A founder’s problem to being CEO and succession planning

CEOEvery would-be entrepreneur wants to be a Bill Gates or Steve Jobs each of whom founded a large company and led it for many years. However, successful CEO-founders are a very rare breed in-deed.

When you look at start-up to IPO it is interesting to see that most founders give up management control long before companies go public.

Choosing money: A founder who gives up more equity to attract investors builds a more valuable company than one who parts with less—and ends up with a more valuable piece, too!

Harvard did a recent study that showed that by the time ventures were three years old, 50% of founders were no longer the CEO; in year four, only 40% were still in the corner office; and fewer than 25% led their companies’ initial public offerings. Other researchers have later found similar trends in various industries and in other time periods. We remember the handful of founder-CEOs in corporate America, but they’re the exceptions to the rule.

Further in the study it also showed that founders do not let go easily. Four out of five entrepreneurs,  are forced to step down from the CEO’s post. Most are shocked when investors insist that they relinquish control, and they’re pushed out of office in ways they don’t like and well before they want to abdicate. The change in leadership can be particularly damaging when employees loyal to the founder oppose it. In fact, how founders tackle their first leadership transition often makes or breaks young enterprises.

Leadership transitions in a business of any size can be influenced by and affect stakeholders. How each stakeholder perceives the process-and their role within it-will have an impact on outcomes. Perhaps the two stakeholders who often play the most central roles in this process are the incumbent, or controlling, CEO and his or her successor.

The transition from one CEO to another is a critical moment in a company’s history. A smooth transition is essential to maintain the confidence of investors, business partners, customer and employees, and provides the incoming CEO with a solid platform from which to move the company forward. A properly designed and executed succession plan is at the center of any successful transition.

CEO vacancies can be planned or unplanned; in either scenario, by the time a succession plan is needed it is far too late to start building one. Because of this, it is the responsibility of the board to make succession planning a priority, even in the face of more immediate and tangible issues. In addition to being necessary for risk mitigation, succession planning brings with it several beneficial by products:

Succession planning is usually directed by the governance or compensation committees, or occasionally a special ad hoc committee. The current CEO’s involvement varies (depending on whether the succession is planned or unexpected) with primary responsibility being the development of internal candidates. The Lead Director often acts as the single point of contact between the board and the sitting CEO on succession matters.

Some tips for the pre-planning are listed below:

i.          Create a written succession plan.

ii.          Conduct regular, in-depth reviews.

iii.          Compare the resulting list of capabilities against the firm’s senior talent pipeline.

iv.          Narrow the field to two or three finalists.

v.          Implementing The Plan

vi.          Assess the finalist candidates.

vii.          Finally, the board deliberates and makes its final decision.

Some tips across the successful transition:

1.      Begin intensive knowledge sharing.

2.      Communicate with stakeholders.

3.      Develop a written transition plan.

4.      Share the transition plan.

5.      Strengthen relationships with the board.

Overjoyed businessman with big bundle of dollarsManaging the CEO succession process is a board’s ultimate responsibility. A regularly reviewed and closely followed succession plan is essential to successfully exercise that responsibility. The costs of short-changing this process are easy to see when companies are caught off-guard by events; the payoff is reflected in the company’s momentum as it moves from one leader to the next. In addition, ongoing succession planning helps the board to be better informed and aligns the development of the senior management team with the strategic needs of the company. Beyond its usefulness in risk mitigation, CEO succession planning contributes to the successful governance and management of the firm long before a successor is needed.

Finally, choosing between money and power allows entrepreneurs to come to grips with what success means to them. Founders who want to manage empires will not believe they are successes if they lose control, even if they end up rich. Conversely, founders who understand that their goal is to amass wealth will not view themselves as failures when they step down from the top job. Once they realise why they are turning entrepreneur, founders must, as the old Chinese proverb says, ‘decide on three things at the start: the rules of the game, the stakes, and the quitting time.’

Do we live in a current economy where we have no customer life time value?

customer-lifetime-value (1)With the ever-changing and fast-speed of the internet and technology, every company and product is interested in selling products and services, but are we missing something?

Research shows that in industry, students have been barraged by an ongoing stream of news and facts, stretched over years, if not decades across what motivates customers to buy. Its ‘customerising’, gearing a company up to focus exclusively on your customers that matters, you need to build a customer-driven company, the results speak for themselves a company that focuses on its customer’s needs will embrace customer loyalty, increased performance and a healthy bottom line.

In marketing, customer lifetime value (CLV) (or often CLTV), lifetime customer value (LCV), or user lifetime value (LTV) is a prediction of the net profit attributed to the entire future relationship with a customer. The prediction model can have varying levels of sophistication and accuracy, ranging from a crude heuristic to the use of complex predictive analytics techniques.

CLV has a central strategic importance for a company, and more and more managers are discovering that their most important asset is not the company’s inventory but its customers… that matters!

The Pareto Principle states that, for many events, roughly 80% of the effects come from 20% of the causes. When applied to e-commerce, this means that 80% of your revenue can be attributed to 20% of your customers. While the exact percentages may not be 80/20, it is still the case that some customers are worth a lot more than others, and identifying your “All-Star” customers can be extremely valuable to your business.

Taking CLV into account can shift how you think about customer acquisition. Rather than thinking about how you can acquire a lot of customers and how cheaply you can do so, CLV helps you think about how to optimize your acquisition spending for maximum value and not minimum cost.

Some seasoned entrepreneurs may say “break even” or some other number is the most important metric, but I believe “lifetime value” is perhaps the most significant measure to benchmark. I also know it is one of the most overlooked and least understood metrics in business, even though it is one of the easiest to figure out.

