The MentalGator » Sunwords.com by Sunny Bindra

Sunwords.com by Sunny Bindra (8 unread)

It’s time to think “What-if”

Posted: February 27, 2012, 11:48 am by Sunny Bindra
“A tumultuous 12 months that saw revolutions in the Middle East, a worsening debt crisis in Europe and a tsunami in Japan has set the tone for corporate activity in 2012.
Caution, flexibility, nimbleness and deep knowledge of host countries are more important than ever, executives and their advisers said at the World Economic Forum’s annual meeting.
Fear of a major geopolitical disruption over the next 12 months has risen to 54 percent, up from 36 percent last quarter, a WEF poll showed at the start of this week’s meeting.
“You have to more than at any time in recent memory think in terms of ‘what ifs,’” said Vasant Prabhu, chief financial officer of Starwood Hotels & Resorts Worldwide Inc (HOT.N).
“This is a world in which you have to think in terms of scenarios and alternate outcomes and what you would do.”

REUTERS (January 29, 2012)

Business leaders gathered at the recent World Economic Forum seemed to come to an important realization: no one really knows what’s coming next.

(I could have told them that on Twitter for free, but they prefer to hear this stuff while rubbing shoulders in swanky settings.)

I have been sending the same message to every corporate I interact with in recent years: we’re all winging it now. No one knows what’s going on, and no one knows what we have to prepare for. Consider the following:

What if you were a business with deep interests in Egypt, Libya and Syria in 2010? Did you know what hit you in 2011? What if you were a globally-dominant mobile-phone maker called Nokia or BlackBerry in 2008? Could you have predicted your market trajectory downwards after that year? What if your core revenues came from the apparently very strong economies of Spain, Greece and Ireland pre-2007? Where would your business be today?

Today, Arab countries are in the eye of the storm of violent political revolution; European countries are engrossed in a game of pass-the-parcel as they try to avoid a ruinous debt default; and once-dominant technology companies fall like flies.

Africa faces its own hugely disruptive force: the coming-of-age of a VERY young, VERY connected and VERY disloyal population. This has very serious consequences, as these people are the consumers and employees of tomorrow. And they are nothing like any generation that came before them.

So what are you going to do, business decision-makers?

The answer is to stop planning and predicting, and start building resilience and a culture of experimentation. The era of stable 5-year plans is done and dusted, and the era of severe uncertainty is with us to stay. Now, it’s all about your philosophy of business rather than your plan; your ability to recover from the unexpected rather than your ability to manage business as usual; your intangible strengths rather than your physical assets.

Strong brands and strong bonds are essential in this environment. Your survival will predicate on how well your customers regard you and how essential you are to their lives; and how much you can attract the most talented employees to give you, rather than your competitor, their best years.

It will also be a time when the most avid experimenters will win. You are going to have to try 10 different things in order to produce one or two winning ideas. It will be a time to fail in many things in order to win in a few. So prepare yourself and your organization in the art of failure: fail often, fail small and fail fast. Learn every lesson from every failure deeply. Then win. Maybe.

This is the age of paradox: a time to have a very clear, but intangible, core to your business; and a time to have a continuously changing periphery. If that sentence makes sense to you, you have a hope.

Related posts:
Are you a relationship manager or just a huckster?

Posted: February 25, 2012, 5:32 am by Sunny Bindra
In business, relationship management is all the rage these days. There seem to be no salespersons any more, just relationship managers (RMs). It sounds warm and fuzzy and touchy-feely, as though you, the customer, have someone in the organization specially focused on you.

Most of the time, it’s an elaborate hoax.

What’s the difference between transacting and managing a relationship? To put it crudely, it’s the difference between a one-night stand and a marriage. The former is easy, momentary, fleeting and soon forgotten. The latter is difficult and hard-won but accrues benefits over a lifetime.

Most selling by most businesses has historically been transactional. Both sides to the transaction try to squeeze out the maximum benefit for themselves. You win if you outdo or outplay the other guy. Therefore you hoard information and try to pull a fast one. It’s a crafty card game, not much more.

