DO I LOOK LIKE TIGER WOODS?

Truthfully speaking, it’s become quite an embarrassing ‘accomplishment’ for me. Almost two years ago, I had taken up the self-acclaimed mantle of being a Tiger Woods lookalike, writing in an editorial how a group of Americans had increasingly pointed out the same to me. Over time, I had rampantly propagated the same vaingloriously. My timing couldn’t have been worse! They say Tiger Woods hasn’t been able to come out of his house for the past many days. I think I won’t be able to come out of my house for many weeks altogether! Be that as it may, the question now is, would the various brands that used Tiger as an ambassador benefit from continuing with him? But even before that, revisiting a question I touched many issues back, do celebrity endorsements really help companies perform better?

While the the latest Interbrand-BusinessWeek ‘Most Valuable Global Brands 2009’ list has Coca Cola (a company renowned for choosing regional celebrity ambassadors) as the most valuable brand in the world (valued at $68.7 billion), the fact is that seven of the top ten ‘most valuable brands’ on the list do not have even a single celebrity brand ambassador as of date. These include names like IBM (worth $60.2 billion), Microsoft ($56.6 billion), Google ($31.9 billion) and Intel ($30.6 billion). Are the times of celebrity branding getting over? Not quite. In fact, not at all!

In their December 2008 paper titled ‘The Economic Value of Athlete Endorsers’, Anita Elbersei (Professor at Harvard Business School) and Jeroen Verleunii (VU University Amsterdam, Amsterdam) prove how sports athletes have a definite positive influence on their clients’ stock performance. They write, “We find that a firm’s stock market valuation increases when it recruits an athlete endorser, and (also) each time one of its athlete endorsers achieves a major career milestone.” In a hallmark 2009 Wharton marketing paper titled ‘Advertising yourself’, Prof. Eric Bradlow of Wharton states that it is important “to reach out to people who are ‘influencers’. Everyone should have a list of 20 or 30 people who will act as their ambassadors…” Professors Robert Clark (HEC Montreal) and Ignatius Hortsmann (University of Toronto) give empirical evidence in their classic research ‘Celebrity Endorsements’ that proves that not only do “celebrities enhance product recall... They also enhance consumer perception of product value... Consumers value more highly a product endorsed by a celebrity than one without a celebrity endorsement.” The acclaimed duo of Amit Joshi and Dominique Hanssens, after a decade-long analysis of Apple, Compaq, Dell, HP and IBM, prove in their thesis ‘Advertising Spending and Marketing Capitalization’ that when celebrities endorsed these ‘tech’ brands, shareholders and investors ensured the firm’s future earnings potential rose. In the brilliant treatise, ‘The Economic Worth of Celebrity Endorsers’, Professor Kamakura (University of Pittsburg) and Professor Agrawal (California State University) put forward the concept that the average impact of celebrity endorsement announcements is definitively positive on stock returns. Researchers Miciak & Stanlin give a global synopsis, “Celebrity endorsements work so well that (now, globally) about 20% of all TV commercials feature a celebrity.” It is time that those companies which do not use brand ambassadors wake up to see the true benefit. Tiger or no Tiger, celebrity endorsements work fantastically well, and avoiding the same can only lead to many opportunities lost.

With all this in the background, after many days, I finally started again socialising. I forced myself out to meet people, realizing that thankfully nobody was reminding me of my earlier follies... until this Saturday, in a party, I noticed one foreigner on the other side of the room intently staring at me for a long time. Petrified – and trying to avoid his gaze – I noticed to my chagrin that he’d started walking towards me. With disappointment, I realised my cover was blown. The man walked up to me, smiled, and spoke, “Has anyone ever told you that you look very similar to... Barack Obama?”

DO I LOOK LIKE TIGER WOODS?

FABLES OF MYOPIA, AND OTHER BESPECTACLED TALES...