Customer journeyWhy is this particular number so important? Mainly because it will give you an idea of how much repeat business you can expect from a particular customer, which in turn will help you decide how much you’re willing to spend to “buy” that customer for your business.

Once you know how often a customer buys and how much he or she spends, you will better understand how to divide your resources in terms of customer retention programs and other services you’ll need to keep your customers, and importantly – keep them happy!

Once you have some idea of the lifetime value of your customer, you have two options in deciding how much to spend to acquire him or her:

1. Allowable acquisition cost: This is the amount you’re willing to spend per customer per campaign — as long as the cost is less than the profit you make on your first sale. This is a shorter-term strategy that makes the most sense when cash flow is a concern.

2. Investment acquisition cost: This is the cost you’re willing to spend per customer knowing that you’ll take a loss on an first or even later purchase. But you have the cash flow and other resources to absorb your initial marketing investment with this longer-term strategy.

The point is that you’ll never know how to develop an optimal marketing budget unless you know what the return on your investment needs to be. This knowledge is vital because it will help you make marketing decisions based on the reality of your own numbers and not the promises of some new media program.

Knowing lifetime value also lets you see how, or if, you can discount. It will help you avoid the potentially disastrous effects of discounting when your business needs cash flow to survive. In addition, you will find innovative ways to build value upfront and create offers that drive enough volume to support and eventually increase your overall lifetime value number.

So take some time to work the numbers in the very simple lifetime value equation, especially if you’re still in the planning stages for your business. Remember to build in some variation and see if your current plans support the numbers you come up with. If so, that’s great. If not, that’s also great because you’ve determined on paper what you need to change to make your numbers work.

Investing to earn the loyalty of your customers often requires trade-offs—you must decide which of the many investments you could potentially make will result in the greatest return. A clear understanding of your company’s loyalty economics will help you make those decisions. It will give you a quantitative basis for investments in long-term customer assets and provide a defense against the short-term, sub-optimal, “quarterly earnings” mind-set that often tempts leaders to generate “bad profits.”

It is possible to calculate loyalty economics with great precision, if you have the resources and the tools to do so. If not, you can also make rough estimates that can help guide decision-making. This page describes a relatively simple way to get reasonable, rough estimates of the potential value that can be created by improving your company’s Net Promoter score and earning the loyalty of more of your customers

Share of wallet and number of products purchased: calculate how the annual purchases of your promoters, passives and detractors vary. This will help you estimate revenue differences. If you have actual revenue per customer, you’ll be able to estimate more precisely, of course.

In the end, it’s the lifetime value numbers that will determine the ultimate success of your company.

Human extinction – what are the effects of living to 200 – is it possible?

Tech-Head-with-Tech-glasses_500A Japanese woman, recognised as the oldest person in the world, died early in the morning of Wednesday April 1, 2015, at the age of 117.

Experts put Japanese longevity down to the nation’s comprehensive healthcare system, the support of the community, encouragement to stay physically active until they are quite elderly, a sense of being part of a family and a healthy diet that has traditionally been heavy in fish, rice, vegetables and

Additional research has suggested that people who were in middle-age during the years of food shortages during the Second World War have subsequently enjoyed better long-term health than people who never had to go without.

But Yasuyuki Gondo, an associate professor at Osaka University who specialises in geriatric psychology, says there is much more to longevity than merely a good diet and advanced medical care

Aubrey David Nicholas Jasper de Grey is an English author and theoretician in the field of gerontology and the Chief Science Officer of the SENS Research Foundation. He is editor-in-chief of the academic journal Rejuvenation Research, author of The Mitochondrial Free Radical Theory of Aging (1999) and co-author of Ending Aging (2007). He is known for his view that medical technology may enable human beings alive today to live to lifespans far more than any existing authenticated cases.

De Grey’s research focuses on whether regenerative medicine can thwart the aging process. He works on the development of what he calls “Strategies for Engineered Negligible Senescence” (SENS), a collection of proposed techniques to rejuvenate the human body and stop aging. To this end, he has identified seven types of molecular and cellular damage caused by essential metabolic processes. SENS is a proposed panel of therapies designed to repair this damage.

So what would be the ratifications is a human could live to age 200?

life expectancy graphSo far as scientists know, the last hundred years have been the most radical period of life extension in all of human history. At the turn of the twentieth century, life expectancy for Americans was just over 49 years; by 2010, that number had risen to 78.5 years, mostly because improved sanitation and basic medicine. But life extension doesn’t always increase our well-being, especially when all that’s being extended is decrepitude. There’s a reason that Ponce de Leon went searching for the fountain of youth. If it were the fountain of prolonged dementia and arthritis he may not have bothered.​

Humans as early as next year, following a key discovery that saw the ageing process reversed in mice. The study, involving Harvard University and the University of NSW, discovered a way of restoring the efficiency of cells, completely reversing the ageing process in muscles.

Two-year-old mice were given a compound over a week, moving back the key indicators of ageing to that of a six-month-old mouse. Researchers said this was the equivalent of making a 60-year-old person feel like a 20-year-old.

It’s hoped the research, published in Cell, will be expanded to humans as early as next year, with scientists set to look at how the theory of age reversal can be used to treat diseases such as cancer, dementia and diabetes.

The research focused on an area of cells, called mitochondria, which produce energy. Over time, the communication between this area and the cell nucleus degrades, leading to the ageing process.