Over the years, some sellers have cottoned on to the fact that good business could be more than just a series of shrewd transactions. A customer that stays willingly with you for a long period of time is worth far more than many transient customers making short-lived transactions. In other words, relationships matter and have an economic value. Hence the need for relationship managers.

That’s all very well, but it isn’t being done at all well so far. As a customer, despite having been assigned a large number of relationship managers in recent years, I can count on one hand those who have actually managed a productive relationship with me. Most just maintained the facade of intimacy, when I was really just another client in their (very) large portfolio.

This is rarely the fault of the individual; it emanates from the policies of the organization. Most selling departments have changed only superficially over the years; they have resprayed themselves and changed their job-titles, but the ethos remains the same: hit the numbers. If you reach your targets, you’re a winner; if you fall short, you’re the saddest of losers.

So, many relationship managers are often just glorified hucksters who have tough targets to meet and need to sweet-talk you into a deal that is worth more to them than it is to you. And that is the antithesis of what genuine relationship management is all about.

In a nutshell: relationship management focuses on the lifetime sale, not just this year’s target. It aims to deliver sustained value to both parties, not just one. It is focused on creating an incentive for long-lived loyalty, not short-term profiteering. When selling is done through a genuine relationship, each party wants the other to gain. It’s not a zero-sum game; it looks for win-win outcomes.

Some organizations and their managers get this; most don’t. To learn some lessons, let me suggest something rare: learn from the best management consultants. They immerse themselves in the depths of their client’s businesses, understanding their nuanced needs. They win when their client wins, and they have every incentive to think deeply about what creates genuine value for both sides. The relationship is a slow burn, and the benefits accrue gradually. And yet, the trusted lifetime advisor earns way more than the one-hit wonder.

If you are a customer assigned an RM, this is one gift horse you must look in the mouth. Lots of sweet talk and lunches are probably setting you up for a one-way bet. Genuine attention paid to your needs and deep insights generated into your life or business, on the other hand, are what differentiate authentic RMs from mere pretenders.

When done well, relationship management yields outstanding value for both sides. The seller gains loyalty, a stream of revenues and higher margins. The buyer gains relevance and genuine utility.

When done the way it’s mostly done, it’s just a silly facade.

Related posts:
Isn’t there a better way to handle layoffs?

Posted: February 20, 2012, 12:14 pm by Sunny Bindra
“Soon after Citigroup let go of 100 employees across India last month, many functional heads received an unusual brief. They were asked to scout for jobs for those who had been terminated.
Counsellors were also roped in to soften the blow and professional services firms were hired to make the career transition of the terminated employees – some of them star performers – smooth.
At this moment, Citi is not the only company trying to find jobs for the people it has let go. A few others, including Bharti Airtel and DLF, are also doing it right now or have done so in the recent past, officials at these companies said. ”

The Economic Times (February 9, 2012)

My attention was directed to an article about layoffs in India’s Economic Times, excerpted above.

Apparently, Indian firms are learning the lessons of handling layoffs well, with Citi and Airtel being amongst the standard-setters.

Layoffs are a fact of economic life. Some of the people, some of the time, will always be surplus to requirements. But many companies respond very badly to the ebb and flow of commercial fortune. As I myself wrote on this page a while back:

“…these days the ability to be ruthless when it comes to downsizing is a badge of honour, a sign of macho credentials in a CEO. And we are paying a price. What is so wrong with having the right number of employees in your organisation at a given time, you ask? Nothing at all. The problem is that we get carried away when times are good, and recruit too many; and then we get carried away at times of trouble, and sack too many. “Right-sizing” is a fluid and dishonest term, because we never know what the right size is.”

There are sound reasons for giving a damn about people we lay off. First, it is quite simply the right thing to do. Throwing someone out onto the unemployment heap should never be done casually or frivolously. It is a serious matter to interrupt a livelihood, and providing soft landings makes us bigger, not smaller, as people and as organizations.

A second reason is that humane policies when it comes to redundancies are actually good for the company itself. The Economic Times made the point thus: “HR gurus say how a company parts ways with employees will have a significant bearing on the morale of the remaining workforce and also on the company’s ability to attract talent in the future. Managing layoffs well is important for the sustainability of the ‘employer brand.’”

