts.
Chinese manufacturers are aggressive and desperate for business. When importers visited the factory, the manufacturers went to great extents to impress them. Even if they did not have a working product line, they created a mock product line to give importers confidence that they could get their products manufactured by them.
Manufacturers bent over backwards, if only to make it seem, as though doing business with them would be a breeze. For many new to export manufacturing, the factory owner doubled as teacher. Beyond cheap labour, speed and convenience (which are hallmark of Chinese manufacturers), everything about China was setup to get customers in through the door. The importers were treated like kings. While these manufacturing relationships tended to become only more difficult over time, the beginning was almost always promising.
China attempted to appeal more easily to Westerners and also appear more up to date. Factory owners dressed like their foreign business partners and they took English names for themselves. Despite China’s insistence on having a unique culture that stretches for millennia, there is no other country in the world whose citizens have given themselves alternate English names, in such numbers and with so much enthusiasm.
It was too expensive to make a product line before an order actually came in. Manufacturers all suffered from this chicken-and-egg problem: to kick-start their businesses, they had to fool customers into thinking that product samples were already in motion. The easiest way to accomplish this was by throwing samples – anyone’s samples – into a showroom. The Chinese made plenty of counterfeit products, and so it was no great surprise that they also faked entire showrooms. Placing an initial order in China was easy anyway – all that was needed was a sample. They could take any product and move it quickly into production. They also showed incredible willingness and enthusiasm to get a relationship started. Copying was rampant in China and made the manufacturers behave in strange ways. Each manufacturer tried to protect the designs, but there would be spies from other companies, so it was not uncommon to see the same designs being made by multiple manufacturers. To respect the client who gave the design, the manufacturer was cautious enough not to sell the same product to other clients from the same geography. But that did not stop them from selling it to clients in other geographies. Some Chinese manufacturers setup an address in the United States and pretended they were a buyer. They then contacted competitors and requested product samples. They were then shipped back to China and placed in a showroom. Ingenuity at its best …
Once they received orders, Chinese factories often engaged in quality fade – the incremental degradation of a product over time. They quietly reduced the amount of materials or else manipulated the quality of raw inputs. The changes were gradual, almost imperceptible. The importer was neither asked for permission nor told. Quality fade was an economic decision that manufacturers in China made. If the shipment was rejected by the importer then they found agents to sell them in the other growing export markets or even in the domestic market. This was one of the reasons for a rise in the quality problems. Factories did not see an attention to quality as something that would improve their business prospects, but merely as a barrier to increased profitability. Importers learnt quickly that improved quality raised their costs. Manufacturers rarely settled for any loss due to these defects. Importers were not inclined to pursue legal action and they did want to put an entire business on hold, just to settle the matter of a few containers. Manufacturing problems tended to be small, relative to the size of the overall business. Factory owners actually took this into account when they considered whether or not to manipulate the quality levels. Manufacturers sometimes offered discount on future orders as compensation for defective parts. The only way to recoup losses created by a factory was to reward them with more orders.
Besides engaging in quality fade to increase the profit margins, the manufacturer also resorted to short term price increase that caught the importers by surprise.The manufacturer would increase the price at the last moment, well after the orders were confirmed. Chinese are good in negotiation despite the language barriers. They relied more on emotion and on their instincts. They made the customer believe that progress was being made in the negotiation, and then at the critical point in the talks, they took the entire deal off the table. These manufacturers went out of their way to make the importer lose his cool. As cash flows for the importers were tight, they preferred to get some revenue, rather than lose business. They yielded to the price increase.
Chinese manufacturers understood the benefits of offering enticements to get a business relationship going, but after some interval, the factory jeopardized goodwill in order to fund its returns. Supplier relationships were almost never better than they were at the beginning. The importers were left with no choice. They could not change the supplier because of the time it would take to get an alternate supplier up to speed. Even if this was possible, the new supplier might be just as bad as the current one.
Be wary. Going to China for low cost need not always end up being low cost. Add to that the woes of quality problems. Look before you (Leap) Invest.
Happy Reading,
Ram
Chinese manufacturers are aggressive and desperate for business. When importers visited the factory, the manufacturers went to great extents to impress them. Even if they did not have a working product line, they created a mock product line to give importers confidence that they could get their products manufactured by them.
Manufacturers bent over backwards, if only to make it seem, as though doing business with them would be a breeze. For many new to export manufacturing, the factory owner doubled as teacher. Beyond cheap labour, speed and convenience (which are hallmark of Chinese manufacturers), everything about China was setup to get customers in through the door. The importers were treated like kings. While these manufacturing relationships tended to become only more difficult over time, the beginning was almost always promising.
China attempted to appeal more easily to Westerners and also appear more up to date. Factory owners dressed like their foreign business partners and they took English names for themselves. Despite China’s insistence on having a unique culture that stretches for millennia, there is no other country in the world whose citizens have given themselves alternate English names, in such numbers and with so much enthusiasm.
It was too expensive to make a product line before an order actually came in. Manufacturers all suffered from this chicken-and-egg problem: to kick-start their businesses, they had to fool customers into thinking that product samples were already in motion. The easiest way to accomplish this was by throwing samples – anyone’s samples – into a showroom. The Chinese made plenty of counterfeit products, and so it was no great surprise that they also faked entire showrooms. Placing an initial order in China was easy anyway – all that was needed was a sample. They could take any product and move it quickly into production. They also showed incredible willingness and enthusiasm to get a relationship started. Copying was rampant in China and made the manufacturers behave in strange ways. Each manufacturer tried to protect the designs, but there would be spies from other companies, so it was not uncommon to see the same designs being made by multiple manufacturers. To respect the client who gave the design, the manufacturer was cautious enough not to sell the same product to other clients from the same geography. But that did not stop them from selling it to clients in other geographies. Some Chinese manufacturers setup an address in the United States and pretended they were a buyer. They then contacted competitors and requested product samples. They were then shipped back to China and placed in a showroom. Ingenuity at its best …
Once they received orders, Chinese factories often engaged in quality fade – the incremental degradation of a product over time. They quietly reduced the amount of materials or else manipulated the quality of raw inputs. The changes were gradual, almost imperceptible. The importer was neither asked for permission nor told. Quality fade was an economic decision that manufacturers in China made. If the shipment was rejected by the importer then they found agents to sell them in the other growing export markets or even in the domestic market. This was one of the reasons for a rise in the quality problems. Factories did not see an attention to quality as something that would improve their business prospects, but merely as a barrier to increased profitability. Importers learnt quickly that improved quality raised their costs. Manufacturers rarely settled for any loss due to these defects. Importers were not inclined to pursue legal action and they did want to put an entire business on hold, just to settle the matter of a few containers. Manufacturing problems tended to be small, relative to the size of the overall business. Factory owners actually took this into account when they considered whether or not to manipulate the quality levels. Manufacturers sometimes offered discount on future orders as compensation for defective parts. The only way to recoup losses created by a factory was to reward them with more orders.
Besides engaging in quality fade to increase the profit margins, the manufacturer also resorted to short term price increase that caught the importers by surprise.The manufacturer would increase the price at the last moment, well after the orders were confirmed. Chinese are good in negotiation despite the language barriers. They relied more on emotion and on their instincts. They made the customer believe that progress was being made in the negotiation, and then at the critical point in the talks, they took the entire deal off the table. These manufacturers went out of their way to make the importer lose his cool. As cash flows for the importers were tight, they preferred to get some revenue, rather than lose business. They yielded to the price increase.