Researchers injected a chemical called nicotinamide adenine dinucleotide, or NAD, which reduces in the body as we age. The addition of this compound led to the radical reversal in the ageing of the mice.

Over the past twenty years, biologists have begun to set their sights on the aging process itself, in part by paying close attention to species like the Lobster, which, despite living as long as fifty years, doesn’t seem to age much at all. Though some of this research has shown promise, it’s not as though we’re on the brink of developing a magical youth potion. Because aging is so biologically complex, encompassing hundreds of different processes, it’s unlikely that any one technique will add decades of youth to our lives. Rather, the best we can hope for is a slow, incremental lengthening of our “youth-span,” the alert and active period of our lives.

Some ethicists have pointed out that death is one of the major forces for equality in the world, and that welfare disparities will be worsened if some people can afford to postpone old age, or avoid it altogether, while others are unable to.

There is research available and concerns when scientists develop any kind of medicine or any kind of technology—the concern that these things are going to widen welfare gaps. The story of industrialisation is that the people who could afford the cars and machines and factories in Western countries were able to produce a lot more and generate a lot more wealth than people in poorer agrarian economies. That’s a serious issue. It’s probably true that if people in the first world were, through some sort of medical intervention, able to live to be 200 years old and people in Bangladesh were still dying at a relatively young age, that would tend to widen the distance in personal wealth.

So how will employers, government and financial service organisations deal with an aging population?

Older people also report, to pollsters and psychologists, a greater sense of well-being than the young and middle-aged do. By the latter phases of life, material and romantic desires have been attained or given up on; passions have cooled; and for most, a rich store of memories has been compiled. Among the core contentions of the well-being research of the Princeton University psychologist Daniel Kahneman is that “in the end, memories are all you keep”—what’s in the mind matters more than what you own. Regardless of net worth, the old are well off in this sense.

Should large numbers of people enjoy longer lives in decent health, the overall well-being of the human family may rise substantially. In As You Like It, Jacques declares, “Man in his time plays many parts, his acts being seven ages.” The first five embody promise and power—infant, schoolboy, lover, soldier, and success. The late phases are entirely negative—pantaloon, a period as the butt of jokes for looking old and becoming impotent; then second childishness, a descent into senile dependency. As life expectancy and health span increase, the seven ages may demand revision, with the late phases of life seen as a positive experience of culmination and contentment.

Further along may be a rethinking of life as better structured around friendship than around family, the basic unit of human society since the mists of prehistory. In the brief life of previous centuries, all a man or woman could hope to do was to bear and raise children; enervation followed. Today, life is longer, but an education-based economy requires greater investments in children—contemporary parents are still assisting offspring well into a child’s 20s. As before, when the child-rearing finally is done, decline commences.

But if health span extends, the nuclear family might be seen as less central. For most people, bearing and raising children would no longer be the all-consuming life event. After child-rearing, a phase of decades of friendships could await—potentially more fulfilling than the emotionally charged but fast-burning bonds of youth. A change such as this might have greater ramifications for society than changes in work schedules or health-care economics.

Regardless of where increasing life expectancy leads, the direction will be into the unknown—for society and for the natural world. Felipe Sierra, the researcher at the National Institute on Aging, puts it this way: “The human ethical belief that death should be postponed as long as possible does not exist in nature—from which we are now, in any case, diverging.

Left brain or right brain – can you still innovate?

Innovation and creative thinking go hand in hand. But today’s corporate leaders are not always encouraged to use their imaginations, especially when it comes to major business deals and decisions. During uncertain times, innovation can take a backseat to well-tested and proven methods of delivering assurances. But novel ideas—and the creative thinking that goes along with them can be the most effective ways to differentiate your corporation or brand in a competitive economy.

When it comes to idea generation, we typically consider ourselves to be either right-brained people or left-brained people. Left-brained thinkers tend to use logic, facts, and objective means to assess the world, whereas right-brained thinkers are known for using imagination, possibility, emotion, and subjective measures. Left-brainers are methodical and verbal while right-brainers are intuitive and visual.

Certain industries are often thought of as being appropriate for right- or left-brained thinkers. Artists and entrepreneurs are creative types who heavily rely on the imaginative sphere of the right brain. Business executives and managers are frequently logical types who may use the left brain for deductive reasoning and analysis. Of course, all humans use both parts of their brains on a daily basis, but the idea of engaging the right brain more readily is one to seriously contemplate, considering ideas are the global currency of today’s ‘creative economy.’

Your brain is divided into two completely separate hemispheres. Each hemisphere processes information differently. Your left hemisphere processes information in series. It thinks in language. It works linearly and methodically. Your right hemisphere processes information in parallel. It thinks in mental images. It ‘sees’ the big picture.

One side of your brain or the other is dominant. In itself, that should not be surprising, since it’s consistent with another well-known human trait: Some people are left-handed and some people are right-handed. In a similar fashion, some people are left brainers and some people are right brainers.

Left brain vs right brain, what are you?

If you’re the CEO of a major corporation, chances are good you are a left brainer. Before you make a decision, you want to be supported by facts, figures, market data, consumer research. It couldn’t be otherwise in a world where the ultimate measurement is the stock price and the bottom line.

If you have a job in marketing, chances are good you are a right brainer. You often make decisions by gut instinct, with little or no supporting evidence. It couldn’t be otherwise in a creative discipline like marketing.

Another striking difference: Left brainers have a strong preference for verbal thinking, while right brainers favour visual thinking. When a management type makes a speech, he or she usually stands behind a podium and reads a script or the words on a teleprompter (or uses PowerPoint slides with nothing but words). When a marketing type makes a speech, he or she usually stands in front of a screen and makes a presentation using dozens of visuals.