I can’t emphasize this enough: if you are known to have a culture of ruthless layoffs, you are risking damaging the very thing that should be at the heart of your competitive advantage: your corporate culture. Few things bestow advantage to companies better than a culture that gets the best performance out of people and gets them to behave in the right ways. Frequent layoffs can cause irredeemable damage to that culture. The best organizations know this, and use redundancies as an absolute last resort.

The real cost of layoffs is often in the form of damage to the employees who stay (who know carry fear in their hearts, wondering when the same might happen to them); and in the potentially great employees who fail to join the organization, knowing it is run whimsically and ruthlessly.

These days, employment brands really matter. We should craft such brands with great care and protect them as much as we do our product brands. Your reputation as an employer is an important thing if you are to attract great people and get them to give their all to your organization. The character and essence of the employment brand is revealed most tellingly in the manner in which layoffs are conducted.

Related posts:
Are you a happy-clappy optimist or a sour pessimist?

Posted: February 18, 2012, 5:51 am by Sunny Bindra
Do you get the feeling that slowly, painfully, a new Kenya is being born?

So do I.

The old guard are being forced to concede ground; the old ways will soon be consigned to history. A new Kenya, one fit for the young and the connected as well as the decent and the discerning, will emerge from the ashes of the old.

This process will be neither smooth nor pretty. Far from it. There will be many roadblocks and reversals of fortune as the guardians of the old model of leadership resist the advent of the new. There will be many battles in court, in print, in parliament and on the streets before we settle into a new order.

This will therefore be a time of arguments and differences of opinion. And so, people of Kenya, we need to be ready to argue in the proper way. The other option is insults, name-calling and snide sneering. That style is already taking root in social media, where a vile breed of hecklers (known as “trolls” in the new lingo) do their best to hurl daily insults under the veil of online anonymity.

This is not a time to engage with imbeciles; it is a time for focused and determined actions. What those actions should be, inevitably, will be subject to debate. In that debate many labels will be used and many people will be typecast.

One of those labels will be whether you are “positive” or “negative” about the future of Kenya.

This is a strange one that seems to mean different things to different people at different times. I, for example, am often bemused by how I am placed in both camps. Some people see this column as a beacon of positive thinking about our country; others think I am an inveterate cynic who sees only negative things in Kenya.

I don’t understand those categories. Seeing things as they actually are is what matters, not viewing them through the lenses of bias. I am neither a career optimist nor a lifetime pessimist. Creating these strange boxes is simplistic thinking at its worst.

To be an Afro-optimist is not to blind yourself to the fundamental changes that are needed in African society. To refuse to see that root-and-branch change is needed in our governance is to be wilfully stupid. The new Africa will not emerge just by singing happily about it or by viewing utopian computer-generated imagery – tough decisions and ruthless reforms are needed.

The trouble with most of us, as Norman Peale once said, is that we would rather be ruined by praise than saved by criticism. And so anyone stating problems robustly and not shirking from pointing out issues is viewed as a cynic and a wet blanket.

To which I can only provide one response. Seeing corruption as a cancer that must be excised; warning against moral entropy; railing against the needless deaths caused every day by negligence, greed and incompetence: if any of those things makes me or anyone else “negative,” then I wear that badge with pride.

But I urge caution. Inane labels don’t serve the cause of national enlightenment. We need reasoned and reasonable discourse, not mudslinging and name-calling. There is so much to think about and so much to do. Let us conduct ourselves with calm decorum rather than occupy intemperately partisan positions.

There are of course irredeemably sour gloom-merchants in our midst, and we need to move past them. There are also lightheaded happy-clappy optimists who will do little to help us design policy or take hard decisions, and we need to let them sing on the sidelines. I’m with George Bernard Shaw on this one: those who say it cannot be done should not interrupt those already doing it.