Chinese manufacturers understood the benefits of offering enticements to get a business relationship going, but after some interval, the factory jeopardized goodwill in order to fund its returns. Supplier relationships were almost never better than they were at the beginning. The importers were left with no choice. They could not change the supplier because of the time it would take to get an alternate supplier up to speed. Even if this was possible, the new supplier might be just as bad as the current one.
Be wary. Going to China for low cost need not always end up being low cost. Add to that the woes of quality problems. Look before you (Leap) Invest.
Happy Reading,
Ram
Sunday, May 30, 2010
To Cheat, or Not to Cheat
It is a month since I last wrote a blog. Just to ensure that I retain the habit of writing blogs, I fall back on my favourite book “Predictably Irrational” by Dan Ariely. In this blog, I summarise two chapters of this book written on “character” – it explores the circumstances when honest people cheat and how non-monetary exchanges increase the chances of cheating.
In 2004, the total cost of all robberies in the United States was $525 million. Compare that to the $600 billion that is lost because of employee’s theft and fraud at the work place. The retail industry loses $16 billion a year to customers who buy clothes, wear them with the tags tucked in, and return these secondhand clothes for a full refund. India hasn’t faced this problem yet - Thanks to the punch line “Goods once sold will not be taken back”
In this blog, we are not talking about crooks who are dishonest thieves but about people who generally consider themselves honest.
To see how much an honest person would cheat, a controlled experiment was conducted at the Harvard School of Business. Students were given 50 multiple choice questions to answer in 15 minutes. At the end of that time, they would be asked to transfer their answers from their worksheet to a scoring sheet. For each correct answer the students would receive 10 cents. In the second setup, a new group of students take the same test, but they were asked to transfer their answers to the score sheet that already has correct answers pre-marked. They would count how many questions they had answered correctly and write it at the top of the scoring sheet. The third group was asked to shred their worksheet and handover only the scoring sheet. As you see with every experiment the scope for cheating increased. The first group scored 32.6, but the second and third group scored 36.1. It was found that the increase in the score was mainly due to cheating. When given an opportunity, many honest people will cheat but not wildly. In another twist to the experiment, the fourth group was asked to write the Ten Commandments before taking the test. Surprisingly, this group, though having a similar scope for cheating like the third group, did not score as much as the third group. Writing the Ten Commandments before taking the test had an effect on their integrity and so they did not cheat.
Similar experiments were conducted in MIT but with a difference. Instead of giving cash, the students were given non-monetary tokens that could be encashed later. The results were very surprising. The third group cheated a whole lot more - as much as twice the first group. So when the cash was replaced with tokens the amount of cheating increased dramatically. In another experiment conducted in the MIT dormitories, a six-pack of Coke cans was left in the communal fridge. Within 3 days all the cans were gone. However when 6 one dollar bills were left in the fridge it remained untouched for more than 3 days. This means that not only did the non-monetary tokens “release” people from some of their moral constraints, but for quite a few of them, the extent of the release was so complete that they cheated as much as possible.
A person may not feel dishonest or guilty, taking a pen from office supplies or using photocopiers for personal use. But he would not take any cash that he finds in the office cupboard. When we deal with money, we are primed to think about actions as if we had just signed an honor code. But look at the latitude we have with non-monetary exchanges. When we look around us, much of the dishonesty we see involves cheating that is one step removed from cash. Companies cheat with their accounting practices; executives cheat by using backdated stock options; individuals exaggerate the cost of the television on their property loss report, or employees falsely report a meal as a business meal.
How can we fix this? We could label each item in the supply cabinet with a price (for instance) or use wording to explain stocks and stock options clearly in terms of their monetary value. However, in the larger context, we need to wake up to the connection between non-monetary currency and our tendency to cheat. Develop and maintain high level of integrity by doing daily prayers and reading spiritual and moral books. Let not even an iota of dishonest thought come to your mind. By assigning currency values to the non-monetary objects, make sure it influences you to not cheat.
Happy Reading,
Ram
In 2004, the total cost of all robberies in the United States was $525 million. Compare that to the $600 billion that is lost because of employee’s theft and fraud at the work place. The retail industry loses $16 billion a year to customers who buy clothes, wear them with the tags tucked in, and return these secondhand clothes for a full refund. India hasn’t faced this problem yet - Thanks to the punch line “Goods once sold will not be taken back”
In this blog, we are not talking about crooks who are dishonest thieves but about people who generally consider themselves honest.
To see how much an honest person would cheat, a controlled experiment was conducted at the Harvard School of Business. Students were given 50 multiple choice questions to answer in 15 minutes. At the end of that time, they would be asked to transfer their answers from their worksheet to a scoring sheet. For each correct answer the students would receive 10 cents. In the second setup, a new group of students take the same test, but they were asked to transfer their answers to the score sheet that already has correct answers pre-marked. They would count how many questions they had answered correctly and write it at the top of the scoring sheet. The third group was asked to shred their worksheet and handover only the scoring sheet. As you see with every experiment the scope for cheating increased. The first group scored 32.6, but the second and third group scored 36.1. It was found that the increase in the score was mainly due to cheating. When given an opportunity, many honest people will cheat but not wildly. In another twist to the experiment, the fourth group was asked to write the Ten Commandments before taking the test. Surprisingly, this group, though having a similar scope for cheating like the third group, did not score as much as the third group. Writing the Ten Commandments before taking the test had an effect on their integrity and so they did not cheat.
Similar experiments were conducted in MIT but with a difference. Instead of giving cash, the students were given non-monetary tokens that could be encashed later. The results were very surprising. The third group cheated a whole lot more - as much as twice the first group. So when the cash was replaced with tokens the amount of cheating increased dramatically. In another experiment conducted in the MIT dormitories, a six-pack of Coke cans was left in the communal fridge. Within 3 days all the cans were gone. However when 6 one dollar bills were left in the fridge it remained untouched for more than 3 days. This means that not only did the non-monetary tokens “release” people from some of their moral constraints, but for quite a few of them, the extent of the release was so complete that they cheated as much as possible.
A person may not feel dishonest or guilty, taking a pen from office supplies or using photocopiers for personal use. But he would not take any cash that he finds in the office cupboard. When we deal with money, we are primed to think about actions as if we had just signed an honor code. But look at the latitude we have with non-monetary exchanges. When we look around us, much of the dishonesty we see involves cheating that is one step removed from cash. Companies cheat with their accounting practices; executives cheat by using backdated stock options; individuals exaggerate the cost of the television on their property loss report, or employees falsely report a meal as a business meal.
How can we fix this? We could label each item in the supply cabinet with a price (for instance) or use wording to explain stocks and stock options clearly in terms of their monetary value. However, in the larger context, we need to wake up to the connection between non-monetary currency and our tendency to cheat. Develop and maintain high level of integrity by doing daily prayers and reading spiritual and moral books. Let not even an iota of dishonest thought come to your mind. By assigning currency values to the non-monetary objects, make sure it influences you to not cheat.
