Friday, October 24, 2008


The smirk on my face all but got wiped out when I saw the University of Colorado 2005 report [‘Worker wellbeing and supervisor gender’] which confirmed beyond doubt that “working in a more female dominated environment” was truly beneficial for employee health! Chauvinist that I was, I couldn’t digest the fact that finally, to get ‘healthier’, I had to work under – of all blistering barnacles – a female boss!!! I mean, there obviously had to be better methods to get healthier than getting fried in the devil’s pan, right?! And there began the quest of my team members to escape perdition.

In fact, if one thought that not having a female boss would lead to productivity losses, the National Business Group on Health [representing 185 companies, primarily Fortune 500 firms covering more than 40 million workers...] shows how, for US firms, “...productivity loss resulting from... smoking related diseases cost a staggering $157 billion every year.” [In fact, the Purdue University’s Health Care Special Report puts this at a killing $234 billion]. This dirge is just the tip. The US Office of Technology & Assessment conclusively proved [in ‘Burden of Tobacco on Your Workplace’] that smokers averaged a whopping 300% more sick leaves than non-smokers. Seattle University showed how “the propensity for smokers to become disabled and retire early is almost 600% greater than for non-smokers!” But what left me stunned was this incredible research of Cappelli, Pauly & Lemaire of Wharton, [‘The Effects of Obesity, Smoking & Drinking...’] who quote that “obese individuals have 30%-50% more chronic medical problems than those who smoke or drink heavily!”

The authoritative US National Bureau of Economic Research and Chicago GSB confirm in their benchmark September 2008 paper that “expenditures on health care in the US are likely to rise from a current level of about 15% to about 29% of GDP by 2040.” That is a mind boggling $3 trillion even at current prices! So are global firms getting worried? Hewitt Associates’ April 2007 survey found out after surveying 8 million workers that now 77% of firms are “profiling chronic health conditions prevalent in their workforce!” This figure was a mere 43% just a year back. Without doubt, employee health & productivity are perfectly correlated! Period! GEMI, a top non-profit research firm with Fortune 500 firms as members, irrefutably proves [in ‘Clear Advantage: Building Shareholder Value’] that excellence in health [and even environment and safety issues] can add dramatically to shareholder value by almost 50 to 90%, apart from reducing operational and capital costs [16% less for high performing companies, as per the noted Towers Perrin ‘2008 Health Care Cost Survey’].

So who should take the blame for all the productivity losses occurring due to bad health habits? The big league Watson Wyatt covered 5 million workers in their stupendous 2005/2006 survey [‘Staying@Work: Employee Health...’] and established that a compelling 74% of organisations believe that “their employees should be held accountable.” Weyco Inc, a top health care firm, now has a policy of throwing out employees even if they smoke at home. BusinessWeek’s February 2007 cover story shows how the ‘totally-smoke-free’ $2.7 billion Scotts Co. throws out its employees for failing nicotine detection tests [for which, Jack Welch exclaimed to Scotts’ CEO Jim Hagedorn, “Man, you have balls of steel!”]. Tell me now boys, after reading all this, doesn’t it occur to you that there are obviously better ways to improve productivity than to have female bosses?! Tony, to have the guts to say yes, all you will need, like the thrice-married Jack mentions above, are two metallic spheres! Got them?


Friday, October 10, 2008


Narcissistic! That’s how it was described. I found myself staring at the report quite disbelievingly. But I should have known, the warning signs had already been there for years. You tell me, would you ever like such a person around you, especially as your superior – a person who dominates meetings, a pathetic listener, not at all showing empathy, with a clear distaste for helping others and one who believes in giving vainglorious visionary speeches? In fact, would you want your CEO to be a narcissist?

Well, I’ve seen such losers all around. This man was born to a teenage unwed girl, who gave him up for adoption! A dropout from the Illinois University, he’s known for his ultimate arrogance, and has not spared even his family members, what to talk about employees. The four times married – thrice divorced – man once boasted to BusinessWeek many years back, “As long as Stanford keeps turning out beautiful 23 year old women, I will keep getting married.” His best friend, not surprisingly, is Steve Jobs, another temperamental leader with many similarities [including being put up for adoption and being a dropout]. Till date, this man doesn’t know who his real father is. Another friend, Andy Grove, warns in the BusinessWeek report, “I would beware of him as a businessman,” while Gates adds, “His hype has expanded to fill his ego.” In 1977, he founded Software Development Labs. From 1986 till late 2008, he has made its shareholder wealth grow by 950% to a super $102 billion!!! His vision is stupendous. His objectives are as arrogantly audacious as his attitude. He’s the 14th richest person in the world. His company is better known as Oracle. He’s Larry Ellison, my vainglorious visionary, whose biography is titled, ‘The Difference Between God & Larry Ellison: God Doesn’t Think He’s Larry Ellison!’

But does one example prove the complete hypothesis? Unbelievably, ivy league research now supports the concept that visionary leaders are narcissistic. In fact, considered amongst the ‘Best of HBR’ is their 2004 report, ‘Narcissistic Leaders – The Incredible Pros...,’ that says, “Many leaders dominating business today have a narcissistic personality. That’s good news for companies that need passion and daring to break new ground.” The report confirms that productive narcissists – like Welch, Soros etc – have “the audacity to push through massive transformations..., and have compelling, even gripping visions” due to their intense desire to compete and – through their awe inspiring speeches – have the capacity to inspire scores of people, despite their being poor listeners, lacking empathy and hating criticism. Professors Chatterjee and Hambrick of Penn University proved in their spectacular May 2006 paper, ‘Narcissistic CEOs...’, that narcissism in CEOs “is significantly positively related to several company outcomes, including strategy dynamism...”

Think about it. From the sniggery “You’re fired!” Donald Trump to the volcano-headed Steve Jobs, from the shoot-from-the-hip Michael Eisner [Disney CEO, added 2747% to shareholders’ wealth from 1984 till 2005, when he quit] to the don’t-know-don’t-care Roberto Guizueta [CEO, Coca Cola, 7100% increase, 1981-1998], the world’s top CEOs have been atrociously egotistical. Which brings me back to the report I started with at the top of this editorial. Lest you be mistaken, the report did not pertain to my ego-state [Oh please, I’m married; not a visionary!]. It was my irritating cook’s. His annual checkup – on which my money got wasted – threw up what I always knew. The ego-maniac is pompous, cooks up visionary unpalatable dishes, hates criticism, is a pathetic listener, and goddammit, behaves like a CEO all the time!


Friday, September 26, 2008


I found myself on the top roulette table at Wynn, the leading casino in Macau [now the world’s largest gambling centre by revenues, larger than Vegas], wondering whether to bet on the next roll of the dice being even, or odd. The last four rolls had been odd, and I had lost all the past bets. Though the laws of averages – and my wife – were screaming out ‘even’, my intuition was screaming harder to be the ‘odd’ one out. Well, my intuition had almost always seen me through such crucial life-threatening situations [my wife, remember?!], and then, don’t even the top CEOs of the world depend mainly on gut feel and intuition?

Fred Smith received a ‘C’ grade [just escaped failing] in his college economics paper where he gave an overnight delivery business idea. “C was a very good grade for me,” he later explained, as his gut told him the idea would work. He started FedEx! Eric Bonabeau in HBR says “the stories are certainly seductive,” with Disney’s Michael Eisner [who, “knowing in his heart,” pumped in millions into the killer show ‘Who Wants To Be A Millionaire’], George Soros [who sensed “in his bones a big shift in currency markets and... made a billion-dollar killing”] and R. Pittman [who “had a vision...while taking a shower,” and created AOL] leading the gut-wrenchers gang! A. Hayashi, Senior Editor, HBR, writes, “Obviously, gut calls are better suited to some functions [strategy, planning, PR, marketing...].” Surely, as Chuck Porter, creator of the historic BMW Mini campaign, comments, “When it comes to creating advertising, we don’t research it!”

But it is not that intuitions are purely figments of irrational imagination. Professor Smith [Surrey] and Erella Shely of the most respected Academy of Management Executive prove that intuitive decisions are viewed by executives as “expertise that has been built up... and influences conscious thought and behaviour.” The Burson Marsteller CEO Survey, 2006, shows how “no effective CEO is driven solely by numbers.” The survey further proves that 71.4% of high-revenue-company CEOs believe that “intuition and gut feeling” are very influential in guiding their decision making [compared to 54.8% who depend on “analyst reports”]. The PwC Global Data Management Survey 2004 amusingly shows that globally, companies in fact feel low level of confidence in their own data, and “an even greater degree of scepticism over outside data.”

In his commencement address to Stanford students, he revealed how his mother [“a young, unwed college student”] rejected him and put him up for adoption, how the folks who were supposed to adopt him backed out at the last moment, how even his ‘final’ parents weren’t graduates, how he himself dropped out after joining college, how he would later sleep on dorm floors returning Coke bottles “for 5 cent deposits” to buy food, how he would “walk 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple.” And how he loved it all, as, much of what he “stumbled into” by following his “curiosity and intuition, turned out to be priceless later on.” He says, “You have to trust in something – your gut, destiny... This approach has never let me down... And most important, have the courage to follow your heart and intuition... Stay hungry, stay foolish!” On Fortune’s March 17, 2008 issue [where his company is ranked The World’s Most Admired in 2008], he says, “We do no market research. We just want to make great products.” He’s Steve Jobs, my hero! I went against the law of averages and bet on ‘odd’. I walked away from that hall resolute in what I had learnt from that one man... I’ll stay hungry, I’ll stay foolish! Yes, even though I lost...


