Friday, December 7, 2007


This was actually my father’s infuriated ‘coupe de grace’ statement at my teenage nephew! According to him, my nephew’s vision could be compared with that of a bottomless pit... totally undefined! Accusing my nephew of not having even one clear defined objective in his life, my father shouted at him that – despite his having joined the undergraduate business management programme at a leading business school in India (much at the behest of ‘the family’) – the only profession that would welcome his zero vision attitude would be the honourable one that’s been mentioned above! Being a mute amused spectator to all this, and seeing the nonchalant grunt of a response of my nephew, I decided to find out whether vision was really as important to companies as all those management gurus – and my father – had made it out to be?

It was perhaps the illustrious Jim Collins who – through an almost 70 year long study (ending 1995) – in his exceptional book, Built To Last, showed that ‘visionary companies’ gave stock returns that were almost 700% more than ‘comparison (not so visionary) companies’. More recently, Stanford, in its electrifying May 2005 working paper, (Vision, Key to Creating Shareholder Value) quoted John Browne, CEO of global energy giant BP, who says, “You have to remember what your vision is, and you have to be disciplined about sticking to it in order to create shareholder value!” No wonder, since Browne took over as CEO in 1995, BP’s annual revenues have increased from $26.95 billion to $274.32 billlion – a stupendous rise of 917.88%! In a 2003 HBS report (Guiding Growth: How Vision Keeps Companies on Course), famed author Mark Lipton, who wished to prove that having a vision is of no use, amusingly had to finally confess to the contrary that “vision, in fact, makes a profoundly positive difference” to a firm’s performance. Lipton goes on to show how even “the best talent is attracted to firms with a compelling vision.”

The top-line global consulting firm, Grant Thornton’s Catalyst (their business journal) mentions that “companies maximising their shareholder value have clearly defined strategic plans (vision) that are forward looking and focused on long term success.” According to the results of a massive research by the remarkable Ken Blanchard Group of Companies (covering 2,004 worldwide respondents between 2003-2006), “failing to communicate the vision in a way that is meaningful,” is the biggest mistake that leaders make when working with others. But then came the shocker! The most respected management author, Jim Heskett, in the HBS paper titled ‘How much of leadership...’, quotes, “Companies growing (shareholder) value the most are the ones with leaders that have a clear vision, continually communicate that vision, and then get out of the way!”

And in this discreet line lies the most dramatic and compelling vision theory of modern times! The concept of ‘Zero Vision’ corporations, the other name for companies like GE, Toyota, Wal-Mart etc! How’s that you might wonder! This ‘zero vision’ concept was in reality initiated by CEOs of Japanese corporations in the late 1950s and 60s, who – in their patriotic endeavour to become world leaders – drilled into their business managers that it was purely their vision, and not their CEO’s vision, that was going to determine their firms’ success... or failure. However paradoxical it might sound, the fact is that this philosophy immediately forced the business managers working below the CEO to suddenly assume quasi-CEO responsibilities. And history shows that Japanese firms succeeded like nobody’s business, and purely because of the unbelievably high passionate commitment that was instilled in the managers due to zero vision at the top!

Interestingly, if one were to think about identifiable American visionary leaders, one would find quite a handful (from Michael Dell to Steve Jobs, from Jack Welch to Sam Walton); but if you had to name ten visionary Japanese leaders, your name list would most probably stop at one (that is, if you knew Akio Morita of Sony). That’s the extent of their commitment to zero vision! But thankfully, the same ‘visionary’ US leaders of yesteryears – from Bill Gates (Chief Architect, Microsoft) to Sam Plamisano (CEO, IBM); from Paul Otellini to Craig Barett (Intel) – are now changing to appreciate the fact that unless zero vision is passionately embraced at the top, and unless promising managers are shoved forcefully into the battlefield, radical growth beyond preset benchmarks can never be attained. However much my dad might hate it, zero vision is the philosophy of the future, and is here to stay within modern day CEOs...and oh yes, within teenaged nephews too...