Happy Reading,
Ram
Wednesday, April 28, 2010
Unsustainable Pay Raises
India has been a successful destination for knowledge based services. It wouldn’t be incorrect to say that it was the cheap but good talent that attracted many Multi National Companies (MNCs) to setup their operations in India. Over the years, this cost advantage of the India operations is slowly disappearing. I wouldn’t be surprised if the MNCs go to other countries that are cheaper than India. We already see the BPOs moving to Philippines, chip design moving to Singapore & China etc. If we analyse the root cause, it will be very evident that the steady, double-digit, year on year pay raises has minimized the cost advantage. Employee’s Cost to Company is only part of the overall cost. The rising infrastructure costs in India, coupled with energy costs further shrink the cost advantage. I restrict this blog to the potential impacts of ever increasing pay raises
India still has some cost advantage because of the pyramid structure of the organization. At the bottom of the pyramid are the new college graduates (NCG) who get the lowest pay in the company. At the top of the pyramid are the senior most managers of the company who would be paid, the most. In between, there are multiple layers or ranks. As we go up the pyramid, the pay increases but the number of people at each layer become lesser in number. The average cost to the company is still low, as there are more employees at the bottom of the pyramid. However, as an organization ages, it will have more senior people and thus the average pay moves up. Add to this, the ever increasing starting salaries of the NCG. The NCG’s pay has grown at a CAGR of 15% over the last 17 years. The pay in USA has not increased that drastically. The ratio of US NCG salary to India NCG salary has dropped from 20 to 4 in the last 17 years. Today, a few of the middle level managers in India get salaries that are in the similar ball park, as their colleagues in USA. While the cost competitiveness has been eroding, the talent pool with critical skills has been growing. This will be the saving grace for the MNCs in order to survive in India. However the rate of growth will slow down. The pay raises will drop. At senior levels it could stay flat or in some cases even decrease.
The number of critical high-impact positions, that justify higher pay, are limited. This means that not all experienced (# of years) employees can occupy these positions. Such experienced employees could be getting higher salaries based on their years of experience but their current position may not justify the same. In some sense, career stagnation happens. Sooner or later, these employees become overheads. The salaries of such employees could stay flat or even decrease. As the pay and benefits could possibly be linked to the job rank or the grades, even demotion of job ranks can happen. They may also be retrenched. Employees would prefer not to be in such situations, but it would be futile to ignore the possibility that it could happen to them.
There are choices that people can make. If they do not want to get into such a situation, then they should work proactively to enhance their careers and add greater value than their current role demands. Take up bigger challenges and deliver results. This requires employees to get out of their comfort zone and take risks. It also requires employees to broaden their repertoire. They should constantly look at upgrading their skill set and ensure that it is relevant, in the ever changing market environment. If they are not ready to face these challenges then they should also be ready to accept that their career and pay may get stagnant.
The unsustainable pay increase also impacts a person’s social life. With more salary, people tend to spend more and get used to a higher standard of living. Spending beyond the means, in anticipation of ever-increasing salaries can create liabilities. It also creates secondary effects in the society by increasing the cost of living.
Continuously upgrading ones skill and living within means can help in long term sustenance of a person’s life and work.
Happy Reading,
Ram
India still has some cost advantage because of the pyramid structure of the organization. At the bottom of the pyramid are the new college graduates (NCG) who get the lowest pay in the company. At the top of the pyramid are the senior most managers of the company who would be paid, the most. In between, there are multiple layers or ranks. As we go up the pyramid, the pay increases but the number of people at each layer become lesser in number. The average cost to the company is still low, as there are more employees at the bottom of the pyramid. However, as an organization ages, it will have more senior people and thus the average pay moves up. Add to this, the ever increasing starting salaries of the NCG. The NCG’s pay has grown at a CAGR of 15% over the last 17 years. The pay in USA has not increased that drastically. The ratio of US NCG salary to India NCG salary has dropped from 20 to 4 in the last 17 years. Today, a few of the middle level managers in India get salaries that are in the similar ball park, as their colleagues in USA. While the cost competitiveness has been eroding, the talent pool with critical skills has been growing. This will be the saving grace for the MNCs in order to survive in India. However the rate of growth will slow down. The pay raises will drop. At senior levels it could stay flat or in some cases even decrease.
The number of critical high-impact positions, that justify higher pay, are limited. This means that not all experienced (# of years) employees can occupy these positions. Such experienced employees could be getting higher salaries based on their years of experience but their current position may not justify the same. In some sense, career stagnation happens. Sooner or later, these employees become overheads. The salaries of such employees could stay flat or even decrease. As the pay and benefits could possibly be linked to the job rank or the grades, even demotion of job ranks can happen. They may also be retrenched. Employees would prefer not to be in such situations, but it would be futile to ignore the possibility that it could happen to them.
There are choices that people can make. If they do not want to get into such a situation, then they should work proactively to enhance their careers and add greater value than their current role demands. Take up bigger challenges and deliver results. This requires employees to get out of their comfort zone and take risks. It also requires employees to broaden their repertoire. They should constantly look at upgrading their skill set and ensure that it is relevant, in the ever changing market environment. If they are not ready to face these challenges then they should also be ready to accept that their career and pay may get stagnant.
The unsustainable pay increase also impacts a person’s social life. With more salary, people tend to spend more and get used to a higher standard of living. Spending beyond the means, in anticipation of ever-increasing salaries can create liabilities. It also creates secondary effects in the society by increasing the cost of living.
Continuously upgrading ones skill and living within means can help in long term sustenance of a person’s life and work.
Happy Reading,
Ram
Sunday, April 11, 2010
Sense of Urgency – A Cure for Complacency
In a fast-moving and changing world, a sleepy or steadfast contentment with the status quo can create disaster. For too often people are content with status-quo and are resistant to change. Complacency is much more common than we might think and very often invisible to the people involved. Success easily produces complacency. It does not even have to be recent success. An organization’s many years of prosperity could have ended a decade ago, and yet the complacency created by that prosperity can live on, often because the people involved don’t see it. Complacency is a feeling that a person has about his or her own behavior, about which he or she needs to do or not do. Almost always, complacent individuals do not view themselves as complacent. They see themselves behaving quite rationally. They can be creative in justifying their point of view. They pay insufficient attention to wonderful new opportunities and frightening new hazards. They continue with what has been the norm in the past. As an outsider, you may correctly see that internal complacency is dangerous, that past successes have created sluggishness or arrogance, but complacent insiders just don’t have that perspective.
To get over this complacency, organizations should create a high enough sense of true urgency among enough people. We live in an age when change is accelerating. The rate of change will continue to go up and up. To address the constant and continuous change, the sense of urgency will move from being an important issue every few years to being a powerful asset all the time.
True urgency focuses on critical issues. It is driven by a deep determination to win. When people have a true sense of urgency, they think that action on critical issues is needed NOW. A sense of urgency is not an attitude that I must have the project team meeting today, but that the meeting must accomplish something important today. Underlying a true sense of urgency is a set of feelings: a compulsive determination to move, and win, now. When it comes to affecting behavior feelings are more influential than thoughts. Thoughts are important, but whether it is contentment with the status quo, anger and anxiety, emotions influence action even more. Great leaders win over the hearts and minds of others. Martin Luther King Junior’s speech addressed not only the strategic plan that called for equality for blacks, but mostly it pounded away at people’s gut-level feelings with poetic rhetoric and passionate words about justice and morality.
Tactics for creating a true sense of urgency should aim at the heart. It should provide human experiences that work appropriately on all senses. People not only hear, but they see something in front of them or in their mind’s eye that helps raise urgency.