Friday, September 12, 2008


Unlike me, Goizueta wasn’t bald! But like me, it’s reported that even he had only one wife (!!!). Unlike me, that imp of a daredevil has already [in 1997] kicked the bucket (I mean, come on, I’m still alive... Right?!). Like me, the poor devil was, is and will continue to remain infinitely unknown through eternity. But unlike me, this impoverished Cuban immigrant – who escaped to Miami with his wife and $40 (not necessarily in the order of importance) to escape Castro’s political influence – became the best performing CEO globally in the history of mankind during his incredible 17 years at the top. Since the time he took over the CEO’s mantle in 1981, he created more shareholders’ wealth than any CEO in history – a mind numbing 7,100% share price increase – more than Lou Gerstner, Steve Jobs, Bill Gates, and even what the neutronic Jack Welch, could ever achieve in that time period!!! And ironically, this top performer’s biggest motherlode of a contribution to the management fraternity has been formalising the art of ‘losing it all when at the top’... in other words, ensuring that he was thoroughly replaceable and could be kicked out lock, stock and barrel, anytime – what we today know as ‘succession planning’!

The world’s most excellently performing CEOs believe religiously in finding their replacements. The ground-breaking 2006 research (In Search Of Excellence: In CEO Succession) on the world’s top-most corporations quotes the Harvard research that “merely announcing who your next CEO will be, can move [up] the market value of your company by 15% or more!” Global research displays unprecedented backing for CEO succession plans, with share prices of companies with planned successions over-performing those of companies without planned successions. And yet – according to National Association of Corporate Directors, US – only a pathetic 16% of directors “reported that their board is effective at CEO succession planning.” The noted Wharton management professor Dr. Katherine Klein comments, “The ideal scenario is careful succession planning that grooms people internally.” The famed 2007 Hay Group Study confirms that almost 80% of Fortune’s Most Admired Companies preferred an internal candidate as a CEO successor! Booz Allen’s 2008 CEO research confirms that around 80-83% of new CEO recruits globally are insiders! Booz Allen also proves beyond doubt that operationally and statistically, ‘insider CEOs’ outperform ‘outsider CEOs’!

And it’s clearly the current CEO’s job to shortlist future replacements [‘The Job No CEO Should Delegate’, Larry Bossidy, HBR]. From GE, where at any given moment there are 5 people battle-ready to become CEOs [Immelt (current GE CEO), Nardelli (current Chrysler CEO) and McNerney (current Boeing CEO) worked under Welch for years before Immelt was chosen], to Warren Buffet who has already identified his successors [in a secret envelope, with the lines, “Yesterday I died. That is unquestionably bad news for me; but it is not bad news for our business!”], top CEOs fire themselves out!!!

To end where we started, my hero, Goizueta had four people ready to takeover his throne at any given moment, and ten more to fill in their posts! Roberto Crispulo Goizueta died of lung cancer on October 18, 1997. For 17 sparkling years, this Cuban ‘revolutionary’ was the world’s best performing global Chairman & CEO of a Fortune 500 company we now know of as Coca-Cola! And nobody’s ever ‘lost’ it like he did...


Friday, August 29, 2008


Two years back, when I heard this name being whispered in management circles, it sounded more like that of a garment trader’s [think about it, Jagdish Sheth & Sons...] than like that of the leading management thinker of modern times. At that time, Fortune had mentioned this media-avoiding former MIT & Columbia professor’s name in a futuristic article, with reference to his unique Rule of Three [a rule that competitive industries, in general, will finally only be left with three significant players]. An year later, this 67 year old imp of a powerhouse called Sheth combined his years of exhaustive global research on the world’s leading corporations and wrote the rule book on why CEOs of the world’s leading and most successful corporations will destroy themselves and their companies [The Self-Destructive Habits of Good Companies] because of a simple reason, “Complacency!” (The book was picked up by the famed Wharton Publishing).

“I used to think that competition destroys good companies. Strangely, I found that’s not true: companies destroy themselves… Success breeds complacency. The average life span of corporations is declining, even as that of humans is rising.” Out of the seven self-destructive habits of corporations, Sheth lists “The No-One-Can-Beat Me Syndrome: Arrogance & Complacency” as number one! From Prof. Carl Robinson of University of Maryland, [Why Great Companies Fail] to the famed Courtman & Wild of Turnaround Management Association [Avoiding Common Traps That Lead to Distress], leading management scientists now accept that complacency of CEOs is the Number 1 reason why companies get destroyed! In fact, now the most famous Prof. Clayton M. Christensen of HBS notes, “Leading companies decline and sometimes die not because of competitor’s advances, but because of new players with lower-quality solutions!” However out of this world this might, this is exactly what Sheth warns about. The first one to forecast that GE is self destructing itself in turf wars, all Sheth got from the world were chuckles. Today, Immelt has proved to be the worst performing CEO of all times for GE. During Immelt’s 7 year reign, GE stocks have plummeted by 30.2% [Jack Welch’s first 7 years had seen a 140.2% rise: Bloomberg].

CEOs have completely forgotten the concept of visioning. Forget visioning, unbelievably so, CEOs have even stopped “thinking.” Ask a CEO a modern management paradigm, and all you’ll see is a blank face. Ask yourself, when was the last time you sat down to ‘think’. Sheth is the first to statistically prove that where earlier “a [Fortune] company would be in existence for 50 to 60 years, now its life cycle is down to just 10.5 years!” Shocked? Sheth’s corporate clients roster now includes Cox Communications, Delta, Ernst and Young, Ford, Lucent Technologies, Motorola, Nortel, Sprint, 3M, Whirlpool, and even General Electric itself, the same company he doesn’t lose an opportunity to criticise. BusinessWeek now notes, “Dr. Sheth is one of the most globally acclaimed academicians, authors, and Board Advisors,” connected to 186 board members across the world [he’s now even a Director at Wipro]! Cut to June 2008, Sheth wins the Guizeta Global Innovation Award; it is presented to him by John Quelch, Senior Associate Dean at HBS in a small ceremony... It’s seriously a strange existence for this man I know of as Jagdish Sheth. And imagine, you hadn’t even heard of him! That’s complacency! This is a special double issue of 4ps B&M and as we have burnt a lot of midnight oil, I guess it is time for us to take time off and be a little complacent. we will be back after a break issue. Cheers!!!


Friday, August 1, 2008


Ahuja! That was his name! He was my first boss and the teacher of my most important leadership lessons. He taught me exactly what never to do as a boss; because everything he did was, well, horribly wrong! I called him the Love Guru much before Mike Myers even made his first movie, because Ahuja showed me how much a ‘leader’ could be hated! He evoked that emotion – and much more – in almost everybody in office. I personally considered him the worst leader history had ever seen. And I realised all that one had to do to be a fantastic leader was to never do the things he did! Mr. Love Guru’s biggest claim to fame was that he never used to mix ‘work’ with ‘fun’! And he used to preach how the world’s top corporations reached ‘there’ because of this rule only. Ugghh!

If only Ahuja had even smelt of an imp of a company called Google! The 2008 Fortune 100 Best Companies To Work For list ranks Google at the brilliant position of #1 amongst all the companies in the world. In their in-depth analysis, Fortune writes, “Why is Google so great?... [Apart from other reasons] Google’s employees like to have a lot of fun during the work day – to relieve stress, build camaraderie and fuel creative thinking.” In fact, the “opportunities to learn, grow, travel and have wildly zany fun during the workday” are what sets the Google culture thoroughly apart. Google’s official “Top 10 Reasons to Work at Google” document clarifies amusingly, and in reality, “Work and play are not mutually exclusive.” Interestingly, Fortune writes that Quicken Loans, the 2nd Best Company to Work For, is also up there because of “its fun, family friendly workplace.” And that’s the common thread through the list. Digest this – Fortune’s year 2008 Best Paying Companies list gives the same Google the unbelievable last rank; clearly proving that being the best company to work for has nothing to do with pay!

Katherine Karl (Marshall University) and Joy Peluchette (University of Southern Indiana) perhaps wrote the rule book on this issue, How does workplace fun impact employee perceptions.... Their finding was succinctly put; and they wrote, “Our results showed that employees who experienced fun in the workplace had greater satisfaction with their job!” Renowned international behavioural scientist Robert Nelson comments, “There’s a big difference between getting people to come to work and getting them to do their best work. Making work fun brings out the best in people.” The notoriously likable Herb Kelleher, CEO, Southwest Airlines, quotes about the employees he hires, “What we are looking for, first and foremost, is a sense of humour!” The last century’s most admired CEO, Jack Welch, writes in this issue of 4Ps B&M how you, as a CEO, have to be “dead serious” about managing employee emotions and being passionate about it at every moment! Steve Wozniak, the co-founder of Apple (Yes! With Steve Jobs!!) gave the following title to his 2006 autobiography – How I invented the PC, co-founded Apple and had fun doing it. Of course, work is worship. But fun mixed judiciously with work is what the world’s excellent CEOs recommend if you want the very best out of your people.

And that, unfortunately, is what my first Hitlerian boss never understood... In fact, I still get nightmares of Ahuja. He’s my Vietnam post-war trauma experience. My wife now calls my symptoms the Ahuja Syndrome. I call it the Love Guru’s kiss. Yeah, baby, yeah...


Friday, July 18, 2008


This happened to me a few years back. It was my eight-year-old nephew’s annual school sports meet [I call him Kit; he calls me Mama]. And the apt ‘grand’ final afternoon event was a classic seven member 350 metre relay race. There were five teams pitted against each other – three mean looking teams from the sixth grade, one more hooliganish clearly over-aged team from the fifth grade, and the last one, my bespectacled nephew’s motley ‘we-were-better-off-in-the-shade’ three-foot tall team from the fourth grade. I realised right away that their chance of winning was worse than what the term ‘impossible’ could have defined; but still, I was all for cheering them like crazy! Come on, they seemed truly excited, and winning wasn’t everything, was it!? Yeah, right, till the time dear Kit, balancing his spectacles on his nose, ambled over confidently to me and shoved a relay-race baton into my hand, with the quasi-order, “Come fast Mama, the seventh member has to be a guardian, and he has to run first!”