The time I spent in school will perhaps never be forgotten. I wasn’t referring to myself (who in heavens would claim he can’t remember his own time in school... alright, maybe a former US President), but to the teachers whose subjects I failed, to the administrator whose projector I destroyed, to the provost who rusticated me out of the hostel five times by the time I kicked myself out, and to the Principal who once chased me around the sports ground brandishing a pair of industrial scissors threatening to cut my slovenly two penny hair. All this was pretty fine with me... all, except one boy, whom I envied to perdition. While we both were equally good sports enthusiasts and used to get into all the school sports teams – basketball, cricket, swimming, football, tennis – he would always be made the captain, however hard I tried to prove my sporting skills to the nepotistic coaches.

The frustrating irritation in me knew no bounds – well, the captain used to be treated like an emperor; and obviously, he would get all the, umm, fan mail, if you know what I mean! Driven to the point of galling exasperation, one fine afternoon, I cornered him at the school grounds after sports practice and loudly threw the accusation that it was only because of his connections that he, and not me, became the captain. Not taking a moment, and like a true sophisticated cultured gentleman that all boys in my school were trained to be, he lunged at me screaming bilingual four, five and six-letter words and shouted, “That’s not true. You couldn’t become the captain because you didn’t clear the vision test. You couldn’t even read the first line on the alphabet board!” His answer hit my jaw like a ten tonne truck before his fist did. The pest was right about the test. I had short-sight, but refused to wear spectacles (like all the ‘boys in the hood’) and to accept that I even had myopia. Consequently, I always failed the vision test, while he’d always pass it. But then, given the emotion of the moment, I did start wondering: did such a fabled connection really exist? Did a leader necessarily need to have an excellent vision to succeed?

Well, I won’t even childishly attempt to draw the metaphor up in the real corporate world – as the answer is a resounding yes! Vision is the obsessive compulsion to continuously achieve beyond benchmarks, and is the essence, the soul, the character of great leadership. Without a sustained and sincere visionary approach, not only does the CEO doom himself, he also magnanimously devastates his company’s future irreparably, targeting objectives which will never allow the organisation to become a global leader. But the toughest part in the whole imbroglio is – does the CEO even have a ghost of an idea of how wonderfully visionary could a vision be? Do you?

This boy of 14 dropped out of school and joined his uncle’s store as a watch salesman (as his penury ridden father had passed away due to tuberculosis). He worked 16 hour days, and even learnt English from a tutor during the night, after work! Seven years later, when he was just 21, he borrowed capital from some friends and family members and opened a plastic flower manufacturing company. Nine years later, his firm became the largest supplier of plastic flowers in Asia. Half-a century later, his empire spans across industries like oil, electronics, telecommunications, retails, ports, power, electricity and even health and beauty. The name of his empire – the publicly traded Hutchison Whampoa group (which he acquired from HSBC in 1971) and Cheung Kong Industries (which he founded in 1950), which operates across 55 countries and employs 2,20,000 people. The name of this determined and born visionary – Li Kashing, the richest man in Hong Kong and the 16th richest on the 2009 Forbes billionaires list, his net worth valued at over $16.2 billion, with his empire worth much more – $120 billion in mcap. Can you match his vision?

Born out of wedlock in Kosciusko, Mississippi, to teenage parents who broke-up soon after, this lady’s mother was a housemaid, and her father, a coal miner. Raped by family members when young, imprisoned in detention centres, pregnant at 14 (with her child dying soon after birth), she’s my icon of how vision can motivate one to become the champion of circumstances and business. At 17, she won the Miss Black Tennessee beauty pageant and was noticed by the local black radio station, WVOL, which hired her as a part time radio jockey. That proved to be her baby step into the world of media. After that, she worked with Nashville’s WLAC-TV and Baltimore’s WJZ-TV. Today, her company Harpo Corp. produces The Oprah Winfrey Show, aired in 140 countries around the world, with 30 million viewers a week in US alone. Oprah is the only black woman billionaire in world history, her personal worth estimated by Forbes at $2.3 billion. Can you match her vision?

