Thursday, December 30, 2010

What I learned from Alfred Kahn

Alfred Kahn, the father of airline deregulation, and much more, recently died. Around 15 years ago, he told me of his hopes for deregulation and how it would lead to lower prices, greater transparency, more competition, better service and wider choice. As I was then and continue to work intensively in this area, I was very interested in his hopes. I would, though, have to say that in most cases the law of unintended consequences has struck and the results have not been as complete as he envisaged. However, there has been progress in many areas, with the shortcomings being caused by the failure of legislators and regulators to imagine the alternatives.

Thursday, December 02, 2010

US education, Healthcare and military spending - a failure of management

The USA spends twice as much on healthcare and education as most other Western countries, yet gets middle of the pack, at best, results. The US spends more on the military than the next 28 countries combined, we are told, yet, it has problems defeating the Taliban. We hear much discussion about government vs. private spending, yet this may not be the issue. We fear the Government run Chinese companies, yet continue to boast that capitalism is the system which will always win. Perhaps the real problem is that management in the US is just not as good as we think it is. Perhaps we have over-complicated all the processes, and over-educated all the managers.. We also allow politics to play a large part in each of them. Decisions are made on grounds which are frequently only rational in the context of politics. Simplification, if possible, would probably improve each of these areas.

Wednesday, November 10, 2010

Persistence - so true

"Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination are omnipotent. The slogan 'press on' has solved and always will solve the problems of the human race." ~ Calvin Coolidge

Tuesday, October 12, 2010

Is this the best way to predict an election result

Politicians have long relied on polls. However, we know that they are flawed. Early results from prediction markets seem to be more accurate. Now we can use "listening tools" to do the same.

Thursday, September 30, 2010

Change is good; change is very hard

We can only get a step change improvement if we change the business model, but this is also a situation in which prior experience may become obsolete. Most people avoid this, so it is the weaker competitors which welcome change more as they have nothing to lose. Market leaders have to force themselves to create change and innovation, whether through technology, business model, distribution channel or regulation.

Saturday, September 18, 2010

The BP well is plugged

While this was at the top of the news for so long, the news cycle has moved on. As a result, the good news, that the well has been permanently plugged, is barely on the news at all. This means that the story, for most people, is incomplete. I suspect that this is the case with so many others, such as the Chilean earthquake, the Australian elections (in America at least), or the Asian tsunami. How many more things do we know incomplete facts about?

Tuesday, September 07, 2010

The need to re-invent a business

The world is changing at an accelerating pace. So companies have to change at an accelerating pace. This is an enormous challenge for executives, who are already dealing with the increasing and 24 hour demands on their time. Some of this is best achieved by better processes, but some has to be done via a culture which rewards change and encourages people to constantly improve, not just incrementally, but also step changes.

This tends to be easier for organizations which do not have a vested interest in the way in which things have always been done, but some have demonstrated the ability to re-invent themselves. Apple may be the shining example of how to do this, having changed technology, business model and organization several times.

Friday, September 03, 2010

The US and UK - two nations separated by an uncommon cultural experience

While the fact that the US and UK are two nations separated by a common language is widely quoted, the fact that there are many cultural experiences which are not shared is rarely mentioned. Going back a few hundred years, both nations share Shakespeare, John Stuart Mill, and Magna Carta. However, it is the more recent experiences which diverge, even now with the Internet as the great leveler. To Americans, the stories of Derek Bentley and Ruth Ellis, which contributed to the end of capital punishment in the UK (itself a great difference) are unknown. In the parallel universe which is Britain Joseph Swan (vs. Thomas Edison) invented the electric lightbulb (patented it a year before Edison and overturned Edison's US patents in US courts). In the UK, John Logie Baird invented TV, not Philo Farnsworth. Marie Stopes led the charge for birth control, not Margaret Sanger, Emily Pankhurst led the fight for women's suffrage. Children grew up watching Bill and Ben the flowerpot men and Blue Peter, and never knew who Beaver was, or anything about the Honeymooners. Britons drove Triumph cars, and Morris Minors, instead of Buicks and Ramblers. Amy Johnson was the woman who pioneered flying, not Amelia Earhart. They drank Corona, Vimto and Tizer instead of RC Cola and Shasta. They poured Heinz Salad Cream on salads, not Kraft salad dressings, drank Heinz soups, ate Mr. Kipling cakes, put Branston pickle on cheese sandwiches, laughed at Morecombe and Wise or Spike Milligan. They listened to the Shipping Forecast on the radio, and watched the Queens speech on TV. Americans watched the Superbowl for their shared experience, gathered together for Thanksgiving dinner, and asked strangers who they thought would win the World Series. Americans grew up with the Sears catalog and shopped at Target, Walgreens, and A&P, while Britons bought their essentials at Marks & Spencers, Boots the Chemists, W. H. Smiths, and the Coop.
Perhaps the Internet will change much of this, but even now, only Britons can experience the BBC's iPlayer, while only Americans can buy a newspaper from a machine.