The ten seconds of silence that followed, with me looking perplexed, was a lifetime. Me?!! A relay-race runner?!?! The sun was burning down hotter than in a western movie; I could smell the sweat running down the back of my head into my spine. Worse, the cannibal competitors seemed all set to massacre the ‘fourth’ graders. No way could I be humiliated like this in public. Neither was I fit, nor was I on the right side of 30! And my team’s incompetence was more evident than the burning dust on the track. I shoved the baton rudely back into Kit’s hands, ordered him to find somebody else, and shouted, “Anyway, what difference can I make in a team born to come last?” I felt the words hit him like a ton of bricks. His expression changed from eager enthusiasm to sudden disappointment... For a moment, I regretted my words... But then, seriously, can an individual really make a difference? Especially when the team, for the lack of a better word, sucks?

O. E. Graves was born way back in 1811, on a farm near Vermont, to a family in perennial financial trouble. Afflicted with poor health throughout his life, he moved to New York and worked as a mechanic in a railway workshop, where he understood the concept of railway safety brakes. Graves kept wondering why couldn’t such brakes be used in elevators [which had already been invented]. His mechanic teammates kept dissuading him for his inane idea, trying to convince him that elevator lines were practically unbreakable. Despite all negative opinion, Graves conviction grew in his idea and in the belief that he individually could make the change. After years of struggle, and more of financial pecuniary, he invented the first elevator safety brake. In 1853, Otis Elisha Graves founded the world’s first ‘safety’ elevator company, today the world’s largest elevator company.

This man struggled to handle his doomed-from-the-start shoe business for many years. His invention was neither a product or a service. He invented a ‘process’ called General Electric! Neither is he Jack Welch, nor is he Thomas Edison [the founder, on paper at least]. His name is Charles Coffin, the man who convinced Edison that rather than simply having a ‘GE’, the company should depend less on individuals and more on self-replicating processes. Coffin understood that world-class companies can succeed over a long term only if the concept of innovation is not restricted to singular people and only when top performing people find their replacement, and in hordes. Edison made him the first President of General Electric. Renowned management expert Jim Collins quotes, “While Edison was essentially a genius with a thousand helpers, Coffin created a machine that created a succession of giants.” Today, the long dead and gone Coffin is rated by Fortune as Number 1 in the list of Ten Greatest CEOs of All Times!

This man used to see Star Trek like nobody’s business. He was so enamoured by Captain Kirk’s “Scotty, beam me up!” calls that he decided to find out how to invent such a phone. Despite everybody dissuading him [because of the unbelievably high costs involved], this general manager in a tiny electrical company kept working on the concept. On April 3, 1973, from a Manhattan street corner, using an apparatus that had no wires attached, he rang up Joel Engel, Head, Bell Labs research, to tell him, “Joel, I’ve beaten you in the race to make the first mobile phone.” Martin Cooper, the inventor of the mobile phone, individually re-invented not only Motorola’s history, where he worked, but of global telecom.

It is the night of September 25, 2000. This promising 23 year old Boston basketball player, who is a draft member of the ‘NBA bench’, is stabbed ruthlessly by hooligans. Medical reports show 11 lethal injuries to the back, face and neck, enough to kill any man. Doctors work relentlessly through the night to save him. Just when they’ve given up, a do-or-die lung surgery unbelievably gets him breathing again. The man lives, but just... Devastated physically, the chances of his coming back are, like I mentioned before, worse than impossible. Eight years pass. It’s June 17, 2008. The judgement night of NBA Finals history. Banknorth Garden in Boston is more than jam packed. The totally unfancied Boston Celtics, who have never won the NBA Finals in the last 22 years, are playing against the second highest winners in history, Los Angeles Lakers [featuring legends like Kobe Bryant, coaches like Kareem Abdul-Jabbar]. The game finally ends. Lowly Boston Celtics have beaten LA Lakers by a margin of 131-92, the largest margin ever in a championship game. The captain of Boston Celtics is an unknown Paul Anthony Pierce. This is his first NBA Finals appearance in life. Though he scores only 10 points, he is surprisingly named the Most Valuable Player (MVP) of the NBA Finals, because of the openings he creates... Oh yes, they also comment that he’s the same guy who was stabbed many times eight years back...

I call all these singular people The League of Incognito Mafiosi. We never knew their names, yet they kept working, steadfast in their beliefs, never giving up in the power of their individual self... Kit was still standing there, not letting his three foot persona stoop in front of me, his face grim, yet not stoic. He hadn’t moved an inch. I knew Kit had been practising with his friends for a long time for this race. But I had no idea that the reason he had invited me so fervently to attend the finals was to make me participate as the lead runner! And he had even promised his team members I would be there. The sun seemed to be mercilessly burning my face. The heat was unbearable. The silence, more than that. Kit kept standing there, not moving, and I wasn’t sure but I thought I saw his eyes turning moist, when he looked at me totally teary eyed, and commented in halting words, “Mama, you can make a difference. We don’t have anybody else... and I believe in you.” [The baton felt too heavy when I ran the lap; oh yes, we lost the race; ...and we won too; Kit made sure we didn’t come last; he was our MVP! And this time, I’m practising with them for the next year... An individual does make a heaven of a difference... Kit was that individual... Yes, ‘I’ believe!


Friday, July 4, 2008


Jesus Christ! If I had made this statement in the US, I might have been flogged in public! But think about it, is there any woman in this world who doesn’t lie all the time, who doesn’t cheat people every moment, and who can ever be trusted even for a nano-second? Well, if you’ve reached this part of my editorial, you’ve fallen into the trap I laid for you like sweet unsuspecting daffy duck! The fact is, neither do I believe in my own statement above, nor do I care a hoot about the answer. But I care a billion hoots about ensuring people read my editorials. And if that factor is the critical measure of my performance, I, dear Angelina, have succeeded like nobody’s business. Controversy begets performance! Reputation has no correlation with success.

Shocked? Gulp down the air stuck in your pipe, for indisputable research from across the globe proves this a thousand times over. Check it out! The most path breaking research globally was the one by noted Professors Chung, Eneroth and Schneeweis of the reputed University of Massachusetts. In their paper titled Corporate Reputation and Investment Performance, the stalwarts prove, “There exists little relationship between high corporate reputation rankings and a firm’s equity performance. It is primarily a firm’s equity market performance...that affects published reputation ranking, and ranking has no impact on the firm’s future returns.” To that effect, even Professor Hungtao Tan of Southwestern University of Finance and Economics, in 2007, thumpingly concluded in his report Corporate Reputation & Earnings Quality, “I find no evidence to support that companies with good reputation share superior earnings relative to the corresponding industry levels.”

To the utter consternation of doubting Thomases, global authorities S. Brammer (University of Bath), C. Brooks (Cass Business School) and S. Pavelin (University of Reading), in their classic international December 2005 report, Corporate Reputation and Stock Returns, electrifyingly state, “There is no such thing as bad publicity. We find that those firm’s whose [reputation] scores have fallen substantially still exhibit positive abnormal [stock] returns in both the short and long run!” Famed Doctors Rajiv Sarin and Brit Grosskopf from the Department of Economics, Texas A&M University, in their world class August 2006 thesis, Is Reputation Good or Bad? An Experiment, ruthlessly devastate past notions and establish, “Reputation is not bad, but neither is it as good as previously thought... as long run players are able to do equally well without having reputations.”

And it’s not just about controversies or reputations per se, but even about the pathetically manipulated agendas that ranking agencies globally have. In their universally published covenant (The Reputation Quotient), Dr. Charles J. Fombrun, professor of management at Stern School of Business, and Dr. Christopher B. Foss, Associate Director of the Reputation Institute, state, “Measures of reputation proliferate, encouraging chaos and confusion... Some are arbitrarily performed by private panels... Some are carried out with private information and are unverifiable.” And now, report after report [NYSE CEO Report 2008, SMU Cox CEO Sentiment Survey 2007, PwC Global CEO Survey] proves that CEOs don’t give priority anymore to reputation or to published rankings, but only to performance. Moving ahead, Authorities G. Chen and Dean Tjosvold of Tsinghua University, Beijing, in June 2006, analysed that “participation and people values, coupled with constructive controversy, provide a foundation for effective CEO leadership!”

And why not! The most successful of global CEOs – Steve Jobs, Jack Welch, Steven Ballmer, Larry Ellison, Lee Scott – have been those who have been most controversial. The most successful of global companies – WalMart, Chevron, GE, BoA, Citigroup – have been the most controversial. If you thought the amazingly successful movie, Erin Brockovich, ran full house because Julia Roberts ‘controversially’ revealed more than her usual self, you perhaps forget, 30 sickening million gallons of oil spilt in Brooklyn, New York, that led to a historic never-before seen $58 billion class action suit, was targeted at a company that is now the world’s most profitable company ever, Exxon-Mobil (with 2007 sales of $373 billion and profits of $41 billion)! Quick, answer my questions. Most controversial book? You said Da Vinci Code, did you? Or The Satanic Verses? Both historic best sellers. Most controversial brand? Coke? It’s the most valued brand ever! And of course, most controversial group of people? Ah, women, obviously! Aren’t they the very best!!! :-) And don’t we love them like crazy :-)


Friday, June 20, 2008


CEOs! Thank me like crazy! For after years of insightful research, I’ve finally hit upon the top six mother-guaranteed strategies to score imperially high on your DQ (Donkey Quotient)! Presenting to you, a never before seen DQ checklist. Do you have it in you to win the world DQ crown? Give yourself one mark for each yes!

DQ Poser #1: Successful CEOs never believe in regularly firing people! Yes or no? If your answer is yes, my hero, you’ve gloriously earned your first Donkey Quotient point. A well quoted classic Forbes 2005 study confirms how “employee retrenchment actually increases loyalty!” BCG too confirms in a BusinessWeek article, “Few things demotivate an organisation (and its top performing employees) faster than tolerating and retaining low performers.” Jack Welch became Fortune’s “Manager of the Century” by firing the bottom 10% of his workforce every year! And his DQ is zero!