Because they are verbally oriented, left-brain people are usually good talkers. Salespeople, for example, are often exceptionally good talkers but notoriously bad at the paperwork or writing part of their jobs.

Right-brain people are usually good writers. Why? Because arranging words on a page is as much a visual challenge as it is a verbal one. In letters and e-mails, for example, right brainers will often arrange the words so that each line contains a complete thought.

Most managers are verbally oriented left brainers. Why is this so?

Because of the way people move up the ladder in the corporate world. The general principle is: You don’t get promoted, you get elected.

business-model-innovationManagement is like politics. Your fellow workers determine whom they would like to work for. A left brainer is an extrovert, particularly good at schmoozing with people. A right brainer is an introvert, totally outclassed when it comes to office politics. As companies get older and bigger, their upper levels tend to be staffed almost exclusively with left brainers. As a result, the innovators (primarily right brainers) tend to leave or get pushed out.

What saves the situation, as far as the economy is concerned, is entrepreneurs such as Bill Gates, Steve Jobs, Michael Dell, Herb Kelleher and dozens of others. Entrepreneurs are invariably right brainers who often turn out to be exceptionally good marketing thinkers, too.

Take Steve Jobs, who at one time was fired from Apple. Jobs is a classic right brainer with a intense focus on a product’s visual appearance and a disdain for the consumer’s opinion. “Steve Jobs doesn’t do market research,’ said venture capitalist and former Apple employee Guy Kawasaki. ‘Market research for Steve Jobs is the right hemisphere talks to the left hemisphere.’

“People don’t know what they want,” Jobs once said, “until you show it to them.”

Once again, what are you? While it would be nice to think you could operate both sides of your brain with equal facility, the facts suggest otherwise.

Most management publications are also focused on execution. Fortune magazine once reported, “Ninety percent of organizations fail to execute on otherwise well-planned strategies.”

But if they fail to execute the strategies, how does one determine they were “otherwise well-planned”?

How do marketing people deal with CEOs who have the power to make strategic marketing decisions without the experience only a lifetime of marketing can accumulate? It’s not easy.

The next generation of entrepreneurs seems especially ready to recognise the value of whole-mind thinking when it comes to innovation. Young entrepreneurs like Twitter founder Jack Dorsey often have a deeply methodical side (he began as a programmer), but also a complementary creative side that grapples with problems nonlinearly while embracing uncertainty.

So while some well-established business leaders may still believe in a mutually exclusive right-brain/left-brain dichotomy, the more progressive approach is realising that creativity actually exists in many different forms. Considering what it has done for social media and other channels of e-commerce, promoting this type of holistic-minded business philosophy is essential to better innovation in almost every industry.​

Is Micro-Management delusional or can it be effective?

micro managerLast year I wrote a blog on Micro-Management, looking at the bigger picture, whilst as a leader and manager I have never deployed a working philosophy across micro-management, the question has been raised is micro-management delusional or can it be effective?

A famous quote by Lt General Gus Pagonis, once said ‘I never tell a subordinate how to carry out a specific goal. Dictating terms to a subordinate undermines innovation, decreases the subordinate’s willingness to take responsibility for his or her actions, increases the potential for suboptimization of resources, and increases the chances that the command will be dysfunctional if circumstances change dramatically.’

Micro-management can be advantageous in certain short-term situations, such as while training new employees, increasing productivity of underperforming employees, controlling high-risk issues, and when there can be no question of who is in charge. However, the costs associated with long-term micro-management can be exorbitant. Symptoms such as low employee morale, high staff turnover, reduction of productivity and patient dissatisfaction can be associated with micro-management. The negative impacts are so intense that it is labelled among the top three reasons employees resign.

Ultimately, micro-management leads to decreased growth potential in a department. Managers who put too much emphasis on daily operational details can miss the broader picture and fail to plan for departmental expansion. Eventually, many micromanagers find themselves at considerable risk of burnout. Changing behaviour associated with micromanagement can be a lengthy and difficult process. As with most problems, the first step is to realise that there is behaviour that needs to be changed and to understand how it negatively impacts the department.

Conducting a self-assessment of one’s leadership style can be advantageous in this process. The true task is to find a balance between effectively performing daily obligations and strategically planning for the future. This task typically involves proper delegation of duties, and that in itself is a difficult challenge. Proper delegation of tasks may be the primary key to combating micro-managing behaviour, however, some other suggestions include:

  • 1. Develop a vision of what the department will look like in the future.
  • 2. Hire people with the right skills for the job.
  • 3. Develop a policy and procedures manual.
  • 4. Develop solid lines of communication between managers and subordinates.
  • 5. Expect some employee errors.

Mistakes are an important process in the learning experience and should be viewed as a training expense. Employees who are allowed to be self-directed will be motivated to be more productive. Staffing issues such as low morale and high turnover will decrease; patient satisfaction will increase simultaneously

Let’s look at some of the positives across Micro-Management:

Putting Micro-management to Good Use

Each leader develops techniques, procedures, and processes to accomplish their art.  Seen as tools in a toolkit, they use each one when the situation dictates to generate trust, produce a vision, or motivate a subordinate to deliver their goods.  In this vein, micromanagement is nothing more than another tool in your toolkit.  You use it when the situation dictates.

micromanager2015When is micro-managing good?  In situations like these:

High-value, Critical Project.

When there’s a high-value, critical project underway in your area of responsibility you do not have an option of failure.