Friday, November 9, 2007


Imagine my consternation! The world is developing at a breakneck technology speed every nano-second, and here’s my family cook, completely disinterested in employing any technological innovation in cooking. For him, cooking means an excruciatingly elongated ‘manual’ exercise stretching over 3 hours, implemented by gastronome connoisseurs, and tasted by epicure gourmets...! I was thoroughly exasperated! Here we were printing this special issue of 4Ps B&M covering the top 20 firms leading the I-T brigade of India, and there was my cook, passionately blabbering out the top 20 reasons leading the Why-T brigade of India; in other words, why technology is not imperative to performance! That was the final straw! I got furiously infuriated; and took it upon myself to show to him why global researchers disagree with their cooks! In other words, this is the story of how I shot myself in the foot, painfully!

I started with PwC’s superlative Annual Global CEO Survey 2007, which strangely (as per me) stated that global CEOs place “technological disruptions” at a lowly rank of seven in the list of most important concerns. The report further stated that only 20% of CEOs are ‘extremely concerned’ about “technological disruptions.” Yang Yuanqing, Chairman, Lenovo Group, quotes in the report, “The most critical factors that determine whether you win or lose are the way you do business, the deployment of your resources, the allocation of functions and your operational workflow...(rather than technology).” Stunningly, the situation has been the same even in the past. Even in PwC’s 2004 Global CEO Survey, top honchos firmly believed that “Technology” was only a lowly 7th in their priority of biggest challenges. The number one of course being – People! The outstanding NYSE CEO Report 2008 had similar findings. Like last year, “CEOs view their management team (again ‘people’!) as ‘the’ internal factor having the greatest impact on revenue growth, with brand strength, new product development, technology, and strategic partnerships and alliances in the second tier.” The report further mentions that when asked about the “most important internal factor affecting profitability through 2008, only 5% of the CEOs voted for New Technology!” (There were 8 other factors cited as more critical than New Technology). But the classiest statement was how a spine-tingling 67% of CEOs believe that “the ROI from technology investments have failed to meet expectations till date!”

I found almost all global research pointing towards the same direction. The IBM Global CEO Study 2006 shows how in the electronics industry, the “technology factor” is not the most important external force shaping innovation (‘Market Factors’ is, as per 74% of respondents). In their peerless report titled Economic and Technical Drivers of Technology (March 2006), Dr. P. Yin (HBS) & Dr. Timothy F. Bresnahan (Stanford) dramatically prove that even in technology industries, “distribution played a larger role than did technical progress in determining the market outcomes.” The inimitable Economist Intelligence Unit 2007 report states, “As amazing as engagement technology can be, experts agree that it is generally better to focus on business goals rather than the technology.” The most famous Charles Jennings of Reuters says in the report, “I think there have been lots of mistakes over the last ten years, expensive mistakes, because they’ve been technology-led.”

It wasn’t too long back when the exemplar Jim Collins wrote in his path-breaking treatise, Good To Great, that “none of the Good-To-Great executives put technology as one of their top 5 drivers.” The preeminent Dr. Peter M. DeMarzo, Dr. Ron Kaniel and Dr. Ilan Kremer (Stanford Graduate School of Business; and the Fuqua School of Business, Duke University) in their formidable report (...Technology Bubbles) doubly vindicate that finding with conviction that “the introduction of a new risky technology results in over investment, and in risk-taking behaviour which seems to deviate from a rational outcome.”

Without an iota of doubt, technology can only be a support for better operations, rather than a critical differentiator for dramatic success. As conclusively proven in McKinsey’s classic 2007 report (The Next Frontiers in IT Strategy) – “66% of the IT company CEOs are not sure about their companies being effective/extremely effective at introducing new technology better than their competitors...” Clearly, ‘marketing’ will always work thunderously better than wasting money on ridiculously innovating and implementing new technology that consumers never wanted! My cook somehow had understood this unique learning years back. Good for him! I’ve loaned him away to my neighbour, for free... These days I just order food on the phone! 30 minutes is all it takes :-)