DQ Poser #2: A successful CEO is known to have jumped more jobs than wives! Yes/No? If you think that a CEO who has been in only one company all his life, must be a joker CEO not worth the toothpaste he uses, brother, you’ve just earned your 2nd DQ point! The Deloitte 2007 CEO Survey shows how a mind-numbing 81% CEOs of the top 100 US firms have never worked anywhere else (or maximum, have changed only one job) all their lives. Forbes quotes how a monumental 75% CEOs of leading non-US firms have spent 35 years or more with the same company they lead.

DQ Poser #3: Experienced people are forever more valuable than youth! Yes/No? Wrong without question my DQ aspirant! While the exemplary Spencer Stuart Route To The Top CEO Survey shows how the average age of CEOs is continuously falling, the most respected Roper Starch Inc.’s survey shows how an unbelievable 67% of American workforce now accepts that “the new century is all about youth.” Economist quotes how Bill Gates has ensured that the most important of Microsoft’s employees [programmers] are now in their 20s and early 30s.

DQ Poser #4: A CEO should never end up destroying or selling his company just to increase shareholder value! Yes/No? If you agree with the statement, you’ve just earned another glorious DQ point. CEOs who destroy their own company’s identity by selling it off or entering into an M&A deal when the offer was ripe and pristine, are now considered the world’s most effective and successful. Lucio A. Noto, CEO, Mobil, sold off his company to Exxon, and instantly added 15% to shareholder’s wealth. Reebok shareholders got a 34% premium when their CEO sold off the company to Adidas. Capellas of Compaq got his shareholders a super 35% (sold to HP). Guy Dolle, CEO Arcelor, is the best by getting an awesome 69% for his shareholders from Mittal Steel. On these terms, Jerry Yang of Yahoo fails miserably for having refused a 62% premium being offered by Microsoft in May 2008. Top CEOs destroy, devastate and demolish their own companies, if that can maximise shareholders’ wealth.

DQ Poser #5: Successful CEOs are never authoritative in their style of leadership! Yes/No? Absolutely wrong! Various separate researches of top institutions like HBS, University of Louisiana, Yale and many more support the authoritarian style of leadership without question. Steve Jobs, head of Fortune’s #1 Admired Global Corporation of 2008, Apple Inc., follows this to the tee. Andrew Keen writes in his best seller (The Cult Of The Amateur), “There’s not an ounce of democracy at Apple... Without Steve Jobs’ authoritarian leadership, Apple would be just another Silicon Valley outfit...”

DQ Poser #6: This is the easiest one... Excellent CEOs are never passionate about what they do! Yes/No? Well, duh... If you said yes to this, a donkey must be more passionate than you are! In a classy 2005 HBS paper, Dr. J. Byrnes (actually from MIT), identified “eight essential characteristics” of transformational leaders. The top one was “capacity for passion”. The existence of just one quality defines the world of a difference between being a titan of a performer, or simply being a historical also ran. And that’s passion!

Clearly, if you’ve scored zero (that is, all ‘No’) on my patented Donkey Quotient questionnaire, you’re in the company of the world’s greatest CEOs. And if you’ve achieved a perfect DQ score of 6, you qualify as the world’s first donkey that can read. Congratulations!!! It’s a privilege...


Friday, June 6, 2008


If you want to learn the tricks of the trade in recession, the first rule of the game is, understand the economic difference between a recession and a depression. They say a recession is when your neighbour loses his job. And a depression is when you lose yours :-) Actually, the same rule applies for companies too! Till the time your competitors are getting rogered, it’s ‘fair play’; the moment the downfall hits you, it’s ‘George Bush must go’! But seriously, the National Bureau of Economic Research defines a recession quite succinctly as the time when business activity (a conglomeration of factors like employment, industrial production, real income and wholesale retail sales) starts to significantly and regularly fall! Generally, if the fall is more than 10%, economists term the extreme recession as depression! At a time when the IMF has forecast that the total hit due to the subprime crisis could well touch the gut wrenching mark of $1 trillion, it’s quite imperative that corporations globally develop strategies not just to survive, but to lead the market and to beat competition!

So what do the world’s most excellent CEOs do to tackle recession? The first question is, can you forecast recession itself? Nobel laureate and top-notch economist Paul Samuelson had claimed, “Economists have correctly predicted nine of the last five recessions.” In other words, it’s perhaps better to learn what to do when recession hits, rather than waiting in fearful anticipation year after year for recession to hit. The hilariously famous presenter Jon Stewart had side-splittingly commented once, “Bush advisers have long been worried that a lagging economy could hamper the Republican Party’s re-election chances. They hope that the Cabinet shake-up will provide a needed jolt. If that doesn’t work, North Korea has to go!” Tackling recession doesn’t really require literally ‘bombastic’ strategies (as the ones Bush uses regularly, whether in Iraq, or now in Iran) but intelligent and simple tactics!

It was just a few months ago that I met the hallowed Ram Charan (Fortune considers him one of their favourite management gurus), over lunch. And it was only two months ago that he wrote the classic ‘Investor’s Special for the Recession Economy’ in Fortune, where he gives four simple and broad principles for CEOs to crack the recession conundrum, which are: (1) Keep Building: “Do not consider product development, innovation, and brand building optional. Sacrificing your future for a slightly more comfortable present is not worth it.” (2) Communicate Intensively: “It’s counterintuitive but true that when the economy slows down, the pace of decision-making has to speed up. The companies that are readiest to act on solid information are primed to shoot ahead of the business cycle.” (3) Evaluate Your Customers: “In good times, companies manage the P&L; in bad times, cash and receivables matter more. Therefore, you need to identify your higher-risk, cash-poor customers. You could decide to simply not supply them anymore.” (4) Just Say No To Across-The-Board Cuts: “By all means cut costs if it makes sense to do so, but make sure there is purpose in how you do it.”

Jay Leno, the king of standup acts, gave a classic perspective of the US economy in one of his shows: “Some good news for the economy. President Bush went on a month-long vacation.” Companies, like I mentioned before, wouldn’t necessarily find the blame game as easy as Jay wishes it to be. Harvard Business School, in its most recent April 2008 posting, gives a tempered, but well researched, response with its paper, ‘4 Steps to Growth During a Recession’. First, “Invest heavily in research and development” – Your competitors may in general cut R&D investments; ergo, your investment increase would yield a “strong product advantage” in the future. Steve Jobs quoted a few days back, “In the last recession, we were going to up our R&D budget so that we would be ahead of our competitors when the downturn was over… And it worked! That’s exactly what we’ll do this time!” Second, “Spend some time learning about the customers of your weakest competitors” – Instead of focusing on bagging your strongest competitors’ largest clients, choose these times to add attractive customers of your weakest competitors, who would not have the wherewithal to withstand your attack. Third, “Identify your most critical suppliers and distributors” – Find out ways you could help these suppliers and distributors. HBS quotes, “Even the smallest gesture can sometimes build an enduring loyalty that will pay off for years to come.”

Prime time TV host Craig Kilborn commented recently, “President Bush’s economic plan will create 2.5 million new jobs. The bad news is, they are all for Iraqi soldiers!” After you’ve recovered from your sarcastic chuckles on this statement, is the fourth, and I think the most important of HBS’ learning philosophies, “Think carefully about your talent needs” – When weaker competitors try to survive, many excellent employees of these companies would find themselves without jobs. Recession is the best time to grab on to these world-class employees and give them jobs and responsibilities that they’ll cherish for a long time with unwavering loyalty!
The most distinguished Professor John Quelch, who is also the Senior Associate Dean at HBS, added his expert views for the marketing heads in his terrific treatise, ‘Marketing Your Way Through Recession’, which came out just around a month back. Some of his key recession mantras for the marketing team are: (a) Research the customer well before deciding on pricing tactics. Price elasticities might not change as dramatically as you might expect. (b) Maintain marketing spending. Recession is surely not the period to cut advertising. Recession creates, as Quelch says, “uncertain customers, who need the reassurance of known brands,” and thus ensure customer loyalty for years. (c) Adjust pricing tactics. In other words, rather than cutting the price of your product (which will immediately send a wrong signal about quality), intelligently play around with newer promotional schemes, give credit to the A-category customers, play around with the quantity of your product in, say, every pack (price it the same, but start giving a non-noticeable less, for example). (d) Ensure employees (and customers) believe in the core values of your oganisation and believe that your organisation will get through tough times! For that, the CEO himself must “spend more time with customers, and employees.”

My favourite David Letterman’s classic and ripping statement stays with me forever, “Al Gore says President Bush’s economic plan has zero chance of working. Now, this raises on important question: Bush has an economic plan?!??!” Seriously, look at yourself and ask, do you as a CEO have a plan in place if recession hits you?

Chris Zook and Darrel Rigby, noted consultants of the globally renowned consulting firm, Bain & Company, a few years back had warned through their path breaking paper (Strategy For The Recession) that CEOs globally today don’t have a ghost of an idea of what their Plan B would be if recession were to hit their economy/company. Think about it again yourself. What is the reason that you don’t currently have a Plan B if the economy crashes? Zook and Rigby recommend that as a CEO, you should most necessarily “build strategic contingency planning into your culture,” even if the economy looks really rosy currently. A fact supported fanatically by McKinsey & Co in their quite readable paper that came out in Spring 2007, Preparing For The Next Downturn.

There was once a millionaire CEO who, while on a lone yachting expedition across the Atlantic, got his yacht smashed up in a thunderstorm, floated for a fortnight living on molasses, till one day, half dead already, he floats ashore on a completely isolated island in the middle of nowhere, when he sees an amazingly seductive super-model of a woman, wearing palm leaves, walk over to him. She smiles at him, tells him how she also is a shipwreck living alone on the island. She then guides him to her awesome tree home, gives him delicious water, vegetarian food and fruits to eat, new clothes made out of super-fashionable leaves, provides him a top quality razor made out of animal bone to shave his overgrown beard, shows him her utopian teakwood bathroom, which even has a shower for him made out of bamboo sticks with coconut water pouring out! The CEO’s over the moon! Freshened up, he comes out of the bathroom to see her lying down on her super sized banyan bed, dressed in a very tasteful sarong, when she whispers, “Guess what more I can provide to you!” He thinks for a moment, and then his eyes light up like crazy, and he screams in pleasure, “Don’t tell me you have email too!!!”

