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A Three Step Approach to Accelerating Business Performance

Over the past few years I have been asking CEO’s the same question, “over the last 10 years, has your organization consistently: A) exceeded its promises to shareholders B) kept its promises to shareholders or C) did not achieve its promises to shareholders.  Not surprisingly, the majority were in the C category,  a few B’s and maybe one A.


So the question is: why are most organization mediocre , some average and  only a few truly outstanding? What it is that makes the difference?  The consistent answer I get is that the difference is “people” both at the Board and in Management. The conceptual leap of faith that is made is, because it is people, the solution must be leadership development.

As a result there has been  no end to the amount of time and money we are spending on leadership development but are we truly getting back our returns?  Ultimately, leadership development must translate into an order of magnitude difference in business performance.  Is leadership development delivering its promise?

To help get around the conceptual leap of faith, I have developed a simple 3 part framework to help organizations understand the drivers of performance in much clearer terms.

Drivers of Performance
1. Acumen – this is simply defined as the mental capacity to convert resources into results.  The dictionary defines acumen as “the ability to make good judgments and quick decisions, typically in a particular domain.”   If you want to run a business, your organization must be permeated with people of acumen .  Acumen is needed to be a street vendor, a small business owner or CEO of a large organization.  Acumen is about the know-how to use money  in order to make money.  This may sound crude but it is reality. Without acumen, you will lose your business, sooner or later. Acumen is prerequisite to business viability.

2. Leadership –  Having acumen doesn’t not mean having a productive business.  It just means producing results.  The next step after being able to produce results, is to be able to drive productivity, more specifically – people productivity. This is where “leadership” capabilities come in. Leadership is the ability to set the direction, engage people, institutionalize values and behaviors and bring the best out of others.  Leadership is about leveraging people, talent in order to get the order of magnitude impact into performance.  However, leadership can only stand if it is underpinned by acumen.

3. Infrastructure – Once one has the acumen and the leadership in place then one needs to think of scalability and this is where infrastructure comes in.  It is the systems, policies, processes that allow an organization to scale up revenue faster than cost be it domestically, regionally or globally. All of the CEO’s I have spoken to have in place talent management, performance management systems, incentive pay, leadership development to varying degrees. They  have the infrastructure but not the results.

Where we have gone off track is that we have invested heavily in infrastructure ahead of leadership, and leadership ahead of acumen. It is easy enough to understand why.  Infrastructure is easier to understand than leadership, and leadership is easier to understand that acumen.

For the next 10 years, the economic crisis of the west will present unprecedented opportunity for organizations in the east to gain dominance, but it will require acumen to do. This may be a good time and reason for CEO’s to take stock of the “available acumen” in their organizations and if it is insufficient, this is the time to develop it.

 
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Posted by on June 21, 2010 in Articles, Leadership

 

It’s time to ask WHY?

Think of all the consultants that are consulting to Malaysia – be it the government or the GLC’s, I would almost bet that a large proportion of it would be American Consulting firms. Simply look at all the conferences going on around town and you can be sure that one or more speakers will be “american” or of “american’ experience.”  There must come a time where we ask ourselves, WHY?

There is a real reason as to why we are so attracted to consultants – more so Americans.  

1. America’s global strategy is clearly based on a services economy of which consulting is a big part of.

2. To support its services economy America has a very strong research culture driven by the Universities. They study everything and everything and are superb at creating causality  or explaining cause and effect relationships.

3. As an economy – starting from the critical reforms of Ronald Reagan in the 80’s all through the Clinton years – America grew and grew and grew. And the world looked to America to learn what it was doing, more so when the Japanese Economic Juggernaut started to choke.

What we are not asking is how many countries have been able to replicate America. I highly suspect that very few have been able to do so, nor is replication a guaranteed success. What America and a few other countries in the world  have is a  massive homogenous domestic markets that was growing in affluence as the population aged from a youthful population to now a fairly older population.  

Very little of America’s success had to do with consultants and more to do with sociographics.  Hernando de Soto offers an intriguing read in his book  “The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else.”

The question still remains – with all the clever consultants available to america, how come america has been able to create this huge economic disaster.  How come all the consultants in the world could not foretell or stop the disaster. Why didn’t America’s big three Auto makers turn to the consultants to get them out of the mess.?

 

So here is the reality, we have been duped in to the HALO effect of America’s success. The reality if what works for America – works well for America. Some of it has global applicability but a lot less than what we believe.   What we need is a strong research foundation within our universities to help uncover Asian causalities.  What will work for us will probably be different than for America.  As an example, Singapore has been successful in Singapore, but it really ha not ben able to export its success to the rest of the world.

 

We need to stop trying to copy and start trying to imagine, experiment, learn and take chances. Only then will we be able to see real progress. After 50 years as a nation we have done well, but I think we can do better – much better . All we need is the political will… and the courage to be confident of who we are and what we can do.

 

 

 
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Posted by on December 14, 2008 in Articles, Business

 

What is the real value of USD700 Billion?

This question was answered by Speigel On line International. For the full article, click here.

The quick answer is that with USD700 billion you could do the following:

By the way a USD1 note is .0043 inches thick or .10922mm. If you were to stack 700 billion of them, the height would reach – 2,745 kilometers or 1,725 miles high, which would literally take it out of the earth’s atmosphere!