Born nearsighted, a dyslexic, a school dropout, a failure in the first two business ventures he started, this man started a magazine called Student to cater to young demographics. To cover postage charges, his mother donated four pounds. Working from his basement, Student debuted in January 1968 (The first feedback he received for the magazine was from the headmaster of his previous school, who wrote: “Congratulations! I predict that you will either go to prison or become a millionair”) Within 25 years of that letter, this visionary put into place a diversify ed group with more than 150 companies, spread across six continents; and much to prove his school headmaster wrong, became a billionaire! With businesses ranging from comics to airlines, from colas to mobile telephony, Richard Branson’s personal wealth now amounts to $2.5 billion, and his fame to something much beyond! Well, can you match his vision?

A few years back, the Stanford University paper (Vision, Key to Creating Shareholder Value) quoted Lord John Browne, then CEO of the oil behemoth BP, “You have to remember what your vision is, and you have to be disciplined about sticking to it in order to create shareholder value!” When Browne became BP’s CEO in 1995, the company’s annual revenues were $26.95 billion. In 2007 when he resigned, they were a spectacular $274.32 billlion – a stupendous rise of 917.88%! Browne’s successor, Anthony Hawyard, has kept the visionary approach as rampant – the revenues for 2008 were a mind blowing $367 billion! That is vision!

The brilliant management guru Jim Collins, using a 70 year long study as a basis, showed in his best selling book Built To Last how ‘visionary companies’ gave stock returns that were almost 700% more than ‘comparison (not so visionary) companies’. The findings of a huge research by the well known Ken Blanchard Group (covering 2000 odd worldwide respondents between 2003-2006) show how “failing to communicate the vision in a way that is meaningful,” is the biggest mistake that leaders make when working with others. Noted author Jim Heskett, in a Harvard Business School paper (‘How much of leadership...’), writes, “Companies growing value the most are the ones with leaders that have a clear vision, continually communicate that vision, and then get out of the way!” Are you such a leader?

Clearly, it’s not just about what vision you have, but about the vision you make your followers believe in, and work towards! In summary, fanatic vision is about targeting objectives fantastically beyond what your normal potential would ever allow – devastate and destroy all current pretensions, processes, procedures, and assumptions that stymie the power of imagination and passionately work towards the fantastical objective like a delusional zealot, believing completely in the fact that you will achieve the quixotic target, at the same time ensuring that all your followers believe as fanatically in this prophetic atom-smashing finality!!! That, my CEOs, is being a visionary!

Coming back to where I started, back in school, post the jaw breaking fight, I ended up over a few months actually becoming friends with the truant captain, given our common roguish antecedents. One day, we both decided to skip school and watch a movie in the nearby theatre. The moment the movie started, I was stunned to see him take out a pair of spectacles from inside his bag and wear them. I was totally dumbfounded! With my mouth agape, I garbled to him, “But you said you had perfect vision?!?” The devil of the town coolly looked at me, and spoke, “I never said that. I just said that you never were able to read out the alphabets on the eye test board... while I used to mug them all up!” Geez, where was it that I started this editorial?...

FABLES OF MYOPIA, AND OTHER BESPECTACLED TALES...

IN SEARCH OF EXCELLENCE: 6 LESSONS FROM THE WORLD’S BEST MANAGED COMPANIES

In the past few months, while I have been trying to make sense of the strategies of the world’s largest companies in my editorials, my analysis has many times flamboyantly and quite shamelessly used the Fortune 500 lists, without doubt the most well known international listing of the world’s best managed corporations. Over the course of various editorials, my research team has time and again brought out data and analysis, which has almost never ceased to surprise me, and many times even changed my preconceived notions of what constitutes the best course of strategic action for a company. In short, the findings of my team have represented some of the most contemporary understanding in the world of modern management and in the world of Fortune 500, the highest revenue earning firms internationally. And in this issue’s editorial, after analysing many of my past editorials, I bring to you the compendium of 6 unique strategic factors that drive a majority of these Fortune 500 corporations in their search of excellence:

LESSON #1: TO HELL WITH ‘FUN’!
Only 6% of Fortune 500 companies in 2009 made it to the list of Fortune Best Companies to Work For 2009 list. In other words, the entire list of Fortune’s Best Companies to Work For had no mention of 94% of the top Fortune 500 names! The highest placed amongst those in the Fortune 500 list was the 10th ranked Valero Energy, which was placed eighth-last on the Best Companies to Work For list. The #1 company on the Best Companies to Work For list (NetApp) was ranked #647 on the Fortune 1000 list! The #2 and #3 on the Best Companies to Work For List (Edward Jones & BCG respectively) did not even feature amongst the Fortune 1000 names!