• Bring the outside reality into groups that are too inwardly focused. Reconnect internal reality with external opportunities and hazards. Bring in emotionally compelling data, people, video, sites and sounds.
• Behave with urgency every day. Demonstrate your own sense of urgency always in meetings, one-on-one interactions etc., and do so as visibly as possible to as many people as possible.
• Find opportunities in crises. Always be alert to see if crises can be a friend that can destroy complacencies.
• Deal with NoNos. Remove or neutralize all the relentless urgency-killers, people who are not skeptics but are determined to keep a group complacent or, if needed, to create destructive urgency.
To sustain urgency over time requires that it not only be created, but that it be re-created again and again. Sense of urgency leads to success, and success may lead to complacency if the sense of urgency is not re-created. The ultimate solution to the problem of urgency dropping after success is to create the right culture. Create the behaviors like being constantly alert, focusing externally, moving fast, stopping low-value added activities. When these behaviors become the norm, then a culture of urgency is instilled. People will then grab new opportunities, avoid new hazards, and continually find ways to win.
p.s This blog summarizes the learnings from the book “a sense of Urgency” by John P Kotter.
Happy Reading,
Ram
To get over this complacency, organizations should create a high enough sense of true urgency among enough people. We live in an age when change is accelerating. The rate of change will continue to go up and up. To address the constant and continuous change, the sense of urgency will move from being an important issue every few years to being a powerful asset all the time.
True urgency focuses on critical issues. It is driven by a deep determination to win. When people have a true sense of urgency, they think that action on critical issues is needed NOW. A sense of urgency is not an attitude that I must have the project team meeting today, but that the meeting must accomplish something important today. Underlying a true sense of urgency is a set of feelings: a compulsive determination to move, and win, now. When it comes to affecting behavior feelings are more influential than thoughts. Thoughts are important, but whether it is contentment with the status quo, anger and anxiety, emotions influence action even more. Great leaders win over the hearts and minds of others. Martin Luther King Junior’s speech addressed not only the strategic plan that called for equality for blacks, but mostly it pounded away at people’s gut-level feelings with poetic rhetoric and passionate words about justice and morality.
Tactics for creating a true sense of urgency should aim at the heart. It should provide human experiences that work appropriately on all senses. People not only hear, but they see something in front of them or in their mind’s eye that helps raise urgency.
• Bring the outside reality into groups that are too inwardly focused. Reconnect internal reality with external opportunities and hazards. Bring in emotionally compelling data, people, video, sites and sounds.
• Behave with urgency every day. Demonstrate your own sense of urgency always in meetings, one-on-one interactions etc., and do so as visibly as possible to as many people as possible.
• Find opportunities in crises. Always be alert to see if crises can be a friend that can destroy complacencies.
• Deal with NoNos. Remove or neutralize all the relentless urgency-killers, people who are not skeptics but are determined to keep a group complacent or, if needed, to create destructive urgency.
To sustain urgency over time requires that it not only be created, but that it be re-created again and again. Sense of urgency leads to success, and success may lead to complacency if the sense of urgency is not re-created. The ultimate solution to the problem of urgency dropping after success is to create the right culture. Create the behaviors like being constantly alert, focusing externally, moving fast, stopping low-value added activities. When these behaviors become the norm, then a culture of urgency is instilled. People will then grab new opportunities, avoid new hazards, and continually find ways to win.
p.s This blog summarizes the learnings from the book “a sense of Urgency” by John P Kotter.
Happy Reading,
Ram
Sunday, March 14, 2010
The Reorganisation Malaise
With the economy recovering, now is the time when companies go about reorganising their various business units for accelerated growth. There is a certain merit in re-organising businesses to bring in new leaders with fresh ideas. But most often when very many business groups are re-organised it causes more harm than good.
Humans, by nature, prefer status-quo to change. With re-organisation comes change and with every change, people become more uncomfortable. Few heads will roll. While some of the leadership changes are needed, others become causalities through no-fault of theirs. When a change happens at the top, it takes some time before changes are made down the hierarchy. While the new leader takes stock of the situation, before restructuring the group, guesses on who would be axed becomes the hot topic of water-cooler discussions. Employee motivation is not at its best. Uncertainty and chaos, during these times, do not get the best out of the people. The constant fear about what would happen to the organisation, whether the projects would be cancelled etc., creates a negative feeling which is not healthy for any organisation.
Leaders existing in the middle rung -who are usually unaffected - face challenges of a different sort. The new leader he reports to may have come from a different domain and may not have a good appreciation for the work his team does. He has to establish a good relationship in his role and also re-establish the credibility of his team with the new boss. Remote teams in different geographies face greater challenges. They wonder if the new boss would support the remote team or not. Cultural differences also play an important role in the relationship.
The new boss may have a different approach and his expectations from the team may be different as well. The team has to adjust and get used to the expectations of the new boss. If his suggestions result in a better process than the current one the team benefits. But if the suggested changes are just a different way of doing things, then it causes more overhead for the people. Off-site meetings, new review meetings etc., add to the overhead and hamper the productivity of the group. Even the human resources (HR) team is not spared. Instead of their focusing on core HR functions, like talent development, they will be busy managing the communication and the outcome of changes.
Sometimes the re-organisation makes a few roles redundant. People in such roles have to put up with the embarrassment till they find a new job. Sometimes old peers may become your boss or vice-versa. One has to adjust to all such changes. Uncertain of their future in the group, employees look outside for better opportunities. These unnecessary uncertainties in the organizations cause potential attrition.
The effects of re-organisation are not limited to within the company. It impacts the external customer focus and relationships. It breaks the continuity. Changes bring in new faces and they have to re-establish relationships with the customers. Business opportunities have been lost due to issues in transition of customer responsibilities from one person to another. Long term goals are compromised for short term gains. The new leader is eager to show early wins and might make decisions resulting in the short term gains at the expense of long term returns.
Given these ill-effects, why do companies still go through restructuring? The fundamental reason for change is to bring a new person with a different perspective to improve the business. The issue is not so much with changing one leader with another, but making sweeping changes to the whole organization structure. If such a sweeping change is needed - it means that all the existing leaders were incompetent. The real issue then was the wrong choice of leaders to begin with. Changing leaders may not solve the problem unless they are the right ones. Rather a better solution is to work on the existing leaders and improve them. As a strategy, having a succession plan in every organisation to ensure the right number and competent leaders are identified and trained, would go a long way.
Sometimes I feel even the leaders at the top are not sure why they make these changes. Maybe they believe in Chaos. Create a chaotic environment and expect a solution to emerge out of it. May be they believe in Darwin’s theory that the fittest survive. If things turnaround, they can claim victory. If not, restructure again. If none of this works, the next economic downturn would provide yet another opportunity of restructuring.
Given that change is the order of the day, the best one can do is to adapt to it. Accept that restructuring is a norm and get on with your job. Focus on what is expected out of you and deliver it. Seek to make yourself better and critical so that these changes do not affect your job. On a positive note, with every new boss you expand your network. You have an opportunity to pick up the strengths of each boss and avoid their weaknesses.
Happy Reading.
