Good one......from one of my fav author Paulo Coelho
A boy was watching his grandmother write a letter. At one point he asked: ‘Are you writing a story about what we’ve done? Is it a story about me?’ His grandmother stopped writing her letter and said to her grandson: I am writing about you, actually, but more important than the words is the pencil I’m using. I hope you will be like this pencil when you grow up.’ Intrigued, the boy looked at the pencil. It didn’t seem very special. ‘But it’s just like any other pencil I’ve ever seen!’ ‘That depends on how you look at things. It has five qualities which, if you manage to hang on them, will make you a person who is always at peace with the world.’
‘First quality: you are capable of great things, but you must never forget that there is a hand guiding your steps. We call that hand God, and He always guides us according to His will.’
‘Second quality: now and then, I have to stop writing and use a sharpner. That makes the pencil suffer a little, but afterwards, he’s much sharper. So you, too, must learn to bear certain pains and sorrows, because they will make you a better person.
‘Third quality: the pencil always allows us to use an eraser to rub out any mistakes. This means that correcting something we did is not necessarily a bad thing; it helps to keep us on the road to justice.’
‘Fourth quality: what really matters in a pencil is not its wooden exterior, but the graphite inside. So always pay attention to what is happening inside you.’
‘Finally, the pencil’s fifth quality: it always leaves a mark. in just the same way, you should know that everything you do in life will leave a mark, so try to be conscious of that in your every action’
source: “Like the Flowing River” by Paulo Coelho
Thursday, July 15, 2010
Wednesday, March 17, 2010
Defining Success
Friends : Recently I read a speech from Subroto Bagchi CEO MindTree on Defining success, This speech touched me in many aspects, Its very simplistic approach to life itself, easy to comprehend speech (I mean the language) and many more aspects made me to share this with you all, I hope you all feel the same after reading this. These experiences were shared by Subroto Bagchi to the students of IIM Bangalore.
Here he goes.......
I was the last child of a small-time government servant, in a family of five brothers. My earliest memory of my father is as that of a District Employment Officer in Koraput, Orissa. It was, and remains as back of beyond as you can imagine. There was no electricity; no primary school nearby and water did not flow out of a tap. As a result, I did not go to school until the age of eight; I was home-schooled. My father used to get transferred every year. The family belongings fit into the back of a jeep - so the family moved from place to place and without any trouble, my Mother would set up an establishment and get us going. Raised by a widow who had come as a refugee from the then East Bengal, she was a matriculate when she married my Father.
My parents set the foundation of my life and the value system, which makes me what I am today and largely, defines what success means to me today.
As District Employment Officer, my father was given a jeep by the government. There was no garage in the Office, so the jeep was parked in our house. My father refused to use it to commute to the office. He told us that the jeep is an expensive resource given by the government- he reiterated to us that it was not "his jeep" but the government's jeep. Insisting that he would use it only to tour the interiors, he would walk to his office on normal days.. He also made sure that we never sat in the government jeep - we could sit in it only when it was stationary.
That was our early childhood lesson in governance - a lesson that corporate managers learn the hard way, some never do.
The driver of the jeep was treated with respect due to any other member of my Father's office. As small children, we were taught not to call him by his name. We had to use the suffix ‘dada' whenever we were to refer to him in public or private. When I grew up to own a car and a driver by the name of Raju was appointed - I repeated the lesson to my two small daughters. They have, as a result, grown up to call Raju, ‘Raju Uncle' - very different from many of their friends who refer to their family driver, as ‘my driver'. When I hear that term from a school- or college-going person, I cringe.
To me, the lesson was significant - you treat small people with more respect than how you treat big people. It is more important to respect your subordinates than your superiors.
Our day used to start with the family huddling around my Mother's chulha - an earthen fire place she would build at each place of posting where she would cook for the family. There was neither gas, nor electrical stoves.The morning routine started with tea. As the brew was served, Father would ask us to read aloud the editorial page of The Statesman's ‘muffosil' edition - delivered one day late. We did not understand much of what we were reading. But the ritual was meant for us to know that the world was larger than Koraput district and the English I speak today, despite having studied in an Oriya medium school, has to do with that routine. After reading the newspaper aloud, we were told to fold it neatly. Father taught us a simple lesson.
He used to say, "You should leave your newspaper and your toilet, the way you expect to find it". That lesson was about showing consideration to others. Business begins and ends with that simple precept.
Being small children, we were always enamored with advertisements in the newspaper for transistor radios - we did not have one. We saw other people having radios in their homes and each time there was an advertisement of Philips, Murphy or Bush radios, we would ask Father when we could get one. Each time, my Father would reply that we did not need one because he already had five radios - alluding to his five sons.
We also did not have a house of our own and would occasionally ask Father as to when, like others, we would live in our own house. He would give a similar reply," We do not need a house of our own. I already own five houses". His replies did not gladden our hearts in that instant.
Nonetheless, we learnt that it is important not to measure personal success and sense of well being through material possessions.
Government houses seldom came with fences. Mother and I collected twigs and built a small fence. After lunch, my Mother would never sleep. She would take her kitchen utensils and with those she and I would dig the rocky, white ant infested surrounding. We planted flowering bushes. The white ants destroyed them. My mother brought ash from her chulha and mixed it in the earth and we planted the seedlings all over again. This time, they bloomed. At that time, my father's transfer order came. A few neighbors told my mother why she was taking so much pain to beautify a government house, why she was planting seeds that would only benefit the next occupant. My mother replied that it did not matter to her that she would not see the flowers in full bloom. She said, "I have to create a bloom in a desert and whenever I am given a new place, I must leave it more beautiful than what I had inherited".
That was my first lesson in success. It is not about what you create for yourself, it is what you leave behind that defines success.
My mother began and galvanized the nation in to patriotic fervor. Other than reading out the newspaper to my mother, I had no clue about how I could be part of the action. So, after reading her the newspaper, every day I would land up near the University's water tank, which served the community. I would spend hours under it, imagining that there could be spies who would come to poison the water and I had to watch for them. I would daydream about catching one and how the next day, I would be featured in the newspaper. Unfortunately for me, the spies at war ignored the sleepy town of Bhubaneswar and I never got a chance to catch one in action. Yet, that act unlocked my imagination.
Imagination is everything. If we can imagine a future, we can create it, if we can create that future, others will live in it. That is the essence of success.
Over the next few years, my mother's eyesight dimmed but in me she created a larger vision, a vision with which I continue to see the world and, I sense, through my eyes, she was seeing too. As the next few years unfolded, her vision deteriorated and she was operated for cataract. I remember, when she returned after her operation and she saw my face clearly for the first time, she was astonished. She said, "Oh my God, I did not know you were so fair".. I remain mighty pleased with that adulation even till date. Within weeks of getting her sight back, she developed a corneal ulcer and, overnight, became blind in both eyes. That was 1969. She died in 2002. In all those 32 years of living with blindness, she never complained about her fate even once. Curious to know what she saw with blind eyes, I asked her once if she sees darkness. She replied, "No, I do not see darkness. I only see light even with my eyes closed". Until she was eighty years of age, she did her morning yoga everyday, swept her own room and washed her own clothes.
To me, success is about the sense of independence; it is about not seeing the world but seeing the light.
Over the many intervening years, I grew up, studied, joined the industry and began to carve my life's own journey. I began my life as a clerk in a government office, went on to become a Management Trainee with the DCM group and eventually found my life's calling with the IT industry when fourth generation computers came to India in 1981. Life took me places - I worked with outstanding people, challenging assignments and traveled all over the world.
In 1992, while I was posted in the US, I learnt that my father, living a retired life with my eldest brother, had suffered a third degree burn injury and was admitted in the Safderjung Hospital in Delhi. I flew back to attend to him - he remained for a few days in critical stage, bandaged from neck to toe. The Safderjung Hospital is a cockroach infested, dirty, inhuman place. The overworked, under-resourced sisters in the burn ward are both victims and perpetrators of dehumanized life at its worst. One morning, while attending to my Father, I realized that the blood bottle was empty and fearing that air would go into his vein, I asked the attending nurse to change it. She bluntly told me to do it myself. In that horrible theater of death, I was in pain and frustration and anger. Finally when she relented and came, my Father opened his eyes and murmured to her, "Why have you not gone home yet?" Here was a man on his deathbed but more concerned about the overworked nurse than his own state. I was stunned at his stoic self.
There I learnt that there is no limit to how concerned you can be for another human being and what the limit of inclusion is you can create.
My father died the next day. He was a man whose success was defined by his principles, his frugality, his universalism and his sense of inclusion.
Above all, he taught me that success is your ability to rise above your discomfort, whatever may be your current state. You can, if you want, raise your consciousness above your immediate surroundings. Success is not about building material comforts - the transistor that he never could buy or the house that he never owned. His success was about the legacy he left, the memetic continuity of his ideals that grew beyond the smallness of a ill-paid, unrecognized government servant's world.
My father was a fervent believer in the British Raj. He sincerely doubted the capability of the post-independence Indian political parties to govern the country. To him, the lowering of the Union Jack was a sad event. My Mother was the exact opposite. When Subhash Bose quit the Indian National Congress and came to Dacca, my mother, then a schoolgirl, garlanded him. She learnt to spin khadi and joined an underground movement that trained her in using daggers and swords. Consequently, our household saw diversity in the political outlook of the two. On major issues concerning the world, the Old Man and the Old Lady had differing opinions.