Learning: The best performing corporations of the world (in terms of revenues, increasing shareholder value and earnings) make sure they’re not fun places to work; rather, excellently performing companies like Exxon and Berkshire ensure that employees are made to work killingly hard.

LESSON #2: ‘SERVICES’ IMPLY ‘SHAREHOLDER VALUE’!
Surprisingly, the top ranked Fortune names weren’t the ones who could be most proud about delivering the best of returns of their shareholders. So guess which company delivered the maximum returns to its shareholders amongst all 2009 Fortune 500 names? An unknown firm called Dollar Tree, now ranked #499 on the Fortune list, gave back to its shareholders 60.8% returns y-o-y. In fact, only six Fortune 500 names delivered annual returns superior to 20%. The other five names are: Family Dollar Stores (ranked 359), Nasch-Finch (ranked 492), World Fuel Services (ranked 147), Amgen (ranked 168) and Omnicare (ranked 392); all of which, except one (Amgen) are into the ‘Services industry’! Even when we look at the revenues earned per dollar of assets or per dollar of equity, the top five industries in both the categories belong to the services sector.

Learning: If you want to be counted amongst the most efficient and productive companies of the world (for your shareholders, investors, customers), the services sector is where you might want to be for the coming few years.

LESSON #3: NEVER TRUST A WOMAN!
Only 3% of 2009 Fortune 500 companies have women as their CEOs; and the irony is that this puny woman CEO figure is actually a 0.6% jump over the previous year. And if the Fortune 1000 names are considered, the count boils down to a lower 2.8%. The figure is similar to the Standard & Poor’s 500 list, which has just 14 names of companies that are headed by women CEOs (again, 2.8%).

Learning: The world’s biggest companies don’t trust a woman to be their CEO.

LESSON #4: THE ‘FORTUNE’ OF LOYALTY AND YOUTH
While the average tenure with a single Fortune company for a Fortune 500 CEO is a high 26 years, the same for an S&P 100 CEO is also a similar 23 years, disproving the hype and hoopla about job-hopping leaders. While 61% of S&P 100 CEOs have been working for the same company for 15 years or more, 30% have never worked anywhere else (Source: Hewitt Associates CEO Study)! The report by Booz Allen Hamilton titled ‘CEO Succession: Stability in the Storm’, after analyzing the world’s 2,500 most valued publicly listed companies, also proves how loyalty is still alive and kicking, with boards today even encouraging succession planning of ‘internal candidates’. The study notes how “among new CEOs, outsiders – those brought in from outside the company to take the helm – make up only about 24 percent of the incoming class.” The belief in youth is also quite strong. Another study by Hewitt Associates, titled ‘Board Index 2008’, notes that as boards get older, “the average age of the CEO has decreased” as compared to 10 years back. As per the C T Partners report titled ‘Does Age matter when you’re CEO?’, S&P 500 companies, which are run by the youngest CEOs, outperform those run by the oldest. Stocks of S&P 500 companies whose CEOs are 47 and younger have outperformed the S&P 500 Index by 6.2% since 2007, while those led by CEOs who were 72 and older underperformed the S&P 500 Index by 12%. Even when Forbes magazine measured the performance of the 10 youngest (average age 44) CEOs vs. the 10 oldest (average age 74) CEOs of large companies using a formula to measure CEO compensation packages relative to shareholder return, it found that “the younger CEOs as a group outperformed the higher-paid, older CEOs.”

Learning: If you have any ambition of becoming a CEO, be loyal, and never jump jobs (at least, not more than once)!