-Ram
Humans, by nature, prefer status-quo to change. With re-organisation comes change and with every change, people become more uncomfortable. Few heads will roll. While some of the leadership changes are needed, others become causalities through no-fault of theirs. When a change happens at the top, it takes some time before changes are made down the hierarchy. While the new leader takes stock of the situation, before restructuring the group, guesses on who would be axed becomes the hot topic of water-cooler discussions. Employee motivation is not at its best. Uncertainty and chaos, during these times, do not get the best out of the people. The constant fear about what would happen to the organisation, whether the projects would be cancelled etc., creates a negative feeling which is not healthy for any organisation.
Leaders existing in the middle rung -who are usually unaffected - face challenges of a different sort. The new leader he reports to may have come from a different domain and may not have a good appreciation for the work his team does. He has to establish a good relationship in his role and also re-establish the credibility of his team with the new boss. Remote teams in different geographies face greater challenges. They wonder if the new boss would support the remote team or not. Cultural differences also play an important role in the relationship.
The new boss may have a different approach and his expectations from the team may be different as well. The team has to adjust and get used to the expectations of the new boss. If his suggestions result in a better process than the current one the team benefits. But if the suggested changes are just a different way of doing things, then it causes more overhead for the people. Off-site meetings, new review meetings etc., add to the overhead and hamper the productivity of the group. Even the human resources (HR) team is not spared. Instead of their focusing on core HR functions, like talent development, they will be busy managing the communication and the outcome of changes.
Sometimes the re-organisation makes a few roles redundant. People in such roles have to put up with the embarrassment till they find a new job. Sometimes old peers may become your boss or vice-versa. One has to adjust to all such changes. Uncertain of their future in the group, employees look outside for better opportunities. These unnecessary uncertainties in the organizations cause potential attrition.
The effects of re-organisation are not limited to within the company. It impacts the external customer focus and relationships. It breaks the continuity. Changes bring in new faces and they have to re-establish relationships with the customers. Business opportunities have been lost due to issues in transition of customer responsibilities from one person to another. Long term goals are compromised for short term gains. The new leader is eager to show early wins and might make decisions resulting in the short term gains at the expense of long term returns.
Given these ill-effects, why do companies still go through restructuring? The fundamental reason for change is to bring a new person with a different perspective to improve the business. The issue is not so much with changing one leader with another, but making sweeping changes to the whole organization structure. If such a sweeping change is needed - it means that all the existing leaders were incompetent. The real issue then was the wrong choice of leaders to begin with. Changing leaders may not solve the problem unless they are the right ones. Rather a better solution is to work on the existing leaders and improve them. As a strategy, having a succession plan in every organisation to ensure the right number and competent leaders are identified and trained, would go a long way.
Sometimes I feel even the leaders at the top are not sure why they make these changes. Maybe they believe in Chaos. Create a chaotic environment and expect a solution to emerge out of it. May be they believe in Darwin’s theory that the fittest survive. If things turnaround, they can claim victory. If not, restructure again. If none of this works, the next economic downturn would provide yet another opportunity of restructuring.
Given that change is the order of the day, the best one can do is to adapt to it. Accept that restructuring is a norm and get on with your job. Focus on what is expected out of you and deliver it. Seek to make yourself better and critical so that these changes do not affect your job. On a positive note, with every new boss you expand your network. You have an opportunity to pick up the strengths of each boss and avoid their weaknesses.
Happy Reading.
-Ram
Saturday, February 27, 2010
Strategy for Successful Transition
You’ve taken a new role in a new organization. You have been promoted to a new leadership position. You’ve changed jobs. In all these cases, how quickly you manage your transition into the new avatar and add value in the new role, determine your success. In the book “The First 90 Days” - Michael Watkins lays out a roadmap for taking charge quickly and effectively during critical career transition periods. This book outlines strategies that will dramatically shorten the time it takes to reach, what Watkins calls, the “breakeven point”: the point at which your organization needs you as much as you need the job. In this blog I publish a few of these strategies.
Start with “Promoting Yourself”. It means making the mental break from your old job and preparing to take charge in the new one. Let go of the past and embrace the imperatives of the new situation thereby getting a running start. Everyone has an urge to work at one level below where they are now. You need to work where are you are, and not where you were. Assess your vulnerabilities and compensate it with self-discipline, team building, advice and counsel. The qualities that have made you successful, so far, can prove to be weaknesses in your new role. So, beware to not overuse your strengths. Transitioning into a new job may revive some deep fears about your capabilities that you thought you had long laid to rest. If you embrace the need to learn, you can surmount them. As you advance in your career, the advice and counsel you need changes. Promoting yourself calls for working proactively to restructure your advice-and-counsel network. Watch out for people who want to hold you back. Getting others to accept your promotion is a very essential part of promoting yourself. However, if you conclude that the people in question are never going to accept the situation, then you must find a way to quickly move them out of your organization.
“Accelerate your learning”. It is essential to figure out what you need to know about your new organization and then to learn it as rapidly as you can. Try to know the history of the organization. Beware of the near-compulsive need to take action without systematically learning about the new organization. The most destructive mistake to make is to come to the new organization “with answers” on how to solve the organization’s problems. What works well in one organizational culture may fail miserably in another. Identify promising sources that make your learning process more complete and more efficient. You need to listen to key people, both inside and outside the organization, and even old-timers as well. Talking to people with different points of view will deepen your insights. The best way to get a health-check of an organization is to have one-on-one discussion with the employees. Ask the same questions to everyone. This approach is powerful because the responses you get are comparable. This helps you gain insight into which people are being more open or less. It also tells a lot about the team and politics. Distill the discussion and feedback your impressions with questions to your direct reportees. Then invite some discussions.
“Match your strategy to the business situation”. Depending on whether the business situation is a start-up, Turn-around, Realignment or sustaining, the strategy to be adopted is very different. For example in a sustaining business situation, the challenge is that of living in the shadow of the revered leader and dealing with the team the he or she created. One has to find ways to take the business to the next level. However the advantage this situation presents is that a strong team may already be in place. Foundations for continued success may be in place. The leader has to invent challenges to keep people motivated. Gaining and displaying the understanding of what made the organization successful is a key to early win. One has to play good defense by avoiding decisions that cause problems. Compared to other business situation, the leader has little bit more time before he can call shots. He should avoid early mistakes that risk traditional strengths of the organization.
Securing early win is a critical factor in successful transition. Early wins excite and energize people and build personal credibility. Potential pitfalls to watch out for, in seeking early wins, is failing to focus, ignoring the business situation and not adjusting to the culture. Understand what matters to the boss and make sure that it is addressed as part of the early wins. Early wins should be consistent with the A-item business priorities – critical ones that have greatest opportunities for dramatic improvement in performance. These priorities should offer clear direction. As you make progress in getting connected, identify and act as quickly as you can to remove minor but persistent irritants, in your new organization. Focus on strained external relationships and begin to repair them. Cut out redundant meetings, shorten excessively long ones.
If you are inheriting a team, you will need to evaluate its members and perhaps, restructure it to better meet the demands of the situation. Your willingness to make tough early personnel calls and your capacity to select the right people for the right positions are among the most important drivers of success during your transition.
Finally you need to help everyone in your organization – direct reportees, bosses, peers – accelerate their own transitions. The quicker you can get your new direct reportees up to speed, the more you will help your own performance.