Fulfilling Expectations of Superiors. Call it self-preservation. Call it pandering. I call it ‘smart’.  Micro-management sometimes needs to be deployed to satiate superiors who themselves wield micro-management as their normal operating mode.

Inept Staff.

Not a happy situation, but you may have staff members that aren’t up to the task.  Yes, you need to fix that either through training or getting new talent.

If you have to micro-management ensure you do it correctly.  Most people react to micro-management negatively, so ensure you do the following:

Let your team know you’re going to deep dive and why.  Subordinates may not enjoy the extra involvement, but most often they’ll accept it if they know why you’re getting into the weeds.

Train your team so micro-management goes away.  If you’re team is new or not seasoned enough, get to work training them to anticipate what questions to answer and what information to push forward.  Micro-management is used most often when there’s a lack of trust in a subordinate’s skill or blind spots in a projects path.  Provide the training/mentoring necessary to in still the needed skill and give your team the recipe for what information is needed to illuminate the key aspects of the project.

Do not micro-manage as Standard Operating Procedure (SOP).  Using this tool is good if done so sparingly.  If you’re using it on every project, then it’s time for some self-analysis.  Constant micro-management comes from a lot of bad stuff on behalf of the leader:  lack of self-confidence, lack of knowledge/skill, perfectionism, ego/arrogance, etc.  If you find yourself in the weeds constantly, step back and ask ‘why’.

Always remember, leadership has sometimes been described as taking people to a place that they would not normally go to on their own. Once a sound strategic planning process has determined what that place should be it is the leader’s prime and fundamental responsibility to assure that the full resources of the organisation are effectively brought to bear to achieve that destination.

An effective planning process can and will systematically examine the company’s situation, its assumptions about the future and its current and required competencies. It will then bring the management team to consensus on a future course and direction for the firm.

The output should be a vision: a realistic, credible, attractive future for the organization. An effective planning process will also be participative in nature. A team of people will provide input from different functional and personality perspectives and their participation will create the buy-in necessary for successful implementation. But at the end of the day it is the organisation’s leader who has to be the chief steward of the vision. It is he or she who has to be obsessed with the desired outcome.

Should customers drive consultants to delivering work for free?

work for freeA recent discussion over coffee with a highly respected finance and investment group prompted this blog, a subject which has been carried on for as many years has now started to emerge again with customers seeking free advice and work from consultants, the question is why?

The $101 billion consulting market is jammed with boutique shops looking to peddle their wisdom. The big question is: What is all that advice worth? Or more important from an entrepreneur’s perspective, what are customers willing to pay?

New entrepreneur consultants tend to undercharge for their services. The mistake is understandable. First, it’s difficult to know the going rate because most consultants vigilantly guard their prices. Second, despite the seemingly small barriers to entry, first-time consultants usually don’t have the strong client relationships that giants like McKinsey & Co., Accenture and Marsh & McLennan have built; so, not surprisingly, small fries try to attract attention by competing on price. Finally (and perhaps ironically), many consultants simply underestimate how much a business will cost to run, says Bill Mooney of William Mooney Associates, a consultancy to consultants.

When consultants commiserate about their projects with their managers, colleagues, project managers or account managers, the most difficult issues are given the same  responses, the six words every consultant hates to hear: “You should have managed their expectations.”

  • Client will not cooperate? “You should have managed their expectations.”
  • Client won’t let you do your thing? “You should have managed their expectations.”
  • Client is not happy? “You should have …” And so on.

What’s one to do? Besides watching scope, budgets, deadlines, juggling conflicting requirements, and now managing expectations? Where does one find these customers? And if you find them, how do you manage them?

Expectations are deeper and broader than “requirements:”

Expectations are your client’s vision of a future state or action, usually unstated but which is critical to your success: A client who “wants the project to be quick and delivered,” or who “wants to be involved in all the details” or “not involved at all,” or who expects that your project will result in “reducing his work force by 80%.”

Expectation management techniques are very valuable in client service work. It’s partly for our client’s benefit – to keep their eyes on the ball, to work towards the same goals, etc. We also do it for our own benefit because our project targets are sometimes less precise than we wish they were, our performance criteria are demanding and many activities, such as presentations or deliverables are frequent opportunities for clients to pass judgment on us.

Expectations are a three-way association:

1. They are a primary measure of your success as a consultant. In your client’s mind, satisfaction is how close you have come to their expectations. Not how close you were to the wording of the contract or the scope of work or even the performance criteria, but to their expectations. It may not even be the real results of the project but the process with which you arrive there.

2. Expectations drive all of your client’s actions and decisions. It’s not their everyday duties or their “assigned role” or your very rational explanations that drive them, but their expectations.

3. The consultants expectation needs to be met based on the delivery of 1 and 2, and a payment whether this being an upfront commitment fee, retained monthly fee or tasking fee needs to be paid and agreed in advance of any work being committed to or delivered, payment is more than a fee, payment is a psychological bond between the consultant and the customer and no respect will ever be sanctioned as a direct result of ‘free work’ or contingent work on success only.

To be sure, consultants’ fees vary depending on location and target industry. But there is a common methodological framework for arriving at an attractive pricing structure–both for the consultant and  customers.

You can find success in consulting by developing certain qualities. They make you more effective. After years of consulting experience, I have distilled these qualities into a top ten list.

1. Professionalism

Consultants should always keep in mind that client relationship should remain at a professional level. It is sometimes easy for consultants to take on an “employee attitude,” which in many environments can backfire on the consultant and actually create a negative situation for the project.