Sunday, August 29, 2010

Management Skills which are not taught, but should be

Business school does not teach people some of the most fundamental skills which a manager will need. How to give a review, how to fire someone, how to interview a job candidate may be more important at times than the most complex strategic issues. In fact, dealing with people is an area where I suspect that the manager of today is not much better than the manager of 50 years ago even thought there is much more theory on motivation and rewards.

Some of the most simple and basic communication skills are missing in the workplace. I recently saw an example where a manager asked a subordinate to think about a promotion, but gave no timetable so that while the manager assumed a few days, the subordinate assumed a few weeks. When the subordinate did not respond within a few days, the manager assumed he did not want the promotion, which was not correct.

Friday, August 20, 2010

When older people rant against Facebook they make themselves look out of touch

I do encounter people over 40 who proudly declare that they would never go on Facebook. Yesterday I spoke at length with someone who pronounced Facebook as dangerous and responsible for the breakdown of relationships, corruption of innocents and many, many scams. Most young people and knowledgeable older ones, simply laugh at this and see it as proof that the individual is completely out of touch. I have often wondered how anyone can be proud of being behind the times. The reality is that change will happen, that technology is actually neutral, but that people decide how it is used. To argue against change is like King Canute trying to hold back the waves - doomed to failure and a sign of ignorant arrogance.

Friday, August 06, 2010

I hate "utilize"

One of the beauties of English is that it is an easy language in which to communicate. Since it typically has words with the same or similar meaning with Latinate or Anglo-Saxon roots, we have a choice. If we want to obfuscate, we can use the Latin word or if we want to be really clear, we can use the Anglo-Saxon one. We can inflame passions, or we can fire people up. It is often the mark of the somewhat, but not to literate to use long words when short words would be better. Announcements on aircraft are classics of the type. An example which is often found is use of the word "utilize," when "use" is easier, simpler and easier to understand.Perhaps some people would rather trade in good communications for the illusion of erudition.

Thursday, July 15, 2010

How extraordinary talent can hinder happiness

Tightly-folded bud,
I have wished you something
None of the others would:
Not the usual stuff
About being beautiful,
Or running off a spring
Of innocence and love -
They will all wish you that,
And should it prove possible,
Well, you're a lucky girl.

But if it shouldn't, then
May you be ordinary;
Have, like other women,
An average of talents:
Not ugly, not good-looking,
Nothing uncustomary
To pull you off your balance,
That, unworkable itself,
Stops all the rest from working.
In fact, may you be dull -
If that is what a skilled,
Vigilant, flexible,
Unemphasised, enthralled
Catching of happiness is called.

bt Philip Larkin

Monday, June 28, 2010

How few people think ahead

I recently came across a start-up which, although knowing that it would be seeking investors, set itself up as an LLC. It is virtually impossible to have multiple shareholders in an LLC. Any company which seeks them has to be a C-corp, yet converting from an LLC to a C-corp is both time-consuming and expensive. So, thinking ahead would suggest that you set it up as such. It is the same with many things, we do not think about the ultimate consequences of steps we take.

Friday, June 11, 2010

Delegating is very hard

Delegating is one of the keys to being a good manager, yet very few people can to do it effectively. While micro-managing is deadly, so is abandonment. I see so many people who cannot allow subordinates the freedom they need, while remaining well informed and totally supportive. This is one of the many key skills which are not really taught effectively in any environment, but should be. I will cover more of these in future posts.

Sunday, June 06, 2010

Reaching out to people should not be scary

So many people do not feel comfortable reaching out to people. I have increasingly come to believe that if you come across someone whom you can help, can help you, or is simply interesting, you should never hesitate about contacting them. I see job hunters hesitate about calling people, or they call once but do not persevere. Even if you want to talk to someone interesting, it is often astonishing how much they appreciate someone who approaches them.

Regulation vs. none - the role of government

There is much evidence that "top down" regulation does not work as well as regulation which appeals to self-interest. For example setting mileage standards for cars is slower and less effective than raising fuel prices through taxes. Yet, so many in government keep on believing in top down regulation. This is because legislators and regulators do not understand how business works, nor its complexity. As a result, regulated companies spend much time learning how to get around the regulations and this results in the "law of unintended consequences."