In them, we learnt the power of disagreements, of dialogue and the essence of living with diversity in thinking.
Success is not about the ability to create a definitive dogmatic end state; it is about the unfolding of thought processes, of dialogue and continuum.
Two years back, at the age of eighty-two, Mother had a paralytic stroke and was lying in a government hospital in Bhubaneswar. I flew down from the US where I was serving my second stint, to see her. I spent two weeks with her in the hospital as she remained in a paralytic state. She was neither getting better nor moving on. Eventually I had to return to work. While leaving her behind, I kissed her face. In that paralytic state and a garbled voice, she said,
"Why are you kissing me, go kiss the world." Her river was nearing its journey, at the confluence of life and death, this woman who came to India as a refugee, raised by a widowed Mother, no more educated than high school, married to an anonymous government servant whose last salary was Rupees Three Hundred, robbed of her eyesight by fate and crowned by adversity was telling me to go and kiss the world!
Success to me is about Vision. It is the ability to rise above the immediacy of pain. It is about imagination. It is about sensitivity to small people. It is about building inclusion. It is about connectedness to a larger world existence. It is about personal tenacity. It is about giving back more to life than you take out of it. It is about creating extra-ordinary success with ordinary lives.
Here he goes.......
I was the last child of a small-time government servant, in a family of five brothers. My earliest memory of my father is as that of a District Employment Officer in Koraput, Orissa. It was, and remains as back of beyond as you can imagine. There was no electricity; no primary school nearby and water did not flow out of a tap. As a result, I did not go to school until the age of eight; I was home-schooled. My father used to get transferred every year. The family belongings fit into the back of a jeep - so the family moved from place to place and without any trouble, my Mother would set up an establishment and get us going. Raised by a widow who had come as a refugee from the then East Bengal, she was a matriculate when she married my Father.
My parents set the foundation of my life and the value system, which makes me what I am today and largely, defines what success means to me today.
As District Employment Officer, my father was given a jeep by the government. There was no garage in the Office, so the jeep was parked in our house. My father refused to use it to commute to the office. He told us that the jeep is an expensive resource given by the government- he reiterated to us that it was not "his jeep" but the government's jeep. Insisting that he would use it only to tour the interiors, he would walk to his office on normal days.. He also made sure that we never sat in the government jeep - we could sit in it only when it was stationary.
That was our early childhood lesson in governance - a lesson that corporate managers learn the hard way, some never do.
The driver of the jeep was treated with respect due to any other member of my Father's office. As small children, we were taught not to call him by his name. We had to use the suffix ‘dada' whenever we were to refer to him in public or private. When I grew up to own a car and a driver by the name of Raju was appointed - I repeated the lesson to my two small daughters. They have, as a result, grown up to call Raju, ‘Raju Uncle' - very different from many of their friends who refer to their family driver, as ‘my driver'. When I hear that term from a school- or college-going person, I cringe.
To me, the lesson was significant - you treat small people with more respect than how you treat big people. It is more important to respect your subordinates than your superiors.
Our day used to start with the family huddling around my Mother's chulha - an earthen fire place she would build at each place of posting where she would cook for the family. There was neither gas, nor electrical stoves.The morning routine started with tea. As the brew was served, Father would ask us to read aloud the editorial page of The Statesman's ‘muffosil' edition - delivered one day late. We did not understand much of what we were reading. But the ritual was meant for us to know that the world was larger than Koraput district and the English I speak today, despite having studied in an Oriya medium school, has to do with that routine. After reading the newspaper aloud, we were told to fold it neatly. Father taught us a simple lesson.
He used to say, "You should leave your newspaper and your toilet, the way you expect to find it". That lesson was about showing consideration to others. Business begins and ends with that simple precept.
Being small children, we were always enamored with advertisements in the newspaper for transistor radios - we did not have one. We saw other people having radios in their homes and each time there was an advertisement of Philips, Murphy or Bush radios, we would ask Father when we could get one. Each time, my Father would reply that we did not need one because he already had five radios - alluding to his five sons.
We also did not have a house of our own and would occasionally ask Father as to when, like others, we would live in our own house. He would give a similar reply," We do not need a house of our own. I already own five houses". His replies did not gladden our hearts in that instant.
Nonetheless, we learnt that it is important not to measure personal success and sense of well being through material possessions.
Government houses seldom came with fences. Mother and I collected twigs and built a small fence. After lunch, my Mother would never sleep. She would take her kitchen utensils and with those she and I would dig the rocky, white ant infested surrounding. We planted flowering bushes. The white ants destroyed them. My mother brought ash from her chulha and mixed it in the earth and we planted the seedlings all over again. This time, they bloomed. At that time, my father's transfer order came. A few neighbors told my mother why she was taking so much pain to beautify a government house, why she was planting seeds that would only benefit the next occupant. My mother replied that it did not matter to her that she would not see the flowers in full bloom. She said, "I have to create a bloom in a desert and whenever I am given a new place, I must leave it more beautiful than what I had inherited".
That was my first lesson in success. It is not about what you create for yourself, it is what you leave behind that defines success.
My mother began and galvanized the nation in to patriotic fervor. Other than reading out the newspaper to my mother, I had no clue about how I could be part of the action. So, after reading her the newspaper, every day I would land up near the University's water tank, which served the community. I would spend hours under it, imagining that there could be spies who would come to poison the water and I had to watch for them. I would daydream about catching one and how the next day, I would be featured in the newspaper. Unfortunately for me, the spies at war ignored the sleepy town of Bhubaneswar and I never got a chance to catch one in action. Yet, that act unlocked my imagination.
Imagination is everything. If we can imagine a future, we can create it, if we can create that future, others will live in it. That is the essence of success.
Over the next few years, my mother's eyesight dimmed but in me she created a larger vision, a vision with which I continue to see the world and, I sense, through my eyes, she was seeing too. As the next few years unfolded, her vision deteriorated and she was operated for cataract. I remember, when she returned after her operation and she saw my face clearly for the first time, she was astonished. She said, "Oh my God, I did not know you were so fair".. I remain mighty pleased with that adulation even till date. Within weeks of getting her sight back, she developed a corneal ulcer and, overnight, became blind in both eyes. That was 1969. She died in 2002. In all those 32 years of living with blindness, she never complained about her fate even once. Curious to know what she saw with blind eyes, I asked her once if she sees darkness. She replied, "No, I do not see darkness. I only see light even with my eyes closed". Until she was eighty years of age, she did her morning yoga everyday, swept her own room and washed her own clothes.
To me, success is about the sense of independence; it is about not seeing the world but seeing the light.
Over the many intervening years, I grew up, studied, joined the industry and began to carve my life's own journey. I began my life as a clerk in a government office, went on to become a Management Trainee with the DCM group and eventually found my life's calling with the IT industry when fourth generation computers came to India in 1981. Life took me places - I worked with outstanding people, challenging assignments and traveled all over the world.
In 1992, while I was posted in the US, I learnt that my father, living a retired life with my eldest brother, had suffered a third degree burn injury and was admitted in the Safderjung Hospital in Delhi. I flew back to attend to him - he remained for a few days in critical stage, bandaged from neck to toe. The Safderjung Hospital is a cockroach infested, dirty, inhuman place. The overworked, under-resourced sisters in the burn ward are both victims and perpetrators of dehumanized life at its worst. One morning, while attending to my Father, I realized that the blood bottle was empty and fearing that air would go into his vein, I asked the attending nurse to change it. She bluntly told me to do it myself. In that horrible theater of death, I was in pain and frustration and anger. Finally when she relented and came, my Father opened his eyes and murmured to her, "Why have you not gone home yet?" Here was a man on his deathbed but more concerned about the overworked nurse than his own state. I was stunned at his stoic self.
There I learnt that there is no limit to how concerned you can be for another human being and what the limit of inclusion is you can create.
My father died the next day. He was a man whose success was defined by his principles, his frugality, his universalism and his sense of inclusion.
Above all, he taught me that success is your ability to rise above your discomfort, whatever may be your current state. You can, if you want, raise your consciousness above your immediate surroundings. Success is not about building material comforts - the transistor that he never could buy or the house that he never owned. His success was about the legacy he left, the memetic continuity of his ideals that grew beyond the smallness of a ill-paid, unrecognized government servant's world.
My father was a fervent believer in the British Raj. He sincerely doubted the capability of the post-independence Indian political parties to govern the country. To him, the lowering of the Union Jack was a sad event. My Mother was the exact opposite. When Subhash Bose quit the Indian National Congress and came to Dacca, my mother, then a schoolgirl, garlanded him. She learnt to spin khadi and joined an underground movement that trained her in using daggers and swords. Consequently, our household saw diversity in the political outlook of the two. On major issues concerning the world, the Old Man and the Old Lady had differing opinions.
In them, we learnt the power of disagreements, of dialogue and the essence of living with diversity in thinking.
Success is not about the ability to create a definitive dogmatic end state; it is about the unfolding of thought processes, of dialogue and continuum.