Dear CEOs, the final learning is, in a recession, in your attempts to read too much in market dynamics, don’t miss the obvious!


Friday, May 23, 2008


I mean multi-tasking! Actually, the issue had been hitting me since many days, since I saw my teenage nephew multi-tasking like mad on an everyday basis; as I really hate it when, while talking to me, he takes out just one earpiece [of his iWhatever], keeping the other in at full blast, at the same time mumbling away half words that he’s “givin’ me full attention!” Didn’t I say thoroughly inefficient? I knew that with statistical research, I would be able to convince my nephew not to multi-task ever! Well, the famed Ram Charan (Fortune magazine’s favourite management guru) had told me during a lunch last year that “mastery of the subject” one is practising is its own reward. Obviously, you can’t do that if you multi-task, can you?! I was sure the world’s greatest CEOs focus on “mastery” of the subject than on multi-tasking, and decided to do a quick review of what really works for the world’s most specialised leader, Bill Gates! More so as he’s kind of an icon for my nephew...

It was personally shocking for me when I read the NHS Report of the world famous Institute for Innovation and Improvement, which profiled Gates and reported that “Gates is the original multi-tasking man...” In fact, Gates’ belief in multi-tasking is so supreme that “once, Gates hung a map of Africa in his garage, so he could have something to occupy his mind for the precious seconds spent turning on the engine of his Porsche.” Time magazine reported in an inside story on Bill Gates that when Gates was in the sixth grade, due to his behaviour, “his parents decided he needed counselling!” After one year of counselling sessions and a plethora of tests, the psychological counsellor reached his conclusion. He told Gates’ mother, “Mary, you’re going to lose. You had better just adjust to him!” That he can eat food with both hands (in fact, he’s ambidextrous) was something I learnt much later after getting to know that experts describe him to be a master of “parallel processing” and, uhh, “multi-tasking.”

The noted Dr. Louis Csoka’s pathbreaking research (International Communications Research, Dec 2006) shows how great multi-taskers – people who handle more than one job, one designation, one profile at a time – are not only more educated than non-multi-taskers (78% more), but also are better paid (a whopping 200% more)! The benchmark IMF research paper (Enterprise Restructuring and Work Organisation) proves with conclusive findings that world-class organisations of today are slimmer and have an increased number of multi-skilled workforces where, “workers have to be able to handle a multiplicity of tasks and be very flexible.” Dr. Levenson (University of Southern California), Dr. Gibbs (Chicago Graduate School of Business) and Professor Zoghi (Bureau of Labour Statistics) moved the management world three years back when, in their world beating research (Why Are Jobs Designed The Way They Are?), they provided definitive quantitative evidence from the world’s largest and best performing organisations that its ‘multi-tasking’ instead of ‘specialisation’ that “leads to greater productivity.” Dr. Jaime Ortega in a Centre for Labour Market sponsored research, statistically showed that for increased profits, it’s ‘job rotation’ rather than ‘specialisation’ that should be followed!

My arguments against multi-tasking were growing thinner by the minute. That’s when I called up my professor from b-school to take his help. He asked me just one question: “What’s common between top CEOs like Paul Wilbur, Thomas Wright, Carlos Ghosn, Steve Jobs, Larry Page, Larry G. Stambaugh and a host of others?” I didn’t even wish to answer a losing question. Forget multi-tasking at a job level, these world beaters serve as CEOs in two companies at the same time! While few know that Jobs is the single largest shareholder of Disney (apart from being the CEO of Pixar – now with Disney – and Apple together) or that Google’s Larry Page is a top board member at Apple, fewer perhaps know that Carlos Ghosn is the CEO of both Nissan (Japan) and Renault (France), spending half of the week in one country, and half in the other. I was shattered further when my professor shared that there perhaps was no better a multi-tasker than Ram Charan himself, who runs the boards of three global companies (Tyco, Austin Industries and Biogenex) at the same time! These days, every time my nephew saunters across my home sniggering away at me, my blood boils, but there’s little I can do... And yes, for the sake of mentioning, if the only place you think you can multi-task is talking on the cell phone while driving, forget it! I’ve tried it! Not got arrested; but fines have burnt emotional holes larger than my nephew’s smirks!


Friday, May 9, 2008


I’ll be honest! This editorial is simply going to be a shameless eulogy of two of the corporate world’s greatest management leaders. The first stalwart is perhaps the first one in the world to demand that ‘firing’ be termed as a formal corporate strategy! Fortune magazine nicknamed him “America’s Toughest Boss.” This apart from him additionally winning Fortune’s “Manager of the Century” title for four years in succession (1998 till 2001) and the Financial Times award of being the “World’s Most Respected Business Leader!”

When people asked him his number one management rule, he said that throughout his forty years with his company, he followed the 20-70-10 philosophy! He broke up his employees into the best performing ones (top 20%), the average (middle 70%) and the worst (bottom 10%). He praised the top ones as the company’s stars, asking others to follow them. He mentored the middle 70%, educating them what they needed to improve to become stars. And the bottom 10%? He fired them! Once at MIT, he said firing was “the kindest form of management.” He fanatically promoted that “cruel management is when you’re sweet to the bottom 10% people and let them stay.” He was resolute that firing is “right for everyone; the organisation becomes more competitive as you upgrade the talent.” In his first five years as the CEO, he fired 100,000 people. By the time he left, he had fired more than 500,000 people! When he took over as the CEO, his company was America’s eleventh largest. When he retired, it was the largest! The man is Jack Welch; the company he led is General Electric.

Though Jack did not found GE and never invented its core products himself, he taught the organisation the most important management rule of the past, and even this century: firing! Ironically, the second stalwart whom I’m going to eulogise got fired from the very company he founded, a company whose products (almost all) were personally invented by him! When he got kicked out, he was left with just one share of the company! Ironic, did I say?! In 1996, exactly ten years after he got kicked out, this man came back to his company as the interim CEO (the board got him back as the last resort); a company that was – according to most industry experts – a truly dead company going down south at that time. And what did this man do? Reported to be “tyrannical towards his employees,” this CEO often utilised “public humiliation,” firing poorly performing people at free will! It is reported that he could “enter a meeting room full of employees, call their work ‘sh#t’, and then fire them all on the same spot!” In true reality, top employees of his company were scared spineless of travelling with him in the same elevator, because by the time they got out, they could be fired! He’s currently listed as the co-inventor on 103 of his company’s product patents; and he has fired almost all inventors of non-useful (“sh#t products,” as he calls them) patents! Almost bankrupt when he came back, his company now is worth more than $108 billion; CNN reports that $1,000 invested in his company’s shares on the day he took over is worth about $36,000 today! Today, under his ‘firing’ leadership, Fortune lists his company in this current year of 2008 as “America’s Most Admired Corporation” and the number one computer company! Jack Welch now calls him “The most successful CEO of today!” We know him as Steve Jobs; founder of Apple!

World famous Sirota Consulting empirically found out that today “companies do a poor job of facing up to poor performers; it’s always the most negative finding.” A classic Forbes 2005 report confirms how “employee retrenchment actually increases loyalty!” And how’s that? Noted BCG consultant Grant Freeland confirmed in his BusinessWeek report, “Few things demotivate an organisation (and its top performing employees) faster than tolerating and retaining low performers.” The famed authors Chris Edwards and Tad DeHaven of Cato Institute statistically postulate that “poor performers can have a disproportionately large and negative effect on an organisation.” Even at the CEO level, as Booz Allen Hamilton reports, “Underperformance is the primary reason CEOs get fired.” Their summer 2007 report (Strategy+Business) shows how even shareholder returns improve significantly when poorly performing CEOs are axed. The top ten companies of the world have fired more than 58,000 low performance people in the last one year... There’s no second view! If you want your company to one day be the most admired company in the world, if you want to one day be counted as the number one globally, there’s only one rule you should follow like a mad man. Be the kindest manager! Fire at will! Shamelessly!


Friday, April 25, 2008


“Dude, have you read the book called The No A$#h%le Rule?” The loud question came quite abruptly from this very well-suited Swiss ‘gentleman’ standing by my side at the roulette table in Luzern’s top casino, who had noticed that I was just about to place all my remaining money on a sure-shot winning bet! Well, you could put your money forecasting that the roulette ball would fall either on an even number or on an odd one! In the past five moves, the ball had always fallen on an even number, and this time, I was 100% certain that the ball would surely fall on an odd number, given my extensive knowledge of the law of averages. I was proudly and silently confident of the load that I was about to make... when I heard that question! The man continued, “It’s a 2007 best-seller written by some well known Stanfordian called Robert Sutton, who says that in business, you shouldn’t take high risks like an a$#h%le!” I was irritated at this thoroughly unwanted interjection from this self-titled risk guru, who was openly slandering my seemingly high-risk move; surely out of pure jealousy! Aren’t the world’s most successful companies and entrepreneurs those who take high risks without flinching an eyelid? Would Steve Jobs have been Steve Jobs sans his proven supremely high risk appetite? Isn’t high-risk the only route to high achievement? A reality check...

The famed David McClelland had proven way back in 1961 that high achievement motivation was related not with ‘high-risk’ taking but, surprisingly, with ‘moderate-risk’ taking. But that was 1961. What about now? Professor T. J. Kamalanabhan of Universiti Telekom, Malaysia and Dr. D. L. Sunder (IIT Madras) concluded in their noted 1999 paper, Managerial Risk Taking: An Empirical Study, that “considering managers are aware of their organisations’ resource constraints, moderate risk taking is eminently rational.” But seriously, aren’t entrepreneurs supposed to be living on the edge of top-end risk?

Dr. Stewart (Clemson University) and Professor Carland (Western California University) in their famed paper, Risk Taking...And Entrepreneurship, concluded that the results of past research had failed to prove that entrepreneurs take any higher risks than managers. For that matter, the American Management Association’s five commandments of great leaders includes a pristine second commandment – “Great leaders are informed risk takers... They act decisively, not recklessly, to maximise ‘lucky’ breaks!” The Australian Institute for Commercialisation’s golden rule book of successful entrepreneurs reads: “Successful entrepreneurs are moderate risk takers, not gamblers. They conduct feasibility studies and test-market their ideas...”