Related posts:
1. Happy employees create happy shareholders
Watching Japan’s tumbling giants

Posted: February 13, 2012, 10:16 am by Sunny Bindra
“Japan’s Panasonic Corp forecast a record annual net loss of $10.2 billion on Friday, joining beleaguered rivals Sony and Sharp in a sea of red ink as they struggle to fix their broken TV businesses and overcome criticism that they have lost their way.
Panasonic said it was headed for a loss of 780 billion yen ($10.24 billion) for the year to March, dwarfing expectations for a loss of around $6.2 billion. The loss was almost entirely due to big restructuring charges and writedowns, including to its Sanyo Electric unit.
Its grim outlook follows loss forecasts at Sony and Sharp Corp – almost $17 billion combined for the three Japanese electronics firms – highlighting the impact of fierce competition from foreign rivals such as South Korea’s Samsung Electronics, weak demand and a strong yen.”

Reuters (February 3, 2012)

Last week brought the news that Japan’s giant Panasonic corporation is forecasting an eye-popping loss of US$ 10 billion. Yes, you read that right. Yes, I know that’s a third or so of Kenya’s GDP. And yes, Panasonic will not be the last of the traditional giants to tumble in this way.

Panasonic is not alone. Iconic Sony, stylish Sharp, reliable Toshiba – all are in different degrees of trouble, and the water they’re swimming in is becoming increasingly hot for all of them.

What is ailing these respected Japanese giants? The usual suspects are trotted out with ease: it’s the competitors (the Japanese firms can’t handle the more vibrant upstarts from Korea and China); or it’s the know-how (they didn’t see the new technology coming).

Both those reasons are valid, but they don’t answer the more essential questions: why CAN’T Japanese firms compete; and why CAN’T Japanese firms innovate?

To me, the blame should lie not in external factors, but in internal ones. The failures of these Japanese behemoths are not caused by exogenous shocks, but a series of slowly worsening endogenous flaws.

Take Panasonic, and think like a customer. What is it that makes you walk into an electronics shop anywhere in the world these days and actually ask for a Panasonic product? Are they the best quality? The best value? The most alluring brand? The most cutting-edge technology? Struggling for a reason? I thought so. It’s a long time since I felt a burning need to own a Panasonic product (and increasingly, a Sony, Sharp or Olympus), and I don’t think I’m alone.

I’m old enough to remember the 1980s, when the West was made to quake in its boots by the Japanese assault on its markets. The Japanese, it seemed, could offer better quality at a lower price than anyone else in the world. And so they wiped the floor with the cheaper European and American brands. However, they laid not a glove on the differentiated high-end brands: Bosch, Bose, Miele, B&O et al. Japanese brands all adopted a “me-too” approach, trying to relentlessly copy each another and drive prices down instead of up.

And so, when Korean and Chinese competitors appeared with markedly lower cost structures and access to the same benchmarked technology, it was game over for the Japanese. They could neither compete at the classy upper end; nor the price-sensitive mass-market. This is not bad luck. These failures are mishaps in strategy. Bad choices were made.

I also blame demographics. Japan has one of the world’s most aged populations. There is a severe shortage of young people. Despite this, Japan is notoriously reluctant to allow any immigration. Those again are choices. The Japanese do not wish to have many children; and they wish to protect social cohesion.

That’s all well and good, but the cost comes in the loss of creativity and innovation. A corporate sector dominated by grey-heads simply won’t come up with daring and different products. I fear there is more corporate decline to come.

Related posts:
A rule of life: If it’s “free”, it’s probably very expensive

Posted: February 11, 2012, 5:11 am by Sunny Bindra
People everywhere love freebies. If it’s “free,” we want it. And we want lots of it.

Here’s the thing, though: nothing is really free. Resources are limited. To provide or make anything on this planet consumes resources. So if something seems free, it’s up to you to work out who’s bearing the cost.

Some simple examples. When a shop tells you to “buy two, get one free” the third item is not really free at all; all three items are being offloaded at a discount. And this is not a wonderful act of charity by the retailer; he is merely disposing of dead (and often sub-standard) stock.

Kenyan politicians are known to offer “free” t-shirts and handouts in exchange for votes. Was the t-shirt free? Not at all. In exchange, you received a leader who buys votes; who has paid heavily for shirts, caps, cars, stooges and helicopters; and who will most likely recoup this investment by aiming to plunder taxpayers’ funds at the first opportunity. That is what the t-shirt cost you: your children’s development retarded in future.