Two years back, at the age of eighty-two, Mother had a paralytic stroke and was lying in a government hospital in Bhubaneswar. I flew down from the US where I was serving my second stint, to see her. I spent two weeks with her in the hospital as she remained in a paralytic state. She was neither getting better nor moving on. Eventually I had to return to work. While leaving her behind, I kissed her face. In that paralytic state and a garbled voice, she said,
"Why are you kissing me, go kiss the world." Her river was nearing its journey, at the confluence of life and death, this woman who came to India as a refugee, raised by a widowed Mother, no more educated than high school, married to an anonymous government servant whose last salary was Rupees Three Hundred, robbed of her eyesight by fate and crowned by adversity was telling me to go and kiss the world!
Success to me is about Vision. It is the ability to rise above the immediacy of pain. It is about imagination. It is about sensitivity to small people. It is about building inclusion. It is about connectedness to a larger world existence. It is about personal tenacity. It is about giving back more to life than you take out of it. It is about creating extra-ordinary success with ordinary lives.
Monday, December 29, 2008
Customer Led Growth
Friends : This is one of the interesting articles from Bains & company on customer led growth, I liked this one as it reiterates the need to think for and as customers..........
Most companies assume they're giving customers what they want. Usually, they're kidding themselves. Bain & Company recently surveyed 362 firms and found that 80% believe they deliver a "superior experience" to customers. But when Bain asked their customers, they said only 8% are really delivering.
Bain dubbed the 80% the "believers" and the 8% the "achievers." Whatever the nomenclature, this ten-to-one ratio suggests a startling gap between those who think they’re doing right by the customer and those who truly are.
It’s just this gap, of course, that Net Promoter Scores can help close. Create a credible, timely NPS system and companies will be well on their way toward focusing their organizations on what customers are really thinking, feeling, and doing.
There are two reasons for the gap. The first is a basic paradox: Most growth initiatives damage the most important source of sustainable, profitable growth—a loyal customer franchise. To increase revenue and profits, businesses do things like raise transaction fees that end up alienating their core customers. Efforts to pursue new customers compound the problem, distracting management from serving the core.
The second is that good relationships are hard to build. It's extremely difficult to understand what people really want, keep promises and maintain a dialogue to ensure customers' changing needs are met. Even initiatives to "better understand" customers can backfire, drowning firms in a sea of data.
How can companies close the delivery gap? Bain found, in analyzing the achieving 8%, that they rigorously focus on treating their most profitable customers in ways that ensure they come back for more and recommend the company to friends. Unlike most companies, which instinctively turn to product or service design to satisfy customers, the elite few pursue three imperatives simultaneously.
These are the "Three D's":
1. They design the right propositions for the right customers.
2. They deliver those propositions at the lowest system cost.
3. They develop the institutional capabilities to do it again and again.
Each of these Three D's reinforces the others. Together, they ensure the company is continually led by the voices of its customers.
Design: Most large companies are adept at traditional market research, segmentation and product design. But in their efforts, the 8% who succeed include customer interaction—focus groups, interviews and observation—that leads to real insights. They convert those insights into truly differentiated propositions reflecting a customer's total experience.
Delivery: The achievers treat every customer interaction as a precious resource, continually listening to what customers want. These companies set up cross-functional teams to ensure that they keep their promises to customers at all touchpoints.
Developing capabilities: Finally, companies that delight customers build processes to maintain a real dialogue. They establish capabilities that foster ongoing, systematic improvement and feedback loops that identify shifts in customer attitudes.
Case Studies :
1. Design:
Company Example : Commerce Bank of New Jersey
Design the right propositions for the right customers , Many managers claim that they can’t design value propositions for targeted segments because their industry is just a commodity business. What they are really saying is that they have failed to uncover innovative solutions for their customers. Many of the NPS leaders operate in industries that were once considered commodities. What could be more commodity-like than renting cars—the same Fords, Pontiacs, and Toyotas that everyone else rents? Then there was Enterprise. What could be more commodity-like than a no-frills airline seat? Then along came Southwest. If every business these days is a service business, as has often been said, then every company is capable of designing value propositions for particular segments of the market that can both deliver a high profit and turn customers into promoters.
Perhaps the clearest illustration of this maxim is Commerce Bank of New Jersey, which turned the so-called commodity business of branch deposits into a rocketing growth success story. Most companies in the industry right now are playing an end-game of branch closures, mergers, and consolidation, in hopes of squeezing the last drop of profit out of a moribund business. Rather than pursue traditional retail banking, they are pushing customers to use ATMs or online services, both of which cost them less. CEO Vernon Hill of Commerce Bank, by contrast, stopped thinking like a banker and began to focus on creating a “Wow!” experience for his design target, busy middle-class mothers. Commerce Bank’s new branches blanket target neighborhoods and remain open seven days a week. On weekdays they are open more than twelve hours, 7:30 in the morning to 8:00 in the evening. The company’s carnival-like branch openings, entertainment for kids, and lunchtime concerts have made banking fun. A free (and fun) change-counting machine called the Penny Arcade appears prominently in every branch. But Hill didn’t stop there. He and his team redesigned the appearance of branches to appeal more to their target customers. They simplified and streamlined the company’s products. They slashed nuisance fees, even eliminating (for qualified customers) the charges for using other banks’ ATMs.
The bank’s motto—“fans, not customers”—is reflected in Net Promoter Scores topping 50%, the highest anywhere in banking. (Branch banking averages an NPS of 12%.) While competitors are happy to eke out single-digit growth, Commerce’s same-store sales are expanding at 32% a year. The franchise now extends beyond New Jersey to Philadelphia, Manhattan, Delaware, and the Baltimore-Washington area. Returns to shareholders from 1991 to 2004 have averaged 30% a year. Commerce Bank’s 2004 Annual Report reveals its formula: “We know that improving the customer experience is the key to success.”
2 . Delivery:
Company Example : USAA Call Center
Deliver your propositions at the lowest system cost
All the problems and opportunities of creating promoters through enthusiastic, well-trained front-line employees come together in that signal institution of modern business, the call center. And what an irony it is! Employees in call centers are in constant dialogue with customers. They spend hour after hour, day after day, listening to customers’ needs and concerns. They are responsible for solving customers’ problems. Yet most companies regard the call center purely as a cost—as a function to be minimized, automated, outsourced, or eliminated. They give call-center employees little opportunity to exercise initiative or judgment. They don’t ask these employees to weigh in on customer concerns. Indeed, many phone reps are so tightly scripted that they have virtually no flexibility to come up with creative decisions. Quite the contrary: since their performance evaluation is based solely on productivity—the number of calls handled per hour—all their creativity goes into getting the customer off the phone as fast as possible. Of course, by the time a customer actually reaches a rep she is likely to be infuriated by the series of automated prompts that companies use to screen and classify customers. A time-pressed rep, an angry customer—it is not a recipe for delight.
But it doesn’t need to be that way. Consider USAA, the San Antonio, Texas, company that is the nation’s preeminent insurer of military personnel. The company could be a poster child for many of the points made in this book. A top-ranker in Fortune’s annual “Best Companies to Work For” list, the company instills the military values of honesty, integrity, loyalty, and service in all its employees. Every individual goes through an orientation process to learn military culture and nomenclature, including ranks, service branches, and history. Monthly videos feature members of the USAA customer community and their military experiences.
Not surprisingly, USAA’s call center is a model of its kind. The company avoids recruiting agents with previous call center experience, so as to keep bad habits out. It uses no pre-scripted conversations, and it empowers the phone staff to use their judgment on all issues, including authorizing payments on the spot. It also spends twice the industry average on training—and it trains every employee every year, not just new hires.
Rather than being rewarded for high productivity, call-center staff are measured on their ability to resolve all of the customer’s issues on the first call. This metric both delights the customer and motivates employees. Then, too, the firm invests aggressively in customer service technology, such as scanning all documents into a central database and providing reps with real-time access to the trail of customer communications and interactions. For USAA, the call center plays a central role in driving world-class customer loyalty. Employees, too: turnover in the centers is one-third that of USAA’s competitors.
The retired military officer in charge of phone operations at USAA—almost all the executives are retired officers—explains that the military studied the link between team size, effectiveness, and loyalty for many years. It concluded that the best building block for a high performance organization was a team of two five-man squads. At this scale, team members could rely on each other; they could connect with one another at an emotional level; they could learn rapidly; and they could respond flexibly to the chaos of combat. Again not surprisingly, USAA has organized its phone reps into teams of ten to twelve people. Because each team sits together, members overhear each other and can learn and offer suggestions. They also can collaborate on coming up with ideas for improvements to deliver an even better experience for their customers. (It doesn’t hurt that employees become eligible to become USAA members themselves, so they have little trouble relating to their customers’ situations.) If management wants to find out which individual reps are doing the best job in providing and outstanding experience, managers can simply ask the team.
USAA racks up NPS scores of over 80 percent. Its credit-card division generated the highest NPS ratings of any business we have found to date—over 90 percent. Unlike so many companies, USAA understands that its front-line employees are the key to delivering a great experience to customers, and it treats them accordingly. Its managers recognize that it is impossible to earn customer loyalty without first earning the loyalty of front-line employees.
3. Developing capabilities:
Company Example : Intuit
Developing capabilitiesCompanies can’t delight customers when they are abusing them. They win customers’ loyalty by providing goods and services wrapped in an outstanding end-to-end experience. Net Promoter Scores quantify how delighted customers really are. They thus convert vague words like customer focus and customer delight from fuzzy philosophy into hard, objective strategy. Measuring NPS makes generals and troops alike accountable for the customer experience. The payoffs of raising your score—of delighting more and more customers—are growth and profits: true growth and good profits, the kind that can be sustained over time.