And why not, as shown by the pan-global benchmark 2005 global CEO survey of KPMG, Risk Taker, Profit Maker?, which found that the top two factors leading to reduced margins were ‘Poor Forecasting’ and ‘Poor Risk Identification’! The world famous Protiviti 2007 US Risk Barometer’s global Fortune 2000 gave stark findings. The ‘Risk Appetite’ of global firms – which already was moderate – is further falling, and how! In 2007 itself, even compared to one year before, this factor fell from 5.12 to 5.07 (on a scale of 1 to 10; 10 being the highest-risk level). ‘Organisational Risk’ too fell from 5.62 to 5.23; and ‘Industry Sector Risk’ fell from 6.07 to 5.76! This ‘moderate-risk’ orientation has clearly come because of an increased risk management focus. The classic E&Y 2006 survey (Risk! Let’s Talk!) shows how a mammoth 66% of leading global firms plan to increase risk management investments. The fact is, howsoever competent a CEO might be, high-risk cannot be handled. The path breaking Grant Thornton Survey US Business Leaders Survey (11th ed.) shows how at best, only a puny 19% of CEOs were confident of excelling while facing high risk choices...

I snapped back! I was still on the roulette table. All my money was on the ball landing on an odd number. Statistics be damned, I was sure my command over the topic of probability couldn’t be wrong! The ball rolled across the table, slowed down, and finally landed... on zero!!! Goddammit!!! They said it’s the rarest of rare instances when this happens! Goddamn them too!!!! And where the hell was that suited guy?!? God be with him too... That I left with my clothes on after losing everything on that table was a miracle. Anyway, like I mentioned, the book is called, “The No A$#h%le Rule”. It’s available in all leading book stores. Fortune’s latest issue covers it too. I’ve read it page to page... Ah yes, just for information, I don’t visit casinos anymore... or drink the municipality water... or eat my cook’s food... or argue with my wife on any topic...!


Friday, April 11, 2008


It was in a rare moment of emotional disclosure, that one of my colleagues, who has always looked up to me for guidance, confessed sheepishly that the biggest issue in his life right now was that his wife was too dominating. “She doesn’t let me decide anything,” he groaned. I, the CEO trainer, gloatingly chided him that a man ALWAYS should be authoritative with his wife. “Shout, and she’ll follow your orders buddy,” I sniggered away at him. Interestingly, my team’s research proved that a similar situation exists in companies too!

In a 2006 Harvard Business School case paper, titled Harley’s Leadership U-Turn, Rich Teerlink (ex-CEO of Harley-Davidson), while explaining how his organisation took a U-turn from near extinction, concluded, “When an organisation is under extreme pressure — so much so, that one wrong move can mean its collapse — authoritarian leadership may very well be necessary.” So which, according to you, is the best form of leadership in a competitive business environment? In a comprehensive paper titled Is Servant Leadership Part of Your Worldview?, Dr. J. Howard Baker, Professor, University of Louisiana, argues, “An authoritarian, command and control model of leadership may be very effective for stopping something, destroying something, or conquering something...” Having said this, he rightfully praises John F. “Jack Neutron” Welch, the authoritarian ex-Chairman of GE, who is undoubtedly one of the most highly regarded leaders in the business world today. Welch once said, “Management is looking reality straight in the eye and then acting upon it with as much speed as you can...” Undoubtedly, he was a staunch believer of authoritarian leadership style.

Then there is the common myth of authoritarian leadership style being inversely related to shareholder returns. In his most smashing work, The Affinity of Foreign Investors for Authoritarian Regimes, Prof. John R. Oneal of the University of Alabama, countered that “(shareholder) rates of return have been greater under authoritarian regimes.” Yale University’s Prof. Samuel Huntington’s paper Political Order in Changing Societies further concluded, “Authoritarian regimes are more capable of rational, consistent, and responsible decision making than democratic ones, and a participatory democracy affords special interest groups the power to block, delay or hinder changes that might be beneficial to the economic growth of the entire society.” Interestingly, in 1993, a World Bank study titled The East Asian Miracle endorsed the authoritarian regimes in the region by putting forward the argument that “the ‘Asian Way’ was rightly untrammelled by excessive concern with individual rights.”

Clearly, there have been instances where leaders with their authoritarian style of leadership have given to the world what they hold in awe and pride. One such glorious example can be found in Andrew Keen’s best-seller titled The cult of the amateur where he writes, “There’s not an ounce of democracy at Apple. That’s what makes it a paragon of such traditional corporate values as top-down leadership, sharply hierarchical organisation and centralised control. Without Steve Jobs’ authoritarian leadership, Apple would be just another Silicon Valley outfit run by mind numbingly conventional Stanford MBAer’s. We’d have no iPod, no iTV, no iPhone, no iTunes.” Another book by J. Fentster titled In the words of Great Business Leaders, states how John. D. Rockfeller (founder of the great Standard Oil Company) “saw his relationship with them (employees) as transactional. He led, operating in a directive, autocratic way.” The book also talks of other such leaders like Thomas Watson (IBM), Andrew Carnegie (Carnegie Steel), Ted Turner (CNN), David Packard Henry Ford I and II (Ford Motors) & Sam Walton (Wal-Mart), who have made their mark in the corporate world. Just as Peter Drucker said, “The leader of the past was a person who knew how to TELL. The leader of the future will be a person who knows how to ASK.”

Critically, in today’s world, using authority over intellectuals (like in R&D) or over young dynamic leaders would surely backfire. But when an organisation, or a nation, in general has massive potential waiting to be exploited, a CEO has to necessarily use a killing yet passion-building authoritative leadership, if the organisation has to be world-class one day soon! Having said all that, my less-than-convinced colleague still promised to test out the theory on his wife. I told him even I’ll start putting more authority on my wife. I’m happy to inform you that post our testing this on our respective wives, both my colleague and I have become much closer these days. I was thrown out of my room and these days sleep in the guest house. My colleague too has temporarily shifted in with me...


Friday, March 28, 2008


I’ll come straight to the point. I was buying a house; and as the travails go in such cases, I was short of money. Given my ‘excellent’ credit rating within the family, my wife – my only practical hope for cash infusion – refused to even enter into any discussions of lending me money (I think a tube light would have stood a better chance). Gloriously confident that any bank/public institution would easily lend me the required investment, I was ready to walk out, when Dad ‘occurred’! My father questioned me on my intentions to take a loan from the outside public, and offered me his money. Though the offer was deliciously lucrative, my biggest worry was that if I accepted this ‘private equity’, Dad would get to make all the decisions with respect to how the house should be done up; and being typical South Indians, we’ll end up with a wash basin in the drawing room! Clearly a nightmare... I took a day off to decide...

But seriously, away from familial issues, I did start wondering whether private equity fund investment helps or actually destroys the performance of firms? Don’t private equity investors, who end up holding significant share holding within the company, interfere much more in the CEO’s and top management’s decisions than would have external banks or general public investors? Almost a year back, I had written an editorial on why promoter-owned private companies are much better than publicly held companies. But what about private equity from non-promoters? Wouldn’t that end up being a worse bargain?

A 2006 Wharton seminar on Private Equity showed how private equity investment for shareholders seemed to be more efficient than the normal stock markets...and even loans! The seminar summary quoted Warren Buffet’s comment, “Borrowed money is the most common way that smart guys go broke!” While The Economist magazine described private equity firms as the “sharp edge” of contemporary capitalism, Bloomberg’s Venture Economic report shows that over a period of 10 to 20 years, private equity has outperformed the markets by a thumping 66% to even more than 100% in some cases! The National Bureau of Economic Research, in their benchmark paper titled The Cash Flow, Return and Risk Characteristics of Private Equity, resoundingly proved how private equity always generates “excess returns” relative to ordinary equity markets. Very interestingly, Mercer came out with its 2007 private equity study that confirmed, “Not only has the rate of return for PE firms overall been substantially greater than that of public corporations, but such companies – once returned to public ownership – have outperformed the market as a whole.” To this effect, a recent Economist research concluded that “in an odd twist, all the money going to private equity has helped buoy shares of public companies!”

The case for private equity funding has remained strong throughout the world’s top economies. While the US and UK, according to the European Venture Capital Association data, had the “broadest and most developed private equity markets in the world (ranked at number 1 and 2),” such private equity investments had actually led to dramatic innovation and stunning economic growth too! Look at the situation in India. The Economist Intelligence Unit’s 2005-06 worldwide survey rates India second from bottom in terms of promoting environment for private equity. The famed Apax Partners, in 2007, in their yearly survey, Future Trends in Private Equity Investment Worldwide, statistically confirm the same with the cherry statement, “India has the second worst environment for private equity!” The survey, in fact, rates India last in all countries surveyed in the factor of ‘Market Opportunities’ (for Private Equity), an honour India could well do without!

But then, even if the case for private equity investment is thumpingly strong, how does a promoter retain decision making power despite private equity investors (or even public equity) being present? For that, we have the stunning concept of super-voting rights – that is, having more voting rights than your shareholding! For example, Page & Brin hold only 20% of shares of Google, but retain over 60% voting rights. Think about it, Rupert Murdoch’s family owns only 30% of shares in NewsCorp. What’s their voting power in the media behemoth? 100%!!! And now Rupert Murdoch might be trying to even invest in The Times of India group, if our cover story analysis is right, through private equity! Well, my decision was made. I went back to Dad, took his private equity without a hitch. And what about house renovation decisions? That was super-voting simple. My wife now holds 0% ‘shares’ of the house, and retains 100% voting and decision rights! Beat that for quick learning...