Thursday, June 03, 2010

Peer Group counseling or practitioner coaching improves performance

Vistage recently looked at growth rates for member companies and found that over 2005 to 2009, growth averaged +5.8% vs. an average decline for D&B companies of 9.2%. This kind of relative performance is true for any company or individual who asks for and receives advice. Whether the advice is through peer counseling as in Vistage or YPO, or individual coaching from a practitioner, who has "been there, done it," the results are better than if someone tries to go it alone. Yet, many people resist seeking advice. Perhaps they see it as a sign of weakness, or perhaps they do not realize how valuable another perspective can be.

Tuesday, June 01, 2010

Do hyphenated Americans have to reject their heritage to be successful politicians?

It is interesting that the two most successful Indian-American politicians, Bobby Jindal, Governor of Louisiana, and Nikki Haley, probably next governor of South Carolina, felt compelled to change both name (from Piyush to Bobby and Nimrata to Nikki) and religion (from Hindu to Roman Catholic and Sikh to Methodist). Was this a wish to seem more "American," or simple happenstance. I find it sad that they felt comfortable in walking away from their cultural and religious heritages.

Tuesday, April 27, 2010

Colleges fail Americans who drop out in large numbers

While America was in the lead after WW II in setting a college degree as an achievable goal, it has fallen back since. In 2009, only 53% of college students graduated in 6 years or less. Over one third of US students drop out without graduating, and less than one third of the nation ever graduates, less than the UK, the Netherlands, Japan and South Korea. The drop out rate at the University of Cambridge is 0.01%. Americans have a very different attitude to a University education. Dropping out for periods of time is regarded very casually, and failing to complete your education is not the cause of any peer disapproval. The Universities themselves are quick to recommend that the undergraduate take time out for indeterminate periods of time if he or she has any reverses - from poor grades to death in the family. This is not the norm in other countries where perseverance is valued more.

Friday, April 23, 2010

We should value the mistakes people make

We learn more from our mistakes than from our successes. Our mistakes provide an opportunity for introspection and a need to understand what we did, and why. Successes tend, however, to breed self-congratulation and glossing over what happened. Yet, we often forget that mistakes are important to learning. When interviewing a job candidate, we ask about successes, but rarely about failures. In a resume, we list all our achievements, but not our learning opportunities. Probably, this will never change, but perhaps it will be at least a minor topic in interviews in time.

Saturday, April 10, 2010

Why are so many people such poor executives?

Some of the reasons include:
  1. Inadequate objectivity. Emotion and ego rule while data is neither sought nor considered.
  2. Favoritism. Views people they personally like as more capable than those with whom they do not feel comfortable.
  3. Too short term. Does not have a long-term perspective or believes that immediate results are what count even if they have harmful long-term consequences.
  4. Motivates by fear and criticism rather than by encouragement of productive activities.
  5. Inadequate knowledge and no recognition that there is missing knowledge, which results in over-simplification and over-confidence.
  6. No consideration of unintended consequences. Does not think it through.
  7. Too much managing upward. Sometimes results in the appearance of activity with little real personal risk-taking.
  8. Unwillingness to ask for advice and help. No recognition that other people may have important insights or recommendations.
  9. Impatience. Often goes with "ready, fire, aim."
  10. Narrowness of experience base. Breadth of experience may be more important than depth if it is in large quantity.
The above is a brief listing of reasons why executives have probably not improved in the past 50 years. The McKinsey Quarterly recently published an article which suggested that in CPG companies, the splitting up of responsibilities which used always to belong to the Brand Manager has been harmful.

Even though they usually lose, most resist change

History shows that people who resist change usually lose. Progress overall tends to win even if the conservative wins occasionally. This is particularly true with the adoption of new technology. Perhaps people do not have the broad perspective to understand that change is inevitable. The vacuum cleaner makers who turned down James Dyson though that they could stop it as the bagless cleaner would require them to change their business model. I see time and time again that companies and many individuals will not even listen to new technology. The adoption curve tells us that there are very few people on the leading edge as "innovators," and while a larger number, early adopters are very much a minority. I suspect that the laggards and those who fight a strong rearguard action against new technology are actually afraid that it will "expose" them. New technology, which they do not know, means that they become vulnerable to charges of ignorance. This is actually the wrong way to tackle the problem. The only way to avoid being seen as ignorant is to be at least an early adopter. New technology will not go away, and if anyone tries to ignore it, someone else will adopt it and make the resistors look foolish, as others have GM with electric and hybrid cars.