2. Time Management

Consultants should look for ways to adjust their work style to accommodate the schedule, budget and overall requirements of the project. This is particularly true when faced with pressure to maintain high quality within finite time and budget constraints.

3. Judgment

Consultants are required to have good judgment when confronted with a problem. We should not jump to conclusions. Consultants should take time to consider the facts and to get feedback from their peers and management before reaching a decision.

4.Team Player

Consultants must demonstrate that they are team players and are willing to learn from team members, genuinely valuing the input and expertise of others. It is important to establish a collaborative relationship with peers.

5. Good Communication Skills

The consultant should have excellent oral and written communication skills. Since we are often viewed as the subject matter expert (SME), we should be able to communicate our opinions effectively. In addition to English, it is beneficial to know the language widely used by the employees of the company. In some countries, the documentation may be in a local language. Ideally, the consultant can easily read this language without employing any translators.

6. Expert Knowledge

Clients typically approach an external consultant for two reasons: 1) the client expects the consultant to have more expertise than the organization’s internal resources or 2) because clients do not have sufficient time to solve their own problems or implement their own projects. As consultants, our level of knowledge should be broad enough to know when to ask questions and/or where to research to find solutions. At all times, the consultant should remain current by reading journals, magazines, informative websites and through networking with fellow consultants. We should know how to apply theory into practice and also be skillful in using appropriate tools (software, professional journals, etc.) to function efficiently in the job.

7. Good Listening Skills

During the consulting process, consultants will meet different people with unique characteristics. Some will be verbose, others reticent. Having excellent listening skills will encourage all to talk freely. This leads to more information sharing which, in the end, can make the consulting process more streamlined.

8. Roles and Responsibilities

It is important for consultants to understand the responsibilities of their role, as well as the practices and parameters of the job. You may notice that each client has a different take on what the role of a consultant entails. Clarifying your client’s expectations and deliverables beforehand may possibly be the single most important task one undertakes. Remember that in a consulting role the client also has duties and responsibilities: they are bringing you in to recommend what they should implement. If they fail to implement within the agreed terms then you can’t help them further and it’s time to walk away.

Remember that each client has his or her own preconceived view of the consultant’s abilities and capabilities—views that will almost certainly differ from reality by varying degrees. Some clients expect the consultant to be a god and recommend solutions that will fix everything that is wrong with their organization; others expect one to be nothing much more than a glorified mechanic called in to fix the photocopiers. Clarifying what you can and cannot do, and what you are willing to do, are paramount concerns before commencing work.

9. Involve Other Consultants

Saying “I don’t know” is often a very good answer to a question. An even better answer is “I don’t know, but I know people who do know.” Consultants do not know everything, and should not be expected to know everything. Saying, “I do not know” will not damage your prestige. As an example, if your client has a problem related to legal issues, try to consult with a legal consultant to help your client find a solution to the problem.

10. Reputation

Protect your public reputation above everything else—you will not get an easy chance to repair it if it is damaged. If necessary, walk away from situations or contracts that could potentially damage your reputation. Consulting is not simply contracting by another name; it involves duties of care and levels of accountability, responsibility and integrity that may well be greater than those of the client. If that proves to be the case and you find a client’s operations and methods are not ethical, then it is time to walk away. Be selective about the clients for whom you work.

work for free

The figure above, the red line represents your client’s expectations, the black line a measure of the value you’re providing and the green line your client’s perception of that value. Notice the step down in the expectations line? That indicates expectations that have been successfully reduced. Perceived value is commonly below the actual delivered value, as the results are not always visible, not well explained or publicised. Your objective is to keep the gap between their expectation and the perceived value to a minimum.

In summary, consultancy’s who deliver to clients value, expectations and a scope of work should not be afraid of asking for fees that require execution and delivery on one’s time, if a man or woman works a day of time, they should be paid.

Is Telecommuting to be considered or banned?

telecommutingYahoo has banned its staff from “remote” working. After years of many predicting working from home as the future for everybody, why is it not the norm?

When a memo from human resources dropped into the inbox of Yahoo staff banning them from working from home it prompted anger from many of its recipients.

“Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings,” the memo said. “Speed and quality are often sacrificed when we work from home.”

The move to get staff back into the office is thought to have been driven by new chief executive Marissa Mayer, who herself returned to work weeks after giving birth.

Telecommuting may seem like a win-win situation for both employers and employees, especially in situations where an employee’s presence in the office is not required for the employee to effectively perform his or her job.

Employers may seize on the opportunity of allowing telecommuting to cut down on the amount of office space they need or to channel the time employees would otherwise spend commuting into business-productive work.

Employees may be attracted to telecommuting to cut commuting time, be available for child-care responsibilities, or continue working during a period of recuperation from illness or injury.

office_homeLost in employers’ decision-making processes are the inherent risks of encouraging or allowing telecommuting, including

  • the employer’s inability to accurately track employees’ hours of work,
  • the loss of confidentiality regarding business-related matters,
  • the potential for workers’ compensation claims for home injuries,
  • the inability of an employer to monitor employee behavior, particularly alcohol and substance abuse,
  • the difficulty of an employer meeting OSHA standards for in-home work, and
  • setting a precedent which may be difficult to control.

Last year, according to Mobile Work Exchange, 71% of the organisations that participated saw an increase in productivity during the week and 75% of participating individuals said they were able to accomplish more.

Marissa Mayer might take issue with those stats. Business Insider is reporting that the Yahoo chief used information from the company’s VPN records to show that people claiming to telecommute were not really working, and that is why Mayer shut the program down. Now, Best Buy is the latest struggling company to rein in workers. Recently, the electronics giant scaled back its well-known telecommuting program, saying the company needs more collaboration. Some employees can still work from home, but only with an okay from their direct manager.