In Kenya we have “free” primary education. Or do we? What is “free” about billions of shillings intended for the awakening of little minds going “missing” and no one raising a finger in response? What is “free” about schools where parents have to contribute a kitty to pay teachers’ salaries, or where children have to come early to clean the school first?

Driving in Kenya is “free.” Well, not quite, as you do have to pay for your vehicle and the costs of fueling and maintaining it. But a big part of the cost of driving is free – the cost that driving imposes on society in the form of congestion and pollution. That is not charged to any individual, but someone pays. You guessed it – that someone is everyone. We all pay because when something is not priced it is over-consumed. Vehicles of all description pile onto roads that can’t take them, simply because the roads are “free.” The cost comes in time wasted and health lost.

In business, in economics, in life in general: what is touted as “free” ends up being very expensive indeed. It only gives the illusion of being free of cost. But someone is footing the bill, and usually that someone is you. You will pay in one way or another: in the form of higher future taxes; in pain and inconvenience; in shoddy quality; in stress and health problems; in failing to receive better offerings because you took the “free” ones instead; in the loss of your privacy; in being bombarded by adverts you don’t have the slightest interest in.

If you want value and utility you have to pay for them. Quality products cost money, so no one gives those out for free. Quality people cost money, so they can’t be procured with peanuts. What goes in is what comes out. If you are being offered something for free, think hard about what you are getting, and who will really pay for it.

There is, of course, something called altruism: selfless concern for the wellbeing of others. Some people do indeed do things for others and bear the full cost of doing so. But this is a rarer phenomenon than you might think, and it pays to be circumspect. When dealing with politicians, policymakers and business folk, be very suspicious of the thing they are giving you if they say it’s free of charge.

At a personal level, always being on the lookout out for things we don’t want to pay for is a dangerous strategy. It turns us into mendicants who are always ready for the freebie, the lottery, the pyramid scheme. It harms our psyche and our self-esteem. Far better to realize that there is a price to pay for anything that’s worth having, and being willing to work and save to pay that price.

Related posts:
Yes, CEOs: you WILL need to understand and engage with social media

Posted: February 6, 2012, 9:34 am by Sunny Bindra
“As I jogged down Wall Street in New York in October through the barricades, police horses, and thousands of activists, something became clear. The masses had self-organized and social media had added yet another social movement to its résumé. At the same time, something else became clear to me. Much higher than street level, in the boardrooms of America’s largest companies, social media expertise was far from entering the résumés of most C-suites.
Why is there confusion inside these glass fortresses around the world? Senior executives are struggling to get a grasp of what to do about the social opportunity for their kingdom. But hey, it’s new, right? The kids only started signing up eight years ago. ”

MICHAEL SCISSONS Fast Company (December 15, 2011)

“Social media? Kids, right? That’s where they hang out, arrange dates, all that stuff? What on earth has that got to do with my business?”

That sentence would be the reaction of many a CEO to the social media phenomenon. Twitter, Facebook, YouTube, Google+ et al are usually dismissed as a trivial social pursuit. Surely only the very young or the very idle have time for it.

Here’s the thing, though: your staff, your customers and your competitors have plenty of time for it.

It is indeed true, much of what constitutes social media content is irredeemably trite and banal. But that is NOT all there is to it. Social media has become an essential tool of life for the online generation. Social media is also where information is found, news is tracked, views are exchanged, opinions are refined, networks are grown, deals are done, careers are advanced, brands are built, reputations are polished.

Why would you not want to be part of that?

Consider this, too: social media is ALSO where brands are destroyed; where complaints about your organizations reach thousands of people in minutes; where you can gauge the reaction to your new product instantaneously.

If you’re an enlightened chief executive, you should be rubbing your hands in glee. One of the biggest problems most leaders have is getting hold of the right information. Leaders are usually separated from reality by many layers of bureaucracy. Market information passes through many minders before it reaches the boss. Courtiers prevent people with valuable insights from accessing the head honcho.

Now, simply having a (visible or invisible) Twitter account can allow a CEO to gain real-time, direct access to customer feedback. Unfiltered and unaltered. Straight from the horse’s mouth. And it’s free. Is this not leadership nirvana? Try it and see how your data is enriched daily.