Thursday, April 01, 2010

Corporate Training Programs are usually only Cosmetic

Most companies only pay lip-service to training and development of their employees. In the later part of the 20th Century, much effort went into this, but as the contract between employer and employee fell apart, companies started to rely on Business schools and other vocational schools filling the gap. Of course, they do not, so most employees are on their own as companies find it more convenient to hire from outside than promote from within. Since most appraisal systems are complex but not useful, this becomes part of a Kabuki theater performance, where masks are worn to communicate what you want. Managers frquently do not know how to evaluate subordinates, and data shows, again and again, that they rate highly those whom they like, rather than the really excellent. As a result, people soon work out that being liked is the most important and they soon suppress their real personalities and opinions to get ahead.

Thursday, March 18, 2010

Companies still reject innovation from outside

Much is made of open innovation, but it is found far less often than it is claimed. Most large companies remain closed to new ideas from outside, even those that boast about how much they seek it. I have seen many times in the past few years that companies do not simply reject ideas, but more worrying still, are unwilling to even listen to new ideas. It is ironic that the same person who calls for more externally sourced ideas the same day refuses to listen to one which has been proposed in response to the call.

Friday, March 05, 2010

MENG Trend Survey shows how social media challenges business

The Marketing Executives Networking Group recently carried out a survey among 533 senior Marketing executives. Among other key findings it showed that "social media" frustrates them. While they recognize how important it is, and plan to increase spending on it, they are unsure of how best to use it. This seems to continue the long-time discomfort with tools which are not completely under the control of the marketer. Public Relations is similar in that it is difficult to predict results, can easily backfire, and is tough to measure.

In fact, measurement of social media performance is becoming easier, and new "listening" tools,such as "Wise Window" are providing powerful new ways to track results. Since the tracking is almost instantaneous the company has the ability to fine tune. However, having said that, there is always the possibility of unexpected outcomes and the company has to go with the flow.

Potentially more interesting is the business which is dependent on social media, such as a networking site. For these, social media is not just a tool, but the product. Look for more and more of these to arise.

Saturday, February 27, 2010

I am concerned for the competitiveness of the USA

The US continues to "offshore" manufacturing jobs. Yet, with the most expensive labor in the world, Germany continues to be the most succesful exporter of manufactured goods in the world per capita. Germany has an educational system geared to effectiveness, superb infrastructure, a strong support system for healthcare and the unemployed so that they are not a burden on industry. In the meanwhile, the US educational system is a two tier one, as is the healthcare system. Infrastructure, from roads to rail, bridges to electricity distribution is deteriorating. Most US exports are of commodities or financial services, whereas Germany exports primarily added-value manufactured products. We must learn to do the same.

Thursday, February 18, 2010

Sucessful entrepreurs are ignorant..

Of the really low chances of success they face, and are supremely self-confident. In order to initiate a business, being too aware of the chances of failure is a handicap. Most entrepreneurs underestimate the challenges they will face, but because they have total self-confidence, start the business anyway. Yet the ranks of successful entrepreneurs consist of people like this. Too much experience and knowledge will make a potential business founder hesitate too much. The smart entrepreneur will, however, ensure that more experienced and cautious people are advisers so that some issues may be foreseen better.

Wednesday, February 10, 2010

The US has less intergenerational mobility than most Western countries

What a waste of human resources! While the correlation between individual and parental earnings is 0.15 in Denmark, 0.19 in Canada, 0.32 in Spain, it is 0.47 in the USA. This means that your position in life is determined by your parent's position more in the USA than othet Western countries. The children of poor people are destined to be poor. There is huge opportunity to increase the well-being of the US by providing more opportunity to its young citizens.

Friday, January 29, 2010

Back to my Blog - vision

I have been quiet for a month. If anyone has been wondering why, I have been going through a series of eye surgeries, with one more (and I hope final) one on Monday. It has forced me to think about Vision - not the optical kind, but the imagination kind. Listening to President Obama's speech and reviewing some of the equivalent speeches from other countries, it strikes me that few really signal a long term view of the world. When the architect Gaudi started building the church of the Sagrada Familia in 1883 he knew he would never live to see it completed. He also designed it to have the design completed by others, even though he had the guiding vision. Few people have that kind of far-sightedness, and it seems, even fewer politicians and business people. I see that the founders often do, seeing far beyond their lifetimes, but too many others are simply caretakers, hoping only to see out their time.