There are signs that the number of people working from home is on the increase in the UK, according to the CBI. A total of 59% of employers who responded to a survey in 2011 were offering teleworking, up from 13% in 2006.

In the US, 24% of employed people report working from home at least some hours each week, according to the Bureau of Labour Statistics. But only 2.5% of the workforce (3.1 million people, not including the self employed or unpaid volunteers) consider home their primary place of work, says the Telework Research Network.

Clearly telecommuting is not something that can be implemented without oversight and thought. If you are considering allowing your employees to telecommute either full-time or part-time, here are 5 questions to ask yourself.

1. Am I the kind of manager that can judge performance on results only?

2. Can the work be, reasonably, done from home?

3. Are your employees already doing a considerable amount of work from home?

4. Do they have a desire to work from home?

5. Will you be able to meet all legal requirements?

Take a look at the situation in your office and decide if it’s a possibility. You can start slow allowing people to work one day a week from home and see how it works out. If it does not work, you can always cancel the policy. But, you may find out that it increases your productivity and your employee happiness!

It’s risky business to ignore gender inequality in the work place

arm wrestling man and womanWomen make up 50% of the workforce, have a higher education level than men, and are often the primary breadwinners in their families, yet end up underpaid and underrepresented in the workplace.

According to UNICEF, women do 66% of the world’s work, but only earn 10% of the world’s income, and the Organisation for Economic Co-operation and Development (OECD) state; that if developed countries raised women employment rates to those of men they could increase their GDP by 12% by 2030. Other studies, such as a recent report from McKinsey & Co., say that having more women in the workplace can lead to higher productivity and efficiency.

So with all these statistics ‘ do companies need to have a strategic framework for gender diversity, with goals, targets, sponsors, and support networks, with clear leadership from the top?

Should Multinational companies focus on leadership training for women in their international offices and consider mentorship programs that allow women from the different offices to connect and network?

A good strategy is to think about gender initiatives as simply good business practice. If your company wanted to attract consumers from China, you would hire an expert who understands what Chinese consumers want and how they think and act. The same kind of strategy can be adopted for women customers. Since women make most of the financial decisions in households, not having a female perspective to attract women customers would just seem like bad business.

Train sponsors on the complexities of gender and leadership and make best practices more effective!

In a study led by the New York University psychologist Madeline Heilmann, participants evaluated the performance of a male and female employee who did or did not stay late to help colleagues prepare for an important meeting. For staying late and helping, a man was rated 14 percent more favourably than a woman. When both declined, a woman was rated 12 percent lower than a man. Over and over, after giving identical help, a man was significantly more likely to be recommended for promotions, important projects, raises and bonuses. A woman had to help just to get the same rating as a man that did not help.

So what’s the answer, sponsors, mentors?

gender_equalityGood sponsorship requires a set of skills and sensibilities that most companies’ star executives do not necessarily have. When you layer on top some of the complexities of sponsor relationships between senior men and junior women, you easily have a recipe for misunderstanding. The strategies and tactics that helped the men progress in their careers may not be appealing or even feasible for the women.

A classic case is the challenge of developing a credible leadership style in a context where most of the successful role models are male. One of the women in our research describes the problem like this: “My mentor advised me that I should pay more attention to my strategic influencing skills…but often he suggests I do things that totally contradict my personality.” The behavioral styles that are most valued in traditionally masculine cultures and most used as indicators of ‘potential’ are often unappealing or unnatural for high-potential women, whose sense of authenticity can feel violated by the tacit leadership requirements.

A further complexity is the famed “double bind” examined in Alice H. Eagly and Linda L. Carli’s book Through the Labyrinth (Harvard Business Review Press, 2007) and in the 2007 Catalyst research report ‘The Double-Bind Dilemma for Women in Leadership.’ Here’s the problem in short: The assertive, authoritative, dominant behaviors that people associate with leadership are frequently deemed less attractive in women. Male mentors who have never faced this dilemma themselves may be hard-pressed to provide useful advice. As one of our interview participants describes, even well-intended mentors have trouble helping women navigate the fine line between being ‘not aggressive enough’ or ‘lacking in presence’ and being ‘too aggressive’ or ‘too controlling.’

Male sponsors can be taught to recognize such gender-related dilemmas. Women in Sodexo’s reciprocal-mentoring program, for example, have been promoted at higher rates than other high potential women at the company, in part because the senior male mentors serve as career sponsors and (thanks to the upward mentoring) learn to manage their unconscious biases.

More sponsoring may lead to more and faster promotions for women, but it is not a magic bullet: There is still much to do to close the gap between men’s and women’s advancement. Some improvements such as supportive bosses and inclusive cultures are a lot harder to mandate than formal mentoring programs but essential if those programs are to have their intended effects. Clearly, however, the critical first step is to stop over mentoring and start accountable sponsoring for both sexes.​

We love what we do, do we?

baby-technologyHuman identity, the idea that defines each and every one of us, could be facing an unprecedented crisis.

It is a crisis that would threaten long-held notions of who we are, what we do and how we behave.

It goes right to the heart – or the head – of us all. This crisis could reshape how we interact with each other, alter what makes us happy, and change our capacity for reaching our full potential as individuals.

And it’s caused by one simple fact: the human brain, that most sensitive of organs, is under threat from the modern world.