In addition, many social media platforms allow you to follow experts, thinkers and news sources. They allow you to track opinion and competitor activity. They allow you to gain easy access to the knowledge you want to keep abreast of.

Social media, like life in general, is what you make of it. It can be noisy and meaningless and trivial. It can also be a powerful tool for leadership engagement, personal awareness and keeping tabs on the world.

Sadly, many CEOs either dismiss it out of hand, or lead botched attempts to enter the social space without any clear thinking, objectives or rules of engagement. The result is the brainlessly obvious marketing and robotic customer engagement many corporates are guilty of.

Social media is a conversation, not a brochure. It’s where things are discussed, debated, criticized, praised, rubbished, adored. To benefit from it, you have to enter the conversation without trying to control or manipulate it. Honest, open engagement is the best policy.

You can’t leave your social media engagement to a ‘department.’ In today’s and tomorrow’s world, it’s a leadership issue. It requires judgement and insight to get right, and no consultant or techie is going to do that for you.

Related posts:
For things to change, policymakers must feel the pain

Posted: February 5, 2012, 8:05 am by Sunny Bindra
A drive on one of Kenya’s highways is, we can all agree, a hair-raising experience. We have one of the world’s highest road fatality rates, for one simple reason: the roads are full of what our president fondly calls “pumbavus” who have inexplicably been allowed to drive.

So you will get pea-brained drivers coming at you from all directions: overtaking on bends and inclines; overtaking from the left; stubbornly blocking the “fast lane”; trying hair-raising manoeuvres for no reason at all. The result is daily death and destruction. In full view of the police.

I think we should adopt a measure famously suggested by American economist Armen Alchian: mounting a small spear on every steering wheel, pointed directly at the driver’s heart. Do that, and watch all that speeding and dumb driving go down overnight.

You probably laughed at that policy proposal, but there is an important principle that underlies it: people respond to incentives and penalties. Most pea-brained drivers have little sense of the risks they take by driving like damn fools; it is therefore in society’s interest to incentivize them not to do it, by making the danger very personal and immediate. A Maasai spear pointing at the chest will do the job very nicely. Average speeds will slow dramatically.

This principle can be applied to other areas of policy. The reason people misbehave is that they have incentives to do so and face little risk of meaningful penalty. The policy prescription is to reduce the incentives and amplify the penalties of bad behaviour. And particularly, make sure this applies most acutely to the policymakers themselves.

Suppose someone with supreme authority issued an edict: Each and every government vehicle is herewith banned from any form of dangerous driving, including overlapping and driving on pavements. This is a strict order, and there will be severe repercussions for any vehicle caught flouting it. The media, and the ordinary citizenry through social media, are invited to highlight any instances of abuse. Reprimands will be punitive and immediate, regardless of status.

If such a thing were done, believe me the effects would be instantaneous. For the first time, government bigwigs would have every incentive to fix the traffic problem, because for the first time they would be exposed dramatically to its consequences. You would see a flurry of projects aimed at improving and extending the roads quickly; and would see an emphatic crackdown on bad driving. Suddenly, traffic police would do what they are paid to do, and many new ideas for fixing the traffic problem would emerge.

Simply because the repercussions had been brought to bear on the Big People.

You can apply this to many other situations in life. Don’t allow important personages any extra security, and watch security improve for all. Restrict the children of all ministers and civil servants to attending government-funded schools, and watch the quality of free education rise rapidly. Force CEOs to queue up for their own products, and watch the lines reduce dramatically in a short space of time.

You get the idea. When the Big People suffer alongside the Little People, they fix problems. Otherwise they ignore them. In Kenya today we offer exemptions from ordinary pain to all our Big People. They can dodge the traffic, evade the law, be exempted from taxes, hire private security, get free health treatment abroad. Therefore they have no incentive to fix any of our entrenched problems, since they never suffer their consequences.

This is because only the Big People set the rules today. But that will change. The impact of the new constitution, combined with an ever more youthful population powered by mobile social media is going to change the game forever. Wise leaders and policymakers, please start noting the need for rules that apply to all, equally and without fear or favour.

Related posts: