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Category Archives: Transformation

Too many managers, too few leaders…

This in one of the most idiotic statements to have come out in management discourse.   I use the word “idiotic” in the same way that Warren Buffet uses it.  When asked in an interview, why did the crash happen,  he  replied, “in any market there are 3 types of people, a: the innovators who pioneer new ways of doing things, b:  the copycats who then learn what the innovators do and follow with full understanding what they are doing and finally c: the idiots who do it just because everyone else is doing it.

Idiots have a special role in the market place as they do things not out of understanding but simply by jumping on the bandwagon. All crisis and accidents can almost be traced back to an idiot who made a decision without understanding the risk and implications of the decisions.

Coming back to the concept of “too many managers, too few leaders.”  The first mistake the idiots (or more politely, the proponents of the above) make is to confuse role with task.  Managing and leading are not enshrined in roles but in tasks.  Every person who has even 1 subordinate has the task to manage and the task to lead. And the biggest idiots in town are the consulting houses and  the peddlers of leadership development.

Today, due to the enormous hype around notion of “leadership” created non other than Jack Welch, the task of managing has taken a complete back seat.  It has gone so ridiculously far that what used to be called “management team” is now being called “leadership team”!

The second mistake that is been made is pouring so much time and effort into Leadership Development and forgetting about Management Development.  With increasing mobility of people across organizations and a penchant for hiring those with “leadership abilities” at the expense of  “management ability,” companies are shooting themselves in their foots.

If anything I will argue that the biggest problems faced by organizations is the lack  people who excel in the task of management. We need to refocus and get back to the fundamentals, that the act of managing and leading are both tasks within the role of one who supervises.

Here is a nice article to read on the matter:

True Leaders Are Also Managers

8:20 AM Wednesday August 11, 2010

by Robert I. Sutton | Comments (39)

Ever have occasion to do an in-depth review of the academic and practical literature on leadership? I have — twice in the past five years. The first time was for a 2006 book with Jeff Pfeffer, Hard Facts, Dangerous Half-Truths, and Total Nonsense. The second time was for my new book, Good Boss, Bad Boss.

It is impossible to read it all.

Tens of thousands of books have been written on leadership and there are several academic journals devoted entirely to the subject, including The Leadership Quarterly and The Journal of Leadership and Organizational Studies. Perhaps the most definitive review and integration of the leadership literature was Bass and Stogdill’s 1,200-page Handbook of Leadership, which was published in 1990 (and still does the best job of making sense of the literature, for my money). And if you really want a long book on leadership, you can get the four-volume Encyclopedia of Leadership, which at 2,120 pages weighs in at 15 pounds, and costs a whopping $800. Clearly, the task of reviewing the leadership literature — and acting on it as leader — isn’t to understand it all (that is impossible), but to develop a point of view on the few themes that matter most.

In my reviews of the writings and research, I kept bumping into an old and popular distinction that has always bugged me: leading versus managing. The brilliant and charming Warren Bennis has likely done more to popularize this distinction than anyone else. He wrote in Learning to Lead: A Workbook on Becoming a Leader that “There is a profound difference between management and leadership, and both are important. To manage means to bring about, to accomplish, to have charge of or responsibility for, to conduct. Leading is influencing, guiding in a direction, course, action, opinion. The distinction is crucial.” And in one of his most famous lines, he added, “Managers are people who do things right and leaders are people who do the right thing.”

Although this distinction is more or less correct, and is useful to a degree (see this recent interview with Randy Komisar for a great discussion of the distinction), it has unintended negative effects on how some leaders view and do their work. Some leaders now see their job as just coming up with big and vague ideas, and they treat implementing them, or even engaging in conversation and planning about the details of them, as mere “management” work.\

Worse still, this distinction seems to be used as a reason for leaders to avoid the hard work of learning about the people that they lead, the technologies their companies use, and the customers they serve. I remember hearing of a cell phone company CEO, for example, who never visited the stores where his phones were sold — because that was a management task that was beneath him — and kept pushing strategies that reflected a complete misunderstanding of customer experiences. (Perhaps he hadn’t heard of how often Steve Jobs drops in at Apple stores.)

That story is typical. “Big picture only” leaders often make decisions without considering the constraints that affect the cost and time required to implement them, and even when evidence begins mounting that it is impossible or unwise to implement their grand ideas, they often choose to push forward anyway .

I am all for dreaming, Some of the most unlikely and impressive things have been done by dreamers. But one characteristic of the dreamers I respect — Francis Ford Coppola, Steve Jobs, folks at Pixar like Ed Catmull and Brad Bird — is that they also have remarkably deep understanding of the industry they work in and the people they lead, and they are willing to get very deep into the weeds. This ability to go back and forth between the little details and the big picture is also evident in the leaders I admire most who aren’t usually thought of as dreamers. Anne Mulcahy’s efforts to turn around Xerox were successful in part because of her in-depth knowledge of the company’s operations; she was very detail-oriented during the crucial early years of her leadership. Bill George, one of Jim Collins’ level 5 leaders, told me that, in his first nine months as CEO of Medtronic (a medical device company), he spent about 75% of his time watching surgeons put Medtronic devices in patients and talking with doctors and nurses, patients, families, and hospital executives to learn the ropes.

I guess this is one of the themes that I have written about before, especially in The Knowing-Doing Gap (with Jeff Pfeffer). But it is bothering me more lately, as I’ve had some conversations with project managers who have been assigned tasks by naive and overconfident leaders — things like implementing IT systems and building software. When they couldn’t succeed because of absurd deadlines, tiny staffs, small budgets, and in some cases, because it simply wasn’t technically possible to do what the leaders wanted, they were blamed. Such sad tales further reinforce my view that thinking about what could exist, and telling people to make it so, is a lot easier than actually getting it done.

I am not rejecting the distinction between leadership and management, but I am saying that the best leaders do something that might properly be called a mix of leadership and management. At a minimum, they lead in a way that constantly takes into account the importance of management. Meanwhile, the worst senior executives use the distinction between leadership and management as an excuse to avoid the details they really have to master to see the big picture and select the right strategies.

Therefore, harking back to the Bennis theorem I quoted above, let me propose a corollary: To do the right thing, a leader needs to understand what it takes to do things right, and to make sure they actually get done.”

When we glorify leadership too much, and management too little, there is great risk of failing to act on this obvious but powerful message.

 
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Posted by on November 15, 2010 in Business, Leadership, Transformation

 

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Afzal Rahim and Time dot Com

We have been seeing a lot of Time Dot Com in the papers recently and the reason for it being back in the new CEO, Afzal Rahim has just crossed his 100 days in office and has successfully got his turnaround plan approved by the board.

I had the pleasure of spending 60 minutes with Afzal, who by the way is the 14th CEO of TdC.  My takeaway from our short conversation is that TdC will not only survive, but will become a real market competitor to TM in the spaces that they compete.

My confidence to make the above statement is built the fact that Afzal was able to layout the business issues with such clarity and simplicity and support all his assertions with facts. Step 1 to a great turnaround is CLARITY and this, Afzal had loads off. He did not waffle around talking about talent management or pay of structure or theories or concepts. He was clearly focused on the business of the business – what is it that we need to do to make money and most importantly he was not looking for validation. The road ahead will be difficult and the journey will take time but I am sure that he will do it.

One of the challenges with talking to any CEO is to be able to separate the showman from the substance.  Afzal is quite a showman but the substance clearly shines through.

Given the current business situation and share price, Afzal and his team have only one way to go and that is up. 

Time dot Com Share price for the last 12 months

Time dot Com Share price for the last 12 months

 

I wish Afzal and his team every success..

Here is a chronology of articles (from The Star) on Afzal and TdC:

 

Tuesday October 7, 2008 MYT 6:45:10 PM

Khazanah ropes in Global Transit to turn around TdC

KUALA LUMPUR: Khazanah Nasional Bhd has roped in Global Transit International Sdn Bhd (GTI) to turn around Time dotCom Bhd (TdC). 

Khazanah said on Tuesday that GTI’s former chief executive officer (CEO), Afzal Abdul Rahim would take over as CEO at TdC that was previously vacant.

“Additional team members will be nominated to fill other vacant key senior positions, namely chief operating officer and chief financial officer,” it said.

The new team led by Afzal will have three months to assess the operations of TdC and formulate a long term turnaround strategy for the approval of TdC’s board, it said

 

 

Wednesday October 8, 2008

Khazanah ropes in Global Transit to turn around TdC

PETALING JAYA: Khazanah Nasional Bhd has roped in Internet protocol player Global Transit International Sdn Bhd (GTI) to turn around Time dotCom Bhd (TdC) and to ensure its long-term operational and financial sustainability. 

Khazanah said GTI former chief executive officer (CEO) Afzal Abdul Rahim would take over as TdC CEO, a post that was previously vacant.

“Additional team members will be nominated to fill other vacant key senior positions, namely chief operating officer and chief financial officer,” it said in a statement yesterday.

Afzal Abdul Rahim

Khazanah, which owns 30.04% of TdC, said the new team led by Afzal would have three months to assess the operations of TdC and draw up a long-term turnaround strategy for TdC board’s approval.

TdC had in May announced its allocation of RM200mil to roll out high-speed wireless Internet services in major cities in the country. It had in May also transferred its 3G spectrum licence to DiGi.Com Bhd for a 10% stake in the latter.

Khazanah said yesterday that under the agreement with GTI, it would transfer its TdC stake to a special-purpose vehicle, Pulau Kapas Ventures Sdn Bhd (PKVSB), in which Khazanah would have a 61.2% stake.

GTI would hold the remainder 38.8% in PKVSB and inject its unit, Global Transit Communications Sdn Bhd (GTC), which is a major player in the wholesale Internet protocol transit market in Malaysia and the region, into PKVSB.

Upon meeting certain performance targets of TdC and GTC, GTI would be given an earn-out option to increase its stake in PKVSB to become its major shareholder.

GTI is part of a consortium to build a US$300mil, 10,000km undersea cable from Japan to the US, alongside Google, Bharti Airtel of India, KDDI of Japan, Pacnet of Hong Kong and SingTel of Singapore.

Khazanah managing director Tan Sri Azman Mokhtar said the agreement with GTI was to ensure TdC’s long-term operational and financial sustainability as well as injecting key senior management talent to fill existing gaps in the company.

He added that Khazanah had formed a selection committee, that included independent professionals from the telecommunications and corporate sectors, to assess proposals from several companies.

“The committee believes that GTI is best for the task as it has the entrepreneurial skills and telecommunications experience, as well as sound management to assist TdC in its operational and financial recovery,” he said.

 

 

 

Thursday October 9, 2008

Let Afzal do his ‘magic’

News Analysis by B.K. SIDHU

TOO often Time dotCom Bhd (TdC) had tried to turn things around but failed.

Would things be any different this time with Afzal Abdul Rahim and his team?

National investment arm Khazanah Nasional Bhd has been trying for years to fix the problem at TdC and had evaluated several proposals.

Four months ago, it started negotiations with Afzal, culminating in a deal announced on Tuesday.

Under the deal, Khazanah will hold 61.2% of Pulau Kapas Ventures Sdn Bhd (PKV) while Afzal’s Global Transit International Sdn Bhd will hold the remaining 38.8%.

PKV, in turn, will hold a 30% stake in TdC and 100% of Global Transit Communications.

The deal is expected to be completed in a month.

Afzal will take over as CEO of TdC and has three months to come up with a turnaround plan.

It is not clear how much the deal is worth but TdC shares gained 2 sen to close at 32.5 sen yesterday.

The reason why Afzal’s proposal was accepted over many others was because he just wanted to focus on the wholesale and enterprise business and not compete head-on with Telekom Malaysia Bhd (TM) in the retail market.

This had been a consideration for Khazanah, which is also a shareholder in TM.

But an analyst has said that “selling bandwidth alone does not sound interesting”.

Afzal was not available for comment.

The story of TdC dated back more than a decade ago when it built a fibre optic network across Peninsular Malaysia to co-exist with TM’s network.

TdC got listed on Bursa Malaysia in 2001, but now its share price is a long way off the IPO price RM3.30 a share. The company has also reported a RM160mil net loss for the last financial year ended Dec 31, 2007.

Over the years, TdC sold its cellular business to Maxis Communications Bhd and its 3G spectrum to DiGi.Com Bhd in exchange for a 10.37% stake in DiGi. Now, it is left with a severely under-utilised fibre optic network that spans across Peninsular Malaysia.

Those in the know have claimed that TdC would not sell its stake in DiGi for the time being even though it could fetch RM1.75bil now.

But if Afzal can indeed turn TdC around and the company can generate decent returns, the DiGi stake sale is an option for future expansion or as a form of capital repayment, said a source.

Those who know Afzal believe he can do the “magic’’ that TdC needs to turn around, provided he is allowed to run TdC like a commercial entity.

He has the track record and experience and should be given a chance, they said, noting that he had delivered while at Applied Information Management Services — a company that operates data centres.

 

 

 

Saturday January 17, 2009

Time dotCom won’t sell any more DiGi shares

By B. K. SIDHU

TDC will continue to hold 7.1% stake 

TIME dotCom Bhd (TDC) has no intention to sell more of its DiGi.Com Bhd shares after the recent disposal of a 2.9% stake or 22.5 million shares for RM463.50mil, sources say.

“TDC will continue to hold a 7.1% equity stake or 55.25 million shares in DiGi,’’ one source says.

An analyst, in his report, says KWAP (Kumpulan Wang Persaraan), the civil servant’s pension fund, is among the buyers of TDC’s DiGi shares. It is learned that there are five local institutions that have bought the shares.

“Whoever the buyers may be, they have to be local and not foreign institutions,’’ the source says.

TDC chief executive officer Afzal Abdul Rahim is expected to present to the TDC board a business turnaround plan over the next few days after a Jan 12 board meeting was postponed.

Afzal Abdul Rahim

He was appointed in October last year and had 100 days to submit to the board a business plan to turn the ailing company around.

When contacted, Afzal does not elaborate on the plan and merely says “the proceeds from the sale of the 2.7% equity stake cannot be used for anything else other than to repay the loans.’’

There is speculation that part of the proceeds will be used to turn the company around but Afzal says that is not going to be the case.

The sale of 22.5 million shares is necessary to cover a loan facility that TDC had undertaken when it purchased the DiGi shares.

After paying off its loans and based on its audited financial statements for the financial year ended Dec 31, 2007, the company’s net gearing would be reduced from 0.48 times to 0.25.

There is a lot happening at TDC since Afzal took charge.

Apart from the business plan that he has to come up, he is said to have instituted various changes, putting in place a “de-layering” exercise to streamline operations.

To bring down costs, various measures are in place, including moving to an office space in Glenmarie in Shah Alam from its current premises at Jalan Tun Razak in Kuala Lumpur.

It is learnt that Afzal’s business plan will focus on the basics, optimise the existing infrastructure that is virtually under-utilised, and exploit the opportunities available in the market place.

It will continue to focus on offering wholesale and international businesses, tap the small and medium enterprises market and push its products and services to corporates and the government.

It is also learnt that a voluntary separation scheme is in place and 10 senior management team members have left the company.

Megat Hisham Hassan is expected to be appointed the new chief operating officer very soon.

Megat was formerly general manager of Fibrecomm Sdn Bhd.

“What the company needs is a sense of focus. It needs to focus on three or four businesses instead of trying to do 11 million things at one go,” says the source.

“The turnaround is going to be tough and there are no quick fixes in sight.

“What is important is for the new team to re-build the organisation, tap the potential in the market place for its products and services and restore engineering pedigree.

“If they are able to do that and if their business plan gets approved, then TDC will eventually shape up, but for now the waiting game continues,’’ he adds.

 

 

 

Thursday January 29, 2009

CEO: TdC needs complete revamp

By B.K. SIDHU

  

Chief executive officer Afzal Abdul Rahim

SHAH ALAM: A total overhaul that incorporates not just the business plan but also a mindset shift in the way things are done is needed to turn Time dotCom Bhd (TdC) around.

This is vital as TdC, which has been mired in red ink for nearly a decade, has too many leakages in operating expenses. Its spending for network is high, it is too dependent on vendors’ solution, it lacks direction, has no clarity and, most importantly, its product offerings are too complex.

“This company has structural issues and people work in silos. We have to be conscious that we are dysfunctional as an organisation and we have to do basic cleaning up as we can get simple things wrong.

“If we do not change everything in the peripheral, we cannot achieve the target and that is why a complete overhaul is needed,’’ chief executive officer Afzal Abdul Rahim told StarBiz in an interview.

He said the structural problems came about because “people were too busy organising functions around personalities and this resulted in them building silos and empires which led to no synchronisation.”

“There is clearly a lack of direction and clarity and everyone only thought of his own work. (TdC has been looking inwards) and that is why TdC is disconnected from the market. We did not know what the market wanted,’’ Afzal said.

Afzal came on board in October last year and that is what he discovered after more than three months at the helm.

He has a three-year mandate from Khazanah Nasional Bhd to turn TdC around. This may be Khazanah’s last-ditch effort at cleaning up the company which, since listing in 2000, has seen its share price plunge from the initial public offering price of RM3.30 to a low of 26.5 sen yesterday. It is also the last government-linked company to be restructured.

Khazanah, via a special-purpose vehicle, has a big portion of a 30.4% stake in TdC. The rest is held by Afzal and his partners. Many investors, lured by TdC’s potential, have instead been left licking their wounds.

Afzal had three months to come up with a business turnaround plan, which was approved by the board on Jan 21.

“No amount of talk is going to change anything if the execution is not there. We just have to focus and get things going,’’ he said.

The plan is divided into four sections: a business plan, turnaround initiatives, divisional initiatives and quick win labs.

The business plan is no different from earlier schemes. The company will focus on the wholesale, corporate and enterprise markets but what will change is the way products offered are packaged and the quality of service.

Retail consumers are last on its list as that is not a market segment TdC wants to jump into immediately.

“We have no capacity to service the retail consumers for now but will do that later,’’ Afzal said.

In his first three months, Afzal has also flattened the organisational structure as “there was not much visibility in what we were doing earlier.’’ Twenty-three of TdC’s 27 senior executives have left the company – via a voluntary separation scheme, resignations or unrenewed contracts. A cost reduction initiative is in place and TdC has moved from its Jalan Tun Razak office to its premises in Glenmarie in Shah Alam.

TdC has de-coupled from the United Engineers (M) Bhd (UEM) group and there will no longer be board representatives from UEM or its unit, Time Engineering Bhd at TdC even though Time will continue to hold 20% stake in TdC.

“We are no longer part of the conglomerate and we need to realise that we need to survive by ourselves,’’ Afzal said.

Capital expenditure had been slashed from over RM100mil to RM40mil this year, he said, adding that Megat Hisham Hassan had been appointed chief operating officer and entrusted to execute the plan.

The turnaround plan, according to Afzal, is intended to return TdC to profitability, but as he put it: “I think the team can make a difference. I am the ring leader but the proof will be in the pudding.’’

 

 

Saturday January 31, 2009

Better service quality

By B.K. SIDHU

Time dotCom’s Afzal says he can’t wait to turn the fibre-optic network provider around 

It has taken awhile for Khazanah Nasional Bhd to find someone with the right fit to drive Time dotCom Bhd (TdC) turnaround.

For almost a decade now, TdC has not been able to fully remove the red ink from its books. As a result, the counter has been shunned by investors. This is a huge contrast from its initial public offer (IPO) days when it was much sought after. For the quarter ended Sept 30, the company reported a net loss of RM3.1mil and for the cumulative nine months, the losses widened to RM110mil.

Afzal Abdul Rahim at Time dotCom’s control centre in Shah Alam.

Marred by a complexity of operational issues, confused brand architecture and a lethargic work culture, its product offerings never made it big like the sector’s favourites, Hotlink or iTalk.

Afzal Abdul Rahim’s name cropped up about a year ago as a potential candidate to take over the reins of the company. He was keen to be part of a bigger organisation and both parties laid their cards on the table.

“They (Khazanah) were tough in negotiations. I had put in some clauses favourable to me in the agreement and thought I could get away with them, but they yanked it out. They were so thorough. If that is how Khazanah does it with other parties, then good on them,’’ says Afzal in an interview with StarBizWeek.

In October, the deal was sealed. Khazanah inked an agreement with Afzal’s Global Transit International Sdn Bhd (GTI) to transfer its TdC stake into a special purpose vehicle, Pulau Kapas Ventures Sdn Bhd (PKV). Khazanah holds a 61.2% stake in PKV and GTI, the remaining 38.8%.

PKV, in turn, holds a 30.4% stake in TdC and 100% of Global Transit Communications, a unit of GTI, which is an Internet Protocol (IP) transit service provider. Afzal declined to provide details on his stake in TdC.

This deals gives TdC an extended lease of life and whether it sinks or prospers depends on how Afzal drives the company. “It is a great opportunity for me but before we can see any success, we need to drive a cultural change,’’ he says.

On his first day at work, he was ushered into the CEO’s room, which was too plush for him. Given his casual style of management, Afzal opted instead for an open area on a different floor as he didn’t like being cooped up in a room by himself. He frequently addresses his employees as “bro’’ (slang for brother) and much prefers to go over to their desks instead of summoning them over to his office.

He is a well-regarded personality in the telco industry. He set up Applied Information Management Services Sdn Bhd (AIMS), a company that operates data centres, and later GTI.

GTI is also part of a consortium to build a US$300mil 10,000km undersea cable from Japan to the US, alongside Google, Bharti Airtel of India, KDDI of Japan, Pacnet of Hong Kong and Singapore Telecommunications.

Why did he take up the job?

So, what prompted Afzal to take up the offer to helm TdC, which is in dire straits? Simply put, two factors: First, he says, no matter how big GTI grows, it does not have its own domestic infrastructure and as such, will always be dependent on other players. With TdC, the routing of traffic can be done via its own network. In fact, TdC is also in a position to tap the international traffic from Thailand to Singapore. No doubt, the wholesale market can do with another aggressive player as there is plenty of room for growth.

Second, as Afzal puts it, “we need to earn our stripes’’. GTI is a small company while TdC needs a strong management team to run the operations. The tie-up allows GTI to move up the chain.

In short, Khazanah gets someone competent to manage TdC while Afzal gets a listed vehicle for GTI. Indeed, this falls in very nicely with his plan to grow the business, which he had started with his long-time friend Megat Hisham Hassan, now chief operating officer at TdC.

“Megat is a clear opposite of me. I like to plan, he is an amazing manager and a task master too. We need strong people like him as the turnaround job at TdC is huge. He is re-engineering the organisation in such a way that the focus is on delivery and result,’’ says Afzal.

Filling the gaps

Within the first 115 days in office, Afzal had identified TdC’s weak links – a weak brand, drain on human capital, a lethargic work culture, poor financial planning and disengaged sales force. These are the very aspects that need to be addressed quickly, he says.

“If you send me and the senior team on a trip to Jamaica for a year and leave four senior people to run the show, there will be internal chaos. But customers could not have felt anything in terms of sales and quality of service with the 14 people gone to Jamaica. That is how disconnected we were from the market,’’ he says.

To address that, he has put in place a total overhaul plan or what he calls, a turnaround plan, the very thing Khazanah wanted him to do. He was given three months to do so and the plan was approved on Jan 21. He has three years to turn TdC around.

The plan covers crucial aspects of growing the business, engaging with employees and clients, recreating a product that sells and reducing cost. Part of the plan is to increase the efficiency of the fibre-optic network that TdC has in the country.

In the three months, he has also flattened the organisational structure to ensure better interaction. Over 20 senior people have left the organisation and the head office relocated to Glenmarie to save on rental.

Recruitment has been frozen and the company’s capital expenditure (capex) plans have been tweaked. “This year, we will spend only RM40mil in capex from RM100mil earlier,’’ he says.

Presenting his turnaround plan to the media on Thursday, he attributed the high capex to leakages in operating expenses, high spending on network and procurement which was far too dependent on vendor’s solution.

In future, procurement is going to be very detailed and the parts required would be listed so that vendors would not have to go through pages and pages of RFP (request for proposal) documents.

“I am a network engineer. You cannot pull wool over my eyes where pricing of equipment is concerned,’’ Afzal says.

Internally, TdC has already felt the impact of these changes. He expects consumers to experience better quality of service by the second quarter and analysts will see positive data by the fourth quarter.

“Three years is a long period to turn the company around. I am a very impatient man but this needs a lot of hard work,’’ he says.

As part of the negotiations with Khazanah, Time Engineering Bhd will retain its 20% in TdC but relinquish board seats at TdC.

“We need to be independent. They are no longer on the board and the net of a conglomerate is removed. We need to survive and we are now in charge of our own destiny,’’ he says.

Can he do it?

Afzal is the group’s 14th CEO. He has clearly rallied the employees to walk the line with him but the question arises – in an economic slowdown, when customers are cutting costs, can TdC really be turned around?

“It requires strong execution power. We need to demonstrate that we can do it. There is plenty of room for growth even in a downturn and we have not fully explored our potential,’’ he says.

For far too long, TdC has over-promised and under-delivered. While Afzal may very well have what it takes to turn around the company, for most industry observers, “seeing is believing”. They will wait for the numbers to roll in to judge his delivery.

Meanwhile, one thing TdC may want to consider is shedding the “dotcom” tag, as that particular boom and bust has come and gone, a long time ago.

 

 
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Posted by on February 2, 2009 in General, Transformation

 

The Narrative Fallacy – How CEO’s crash companies

Every time a company crashes, it is the employees or workers that stand to loose the most. Loosing a job is not just about a paycheck but also about identity, self esteem and dignity.

But what is the causal linkage between a company crashing and workers? Well, in all my experience, I have never seen a company crash because of its employees but I have seen so many crash because of its leaders. End of the day the buck stops at the CEO.

Then how come the CEO is not the first to go?

A lot of it has to do with this phenomenon called the narrative fallacy, a tems used by Nicholas Taleb in “The Black Swan.”  To understand Taleb’s thinking, this is what he said in 2006:

Warning of the Global Banking Crisis

In 2006, in The Black Swan[16]

Globalization creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words it creates devastating Black Swans. We have never lived before under the threat of a global collapse. Financial Institutions have been merging into a smaller number of very large banks. Almost all banks are interrelated. So the financial ecology is swelling into gigantic, incestuous, bureaucratic banks – when one fails, they all fall. The increased concentration among banks seems to have the effect of making financial crisis less likely, but when they happen they are more global in scale and hit us very hard. We have moved from a diversified ecology of small banks, with varied lending policies, to a more homogeneous framework of firms that all resemble one another. True, we now have fewer failures, but when they occur ….I shiver at the thought.

The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deem these events “unlikely”.

So he says of the narrative fallacy,is that our brain is so good at looking at an event post-hoc or after the event and then creating good explanations for the event. Prior to the event happening, its occurrence is seen as improbable or impossible but after the event – the explanations provided make the event seem so predictable. Our brain works very hard to ensure it mitigates any form of cognitive disonance:

A powerful cause of dissonance is when an idea conflicts with a fundamental element of the self-concept, such as “I am a good person” or “I made the right decision.” This can lead to rationalization when a person is presented with evidence of a bad choice. It can also lead toconfirmation bias, the denial of disconfirming evidence, and other ego defense mechanisms.

So when a company hits a crisis, the brain of the CEO does two things, a: it quickly works to justify all the actions that the CEO had taken prior to the event  and to make the crisis an external event and b: it quickly looks for possible solutions of how to overcome the crisis.

Have you ever sat with a bunch of CEOs or senior leaders and here them talk about how they were the cause of their organizations problems? I bet you not. They all will speak of others being the problem but not themselves. (Actually this is true for everyone, we are never the problem).

So why do the CEO’s stay and employees get fired? In crisis, a CEO has 2 key tasks, that is to convince the Board that a: the crisis was a result of an external event and b: that he has a solution.

The Board really has 2 tasks: a. to protect as many jobs as possible and b: to look for a new CEO.

I am sure as the US led financial crisis is sinking companies around the world, you must be thinking that I am nuts to be suggesting that a company which fails as a result of an indirect impact of the crisis should also fire its CEO.

Well think about it for a moment – if the CEO should not be fired then why should the employees?

The answer is, “we have to lay off the employees because of cost and there is no work”. I think  the real solution for layoff’s is to lay off from the top. Assuming the company needs to shed USD5 million in manpower cost, it should do it from the top. First the CEO, the management team, and keep working down the ranks till USD5 mil is achieved. Sounds ridiculous doesn’t it? 

Well it does sound ridiculous because it  runs against all conventional wisdom, the very same wisdom that got the company into trouble.

Let’s look at FORD and GM,  it would be far better to remove all the senior leaders who over the last decade have only puled the company down to mediocrity then to keep them there and close down lots of plants, putting Mainstreet Joe out of work.

So who will run the company – well its a crisis, markets have shrunk, production is down to a crawl, so its a good time to  look for a new cadre of leaders from the more junior ranks to step up and give management a shot. In all likely hood they probable have an equal if not better chance for success…..

 

 

 

 

 
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Posted by on December 2, 2008 in Business, Leadership, Transformation

 

When is best practice not best practice?

For a good 10 years now since the Asian Financial crisis of 1998 that I have been telling companies to be very careful of “best practices.”  In theory is sounds good, but in reality it may be more detrimental then helpful.    

The irony to “best practice” is that every best practice company did not becomes best practice by copying other. They became best practice through evolution, learning and relearning – continuous improvement. Embedded in their culture is an attitude of finding new ways of working. Its a mindset thing.

When non best practice companies start to try and adopt best practices of others, usually at the behest of expensive consultants, the loose sight of the fact that being best practice is a mindset and not simply mimicking a process. Even if it was down to mimicking a process, how many companies can really do it and do it well? Very few.

My advise to companies has always been, rather than take one big leap- learn to make small frequent changes. Over time the culture of change and improvement  will quickly set in.  Unfortunately, when expensive consultants throw cliches like – “you can’t cross a chasm in two small jumps” our minds quickly see the problem as having to cross a chasm and having to do it in one big step.  

The reality is no “non best practice” organization has the agility to jump chasms. Organizations are like ships. To turn a ship, one first turns a small trim rudder before making the big rudder turn. Organizations far better just by focusing on taking the next step, and the next and the next and soon each step will be a leap.

I am please that the Harvard Business Review has finally put put an article in support of my position. At least I know that I have been on the right tract all along.

 

Enjoy the article.

 

When Are “Best Practices” Not Best Practices?

“What’s best practice?” Just about any manager seeking to improve corporate performance has fielded this question from leadership. The theory is that the manager should find a successful company, find out what practices have made them successful, mimic those practices, and expect success.

Blindly worshiping at the altar of best practices is dangerous. The problem is that practices that work incredibly well in one circumstance can be ill-suited for another circumstance.

Even if your company has successfully overcome a problem in the past, it is always worth asking if the circumstances have changed in a way that means your approach needs to change as well.

Consider Cisco Systems. During the 1990s the company gobbled up dozens of small companies for relatively reasonable price tags. It developed a process to identify attractive opportunities and seamlessly and quickly integrate the companies into its core business. Business school case studies and glowing articles described the approach as a best practice way to growth through acquisition.

But over the last few years Cisco’s approach has notably changed. Cisco has made bigger acquisitions, like spending $6.9 billion for set-top box manufacturer Scientific-Atlanta and $3.2 billion for online conferencing provider WebEx.

Instead of rapidly integrating all acquisitions, it is giving some acquisitions significant autonomy. For example, when Cisco acquired home networking provider Linksys in 2003, it kept the business separate, even going so far as to appoint a team of “blockers” to make sure that Cisco’s core DNA didn’t unintentionally infect Linksys’s DNA.

Cisco’s circumstances have changed. As Cisco has grown, so have its growth targets. Small acquisitions that sustain its existing business won’t be sufficient to move its growth needle. So it is now searching for targets that can be “platforms” that allow the company to move into different market segments and follow different business models. It has quite appropriately changed its tactics to achieve these objectives.

All in all, Cisco has spent $2.5 billion in the past five years to acquire 44 companies that extend its core business, and $11 billion on a handful of platform deals. Cisco expects core-extenders to be integrated within two months; platforms can take up to two years. As Ned Hooper, Cisco’s head of business development, told the Wall Street Journal, “We can’t buy a company and tell it to do as we see fit if we don’t have a true understanding of the marketplace.”

For just about any business challenge, there really is no such thing as absolute best practices. Best practices are very dependent on the specific challenge, context, and capabilities of the company.

Before blindly copying a competitor’s best practice, or assuming a historic best practice will continue to provide positive results, ask three questions:

• Are market circumstances similar? 
• Are corporate contexts similar? 
• Is the practice “modular,” with few interactions with other corporate systems?

If the answers to these questions are yes, then mimicking best practice can succeed. If the answer to any of these questions are no, think twice. Following so-called best practice might lead to disappointing results.

 
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Posted by on October 15, 2008 in Business, Transformation

 

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What’s Unique about MindSpring’s Conferences?

Having been asked this question many times over, I though I should just post the answer here for all to read.

1. MindSpring only runs 2 conferences a year. The 1st in the early part of the year, typically in Q1 and the 2nd in the later part of the year typically Q3.

2. A MindSpring conference is very much issue based, as opposed to theme based.

 

  • A theme based conference will boast of many speakers each spending 45 to 60 minutes on a particular topic within a General Theme.  Delegates in a theme based conference get general exposure to a range of topics.  
  • Whereas, an issue based conference focuses on a specific issue and work on the issue over a 2 day period. We look at the issue then develop the required frameworks to contextualize and understand the root causes of the issue and how to apply solutions to resolve the issues.  Delegates in an issue based conference leave with a degree of mastery of the issue and are quickly able to apply what has been learned.

 

3. MindSpring  determines its issue to focus on based on the current issues its clients are facing.  This upcoming conference: Cutting through Chaos – Building Coherence into Transformation will address 2 key issue with change: a: the high failure rate of change programs and b: change burnout.

Previously we ran:

 

  • in Q1 08, Coping Skills – Developing Capacity for Organizations to Cope with Change and
  • in Q2 07, Managing for Performance – a rethink of Performance Management. 

 

4. A MindSpring conference has 3 parts to it:

 

  • framing the issues that each delegate’s organization is dealing with, 
  • developing the body of knowledge to understand the root causes of the issues and the possible solutions and 
  • a module we call “Learning in Action” where delegates consult each other to develop real solutions to their issues.

 

5. Delegates leave the conference with a number of valuable gems such as:

 

  • greater clarity on the issues they are facing
  • clear understanding of the root casues of the issues
  • solutions that can be applied to the root causes of the issues
  • from Learning in Action, the confidence to use the learnings from the program in their respective organizations.
Another frequent question we get is if we can run the conference in-house.  Our typical answer is no for the following reasons:
  • Conferences, by virtue of being attended by a variety of organizations help broaden the delegates perspective of the issues
  • It is a tremendous confidence booster to delegates when they are able to help other organizations solve their issues 
  • Delegates soon realize that most people related  issues are common irrespective of business or function
  • And always we see, new relationships develop.
In contrast, our “in-house” programs are run very differently. They are very client centric aimed at solving a real business problems in a fairly robust if not ruthless manner with the goal of creating sufficient tension and discomfort with the status quo, such that it compels people to action. 
We are grateful for the most generous reviews that our conferences have received and we work hard to improve all the time.
Hope to see you soon at our Conference.
Click here to go to MindSpring Conferences
Or here to get to MindSpring’s website

 

 
 

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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

 

Strategy – Pak Lah’s fatal choice

I have always contended that the worse strategy to take is the “middle line” which puts you neither here nor there.  In strategy – be it corporate or political, the goal is alwys to find leverage = the least amount of effort for the most amount of results.

A middle line choice is always the worse – neither here, not there.

To test if my theory is correct, let us watch the political games that are in full swing in Malaysia right now.  The Prime Minister – Abdullah Badawi or Pak Lah just lead his party to its biggest white wash in Malayisa’s 51 year history. He is still PM but a PM on very shaky ground.

He had  the opportunity to make some very difficult choices (read PakLah Seize theDay), instead he went for the middle line – which has hugely compromised his position (read The Bells are tolling for Pak Lah).  safe to say if he survives through the UMNO General Assembly then my theory about the middle line is wrong, but if he doesn’t, then there is merit to my theory.

Now only time will tell, so keep watcing to watch how the story wil unfold.

 
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Posted by on March 19, 2008 in General, Leadership, Transformation