Aphorisms usually have many origins and reincarnations, but the nature of do what you love’ confounds precise attribution. The Internet often attributes it to Confucius, locating it in a misty, orientalised past. Oprah Winfrey and other peddlers of positivity have included the notion in their repertoires for decades. Even the world of finance has gotten in on do what you love’: “If you love what you do, it’s not ‘work,’” as the co-CEO of the private equity firm Carlyle Group put it to CNBC.

The most important recent evangelist of do what you love, however, was the late Apple CEO Steve Jobs. In his graduation speech to the Stanford University Class of 2005, Jobs recounted the creation of Apple and inserted this reflection:

You have got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.”

In these four sentences, the words “you” and “your” appear eight times. This focus on the individual is not surprising coming from Jobs, who cultivated a very specific image of himself as a worker: inspired, casual, passionate all states agreeable with ideal romantic love.

For those forced into unlovable work, it’s a different story. Under the do what you love’ credo, labour that is done out of motives or needs other than love which is, in fact, most labour is erased. As in Jobs’ Stanford speech, unlovable but socially necessary work is banished from our consciousness.

In ignoring most work and reclassifying the rest as love, do what you love’ may be the most elegant anti-worker ideology around. Why should workers assemble and assert their class interests if there’s no such thing as work?

We-love-what-we-doAlready, it’s pretty clear that the screen-based, two-dimensional world that so many teenagers – and a growing number of adults – choose to inhabit is producing changes in behaviour. Our attention spans are shorter, personal communication skills are reduced and there’s a marked reduction in the ability to think abstractly.

This technological-driven generation interpret the world through screen-shaped eyes. It’s almost as if something hasn’t really happened until it’s been posted on Facebook, Bebo or YouTube.

Add that to the huge amount of personal information now stored on the internet – births, marriages, telephone numbers, credit ratings, holiday pictures – and it’s sometimes difficult to know where the boundaries of our individuality actually lie. Only one thing is certain: those boundaries are weakening.

And they could weaken further still if, and when, neurochip technology becomes more widely available. These tiny devices will take advantage of the discovery that nerve cells and silicon chips can happily co-exist, allowing an interface between the electronic world and the human body. A professor recently suggested in an article that someone could be fitted with a cochlear implant (devices that convert sound waves into electronic impulses and enable the deaf to hear) and a skull-mounted micro- chip that converts brain waves into words (a prototype is under research).

Then, if both devices were connected to a wireless network, we really would have arrived at the point which science fiction writers have got excited about for years. Mind reading!

Fascinating thoughts​, but more down to today’s technology, which is already producing a marked shift in the way we think and behave, particularly among the young, which is far from do what we love’ and more about love as we please.

Are leaders born or made?

Are leaders born or made?What do you know about Generation Z? Born in the 1990s, they are beginning to enter the global workforce in greater numbers – and they mean business.

Gen Z arrived into an internet-ruled world, and grew up alongside the first phase of social media. While Generation Y – also known as millennials – were known for their entrepreneurialism, Gen Z are more entrepreneurial and independent than ever.

A large proportion of them want to start their own business, rather than be employees, and most are determined to turn their hobbies into full-time jobs.

In a world where everyone advertises their success on their social networks, they feel pressured to gain professional experience at a young age and they often hop between jobs.

The introduction of smartphones and tablets has made them the first digitally innate generation – and they regularly multitask across five screens. They are high in self-esteem, eager to network, and have an intense interest in new communication technologies.

The question is are you ready for generation Z leadership?

McKinsey & Company, the premier management consultancy firm in the country, were insisting that corporate success today requires a talented mindset. Just as there are naturals in sports, they maintained there are naturals in business.

As the saying goes, some are born great, some achieve greatness, and some have greatness thrust upon them.

Now a new study claims to have proven the theory that great leaders are all born – not made.

Research by a leading military academic claims to have put the debate on whether it is nature or nurture which creates greatness to bed after finding the most effective really are a breed apart, and have brains that are wired differently to most.

The discovery could revolutionise how organisations assess and develop leaders, with brain scans being used to identify those with the ‘leadership gene’ early and train them accordingly.

leadershipIt seems the most successful have more grey matter in places that control decision making and memory, giving them a vital edge when it comes to making the right call.

When Warren Bennis, interviewed great leaders, they all agreed leaders are made, not born, and made more by themselves than by any external means. Bennis concurred: ‘I believe that everyone, of whatever age and circumstance, is capable of self-transformation.’ Not that everyone will become a leader.

In the world we operate within globally we see managers and even CEO’s become bosses, not leaders. They wield power instead of transforming themselves, their workers, and their organisations.​

Management expert Professor Sean Hannah, of Wake Forest University in the United States, said: ‘Once we have confirmed how the brain works in these leaders, we can create an ‘expert’ profileThis profile can help us develop brain training methods to enhance brain functioning in leaders, such as the neurofeedback techniques that have been successfully used with elite athletes, concert musicians, and financial traders. The discovery could revolutionise how organisations assess and develop leaders, with brain scans being used to identify those with the ‘leadership gene.’ The study was published in the American Psychological Association’s Journal of Applied Psychology.

Leaders who had a more complex sense of their leadership skills and greater neurological complexity were found to be more adaptive and effective leaders in these scenarios.

Prof Hannah, a retired Colonel with 26 years of experience in the U.S. Army, said the results are a step toward finding out how effective and adaptable leaders not only think and act, but how their brains are wired to lead.

So are we ready for the new generation Z to breed their new profound strategy’s of how to manage billion dollar corporations from 5 screens or will leaders continue to be born or made?