Start with “Promoting Yourself”. It means making the mental break from your old job and preparing to take charge in the new one. Let go of the past and embrace the imperatives of the new situation thereby getting a running start. Everyone has an urge to work at one level below where they are now. You need to work where are you are, and not where you were. Assess your vulnerabilities and compensate it with self-discipline, team building, advice and counsel. The qualities that have made you successful, so far, can prove to be weaknesses in your new role. So, beware to not overuse your strengths. Transitioning into a new job may revive some deep fears about your capabilities that you thought you had long laid to rest. If you embrace the need to learn, you can surmount them. As you advance in your career, the advice and counsel you need changes. Promoting yourself calls for working proactively to restructure your advice-and-counsel network. Watch out for people who want to hold you back. Getting others to accept your promotion is a very essential part of promoting yourself. However, if you conclude that the people in question are never going to accept the situation, then you must find a way to quickly move them out of your organization.
“Accelerate your learning”. It is essential to figure out what you need to know about your new organization and then to learn it as rapidly as you can. Try to know the history of the organization. Beware of the near-compulsive need to take action without systematically learning about the new organization. The most destructive mistake to make is to come to the new organization “with answers” on how to solve the organization’s problems. What works well in one organizational culture may fail miserably in another. Identify promising sources that make your learning process more complete and more efficient. You need to listen to key people, both inside and outside the organization, and even old-timers as well. Talking to people with different points of view will deepen your insights. The best way to get a health-check of an organization is to have one-on-one discussion with the employees. Ask the same questions to everyone. This approach is powerful because the responses you get are comparable. This helps you gain insight into which people are being more open or less. It also tells a lot about the team and politics. Distill the discussion and feedback your impressions with questions to your direct reportees. Then invite some discussions.
“Match your strategy to the business situation”. Depending on whether the business situation is a start-up, Turn-around, Realignment or sustaining, the strategy to be adopted is very different. For example in a sustaining business situation, the challenge is that of living in the shadow of the revered leader and dealing with the team the he or she created. One has to find ways to take the business to the next level. However the advantage this situation presents is that a strong team may already be in place. Foundations for continued success may be in place. The leader has to invent challenges to keep people motivated. Gaining and displaying the understanding of what made the organization successful is a key to early win. One has to play good defense by avoiding decisions that cause problems. Compared to other business situation, the leader has little bit more time before he can call shots. He should avoid early mistakes that risk traditional strengths of the organization.
Securing early win is a critical factor in successful transition. Early wins excite and energize people and build personal credibility. Potential pitfalls to watch out for, in seeking early wins, is failing to focus, ignoring the business situation and not adjusting to the culture. Understand what matters to the boss and make sure that it is addressed as part of the early wins. Early wins should be consistent with the A-item business priorities – critical ones that have greatest opportunities for dramatic improvement in performance. These priorities should offer clear direction. As you make progress in getting connected, identify and act as quickly as you can to remove minor but persistent irritants, in your new organization. Focus on strained external relationships and begin to repair them. Cut out redundant meetings, shorten excessively long ones.
If you are inheriting a team, you will need to evaluate its members and perhaps, restructure it to better meet the demands of the situation. Your willingness to make tough early personnel calls and your capacity to select the right people for the right positions are among the most important drivers of success during your transition.
Finally you need to help everyone in your organization – direct reportees, bosses, peers – accelerate their own transitions. The quicker you can get your new direct reportees up to speed, the more you will help your own performance.
Sunday, January 31, 2010
Art of Negotiation
My wife thinks I am good at haggling.I have to admit that I am a better haggler than my wife. It has nothing to do with any skill, but the fact that I am not embarrassed to ask for the lowest price. But the haggling most of us do is called as position based bargaining. When I haggle with the road-side or footpath vendors, my formula is to buy things at half the quoted price. So my low-ball number will be much lower than half-price so that when we finally settle at the half-price, I make it look like a fair deal for both sides. The truth is that even the vendor is aware of this and his objective is to slow down the rate at which he concedes. He starts reducing the price in smaller steps, extending the time taken to come to a conclusion, and thereby testing your patience. He will also use psychological tactics to make you feel embarrassed. The moment you walk away, he would drop the price steeper. He will be observing the pace at which you are moving away from him. The moment he realizes you are slowing down, he will stop dropping the price. Haggling is a psychological contest. Now you know why you should leave your shame at home before you go for shopping. You should be even more shameless to haggle in China. My h-constant (not the Plank’s constant, but the haggling factor) for shopping in China is 10 : to settle a price that is 1/10 the quoted price. You need to be extremely unemotional and fully shameless. I realized while shopping in China that the calculator is more than a number crunching machine. It acts as a translator. The vendor punches his price and you shake your head sadly, take the calculator and punch in your quote. The calculator changes hands back and forth till a final price is arrived at. The Chinese vendor uses another psycho trick, of raising the voice and keeps uttering the word “No Joking”. You should be impervious to all of this if you want the best deal.
But doing negotiation based on positions is not a recommended option in business. Any negotiation may be judged by three criteria: It should produce a wise agreement; It should be efficient; It should improve the relationship between the parties. Any negotiation based on positions does not meet these criteria. As the person’s ego is associated with the position he takes, it is highly unlikely that a wise agreement can be arrived at. The more extreme the opening positions and the smaller the concessions, the more time and effort it will take to discover whether or not agreement is possible. Positional bargaining becomes contest of will and thus strains, and sometimes shatters the relationship between the parties.
In the book “Getting to Yes”, the authors suggest that for a better result, one needs to focus on interests and not positions. The book quotes the example of Egyptian-Israeli peace treaty. Israel insisted on keeping part of the Sinai peninsula. Egypt, on the other hand, insisted that every inch of Sinai be returned to Egypt’s sovereignty. Negotiating on position did not lead to any amicable agreement. Looking at their interests, instead of their position made it possible to develop a solution. Israel’s interest lay in security and did not want Egyptian tanks poised on their border ready to roll across any time. Egypt’s interest lay in the sovereignty. Knowing these interests behind the positions, the two countries agreed to a plan that would return the Sinai to complete Egyptian sovereignty and, by demilitarizing large areas, would still leave Israeli secure.
Reconciling interests, rather than positions works for two reasons. First, for every interest there usually exists several possible positions, that could satisfy it. Secondly, behind opposed positions lie many more similar interests than conflicting ones. So how do we identify interests? Ask “Why?”. Put yourself in their shoes. Examine each position they take, and ask yourself “Why?”. You can also ask the other party, why they take a particular position. Make it clear that you are asking, not for justification of the position he made, but for an understanding of the needs, hopes, fears or desires that it serves.
Ask “Why not?”. Think about their choice. One of the most useful ways to uncover interests is first to identify the basic decision that those on the other side probably see you asking them for, and then ask yourself why they have not made that decision. Which of their interests stand in the way? If you are trying to change their mind, the starting point is to figure out where their minds are now.
Realise that each side has multiple interests. To understand that negotiator’s interests means, to understand the variety of somewhat differing interests, that should be taken into account. The most powerful interests are basic human needs like security, economic well-being, a sense of belonging, recognition and control over one’s life. These are easy to overlook. To sort out the various interests of each side, it helps to make a list. It will help in the quality of your assessment, as you acquire new information, and to place interests in their estimated order of importance.
If you want the other side to take your interests into account, explain it to them. Part of the task of impressing the other side, with your interests lies in establishing the legitimacy of those interests. You need to convince them that they might well feel the same way if they were in your shoes. Acknowledge their interests as part of the problem. If you want the other side to appreciate your interests, then demonstrate it\.