Friday, March 14, 2008


I hate dishes made of brinjal... or for that matter bitter gourd... or lady’s finger! But it’s really funny that every second day, when I start for office, I always end up getting either of these brilliant dishes for lunch – and subsequently for dinner too. This is despite the fact that I most patiently “advice” our intemperate ‘trade union’ cook, who’s been with us for years, about what food I prefer! So when recently my patience gave way, I decided to inform Mr. Cook once and for all that I was a kid no more and that he should realise he’s preparing food for the group editor of a leading magazine house! “You’re no celebrity that I should cook special meals,” he replied disdainfully without sparing me a glance, “and even if you were, do I get paid more?”

...Ouch!!! Though I slinked away at that moment, the question was pertinent. Does an association with celebrities really add to a company’s worth? Would an association with, say, the world’s best golfer Tiger Woods (associated with TAG Heuer, Accenture, Nike, American Express, Gatorade, GM...) increase shareholders’ value of the respective firms? Would Shahrukh ‘endorsing’ movies to products to – as we mention in our flap cover story – IPL increase their reach? “Definitely not,” said a marketing ‘expert’ I met at one of the conferences recently. “It’s not the celebrity, but the product’s realistic worth and value that ensure a company’s profitability!” My research team finally got my intellectual ship sailing; and here was what they gave me!

Professors Robert Clark (HEC Montreal) and Ignatius Hortsmann (University of Toronto), in their academic paper titled Celebrity Endorsements provided experimental evidence that definitely “celebrities enhance product recall... They enhance consumer perception of product value... Consumers value more highly a product endorsed by a celebrity than one without a celebrity endorsement.” Another world-class and path breaking statistical paper from the Marketing Science Institute by Amit Joshi and Dominique Hanssens (Advertising Spending and Marketing Capitalization), after analysing data collected over a decade for five PC manufacturers – Apple, Compaq, Dell, HP, and IBM – proved quantitatively and conclusively that when celebrities endorsed brands by appearing in its advertising or even by visiting retail locations and special events, shareholders and prospective investors immediately ensured the firm’s future earnings potential appreciated. Even ‘fast food’ brands like McDonald’s had their “market-adjusted values” increase phenomenally simply because of endorsements from celebrities like Michael Jordan! After analysing 110 high-profile celebrity endorsements, Professors Kamakura (University of Pittsburg) and Agrawal (California State University) concluded in their paper (The Economic Worth of Celebrity Endorsers) that while a growing number of firms are investing in celebrity endorsements to enhance the value of advertising dollars and build brand equity, the average impact of these announcements on stock returns is definitively positive. In summary, that celebrity endorsement contracts are viewed as “worthwhile investments in advertising.” Proving the same were Miciak & Stanlin who, through their benchmark work, showed that having a celebrity on board positively affects stock returns. They quote, “Celebrity endorsements work so well that (now, globally) about 20% of all TV commercials feature a celebrity.”

The writing on the CEO manual is clear: If you had money to invest and had a choice between giving the best of the best quality to the consumer, versus providing normally good quality that is endorsed by a celebrity – categorically go for the latter! Most coincidentally, last fortnight, while I was on a sponsored tour of India’s costliest and most sought after tourist train, the Palace on Wheels, many American and European tourists on the train told me (wide-eyed) that I decidedly resemble, hold your breath, Tiger Woods! After initial disbelief, and after repeated confirmations, I became almost blindingly confident that perhaps I do look like the Tiger! Not wasting a minute when I returned home after the trip, I caught hold of my supercilious swaggering cook and this time ranted off remorselessly about the fact that people now even considered me a celebrity, Tiger Woods! For the first time, I saw semblance of a little respect in his eyes. Not that it mattered, but I knew I had hit it where it mattered the most! I now could at least demand a trite better meal than what I was getting. And better it did get! The next day, instead of just one dish that I generally used to get, I got three – brinjal, bitter gourd and lady’s finger!!! I finally got the equation right – When Tiger Woods wants food, he orders from outside!


Friday, February 29, 2008


“What was that!?!? Prof, did you just say M&A amounts to murder?!” My students in the strategy class (it felt like a courtroom though) were quite sarcastically belligerent in their questioning of my ardent statement, where I said that a majority of M&As destroy shareholder value remorselessly. I could sense a wave of disbelief spreading with haste within the seminar hall. Hadn’t India seen many successful M&A deals? Hadn’t the share price of Tata Steel, which was Rs.537 on October 5, 2006 (before their takeover of Corus) risen thunderingly to the Rs.750 and above range by 2008? Weren’t M&A deals actually rising unbelievably fast?

Yes, yes... and yes! Strangely, I’ve found even CEOs latching on to these very hackneyed excuses for convincing their shareholders to approve of prospective M&A deals. My tryst, though, was militantly cantankerous. The research in my defence was unimpeachable. I started with the motherlode of all institutions, HBS, whose May, 2007 research (Why M&A Deals Are Bad For Shareholders) quotes, “Most M&A deals destroy shareholder value!” How has the thinking been a few years back? The April 2004 HBS paper (Should We Brace Ourselves For Another Era Of M&A Value Destruction?) states eloquently, “In the end, M&A is a flawed process, invented by brokers, lawyers and CEOs with super-sized egos!” Mark Sirower, author of the famous book Synergy Trap, shows how, on an average, 2/3rds of all deals end up destroying shareholder value. Even the famed McKinsey & Co., once a fanatic supporter of M&As, had to accept after its M&A research through the 90s that in the US & UK, only one quarter of all M&As ever recovered the costs of the merger. Their November 2001 hallmark paper (Why Mergers Fail) stated prophetically, “The belief that mergers drive revenue growth could be a myth!” In that paper, McKinsey showed how a massive 78% of companies failed to manage significant growth over a period of three years post the M&A! Professors Weber and Camerer of Carnegie Mellon University, in April 2003, statistically showed in their benchmark thesis (Merger Failure: An Experimental Approach), that “a majority of corporate mergers fail!” The Economist reported in 1999, “Study after study of past merger waves has shown that 2/3rd of all deals have not worked!” CEO Magazine reported similarly, “75% of M&As are disappointing or outright failures!”

BCG’s sparkling July 2007 report, The Brave New World of M&As, documents, “Larger deals destroy progressively more value!... Deals that are above $1 billion destroy nearly twice as much value as those under $1 billion!” The hugely referenced Business Strategy Review‘s 2005 paper (Merging on the Miraculous) had the first line, “More than 2/3 M&As fail to create meaningful shareholder value.” The Gartner/Forbes Executive Survey of February 2007 asked top global executives to rank various business issues. ‘Managing M&As’ came last on the 25 factor list! Factors like ‘Attracting and retaining skilled workers’, ‘attracting new customers’, ‘Increasing market share’ etc were ranked miles above M&As! The Economist Intelligence Unit’s outstanding briefing (Corporate Priorities For 2007) goes better! When more than 1000 global CEOs were asked, “Which forces will have the greatest impact on the global marketplace in the coming three years?”, they ranked ‘M&A activity’ sixth from the bottom! Most hilariously, below this, were factors like ‘Catastrophic events (eg. terrorism, natural disasters)’, ‘Advances in back office technologies’, and of course, ‘Others’. The NYSE CEO Report 2008 put the final nail in the M&A coffin by giving the empirical evidence that “most CEOs think revenue growth in their own companies will be driven far more from organic growth than M&A activity!” It also shows how their is a direct correlation between organic growth and a company’s market capitalisation!

Wharton, Stanford, Booz Allen, Accenture, MIT, you name it and they have research discrediting the strategy of M&A. Factually, for every Tata Steel, there are 3 Time-AOL-Warners... When Time Warner and AOL merged in the year 2000, their combined m-cap was a smashing $247 billion. The value post merger now is a pitiable $58 billion, one reason they’re now demerging! Global M&A deals touched $4.48 trillion in 2007 (from $3.61 trillion in 2006); Indian deals touched $51.11 billion in 2007 (from $20.30 billion in 2006). My strategy professor during my b-school days gave the name “Murders & Acquisitions” to M&As. He called me up a few days back to share a brilliant piece of research, which I later shared with my intemperate students... SARS, the deadly virus, has a fatality rate of 15%; Typhoid – 10%; Severe malaria – 9%; Dengue – 3%; M&A – 75%! Ouch!!!


Friday, February 15, 2008


Plainly put, I had had enough! On paper, our editorial team meeting had started with the premise that we should run the Golden jubilee issue (yes, we’ve reached 50 glorious issues!) with a spectacular array of the top 50Ps of marketing. Obviously, the war had started even before I had entered the battleground! Just when I thought I had ducked the massive war of words (worlds?), the stinging crossfire hit me straight in the guts. Apart from accusing me of focusing horse-headedly on just ‘Ps’, the main accusation was that we were not even considering the most important factor for a company’s growth and shareholder value, namely the concept of Research and Development, which – according to the extremist warriors sitting inside my office meeting room – was the numero uno ‘P’!!! I was forcibly plastered with the names of the top ten R&D spenders in the world – Toyota, Pfizer, Ford, Johnson & Johnson, Daimler Chrysler, GM, Microsoft, GlaxoSmithkline, Siemens and IBM, all excellently performing companies, constituting a mind numbing 15.3% of global R&D spend – as the final proof that it’s R&D and not any ‘P’ that is most important for companies.

(‘When faced with a powerful adversary, run!’ – old jungle saying). I ran! Straight to my research team! And this is what I found! The joint HBS and Southwestern University 2006 ‘Industry R&D Survey’ shows how the total number of R&D spenders in the US, while rising since 1974 and peaking in 1993, have almost regularly gone down year after year since then till the turn of the century. Even the benchmark paper of Dr. Scott J. Wallsten of Stanford, ‘The R&D Boondoggle’, assertively confirmed the same fact that globally, firms have started investing lesser in R&D. And the reason, Wallsten confirmed, was that R&D spenders generally had received considerably lesser benefits than all other firms. BusinessWeek in November 2006 researched the top five R&D spenders in the world and asked the question, “Are there parallels between lavish R&D spending and stock-price gains?” The answer they found was, “Not really!” But what shocked me right through was another hallmark 2006 report titled, ‘The Stock Market Valuation of R&D Expenditures’ by Chan, Lakonishok & Sougiannis of The University of Illinois, who proved definitively that “the average historical stock returns of firms doing R&D matches the returns of firms without R&D... The market is too pessimistic about beaten-down R&D and companies with high R&D to equity market value tend to have poor returns!”