Friday, October 26, 2007


The last time I asked a couple of American co-passengers whether they were ‘loyal’ to their organisation – as my motto was ‘loyalty until death’ – I was almost thrown out of the BA flight on suspicions of being a fanatic extremist! “Why did you even ask them? Even their personal lives have no loyalty,” shouted my most sceptical hypercritic, my wife, “Just look at their pathetically increasing divorce rates!” But what about their GDP being the highest in the world? Then, does it mean that it’s better to have high employee disloyalty for high corporate growth? “Of course dude, that ensures that the best companies get the best employees over a period of time,” accusing me of belonging to a primitive old-school era, my ‘friend’ since b-school days – and a master job-hopper – chided me, “These days, only terrorists – and jokers – are supposed to be loyal. In this world of high-decibel growth, an employee is supposed to change at least five to ten jobs – and wives – in his lifetime before reaching the CEO position in double time! Got it dude?” Frankly, I didn’t! And this is why...

Richard Branson famously said, “Loyal employees create loyal customers, who in turn create happy shareholders!” In one top class research on 750,000 employees, the benchmark annual 2006 Sirota Consulting’s Enthusiastic Employee report (Wharton School Publishing) reveals how, in 2005, firms that had “higher than 70% average employee satisfaction” showed shareholder value increases that were more than the industry average by a colossal 240%. Does it mean then that excellent corporations, to have high employee satisfaction, don’t kick out people? Not at all! The ever referred to research, The New Workforce Reality, a collaborative study by the Simmons School of Management, showed how a stupendous 80 to 90% of employees in organisations globally considered four factors – “rewarding of good performance,” “the organisation treating everyone fairly,” “opportunities for promotion,” and “learning opportunities” – as being the most important factors defining their “Ideal Job”. Astoundingly, ‘job security’ did not even find a mention in the massive study! It’s quite clear that loyal employees are not ‘loyal’ because of financial compensation (“Employee turnover actually increases loyalty... Money isn’t the only thing!” Forbes 2005 report). Out of those 100 making up Fortune’s 2007 list of companies giving ‘Best Compensation’, only 4 find their names in the top fifty of Fortune’s 2007 ‘Best Companies To Work For’ list, (which is headed by Google, that, amusingly, does not even figure anywhere in Fortune’s top 100 compensation list). “Employee loyalty is extremely critical to an organisation’s success,” proved the top-of-the-line Economist Intelligence Unit and Deloitte report (Employee Commitment, The First Link...). And US firms surely have bought the concept! The Walker Loyalty Report, the totem pole of all HR research globally, shows how in US companies, the number of ‘Loyal’ employees has increased to a whopping 40% in 2005 from the 28% it was in 2001. Consider this – an unbelievable figure of 75% employees now comprehensively say they are “satisfied with their job!” If that doesn’t astonish you, digest this – 81% of loyal employees said they’ve stopped looking for newer jobs, and 95% of the same said they would necessarily recommend their company to others as a good place to work! Fortune’s 2007 research also showed that a super 85% of respondents confirmed how “loyalty is alive & kicking!”

And for those lightbrains who thought the case with CEOs was any different, dirt is the best dish I can offer them, apart from this amazing finding by Forbes – a mind numbing 81% CEOs of America’s top 100 corporations have never changed their jobs (or have changed at best only one) throughout their lives! A monumentally similar 75% CEOs of leading non-US corporations have spent more than 35 years or more with the same company they lead. The solid Booz Allen Hamilton 2007 report (The Era of the Inclusive Leader) shows how, globally, the average CEO tenure now is the highest in all the years of their study (and for North America, the CEO tenures are the highest among all continents). Take that for loyalty again! And for my wife, I have this sweet piece of information. The US Census Bureau shows how US divorce rates have dramatically fallen since 1972 to reach the lowest ever now – 3.8 divorces per 1000 (a smashing 30% fall since the ‘70s) – as per the last recorded data. Did all this have any effect on my dawdling b-school ‘friend’? His statement would haunt me for a lifetime, “Dude, does it mean I now only have a 0.0038 chance of having more than one wife in a lifetime?!?? That’s too depressing pal...” Well, umm, er... no comments ‘pal’, not this time :-)