If you want someone to listen and understand your reasoning, give your interests and reasoning first and your conclusions or proposals later. Put the problem before your answer. Beware of arguing with the other side about the past, instead, talk about what you want to have happen in the future. Instead of asking them to justify what they did yesterday, ask, “Who should do what tomorrow?”
To summarise- focus on interests and not on position to result in a win-win solution. I wish I could use this learning to get an iPad with 3G and 32GB for $499 :-)
Happy Negotiating,
Ram
But doing negotiation based on positions is not a recommended option in business. Any negotiation may be judged by three criteria: It should produce a wise agreement; It should be efficient; It should improve the relationship between the parties. Any negotiation based on positions does not meet these criteria. As the person’s ego is associated with the position he takes, it is highly unlikely that a wise agreement can be arrived at. The more extreme the opening positions and the smaller the concessions, the more time and effort it will take to discover whether or not agreement is possible. Positional bargaining becomes contest of will and thus strains, and sometimes shatters the relationship between the parties.
In the book “Getting to Yes”, the authors suggest that for a better result, one needs to focus on interests and not positions. The book quotes the example of Egyptian-Israeli peace treaty. Israel insisted on keeping part of the Sinai peninsula. Egypt, on the other hand, insisted that every inch of Sinai be returned to Egypt’s sovereignty. Negotiating on position did not lead to any amicable agreement. Looking at their interests, instead of their position made it possible to develop a solution. Israel’s interest lay in security and did not want Egyptian tanks poised on their border ready to roll across any time. Egypt’s interest lay in the sovereignty. Knowing these interests behind the positions, the two countries agreed to a plan that would return the Sinai to complete Egyptian sovereignty and, by demilitarizing large areas, would still leave Israeli secure.
Reconciling interests, rather than positions works for two reasons. First, for every interest there usually exists several possible positions, that could satisfy it. Secondly, behind opposed positions lie many more similar interests than conflicting ones. So how do we identify interests? Ask “Why?”. Put yourself in their shoes. Examine each position they take, and ask yourself “Why?”. You can also ask the other party, why they take a particular position. Make it clear that you are asking, not for justification of the position he made, but for an understanding of the needs, hopes, fears or desires that it serves.
Ask “Why not?”. Think about their choice. One of the most useful ways to uncover interests is first to identify the basic decision that those on the other side probably see you asking them for, and then ask yourself why they have not made that decision. Which of their interests stand in the way? If you are trying to change their mind, the starting point is to figure out where their minds are now.
Realise that each side has multiple interests. To understand that negotiator’s interests means, to understand the variety of somewhat differing interests, that should be taken into account. The most powerful interests are basic human needs like security, economic well-being, a sense of belonging, recognition and control over one’s life. These are easy to overlook. To sort out the various interests of each side, it helps to make a list. It will help in the quality of your assessment, as you acquire new information, and to place interests in their estimated order of importance.
If you want the other side to take your interests into account, explain it to them. Part of the task of impressing the other side, with your interests lies in establishing the legitimacy of those interests. You need to convince them that they might well feel the same way if they were in your shoes. Acknowledge their interests as part of the problem. If you want the other side to appreciate your interests, then demonstrate it\.
If you want someone to listen and understand your reasoning, give your interests and reasoning first and your conclusions or proposals later. Put the problem before your answer. Beware of arguing with the other side about the past, instead, talk about what you want to have happen in the future. Instead of asking them to justify what they did yesterday, ask, “Who should do what tomorrow?”
To summarise- focus on interests and not on position to result in a win-win solution. I wish I could use this learning to get an iPad with 3G and 32GB for $499 :-)
Happy Negotiating,
Ram
Sunday, January 24, 2010
?B? - Question Behind the Question
Last week, I attended an off-site meeting of my group. One of the sessions, in the meeting, was to discuss “Personal Accountability”. We were asked to read the book “Question Behind the Question” by John G Miller. I found the concept explained in this book to be very profound. This blog highlights the summary and learnings from this book.
Anyone who has interacted with any government institution knows that, to get a job done one literally has to go from pillar to post. “It’s not my job”, “Go to that table”, etc., are the common phrases one hears. This problem is not restricted just to the government institutions. It can be seen in any organization. We call this malaise “passing the buck”. People take the functional boundaries very religiously and are not willing to go the extra mile, beyond the function to help others. These people do not have personal accountability. A few of the very many questions that can define lack of personal accountability are: “When is someone going to train me?” “Why do we have to go through all this change?”, “Who dropped the ball?”. The Question Behind the Question” (QBQ) is a tool that’s been developed and refined over the years, to practice personal accountability, by asking better questions.
The QBQ is built on the observation that our first reactions are often negative, bringing to mind incorrect questions, but in the moment of decision we can instead discipline our thoughts to look behind those initial questions and ask better ones (QBQs), the questions themselves will lead us to better results. One of the guiding principles of the QBQ is “The answers are in the questions”. If we ask a better question, we get a better answer. Here are the three simple guidelines for creating a QBQ.
1. Begin with “What” or “How” (not “Why”, “When”, or “Who).
2. Contain an “I” (not “they”, “them”, “we”, or “you”)
3. Focus on action.
Don’t Ask “Why?”. Why is this happening to me? Why am I not getting support? When one asks this question he feels powerless - like a victim. Questions with a “Why me?” tone to them say, I’m a victim of the environment and the people around me. Instead of “Why” question if you follow the QBQ guideline, the question can be rephrased as “What can I do to improve the situation?” “How can I support others?”.
Don’t Ask “When?” What we’re really saying is that, we have no choice but to wait and put off action until another time. Questions that begin with “When” lead to procrastination. Instead of “When will they take care of the problem?”, ask the QBQ “What solution can I provide?”. Notice the difference.
Don’t Ask “Who?” When we ask “Who” questions, what we’re really doing is looking for scapegoats, someone else to blame. Blaming others is always counterproductive. Instead of the question “Who made the mistake?” “Who dropped the ball?”, ask the QBQ “What can I do today to solve the problem?” or “What action can I take to ‘own’ the situation?”
Personal accountability begins with “me” not “you”.It is about, each of us holding ourselves accountable,for our own thinking and behaviors as well as the results they produce. This is why the second QBQ guideline contains an “I”,not “they”,”them” or “you”. Questions that contain an “I” turn our focus away from other people and circumstances and put it back on ourselves. We can’t change other people. We often can’t control circumstances and events. The only things we have any real control over are our own thoughts and actions. I can only change myself.
More often the term “we” is used to express the personal accountability. One should be careful not to mix-up personal accountability with team accountability. We can hide behind the team with thoughts – which become excuses- such as: “The team wasn’t given enough resources”. Personal accountability is not about changing others. It’s about making a difference by changing ourselves.
Practicing personal accountability calls for taking actions. If I don’t ask what I can do or make or achieve or build, then I won’t do or make or achieve or build. Only through action is anything accomplished. Action, even when it leads to mistakes, brings learning and growth. It leads us towards solution. It builds confidence. It is better to be the one who is told to wait, than one who waits to be told.
The spirit of QBQ is personal accountability: No more victim thinking, procrastinating, or blaming. I can only change me. Take action!.
Happy reading,
Ram
Anyone who has interacted with any government institution knows that, to get a job done one literally has to go from pillar to post. “It’s not my job”, “Go to that table”, etc., are the common phrases one hears. This problem is not restricted just to the government institutions. It can be seen in any organization. We call this malaise “passing the buck”. People take the functional boundaries very religiously and are not willing to go the extra mile, beyond the function to help others. These people do not have personal accountability. A few of the very many questions that can define lack of personal accountability are: “When is someone going to train me?” “Why do we have to go through all this change?”, “Who dropped the ball?”. The Question Behind the Question” (QBQ) is a tool that’s been developed and refined over the years, to practice personal accountability, by asking better questions.
The QBQ is built on the observation that our first reactions are often negative, bringing to mind incorrect questions, but in the moment of decision we can instead discipline our thoughts to look behind those initial questions and ask better ones (QBQs), the questions themselves will lead us to better results. One of the guiding principles of the QBQ is “The answers are in the questions”. If we ask a better question, we get a better answer. Here are the three simple guidelines for creating a QBQ.
1. Begin with “What” or “How” (not “Why”, “When”, or “Who).
2. Contain an “I” (not “they”, “them”, “we”, or “you”)
3. Focus on action.
Don’t Ask “Why?”. Why is this happening to me? Why am I not getting support? When one asks this question he feels powerless - like a victim. Questions with a “Why me?” tone to them say, I’m a victim of the environment and the people around me. Instead of “Why” question if you follow the QBQ guideline, the question can be rephrased as “What can I do to improve the situation?” “How can I support others?”.
Don’t Ask “When?” What we’re really saying is that, we have no choice but to wait and put off action until another time. Questions that begin with “When” lead to procrastination. Instead of “When will they take care of the problem?”, ask the QBQ “What solution can I provide?”. Notice the difference.
Don’t Ask “Who?” When we ask “Who” questions, what we’re really doing is looking for scapegoats, someone else to blame. Blaming others is always counterproductive. Instead of the question “Who made the mistake?” “Who dropped the ball?”, ask the QBQ “What can I do today to solve the problem?” or “What action can I take to ‘own’ the situation?”
Personal accountability begins with “me” not “you”.It is about, each of us holding ourselves accountable,for our own thinking and behaviors as well as the results they produce. This is why the second QBQ guideline contains an “I”,not “they”,”them” or “you”. Questions that contain an “I” turn our focus away from other people and circumstances and put it back on ourselves. We can’t change other people. We often can’t control circumstances and events. The only things we have any real control over are our own thoughts and actions. I can only change myself.
More often the term “we” is used to express the personal accountability. One should be careful not to mix-up personal accountability with team accountability. We can hide behind the team with thoughts – which become excuses- such as: “The team wasn’t given enough resources”. Personal accountability is not about changing others. It’s about making a difference by changing ourselves.
Practicing personal accountability calls for taking actions. If I don’t ask what I can do or make or achieve or build, then I won’t do or make or achieve or build. Only through action is anything accomplished. Action, even when it leads to mistakes, brings learning and growth. It leads us towards solution. It builds confidence. It is better to be the one who is told to wait, than one who waits to be told.
The spirit of QBQ is personal accountability: No more victim thinking, procrastinating, or blaming. I can only change me. Take action!.
Happy reading,
Ram
Saturday, January 2, 2010
India Shining - Breakthrough Innovation
I have the habit of roaming around book stores at any airport before check-in. Lately I have noticed many management books written by Indians. Subrato Bagchi, with his trilogy of books, has captured the attention of both Indian and foreign readers. One of the recent books, I picked up, was on "Making Breakthrough Innovation Happen" by Porus Munshi. It talks about how 11 Indians pulled off the impossible. A very refreshing read, it makes every Indian proud of the innovations that are happenning in India. If the last decade made the world notice "India shining", the next decade will be even more prosperous for India. I pick the strides made by Cavinkare as the topic for this blog. Cavinkare has innovated to take on giants like Unilever ( Hindustan Lever in its previous avtar).They break the myth that R&D and technology-led innovation can happen only in large organisations. They have demonstrated how entrepreneurs can create winning ideas, even in markets dominated by giants.As we begin the new year, I felt it is apt to share these learnings on Innovation.
CK Ranganathan who started Cavinkare came from the family that pioneered the satchet marketing revolution in India by introducing the famous Velvette shampoo. He branched off and setup his own company and produced Chik shampoo sachet to be sold at 1 Rs. In creating his marketing network, he decided to change the norms. He did not enter into arrangements with established players, but with stockists who had no prior experience in selling FMCG products. He did this so that the stockists would work on his terms. Though the Chik business grew, it did not command the share Velvette shampoo had. Ranga came up with an out-of-the-box strategy to make consumers come back again and again and ask for Chik shampoo. He came up with the innovative marketing idea : he would give one sachet of Chik shampoo free for every four empty sachets of any shampoo. This scheme was the first of the kind and it took the market by storm. Later he changed the strategy and began giving one free sachet for every four used Chik sachets. The sale of Chik shampoo soared and it became an established brand. It had become second-largest selling shampoo in Tamilnadu behind Velvette.
Ranga realised that the penetration of shampoos in India was only 14%. He found out the rest of the 86% were using soap. The strategy of educating the people of disadvantage of using soap and advantages of using shampoo was not helping. One of the insight he had was that, if the consumer believed strongly in something, then don't attack it. Instead find the barriers to their using your product. Indeed, he found price as the barrier. So he came up with yet another innovation of making a concentrated version of the shampoo that was half the size of the original Chik shampoo. The size perception would make the Rs 1 consumer feel that it was a small size, therefore not for him. The existing consumers would, he believed, continue with the Re 1 sachet, while hordes of new customers, who were earlier locked out, would come in at the fifty-paisa price point. The Rs 1 shampoo was improved to have more conditioning and fragrance. With these types of, and more innovations Ranga tapped huge untapped markets and increased the market share of Chik from 5% to 22%. Today it is the second largest selling shampoo in the country.
He further found out that there were many people who were using natural products like shikakai, hibiscus leaves etc., He then created the shampoo "Meera" which had reetha nuts and almond. It was an instant success and still sells at a premium. He then launched Meera with shikakai in Tamilnadu, with hibiscus leaves in kerala. Because of the innovative initiatives, Cavinkare is the largest overall hair wash company in South India. Hindustan Lever and P&G are behind them.
He then took on the "Fair & Lovely" fairness cream. This was the business with higher margins and was dominated by a single player - Fair & Lovely.He realised that he needed to build credibility in the minds of his customers and make his products appeal to them. He found that pregnant women were given saffron and milk as they felt this would make the child fair and healthy. He used this fact and created the fariness cream that has milk and saffron in it. He also wanted to position this cream as something that could help change one's life/future forever. So he branded the fariness cream as "Fairever" and priced the product at a premium, based on insights that told him that the customers were willing to pay more as they knew that saffron was expensive. Again Fairever was able to wrest upto 18% market share in the first year of its introduction in South India.
What learnings can one can take from the success story of CavinKare? Go beyond market segmentation. See how to grow the overall market share. Listen to the customers. If it is the high price that is the barrier then innovate and create products that are low in price and tap into markets that did not exist. Keep prototyping in real time: do limited launch, let customers use the product, get feedback, make changes and launch again. Prototyping is one of the highest forms of insighting. Co-evolve the product working with the customers. Playing fields of the giants can be leveled by using insights that lead to innovation.
Wishing you a happy new year and that it bring lots of opportunites for innovation.
Happy reading,
Ram
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