 
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Posted by on October 15, 2008 in Articles

 

What is Strategy?

Strategy is probably one of the most misunderstood words in all of management speak.  Because of the “coolness” of the word strategy – unless something is “Strategic” it cant be important. However the overuse and misunderstanding of strategy is one of the core issues at the heart of organizational underperformance.

Here is a listing of many ways the word strategy is used:

 

Definitions of strategy on the Web:

  • scheme: an elaborate and systematic plan of action
  • the branch of military science dealing with military command and the planning and conduct of a war 
  • A strategy is a long term plan of action designed to achieve a particular goal, most often “winning”. Strategy is differentiated from tactics or immediate actions with resources at hand by its nature of being extensively premeditated, and often practically rehearsed. …
  • In Neuro-linguistic programming, a strategy is a mental sequence used to achieve a goal. Strategies are usually described in a sequence of sensory-specific terms of the representational systems and submodalities employed. They may include alternatives, fall-back strategies, and the like. 
  • In game theory, a player’s strategy, in a game or a business situation, is a complete plan of action for whatever situation might arise; this fully determines the player’s behaviour. 
  • The science and art of military command as applied to the overall planning and conduct of warfare; A plan of action intended to accomplish a specific goal; The art of using similar techniques in politics or business 
  • Approach taken that will affect the overall direction of the organization and will establish the organization’s future environment.
  • the management of language for a specific effect. The strategy or rhetorical strategy of a poem is the planned placing of elements to achieve an effect. The rhetorical strategy of most love poems is deployed to convince the loved one to return to the speaker’s love. 
  • A systematic plan, consciously adapted and monitored, to improve one’s performance in learning
  • With respect to option investments, a preconceived, logical plan of position selection and follow-up action.
  • a broad non-specific statement of an approach to accomplishing desired goals and objectives.
  • The general plan or direction selected to accomplish incident objectives.
  • In game theory, a set of actions and contingent actions for the several stages of a sequential game, that is, a plan of action for each stage contingent on the outcome of preceeding stages.
  • Actions managers take to attain the firm’s goals.
  • The use of manoeuvre and movement to obtain an advantage over an opposing army.
  • In GAME THEORY, a policy for playing a game. A strategy is a complete recipe for how a player should act in a game under all circumstances. Some policies may employ RANDOMNESS, in which case they are referred to as mixed strategies.
To be useful in business, we need to go back to the classical definition of strategy as articulate by Michael Porter in 1987. Strategy is the unique position that a firm occupies in a market space.  The goal of a strategy is to maximise the firm’s share of profit within that market space. Strategy is what make you unique.
By being absolutely clear of the strategy – all allocation of resources, actions, decisions can be taken to further solidify that unique position making it hard for the competition.
 
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Posted by on September 19, 2008 in Articles, Business, Leadership

 

How NOT to recruit a HR Director

I picked this up in the Saturday 10th May Star. Bank Simpanan Nasional is advertising for the position of Director, Human Resource. Read through the ad and see if you can spot what is wrong with it.

IF you did not spot it, let me share with you. The Ad request anyone who is interested in the HR Directors job to send the CV to Manager, Human Resource….who potentially will be the HR Directors subordinate.

If I were interested in applying for this very senior position, can you imagine the reluctance I would have, because my subordinate will be screening the applications.

As a note of advise, if one is recruiting for the jobs reporting to CEO, always ask the interested parties to mail their CV’s to the CEO. It just sends all the right messages.

 
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Posted by on May 12, 2008 in Articles, Business

 

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What “walking the talk” is not

I said in an earlier post that we will get lots of data to study leadership and change for the aftermath of the elections.   One of the Critical Success Factors to bring about change and confidence in that change is for the leadership to be seen walking the talk.

The Prime Ministers post election cabinet is a good example of what not to do. Please bear in mind, that I have always maintained, you can make 100 correct choices but people will remember you for the 2 wrong ones you made.

In Pak Lah’s case his mistakes are:

1. Retaining Zulhasnan Rafique as FT Minister.  The Federal Territory saw 12 out of 14 seats go to the oppositions.  Simply on the basis of accountability, Zulhasnan should have done the right think and offered himself to not become minister or if that did not happen Pak Lah should have not picked him up as minister.

2. Bringing in Mohamed Taib.  One of the reason’s that BN was decimated in the elections was that Pak Lah had failed miserable to deal with the issue of corruption, which was the platform he stood on at the last elections.  Obviously he doest not read to well in between the lines.  Muhammad Taib was not even offered as a candidate for the elections , then he gets picked up as a Minister. This is the man who was caught with a brief case full of money at Brisbane airport and has to resign as chief minster of Selangor.

No amount of reason or rational can justify their selection.  The only message is send out is that BN/UMNO/PM will continue to say one thing and do another – so this is not how you walk the talk.

 
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Posted by on March 21, 2008 in Articles, Business, Leadership, Transformation

 

Managing for Performance

The conference was run on the 13th and 14th of November. I was quite pleased with the reception and level of participation.   I will soon put up the feedback we got from the conference.

managingforperformance.jpgMfP E-zine

meanwhile feel free to download the Managing for Performance Ezine here.   managingforperformance.pdf

 
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Posted by on November 21, 2007 in Articles