The real challenge is to delight more customers and thus to generate more promoters. Promoters rev up the growth engine. They buy more. They generate more than 80 percent of referrals. If you have enough promoters, and if you continue to delight them, you don’t need to rely on big advertising budgets or an aggressive acquisition plan to grow. The promoters will make you grow.
You need to develop your capabilities to find innovative ways to delight customers month after month and year after year. That is how you will surprise them, turn them into fans, and inspire them to sing your praises to their friends and colleagues.
To learn how to do that—to learn what to emphasize, which direction to go in, where to focus your investments in innovation—well, listen to your customers. They will tell you.
Software powerhouse Intuit did this to help reverse a slide its TurboTax program briefly experienced in the online market in 2003. Intuit institutionalized constant improvements in its offerings by creating a 6,000-member "Inner Circle" of customers, who serve as an ongoing focus group. In addition to answering the all-important question "How likely are you to recommend TurboTax?" they explained their top priority for enhancing any aspect of service, and ranked a list of suggestions from others.
Thanks to such moves, Intuit was able to better segment its customers, redesign its TurboTax product, deliver it more effectively, and maintain a mechanism for continually developing related capabilities. Customer advocacy surged, and unit sales for the tax season rose 27% over the previous year. By systematically attacking the Three D's, Intuit closed the delivery gap.
Most companies assume they're giving customers what they want. Usually, they're kidding themselves. Bain & Company recently surveyed 362 firms and found that 80% believe they deliver a "superior experience" to customers. But when Bain asked their customers, they said only 8% are really delivering.
Bain dubbed the 80% the "believers" and the 8% the "achievers." Whatever the nomenclature, this ten-to-one ratio suggests a startling gap between those who think they’re doing right by the customer and those who truly are.
It’s just this gap, of course, that Net Promoter Scores can help close. Create a credible, timely NPS system and companies will be well on their way toward focusing their organizations on what customers are really thinking, feeling, and doing.
There are two reasons for the gap. The first is a basic paradox: Most growth initiatives damage the most important source of sustainable, profitable growth—a loyal customer franchise. To increase revenue and profits, businesses do things like raise transaction fees that end up alienating their core customers. Efforts to pursue new customers compound the problem, distracting management from serving the core.
The second is that good relationships are hard to build. It's extremely difficult to understand what people really want, keep promises and maintain a dialogue to ensure customers' changing needs are met. Even initiatives to "better understand" customers can backfire, drowning firms in a sea of data.
How can companies close the delivery gap? Bain found, in analyzing the achieving 8%, that they rigorously focus on treating their most profitable customers in ways that ensure they come back for more and recommend the company to friends. Unlike most companies, which instinctively turn to product or service design to satisfy customers, the elite few pursue three imperatives simultaneously.
These are the "Three D's":
1. They design the right propositions for the right customers.
2. They deliver those propositions at the lowest system cost.
3. They develop the institutional capabilities to do it again and again.
Each of these Three D's reinforces the others. Together, they ensure the company is continually led by the voices of its customers.
Design: Most large companies are adept at traditional market research, segmentation and product design. But in their efforts, the 8% who succeed include customer interaction—focus groups, interviews and observation—that leads to real insights. They convert those insights into truly differentiated propositions reflecting a customer's total experience.
Delivery: The achievers treat every customer interaction as a precious resource, continually listening to what customers want. These companies set up cross-functional teams to ensure that they keep their promises to customers at all touchpoints.
Developing capabilities: Finally, companies that delight customers build processes to maintain a real dialogue. They establish capabilities that foster ongoing, systematic improvement and feedback loops that identify shifts in customer attitudes.
Case Studies :
1. Design:
Company Example : Commerce Bank of New Jersey
Design the right propositions for the right customers , Many managers claim that they can’t design value propositions for targeted segments because their industry is just a commodity business. What they are really saying is that they have failed to uncover innovative solutions for their customers. Many of the NPS leaders operate in industries that were once considered commodities. What could be more commodity-like than renting cars—the same Fords, Pontiacs, and Toyotas that everyone else rents? Then there was Enterprise. What could be more commodity-like than a no-frills airline seat? Then along came Southwest. If every business these days is a service business, as has often been said, then every company is capable of designing value propositions for particular segments of the market that can both deliver a high profit and turn customers into promoters.
Perhaps the clearest illustration of this maxim is Commerce Bank of New Jersey, which turned the so-called commodity business of branch deposits into a rocketing growth success story. Most companies in the industry right now are playing an end-game of branch closures, mergers, and consolidation, in hopes of squeezing the last drop of profit out of a moribund business. Rather than pursue traditional retail banking, they are pushing customers to use ATMs or online services, both of which cost them less. CEO Vernon Hill of Commerce Bank, by contrast, stopped thinking like a banker and began to focus on creating a “Wow!” experience for his design target, busy middle-class mothers. Commerce Bank’s new branches blanket target neighborhoods and remain open seven days a week. On weekdays they are open more than twelve hours, 7:30 in the morning to 8:00 in the evening. The company’s carnival-like branch openings, entertainment for kids, and lunchtime concerts have made banking fun. A free (and fun) change-counting machine called the Penny Arcade appears prominently in every branch. But Hill didn’t stop there. He and his team redesigned the appearance of branches to appeal more to their target customers. They simplified and streamlined the company’s products. They slashed nuisance fees, even eliminating (for qualified customers) the charges for using other banks’ ATMs.
The bank’s motto—“fans, not customers”—is reflected in Net Promoter Scores topping 50%, the highest anywhere in banking. (Branch banking averages an NPS of 12%.) While competitors are happy to eke out single-digit growth, Commerce’s same-store sales are expanding at 32% a year. The franchise now extends beyond New Jersey to Philadelphia, Manhattan, Delaware, and the Baltimore-Washington area. Returns to shareholders from 1991 to 2004 have averaged 30% a year. Commerce Bank’s 2004 Annual Report reveals its formula: “We know that improving the customer experience is the key to success.”
2 . Delivery:
Company Example : USAA Call Center
Deliver your propositions at the lowest system cost
All the problems and opportunities of creating promoters through enthusiastic, well-trained front-line employees come together in that signal institution of modern business, the call center. And what an irony it is! Employees in call centers are in constant dialogue with customers. They spend hour after hour, day after day, listening to customers’ needs and concerns. They are responsible for solving customers’ problems. Yet most companies regard the call center purely as a cost—as a function to be minimized, automated, outsourced, or eliminated. They give call-center employees little opportunity to exercise initiative or judgment. They don’t ask these employees to weigh in on customer concerns. Indeed, many phone reps are so tightly scripted that they have virtually no flexibility to come up with creative decisions. Quite the contrary: since their performance evaluation is based solely on productivity—the number of calls handled per hour—all their creativity goes into getting the customer off the phone as fast as possible. Of course, by the time a customer actually reaches a rep she is likely to be infuriated by the series of automated prompts that companies use to screen and classify customers. A time-pressed rep, an angry customer—it is not a recipe for delight.
But it doesn’t need to be that way. Consider USAA, the San Antonio, Texas, company that is the nation’s preeminent insurer of military personnel. The company could be a poster child for many of the points made in this book. A top-ranker in Fortune’s annual “Best Companies to Work For” list, the company instills the military values of honesty, integrity, loyalty, and service in all its employees. Every individual goes through an orientation process to learn military culture and nomenclature, including ranks, service branches, and history. Monthly videos feature members of the USAA customer community and their military experiences.
Not surprisingly, USAA’s call center is a model of its kind. The company avoids recruiting agents with previous call center experience, so as to keep bad habits out. It uses no pre-scripted conversations, and it empowers the phone staff to use their judgment on all issues, including authorizing payments on the spot. It also spends twice the industry average on training—and it trains every employee every year, not just new hires.
Rather than being rewarded for high productivity, call-center staff are measured on their ability to resolve all of the customer’s issues on the first call. This metric both delights the customer and motivates employees. Then, too, the firm invests aggressively in customer service technology, such as scanning all documents into a central database and providing reps with real-time access to the trail of customer communications and interactions. For USAA, the call center plays a central role in driving world-class customer loyalty. Employees, too: turnover in the centers is one-third that of USAA’s competitors.
The retired military officer in charge of phone operations at USAA—almost all the executives are retired officers—explains that the military studied the link between team size, effectiveness, and loyalty for many years. It concluded that the best building block for a high performance organization was a team of two five-man squads. At this scale, team members could rely on each other; they could connect with one another at an emotional level; they could learn rapidly; and they could respond flexibly to the chaos of combat. Again not surprisingly, USAA has organized its phone reps into teams of ten to twelve people. Because each team sits together, members overhear each other and can learn and offer suggestions. They also can collaborate on coming up with ideas for improvements to deliver an even better experience for their customers. (It doesn’t hurt that employees become eligible to become USAA members themselves, so they have little trouble relating to their customers’ situations.) If management wants to find out which individual reps are doing the best job in providing and outstanding experience, managers can simply ask the team.
USAA racks up NPS scores of over 80 percent. Its credit-card division generated the highest NPS ratings of any business we have found to date—over 90 percent. Unlike so many companies, USAA understands that its front-line employees are the key to delivering a great experience to customers, and it treats them accordingly. Its managers recognize that it is impossible to earn customer loyalty without first earning the loyalty of front-line employees.
3. Developing capabilities:
Company Example : Intuit
Developing capabilitiesCompanies can’t delight customers when they are abusing them. They win customers’ loyalty by providing goods and services wrapped in an outstanding end-to-end experience. Net Promoter Scores quantify how delighted customers really are. They thus convert vague words like customer focus and customer delight from fuzzy philosophy into hard, objective strategy. Measuring NPS makes generals and troops alike accountable for the customer experience. The payoffs of raising your score—of delighting more and more customers—are growth and profits: true growth and good profits, the kind that can be sustained over time.
The real challenge is to delight more customers and thus to generate more promoters. Promoters rev up the growth engine. They buy more. They generate more than 80 percent of referrals. If you have enough promoters, and if you continue to delight them, you don’t need to rely on big advertising budgets or an aggressive acquisition plan to grow. The promoters will make you grow.
You need to develop your capabilities to find innovative ways to delight customers month after month and year after year. That is how you will surprise them, turn them into fans, and inspire them to sing your praises to their friends and colleagues.
To learn how to do that—to learn what to emphasize, which direction to go in, where to focus your investments in innovation—well, listen to your customers. They will tell you.
Software powerhouse Intuit did this to help reverse a slide its TurboTax program briefly experienced in the online market in 2003. Intuit institutionalized constant improvements in its offerings by creating a 6,000-member "Inner Circle" of customers, who serve as an ongoing focus group. In addition to answering the all-important question "How likely are you to recommend TurboTax?" they explained their top priority for enhancing any aspect of service, and ranked a list of suggestions from others.
Thanks to such moves, Intuit was able to better segment its customers, redesign its TurboTax product, deliver it more effectively, and maintain a mechanism for continually developing related capabilities. Customer advocacy surged, and unit sales for the tax season rose 27% over the previous year. By systematically attacking the Three D's, Intuit closed the delivery gap.
Thursday, November 20, 2008
LEADERSHIP
Friends : I've read and heard many leadership aspects and qualities, the below article is one of the interesting ones, I like it because it summarises most of the important aspects in leadership.
18 Lessons in LeadershipBy Colin Powell
The following "Lessons in Leadership" were taken from General Colin Powell's Outreach to America presentation at the SEARS Corporate Headquarters in Chicago. The lessons are elegant in their simplicity and relevance.
Lesson 1
"Being responsible sometimes means pissing people off."
Good leadership involves responsibility to the welfare of the group, which means that some people will get angry at your actions and decisions. It's inevitable-if you're honorable. Trying to get everyone to like you is a sign of mediocrity. You'll avoid the tough decisions, you'll avoid confronting the people who need to be confronted, and you'll avoid offering differential rewards based on differential performance because some people might get upset. Ironically, by procrastinating on the difficult choices, by trying not to get anyone mad, and by treating everyone equally "nicely" regardless of their contributions, you'll simply ensure that the only people you'll wind up angering are the most creative and productive people in the organization.
Lesson 2
"The day soldiers stop bringing you their problems is the day you have stopped leading them."
They have either lost confidence that you can help them or concluded that you do not care. Either case is a failure of leadership. If this were a litmus test, the majority of CEOs would fail. One, they build so many barriers to upward communication that the very idea of someone lower in the hierarchy looking up to the leader for help is ludicrous. Two, the corporate culture they foster often defines asking for help as weakness or failure, so people cover up their gaps, and the organization suffers accordingly. Real leaders make themselves accessible and available. They show concern for the efforts and challenges faced by underlings - even as they demand high standards. Accordingly, theyare more likely to create an environment where problem analysis replaces blame.
Lesson 3
"Don't be buffaloed by experts and elite's.
Experts often possess more data than judgment. Elite's can become so inbred that they produce hemophiliacs who bleed to death as soon as they are nicked by the real world." Small companies and startups don't have the time for analytically detached experts. They don't have the money to subsidizelofty elite's, either. The president answers the phone and drives the truck when necessary; everyone on the payroll visibly produces and contributes to bottom-line results or they're history. But as companies get bigger, they often forget who "brung them to the dance" things like all-hands involvement, egalitarianism, informality, market intimacy, daring, risk, speed, agility. Policies that emanate from ivory towers often have an adverse impact on the people out in the field who are fighting the wars or bringing in the revenues. Real leaders are vigilant-and combative-in the face of these trends.
Lesson 4
"Don't be afraid to challenge the pros, even in their own backyard."
Learn from the pros, observe them, seek them out as mentors and partners. But remember that even the pros may have leveled out in terms of their learning and skills. Sometimes even the pros can become complacent and lazy. Leadership does not emerge from blind obedience to anyone. Xerox'sBarry Rand was right on target when he warned his people that if you have a yes-man working for you, one of you is redundant. Good leadership encourages everyone's evolution.
Lesson 5
"Never neglect details. When everyone's mind is dulled or distracted the leader must be doubly vigilant."
Strategy equals execution. All the great ideas and visions in the world are worthless if they can't be implemented rapidly and efficiently. Good leaders delegate and empower others liberally, But they pay attention to details, every day. (Think about supreme athletic coaches like Jimmy Johnson, PatRiley, and Tony La Russa). Bad ones-even those who fancy themselves as "progressive visionaries" - think they're somehow "above" operational details. Paradoxically, good leaders understand something else. An obsessive routine in carrying out the details begets conformity and complacency, which inturn dulls everyone's mind. That is why even as they pay attention to details, they continually encourage people to challenge the process. They implicitly understand the sentiment of CEO-leaders like Quad Graphic's Harry Quadracchi, Oticon's Lars Kolind and the late Bill McGowan of MCI, who allindependently asserted that the Job of a leader is not to be the chief organizer, but the chief disorganizer.
Lesson 6
"You don't know what you can get away with until you try."
You know the expression "it's easier to get forgiveness than permission?" Well, it's true! Good leaders don't wait for official blessing to try things out. They're prudent, not reckless. But they also realize a fact of life in most organizations you ask enough people for permission you'll inevitably come up againstsomeone who believes his job is to say "no." So the moral is, don't ask. I'm serious. In my own research with colleague Linda Mukai, we found that less effective middle managers endorsed the sentiment, "If I haven't explicitly been told 'yes,' I can't do it," whereas the good ones believed "If I haven't explicitly been told 'no,' I can." There's a world of difference between these two points of view.
Lesson 7
"Keep looking below surface appearances. Don't shrink from doing so (just) because you might not like what you find."
"If it ain't broke, don't fix it" is the slogan of the complacent, the arrogant or the scared. It's an excuse for inaction, a call to non-arms. It's a mind-set that assumes (or hopes) that today's realities will continue tomorrow in a tidy, linear and predictable fashion. Pure fantasy. In this sort of culture, you won't find people who proactively take steps to solve problems as they emerge. Here's a little tip. Don't invest in these companies.
Lesson 8
"Organization doesn't really accomplish anything. Plans don't accomplish anything, either. Theories of management don't much matter. Endeavors succeed or fail because of the people involved. Only by attracting the best people will you accomplish great deeds."
In a brain-based economy, your best assets are people. We've heard this expression so often that it's become trite. But how many leaders really "walk the talk" with this stuff? Too often, people are assumed to be empty chess pieces to be moved around by grand viziers, which may explain why somany top managers immerse their calendar time in deal making, restructuring and the latest management fad. How many immerse themselves in the goal of creating an environment where the best, the brightest, the most creative are attracted, retained and-most importantly - unleashed?
Lesson 9
"Organization charts are frozen, anachronistic photos."
In a workplace that ought to be as dynamic as the external environment around you. If people really followed organization charts, companies would collapse. In well-run organizations, titles are also pretty meaningless. At best, they advertise some authority - an official status conferring the ability togive orders and induce obedience. But titles mean little in terms of real power, which is the capacity to influence and inspire. Have you ever noticed that people will personally commit to certain individuals who on paper (or on the org chart) possess little authority - but instead possess pizzazz, drive, expertise, and genuine caring for teammates and products? On the flip side, non-leaders in management may be formally anointed with all the perks and frills associated with high positions, but they have little influence on others, apart from their ability to extract minimal compliance to minimal standards.
Lesson 10 - A MUST FOR ANY SUCCESSFUL INDIVIDUAL
"Never let your ego get so close to your position that when your position goes, your ego goes with it."
Too often, change is stifled by people who cling to familiar turfs and job descriptions. One reason that even large organizations wither is that managers won't challenge old, comfortable ways of doing things. But real leaders understand that, nowadays, every one of our jobs is becoming obsolete. The proper response is to make obsolete our activities before someone else does. Effective leaders create a climate where people's worth is determined by their willingness to learn new skills and grab new responsibilities, thus perpetually reinventing their jobs. The most important question in performanceevaluation becomes not, "How well did you perform your job since the last time we met" but "How much did you change it?"
Lesson 11
"Fit no stereotypes. Don't chase the latest management fads. The situation dictates which approach best accomplishes the team's mission."
Flitting from fad to fad creates team confusion, reduces the leader's credibility and drains organizational coffers. Blindly following a particular fad generates rigidity in thought and action. Sometimes speed to market is more important than total quality. Sometimes an unapologetic directive is more appropriate than participatory discussion. To quote Powell, some situations require the leader to hover closely others require long, loose leashes. Leaders honor their core values, but they are flexible in how they execute them. They understand that management techniques are not magic mantras but simply tools to be reached for at the right times.
Lesson 12
"Perpetual optimism is a force multiplier."
The ripple effect of a leader's enthusiasm and optimism is awesome. So is the impact of cynicism and pessimism. Leaders who whine and blame engender those same behaviors among their colleagues. I am not talking about stoically accepting organizational stupidity and performance incompetence with a"what, me worry?" smile. I am talking about a gung-ho attitude that says "we can change things here, we can achieve awesome goals, we can be the best." Spare me the grim litany of the "realist"; give me the unrealistic aspirations of the optimist any day.
Lesson 13
"Powell's Rules for Picking People" - Look for intelligence and judgment and, most critically, a capacity to anticipate, to see around corners. Also look for loyalty, integrity, a high energy drive, a balanced ego and the drive to get things done."
How often do our recruitment and hiring processes tap into these attributes? More often than not, we ignore them in favor of length of resume, degrees, and prior titles. A string of job descriptions a recruit held yesterday seem to be more important than who one is today, what she can contribute tomorrow or how well his values mesh with those of the organization. You can train a bright, willing novice in the fundamentals of your business fairly readily, but it's a lot harder to train someone to have integrity, judgment, energy, balance, and the drive to get things done. Good leaders stack the deck in their favor right in the recruitment phase.
Lesson 14
"Great leaders are almost always great simplifiers, who can cut through argument, debate, and doubt to offer a solution everybody can understand."
Effective leaders understand the KISS principle, or Keep It Simple, Stupid. They articulate vivid, overarching goals and values, which they use to drive daily behaviors and choices among competing alternatives. Their visions and priorities are lean and compelling, not cluttered and buzzword-laden.Their decisions are crisp and clear, not tentative and ambiguous. They convey an unwavering firmness and consistency in their actions, aligned with the picture of the future they paint. The result? -- clarity of purpose, credibility of leadership, and integrity in organization.
Lesson 15
Part I "Use the formula P@ 40 to 70, in which P stands for the probability of success and the numbers indicate the percentage of information acquired."
Part II "Once the information is in the 40 to 70 range, go with your gut."
Powell's advice is don't take action if you have only enough information to give you less than a 40 percent chance of being right, but don't wait until you have enough facts to be 100 percent sure, because by then it is almost always too late. His instinct is right. Today, excessive delays in the nameof information-gathering breeds "analysis paralysis." Procrastination in the name of reducing risk actually increases risk.
Lesson 16
"The commander in the field is always right and the rear echelon is wrong, unless proved otherwise."
Shift the power and the financial accountability to the folks who are bringing in the beans, not the ones who are counting or analyzing them.
Too often, the reverse defines corporate culture. This is one of the main; reasons why leaders like Ken Iverson of Nucor Steel, Percy Barnevik of Asea Brown Boveri, and Richard Branson of Virgin have kept their corporate staffs to a bare-bones minimum. (And I do mean minimum-how about fewer than 100 central corporate staffers for global $30 billion-plus ABB? Or around 25 and 3 for multi-billion $ Nucor and Virgin, respectively?). Shift the power and the financial accountability to the folks who are bringing in the beans, not the ones who are counting or analyzing them.
Lesson 17
"Have fun in your command. Don't always run at a breakneck pace. Take leave when you've earned it. Spend time with your families."Corollary; "
Surround yourself with people who take their work seriously, but not themselves, those who work hard and play hard." Herb Kelleher of Southwest Air and Anita Roddick of The Body Shop would agree; seek people who have some balance in their lives, who are fun to hang out with, who like to laugh (at themselves, too) and who have some non-job priorities, which they approach with the same passion that they do their work. Spare me the grim workaholic or the pompous pretentious "professional"; I'll help them find jobs with my competitor.
Lesson 18
"Command is lonely."
Harry Truman was right. Whether you're a CEO or the head of a project team, the buck stops here. You can encourage participative management and bottom-up employee involvement but ultimately, the essence of leadership is the willingness to make the tough, unambiguous choices that will have an impact on the fate of the organization. I've seen too many non-leaders flinch from this responsibility. Even as you create an informal, open, collaborative, corporate culture, prepare to be lonely.
18 Lessons in LeadershipBy Colin Powell
The following "Lessons in Leadership" were taken from General Colin Powell's Outreach to America presentation at the SEARS Corporate Headquarters in Chicago. The lessons are elegant in their simplicity and relevance.
Lesson 1
"Being responsible sometimes means pissing people off."
Good leadership involves responsibility to the welfare of the group, which means that some people will get angry at your actions and decisions. It's inevitable-if you're honorable. Trying to get everyone to like you is a sign of mediocrity. You'll avoid the tough decisions, you'll avoid confronting the people who need to be confronted, and you'll avoid offering differential rewards based on differential performance because some people might get upset. Ironically, by procrastinating on the difficult choices, by trying not to get anyone mad, and by treating everyone equally "nicely" regardless of their contributions, you'll simply ensure that the only people you'll wind up angering are the most creative and productive people in the organization.
Lesson 2
"The day soldiers stop bringing you their problems is the day you have stopped leading them."
They have either lost confidence that you can help them or concluded that you do not care. Either case is a failure of leadership. If this were a litmus test, the majority of CEOs would fail. One, they build so many barriers to upward communication that the very idea of someone lower in the hierarchy looking up to the leader for help is ludicrous. Two, the corporate culture they foster often defines asking for help as weakness or failure, so people cover up their gaps, and the organization suffers accordingly. Real leaders make themselves accessible and available. They show concern for the efforts and challenges faced by underlings - even as they demand high standards. Accordingly, theyare more likely to create an environment where problem analysis replaces blame.
Lesson 3
"Don't be buffaloed by experts and elite's.
Experts often possess more data than judgment. Elite's can become so inbred that they produce hemophiliacs who bleed to death as soon as they are nicked by the real world." Small companies and startups don't have the time for analytically detached experts. They don't have the money to subsidizelofty elite's, either. The president answers the phone and drives the truck when necessary; everyone on the payroll visibly produces and contributes to bottom-line results or they're history. But as companies get bigger, they often forget who "brung them to the dance" things like all-hands involvement, egalitarianism, informality, market intimacy, daring, risk, speed, agility. Policies that emanate from ivory towers often have an adverse impact on the people out in the field who are fighting the wars or bringing in the revenues. Real leaders are vigilant-and combative-in the face of these trends.
Lesson 4
"Don't be afraid to challenge the pros, even in their own backyard."
Learn from the pros, observe them, seek them out as mentors and partners. But remember that even the pros may have leveled out in terms of their learning and skills. Sometimes even the pros can become complacent and lazy. Leadership does not emerge from blind obedience to anyone. Xerox'sBarry Rand was right on target when he warned his people that if you have a yes-man working for you, one of you is redundant. Good leadership encourages everyone's evolution.
Lesson 5
"Never neglect details. When everyone's mind is dulled or distracted the leader must be doubly vigilant."
Strategy equals execution. All the great ideas and visions in the world are worthless if they can't be implemented rapidly and efficiently. Good leaders delegate and empower others liberally, But they pay attention to details, every day. (Think about supreme athletic coaches like Jimmy Johnson, PatRiley, and Tony La Russa). Bad ones-even those who fancy themselves as "progressive visionaries" - think they're somehow "above" operational details. Paradoxically, good leaders understand something else. An obsessive routine in carrying out the details begets conformity and complacency, which inturn dulls everyone's mind. That is why even as they pay attention to details, they continually encourage people to challenge the process. They implicitly understand the sentiment of CEO-leaders like Quad Graphic's Harry Quadracchi, Oticon's Lars Kolind and the late Bill McGowan of MCI, who allindependently asserted that the Job of a leader is not to be the chief organizer, but the chief disorganizer.
Lesson 6
"You don't know what you can get away with until you try."
You know the expression "it's easier to get forgiveness than permission?" Well, it's true! Good leaders don't wait for official blessing to try things out. They're prudent, not reckless. But they also realize a fact of life in most organizations you ask enough people for permission you'll inevitably come up againstsomeone who believes his job is to say "no." So the moral is, don't ask. I'm serious. In my own research with colleague Linda Mukai, we found that less effective middle managers endorsed the sentiment, "If I haven't explicitly been told 'yes,' I can't do it," whereas the good ones believed "If I haven't explicitly been told 'no,' I can." There's a world of difference between these two points of view.
Lesson 7
"Keep looking below surface appearances. Don't shrink from doing so (just) because you might not like what you find."
"If it ain't broke, don't fix it" is the slogan of the complacent, the arrogant or the scared. It's an excuse for inaction, a call to non-arms. It's a mind-set that assumes (or hopes) that today's realities will continue tomorrow in a tidy, linear and predictable fashion. Pure fantasy. In this sort of culture, you won't find people who proactively take steps to solve problems as they emerge. Here's a little tip. Don't invest in these companies.
Lesson 8
"Organization doesn't really accomplish anything. Plans don't accomplish anything, either. Theories of management don't much matter. Endeavors succeed or fail because of the people involved. Only by attracting the best people will you accomplish great deeds."
In a brain-based economy, your best assets are people. We've heard this expression so often that it's become trite. But how many leaders really "walk the talk" with this stuff? Too often, people are assumed to be empty chess pieces to be moved around by grand viziers, which may explain why somany top managers immerse their calendar time in deal making, restructuring and the latest management fad. How many immerse themselves in the goal of creating an environment where the best, the brightest, the most creative are attracted, retained and-most importantly - unleashed?
Lesson 9
"Organization charts are frozen, anachronistic photos."
In a workplace that ought to be as dynamic as the external environment around you. If people really followed organization charts, companies would collapse. In well-run organizations, titles are also pretty meaningless. At best, they advertise some authority - an official status conferring the ability togive orders and induce obedience. But titles mean little in terms of real power, which is the capacity to influence and inspire. Have you ever noticed that people will personally commit to certain individuals who on paper (or on the org chart) possess little authority - but instead possess pizzazz, drive, expertise, and genuine caring for teammates and products? On the flip side, non-leaders in management may be formally anointed with all the perks and frills associated with high positions, but they have little influence on others, apart from their ability to extract minimal compliance to minimal standards.
Lesson 10 - A MUST FOR ANY SUCCESSFUL INDIVIDUAL
"Never let your ego get so close to your position that when your position goes, your ego goes with it."
Too often, change is stifled by people who cling to familiar turfs and job descriptions. One reason that even large organizations wither is that managers won't challenge old, comfortable ways of doing things. But real leaders understand that, nowadays, every one of our jobs is becoming obsolete. The proper response is to make obsolete our activities before someone else does. Effective leaders create a climate where people's worth is determined by their willingness to learn new skills and grab new responsibilities, thus perpetually reinventing their jobs. The most important question in performanceevaluation becomes not, "How well did you perform your job since the last time we met" but "How much did you change it?"
Lesson 11
"Fit no stereotypes. Don't chase the latest management fads. The situation dictates which approach best accomplishes the team's mission."
Flitting from fad to fad creates team confusion, reduces the leader's credibility and drains organizational coffers. Blindly following a particular fad generates rigidity in thought and action. Sometimes speed to market is more important than total quality. Sometimes an unapologetic directive is more appropriate than participatory discussion. To quote Powell, some situations require the leader to hover closely others require long, loose leashes. Leaders honor their core values, but they are flexible in how they execute them. They understand that management techniques are not magic mantras but simply tools to be reached for at the right times.
Lesson 12
"Perpetual optimism is a force multiplier."
The ripple effect of a leader's enthusiasm and optimism is awesome. So is the impact of cynicism and pessimism. Leaders who whine and blame engender those same behaviors among their colleagues. I am not talking about stoically accepting organizational stupidity and performance incompetence with a"what, me worry?" smile. I am talking about a gung-ho attitude that says "we can change things here, we can achieve awesome goals, we can be the best." Spare me the grim litany of the "realist"; give me the unrealistic aspirations of the optimist any day.
Lesson 13
"Powell's Rules for Picking People" - Look for intelligence and judgment and, most critically, a capacity to anticipate, to see around corners. Also look for loyalty, integrity, a high energy drive, a balanced ego and the drive to get things done."
How often do our recruitment and hiring processes tap into these attributes? More often than not, we ignore them in favor of length of resume, degrees, and prior titles. A string of job descriptions a recruit held yesterday seem to be more important than who one is today, what she can contribute tomorrow or how well his values mesh with those of the organization. You can train a bright, willing novice in the fundamentals of your business fairly readily, but it's a lot harder to train someone to have integrity, judgment, energy, balance, and the drive to get things done. Good leaders stack the deck in their favor right in the recruitment phase.
Lesson 14
"Great leaders are almost always great simplifiers, who can cut through argument, debate, and doubt to offer a solution everybody can understand."
Effective leaders understand the KISS principle, or Keep It Simple, Stupid. They articulate vivid, overarching goals and values, which they use to drive daily behaviors and choices among competing alternatives. Their visions and priorities are lean and compelling, not cluttered and buzzword-laden.Their decisions are crisp and clear, not tentative and ambiguous. They convey an unwavering firmness and consistency in their actions, aligned with the picture of the future they paint. The result? -- clarity of purpose, credibility of leadership, and integrity in organization.
Lesson 15
Part I "Use the formula P@ 40 to 70, in which P stands for the probability of success and the numbers indicate the percentage of information acquired."
Part II "Once the information is in the 40 to 70 range, go with your gut."
Powell's advice is don't take action if you have only enough information to give you less than a 40 percent chance of being right, but don't wait until you have enough facts to be 100 percent sure, because by then it is almost always too late. His instinct is right. Today, excessive delays in the nameof information-gathering breeds "analysis paralysis." Procrastination in the name of reducing risk actually increases risk.
Lesson 16
"The commander in the field is always right and the rear echelon is wrong, unless proved otherwise."
Shift the power and the financial accountability to the folks who are bringing in the beans, not the ones who are counting or analyzing them.
Too often, the reverse defines corporate culture. This is one of the main; reasons why leaders like Ken Iverson of Nucor Steel, Percy Barnevik of Asea Brown Boveri, and Richard Branson of Virgin have kept their corporate staffs to a bare-bones minimum. (And I do mean minimum-how about fewer than 100 central corporate staffers for global $30 billion-plus ABB? Or around 25 and 3 for multi-billion $ Nucor and Virgin, respectively?). Shift the power and the financial accountability to the folks who are bringing in the beans, not the ones who are counting or analyzing them.
Lesson 17
"Have fun in your command. Don't always run at a breakneck pace. Take leave when you've earned it. Spend time with your families."Corollary; "
Surround yourself with people who take their work seriously, but not themselves, those who work hard and play hard." Herb Kelleher of Southwest Air and Anita Roddick of The Body Shop would agree; seek people who have some balance in their lives, who are fun to hang out with, who like to laugh (at themselves, too) and who have some non-job priorities, which they approach with the same passion that they do their work. Spare me the grim workaholic or the pompous pretentious "professional"; I'll help them find jobs with my competitor.
Lesson 18
"Command is lonely."
Harry Truman was right. Whether you're a CEO or the head of a project team, the buck stops here. You can encourage participative management and bottom-up employee involvement but ultimately, the essence of leadership is the willingness to make the tough, unambiguous choices that will have an impact on the fate of the organization. I've seen too many non-leaders flinch from this responsibility. Even as you create an informal, open, collaborative, corporate culture, prepare to be lonely.
7 Quality Control Tools Old and New
7 QC Tools which originated in Japan were primarily used for "Shop Floor" (factory) quality improvements by workmen formed and empowered groups called Quality circles. The old 7 QC Tools were:
Check Sheets - To collected data in a structured manner
Cause and Effect Diagram - To organize probable causes (used along with 5 Why technique)
Scatter Diagram - To visually display cause / effect relationship with data (correlation)
Pareto - Helps prioritize the key problems (based on problem/defect categories - Define Phase) or Key Causes (out of a list of causes - Analyze phase)
Histogram - To visually present distribution of data (displays process variation and can be compared with specification limits)
Control chart - To monitor process performance through time (can be used before and/or after an improvement project) and highlight "out of control" situations needing action
Stratification - Segment / segregate data based on input sources that may be contrbuting to it (for eg., vendor wise, equipment wise, team wise etc.,)
As the knowledge age dawned, organizations had to confront with problems and improvement challenges in transactional, office, planning and managerial tasks as well. Towards facilitating structured improvement in these areas, the NEW 7 QC got evolved. These were called NEW 7 QC Tools namely:
1. Affinity diagram: organizes a large number of ideas into their natural relationships.
2. Relations diagram: shows cause-and-effect relationships and helps analyze links between different aspects of a complex situation.
3. Tree diagram: Breaks down broad categories into lower level detail, helping to get the thinking much more specific
4. Matrix diagram: Helps to show relationship between multiple groups of information including strength of relationship
5. Matrix data analysis: Technique for analyzing and prioritizing select options among many available options.Uses defined criteria to arrive at prioritization
6. Arrow diagram: A Project Planning tool (a la PERT/CPM)
7. Process decision program chart (PDPC): To identify potential deviations w.r.t to identified plans
Check Sheets - To collected data in a structured manner
Cause and Effect Diagram - To organize probable causes (used along with 5 Why technique)
Scatter Diagram - To visually display cause / effect relationship with data (correlation)
Pareto - Helps prioritize the key problems (based on problem/defect categories - Define Phase) or Key Causes (out of a list of causes - Analyze phase)
Histogram - To visually present distribution of data (displays process variation and can be compared with specification limits)
Control chart - To monitor process performance through time (can be used before and/or after an improvement project) and highlight "out of control" situations needing action
Stratification - Segment / segregate data based on input sources that may be contrbuting to it (for eg., vendor wise, equipment wise, team wise etc.,)
As the knowledge age dawned, organizations had to confront with problems and improvement challenges in transactional, office, planning and managerial tasks as well. Towards facilitating structured improvement in these areas, the NEW 7 QC got evolved. These were called NEW 7 QC Tools namely:
1. Affinity diagram: organizes a large number of ideas into their natural relationships.
2. Relations diagram: shows cause-and-effect relationships and helps analyze links between different aspects of a complex situation.
3. Tree diagram: Breaks down broad categories into lower level detail, helping to get the thinking much more specific
4. Matrix diagram: Helps to show relationship between multiple groups of information including strength of relationship
5. Matrix data analysis: Technique for analyzing and prioritizing select options among many available options.Uses defined criteria to arrive at prioritization
6. Arrow diagram: A Project Planning tool (a la PERT/CPM)
7. Process decision program chart (PDPC): To identify potential deviations w.r.t to identified plans
Toyota's Top Engineer on How to Develop Thinking People
The article is an interview with Nanpachi Hayashi, Toyota's top engineer. He was a student of Taiichi Ohno, and much what he talks about sounds like it came out of the pages of Taiichi Ohno's Workplace Management.
The importance of making people think and struggle on their own, following up, and going to see are a few of the familiar themes. The following is my selected translation, summary and commentary.
Hayashi began working with Taiichi Ohno in 1970 in developing the Toyota Production System. What was it like to work with Mr. Ohno as a boss?
Hayashi: I was really afraid of Mr. Ohno when I was young. But I think he was developing thinking people. He never gave us the answer. When he gave us an assignment, he would just stand by and watch us fail, even if he knew the answer.
Taiichi Ohno would give his subordinates nearly impossible challenges. But from the moment he gave these challenges, Ohno himself would be thinking about the solution, so he followed up. Hayashi says that Ohno always came to see for himself the next day. When the solution was inadequate Ohno would yell "What is this?!" but this helped people recognize where their perspective had been inadequate. According to Hayashi, "Mr. Ohno scolded us after first making us really think and struggle, and this helped us to come to a deeper understanding."
Hayashi says, "Developing people requires physical endurance." Frequent follow up is necessary, in person. It is not acceptable to give an assignment and follow up or scold only after three months, during a progress report meeting. Specific actions and detailed follow up are necessary. Do Toyota and the people within the organization still have this "physical endurance?" Hayashi raises several concerns he has with the current state of people development at Toyota. First, the emphasis on documentation and standardization, although inevitable to raise level across production facilities worldwide. Hayashi makes it clear that he views the current level of global expansion to be excessive, implying that it is not sustainable from the level of detailed-follow up needed to develop thinking people.
Hayashi reflects on how his teacher would follow up on one thing at a time, rather than multiple topics:
When Mr. Ohno came to the gemba (workplace) he would only give one assignment, and he would always be back to check the next morning. It was scary, but it gave me peace of mind to know that he would be back to check.
This paragraph struck me as particularly impressive, and deserves to be translated in full:
Also, when we are required to deliver results with speed, we only give our subordinates small projects so that even if they fail they have time to recover. In the end, we give them the solution. We must firmly carry on the practice of developing thinking people. Mr. Ohno often said to us, "Don't look with your eyes, look with your feet. Don't think with you head, think with your hands." He also taught us, "People who can't understand numbers are useless. The gemba where numbers are not visible is also bad. However, people who only look at the numbers are the worst of all."
Those are two brilliant new quotes from Taiichi Ohno. Thank you again to Mr. Ohno and Mr. Hayashi for continuing the tradition of teaching us.
On the theme of the importance of follow up, Hayashi answers the question "What is the behavior required from management to develop thinking people?"
Perhaps not every time, but managers need to follow up by "random audit" at least one time in ten.
He tells the story of a time when Hayashi went to report progress to Mr. Ohno, and Ohno followed up by asking Hayashi, "Did you go see for yourself?" Hayashi responded, "Yes" even though he had not and had only presented a report received from the gemba. Mr. Ohno said, "Let's go to the gemba. Show me the real thing and explain it to me again." From then on Hayashi always checked for himself and only reported to Mr. Ohno what he had personally seen and understood.
Asked how Toyota was coping with rapid international expansion and the need to develop thinking people, Hayashi provided insight:
Toyota does not have a goal. An increasing number of Toyota people from outside of Japan understand this, but this is something hard to get used to. They think that when a target is reached, they deserve a reward.
Hayashi likens it to Goldratt's "Goal" in that it can never be reached.
Another recent development at Toyota that concerns Hayashi is the increase in the number of temporary or contract labor.
They (temporary or contract labor) are increasing because it is not possible to rapidly hire the people needed, but reducing cost by hiring people so we can pay them less money to do the same work is not kaizen.
Hayashi recognizes that there are both people who prefer to work as contractors in several jobs, and those people who are term employees who participate actively in QC circles. The important thing, he says, is to develop shop floor leaders who can bring together such a diverse group.
Compared to the past, has the gemba at Toyota become stronger or weaker? Hayashi says both are true. Toyota people have become better with computer skills, the development of technical skills and formal training. However the mental toughness and determination to do whatever it takes, when there is no people and no money and you just have to work through the night, is missing.
Hayashi is encouraged that very few people at Toyota think they are as good as they can be, and most recognize that a lot remains to be done. With a kaizen mind, ever looking at problems as opportunities, Hayashi says:
These last few years have been good ones for Toyota and the use of creativity rather than money to solve problems may have been weakened. Now that the economy is slowing down and investments are harder to make, I think this is a good opportunity.
Taiichi Ohno said, "Your wits don't work until you feel the squeeze." Mr. Hayashi sees the latest economic slowdown as just the squeeze Toyota needs to develop thinking people.
The importance of making people think and struggle on their own, following up, and going to see are a few of the familiar themes. The following is my selected translation, summary and commentary.
Hayashi began working with Taiichi Ohno in 1970 in developing the Toyota Production System. What was it like to work with Mr. Ohno as a boss?
Hayashi: I was really afraid of Mr. Ohno when I was young. But I think he was developing thinking people. He never gave us the answer. When he gave us an assignment, he would just stand by and watch us fail, even if he knew the answer.
Taiichi Ohno would give his subordinates nearly impossible challenges. But from the moment he gave these challenges, Ohno himself would be thinking about the solution, so he followed up. Hayashi says that Ohno always came to see for himself the next day. When the solution was inadequate Ohno would yell "What is this?!" but this helped people recognize where their perspective had been inadequate. According to Hayashi, "Mr. Ohno scolded us after first making us really think and struggle, and this helped us to come to a deeper understanding."
Hayashi says, "Developing people requires physical endurance." Frequent follow up is necessary, in person. It is not acceptable to give an assignment and follow up or scold only after three months, during a progress report meeting. Specific actions and detailed follow up are necessary. Do Toyota and the people within the organization still have this "physical endurance?" Hayashi raises several concerns he has with the current state of people development at Toyota. First, the emphasis on documentation and standardization, although inevitable to raise level across production facilities worldwide. Hayashi makes it clear that he views the current level of global expansion to be excessive, implying that it is not sustainable from the level of detailed-follow up needed to develop thinking people.
Hayashi reflects on how his teacher would follow up on one thing at a time, rather than multiple topics:
When Mr. Ohno came to the gemba (workplace) he would only give one assignment, and he would always be back to check the next morning. It was scary, but it gave me peace of mind to know that he would be back to check.
This paragraph struck me as particularly impressive, and deserves to be translated in full:
Also, when we are required to deliver results with speed, we only give our subordinates small projects so that even if they fail they have time to recover. In the end, we give them the solution. We must firmly carry on the practice of developing thinking people. Mr. Ohno often said to us, "Don't look with your eyes, look with your feet. Don't think with you head, think with your hands." He also taught us, "People who can't understand numbers are useless. The gemba where numbers are not visible is also bad. However, people who only look at the numbers are the worst of all."
Those are two brilliant new quotes from Taiichi Ohno. Thank you again to Mr. Ohno and Mr. Hayashi for continuing the tradition of teaching us.
On the theme of the importance of follow up, Hayashi answers the question "What is the behavior required from management to develop thinking people?"
Perhaps not every time, but managers need to follow up by "random audit" at least one time in ten.
He tells the story of a time when Hayashi went to report progress to Mr. Ohno, and Ohno followed up by asking Hayashi, "Did you go see for yourself?" Hayashi responded, "Yes" even though he had not and had only presented a report received from the gemba. Mr. Ohno said, "Let's go to the gemba. Show me the real thing and explain it to me again." From then on Hayashi always checked for himself and only reported to Mr. Ohno what he had personally seen and understood.
Asked how Toyota was coping with rapid international expansion and the need to develop thinking people, Hayashi provided insight:
Toyota does not have a goal. An increasing number of Toyota people from outside of Japan understand this, but this is something hard to get used to. They think that when a target is reached, they deserve a reward.
Hayashi likens it to Goldratt's "Goal" in that it can never be reached.
Another recent development at Toyota that concerns Hayashi is the increase in the number of temporary or contract labor.
They (temporary or contract labor) are increasing because it is not possible to rapidly hire the people needed, but reducing cost by hiring people so we can pay them less money to do the same work is not kaizen.
Hayashi recognizes that there are both people who prefer to work as contractors in several jobs, and those people who are term employees who participate actively in QC circles. The important thing, he says, is to develop shop floor leaders who can bring together such a diverse group.
Compared to the past, has the gemba at Toyota become stronger or weaker? Hayashi says both are true. Toyota people have become better with computer skills, the development of technical skills and formal training. However the mental toughness and determination to do whatever it takes, when there is no people and no money and you just have to work through the night, is missing.
Hayashi is encouraged that very few people at Toyota think they are as good as they can be, and most recognize that a lot remains to be done. With a kaizen mind, ever looking at problems as opportunities, Hayashi says:
These last few years have been good ones for Toyota and the use of creativity rather than money to solve problems may have been weakened. Now that the economy is slowing down and investments are harder to make, I think this is a good opportunity.
Taiichi Ohno said, "Your wits don't work until you feel the squeeze." Mr. Hayashi sees the latest economic slowdown as just the squeeze Toyota needs to develop thinking people.
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