Leave all that, one look at the latest NYSE CEO Report 2008 shows how a huge 57% of global CEOs have refused any increase in R&D spending. Of all CEOs, only 10% thought that ‘New Product Development’ was the most important internal factor influencing profitability! Veritably so, perhaps the biggest hit for the R&D camp was given by none other than a previous supporter of R&D, the famed Booz Allen Hamilton itself, which in October 2007 analysed the top 1,000 R&D spenders globally in their report, ‘Global Innovation 1000!’ (who constitute around 84% of the global corporate R&D spending) over five years. Statistically, the report proved with stupendous clarity that there existed “no correlation” between any performance factor (sales, profitability, shareholder return...) and R&D spend! You could argue for days on the topic, but the killing fact is that not only does WalMart (the world’s largest corporation) not even feature in the top 1,000 R&D spenders’ list, but also that as per York University’s classic January 2008 report, even Big Pharma spends “almost twice as much on promotion as it does on R&D, contrary to the industry’s claim!” Obsessive compulsive spenders in R&D end up devastating shareholder value, sales, profits and other performance factors beyond repair. Sadly, there are still a plethora of CEOs who believe R&D and not a focus on the Ps of marketing can lead them to success.

(‘When faced with a weak adversary, destroy remorselessly!’ – one of my original sayings). Another day, another editorial meeting! What followed was target practice; and I’m proud to say I took no prisoners! The result is this fantabulous issue of 4Ps B&M, which is a commemoration to that inimitable and absolute power of the indomitable Ps of marketing, which are the most critical reasons for a company’s thundering success or pathetic failure. And we have listed 50 of those Ps! R&D – but obviously – doesn’t make it a mile close to this list. The world’s excellently performing corporations have got this equation bang on! If you still haven’t, I’ve got the perfect solution – go ahead, flip the pages, it’s all there...


Friday, February 1, 2008


I could never have imagined that it was going to be the start of one of my most vitriolic arguments. The scene was a CEO forum. And the supernova hot debate was driven by one particular CEO, who had his tanks trained on me, while he argued that the Nano and various overseas takeovers by Indian companies were in reality ‘no news’ as India was already a globalised world-class business powerhouse, driven by the huge number of entrepreneurs that India churns out year in and year out. And when I asked him to provide proof, the answer was, “Because my Dad says so! Got it?” His sarcasm was dripping; and I decided to check his ‘Dad’ out on whether India was really a top notch ‘globalised’ business hub!

But first, for the intemperate critics: does globalisation really work? Without even an iota of doubt, yes! Not only for countries, but also for corporations. The monumental neo-IT 2006 study titled ‘Globalization and the Impact on Shareholder Value and Revenues’, which compared the neo-IT SG Index of the 30 most globalized Fortune 500 companies against the S&P 500, comprehensively proved how companies that ‘globalise’ their services “create (dramatically) more value for shareholders than companies that don’t globalise!”And that too an eye-popping 204% more! Even the classic 2006 Accenture report, ‘Expanding Markets: Innovation and Globalization’, showed how “the best performers were 83% globalised, while average performers were only 18% globalised.”

So is India really a truly globalised nation? There perchance has been no better a study historically on globalisation than the Carnegie Endowment and A. T. Kearney exemplar dissertation, ‘The Globalization Index 2007’, which most analytically ranks various countries of the world on a multitude of parameters, finally providing the consolidated Globalization Index (GI) ranking. I’m sure if you were to see India’s final GI rank, much more than your jaw would have dropped! India has been honourably ranked second... from last! It’s mind boggling and unbelievable that countries like Algeria, Bangladesh, Tanzania, Pakistan, Colombia, Kenya, Peru, Nigeria, Sri Lanka, Thailand, Senegal, Vietnam, Morocco, Ukraine, Botswana, Tunisia, Uganda, Chile, Croatia, Panama and innumerable more are miles ahead of India. Despicably, even last year, and the year before that, India had been knighted with the same rank – second last! The index also shows how the rank of India in terms of FDI is – you won’t believe it – sixth from the last! In telecom usage, India is third from bottom! And similar are the various ranks of India across parameters.

So where lies the blundering mistake that India is committing? The answer – though extremely simple – is almost a slap on the face of policymakers. India has miserably failed to encourage the philosophy of entrepreneurship, the most key factor that can radically catapult India’s globalisation quotient, a factor which stalwarts like Ratan Tata, Kumara Mangalam Birla, Azim Premji et al swear by day in and day out, but unfortunately a factor that policymakers and the majority of India Inc. ignore haphazardly! Columbia GSB’s incisive study (Role For Entrepreneurship in India) reports how while the US entrepreneurship system “has been quite successful” for their economic growth, Indian entrepreneurs actually might “hinder economic development!” Even in a place like Bangalore – ostensibly India’s Silicon Valley – entrepreneurs were playing a “possibly negative” role in the Indian economy! And the blame, according to the report, lies on governmental policies. Against this, imagine how the US most shrewdly uses us very Indians to their benefit. The acclaimed Duke University report, ‘America’s New Immigrant Entrepreneurs’, shows how Indian immigrants, over the past 8 years, have filed the second highest number of patent applications (more than 10,200), have founded the highest number of manufacturing/innovation-related service firms in the US (24%), have founded the highest number of bioscience firms (10%), the highest number of software firms (34%) and so on so forth. And America is the world’s largest economy! Of course, there’s huge optimism within India’s entrepreneurship community (Grant Thornton’s ‘International Business Report’ ranks our entrepreneurs’ optimism second highest in the world). But all that would come to a cypher naught if the government and the majority of India Inc. doesn’t wake up to the thundering call of supporting entrepreneurship, a call the exemplary Ratan Tata has already taken too many times, with the latest Nano being the terrific topping. India, dear CEOs, irrespective of whatever you think, is still ludicrously far from being globalised. Even my Dad says so!


Friday, January 18, 2008


Well, I’ll start with the one I’ve been wrestling with for the past many years; and I’m sure it must be quite obvious to you all by now. I, uhh, am growing bald... Alright, I guess I’ve lost almost all of it by now. Imagine what a ‘challenge’ I’ve had to grapple with to start off 2008! But I suspected that the majority of CEOs globally also suffered the same ‘challenge’! I wasn’t way off, as my subsequent investigations revealed that 66% of global CEOs are ‘challenged’ by some or the other kind of hair loss. And there, amusingly so, began my quest to understand the top challenges that CEOs will face this year!

I stopped at the favourite global watering hole, namely the NYSE CEO Report 2008, to find out the top five! 240 of the world’s top business leaders in more than 24 countries, when asked ‘which internal factors will affect revenue growth the most?’, gave the following list in order of priority: Management team; New technology; Strength of company brand; Strategic partnerships; Customer loyalty! Interestingly, even last year (in the NYSE CEO Report 2007), CEOs had confirmed that the same top five factors affected revenues the most. Coming back to the 2008 report, when asked a similar question with respect to what affects profit growth the most, CEOs cited the following critical factors: Operational efficiency; Management team; Compliance costs; New technology; New product development! Surprise surprise, even last year, the factors were ditto the same! The latest report quotes the statistics that 74% of today’s CEOs definitively agree “Management teams have more impact on revenue growth than they did three years ago!”

I stopped again, and this time at the superbly compiled 2007 Technology Fast 500 CEO Survey by Deloitte and Touche! With respect to ‘what factors drive growth’, the CEOs were unanimous in ranking ‘High-quality employees’ at a smashing number one. Sound business strategy, strong leadership, unique products and right timing in the market place came in at the next four positions. When questioned on ‘key operational challenges’ facing them, ‘finding, hiring and retaining qualified employees’ again came in at a super #1. And for the question of what were the ‘key personal challenges’ facing CEOs, the answers were again unanimous: ‘Developing leaders and delegating responsibility’ was number 1! Just to satisfy my suspicion, I stole a quick look at Deloitte and Touche’s 2001 CEO survey. For the question, ‘What is the single biggest challenge in managing your company’s rapid growth?’, the answer bulldozing in at number 1 was ‘Finding, hiring and retaining qualified employees.’ And when questioned, ‘What is your biggest obstacle as you continue growing your business?’, the factor of ‘Qualified workforce shortages’ was again at, you guessed it right, number 1.

If you thought that ‘global surveys’ were different from what the Asian CEOs were thinking, rest assured! The world renowned Conference Board, which surveyed 769 global CEOs from 40 countries in their report, CEO Challenge 2007: Top 10 Challenges, showed that for Asian CEOs, in the top ten challenges list, ‘Finding qualified managerial talent’ is completely and resoundingly at number 1; a fact confirmed by the brilliant 2007 report by The Economist, titled CEO Briefing: Corporate Priorities..., which proved that for emerging markets, ‘Lack of available talent’ represented the ‘greatest barrier’ for growth! Over the years 2003 till 2006, in four exhaustive and incisive studies done by the top HR consultants, the Ken Blanchard Companies, over 2000 respondents confirmed ‘developing leadership bench strength’ as the issue number one!

“People before strategy,” is what the world’s most successful CEO Jack Welch believes in, “My main job was developing talent. I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds too!” Steve Jobs fanatically believed that his “people are the moving force” behind Apple’s products; “My job is to create a space for them,” he famously quoted! I could go on and on but the fact is that ‘retaining passionate and talented people’ – and not fighting competition or worrying about products, technology or markets – is the number one issue today’s CEOs should focus on! If you have to make that one choice, be the Jack and the Steve of today, passionately, fanatically! Indefatigably, the truth is that the top five global challenges across continents, across sectors, across corporations that CEOs of today face are people, people, people, people and... hair!

I still haven’t found a workable solution around it guys :-(