LESSON #5: CEO + CHAIRMAN = SUPERMAN!
Despite all the hogwash talk about corporate governance and splitting of the CEO and Chairman roles, the truth remains intact – one bird in the hand is better than two in the bush. While 64% of Fortune 500 CEOs play the dual role of a Chairman and CEO, the figure is just about the same with S&P 500 companies, where 61% of the companies have the same person serving as the CEO & Chairman (Source: Hewitt Associates Board Index Report). A case to point is Rex Tillerson, the man in charge of ExxonMobil, one of the world’s top three corporations. Rex has been serving as both the CEO and Chairman. Under him, Exxon has reported eight of the ten highest quarterly net profits for any company in the history of mankind. The top three highest being $14.83 billion (during Q3, 2008), $11.68 billion (Q2, 2008) & $11.66 billion (during Q4, 2007) – all three records when he was the ‘dual’ man on top!

Learning: More the people taking the decisions, more delayed a company’s response to competition. Clearly, the world’s leading firms combine the Chairman’s and CEO’s post.

LESSON #6: CORE FOCUS ON A SINGLE BOARD
Over the past decade, outside board service by CEOs has fallen by 65% as compared to 1998. On an average, CEOs now serve on only 0.7 other boards, down from 1.0 in 2003 and 2.0 in 1998, as the Board Index Report by Spencer Stuart concludes. Not just that, the average size of the Board of Directors is also shrinking, having fallen by 10% over the past decade. The trend towards smaller boards becomes more noticeable now: The number of boards in the S&P 500 with 12 or fewer directors has increased by 18% since 1998 and 8% since 2003. Surprisingly, today 80% of S&P 500 Boards have 12 or less than 12 directors.

Learning: Do not allow the top management to focus on anything other than your corporation!

IN SEARCH OF EXCELLENCE: 6 LESSONS FROM THE WORLD’S BEST MANAGED COMPANIES

STEVE BALLMER SAYS IT’S UTTER HOGWASH!

If looks could kill, the outrageous way my seven year old cellphone looks could have killed anybody a mile around with a ten mile collateral radiation damage. I have been supremely chided by friends, families (neighbours’ included), philosophers and tour guides about the villainously repellent profile my cellphone seems to have inherited after so many years of use, misuse, and abuse. I had been completely insulated from all these ‘change-to-a-modernphone- dear-junkie’ diatribes, till one evening, for the first time, my wife with quite a rancid look on her face accosted me the moment I entered the house, and steamed away, “It’s not anymore about you, but about how outsiders have started perceiving us all due to that schlock of a contraption. Why can’t you buy a new phone? Even the car cleaners have better handsets. Don’t you think buying new technology actually improves productivity?” The thundering sword of a question was pretty haunting in nature: Critically, how valuable do the world’s greatest organisations consider investments in new technology? How well do these investments improve profits, sales etc...?

When the famed Jim Collins wrote a few years back in his best seller, Good To Great, that “none of the Good-To-Great [world class] executives put technology as one of their top 5 drivers,” not many believed that that would be the way it would be in the future. A year back, when I researched the outstanding NYSE CEO Report 2008, it stunningly corroborated Jim’s findings by showing that only 5% of CEOs now thought that new technology would be “the most important internal factor affecting profitability...” 67% of CEOs believed that “the ROIs from technology investments have failed to meet expectations till date!” In fact, the factor considered most important by CEOs for revenue growth was ‘management team’, rather than technology. Now, when I study the most recent NYSE CEO Report 2010, it brilliantly states, “As was the case [previously], operational efficiency and management stand out as the internal factors expected to have more impact on profitability. CEOs have downgraded the importance of new technology and products...” 70% of CEOs now say they would not increase their investments in technology.

A lucid and provocative speaker on business and technology, Nicholas G. Carr, in his most celebrated and controversial HBR article titled, ‘IT Doesn’t Matter’, proves through extensive research how, “As Information Technology’s power and ubiquity have grown, its strategic importance has diminished. Technology’s potential for differentiating one company from the pack – its strategic potential – inexorably diminishes.” While experts and media houses from around the world called the work “A bombshell” (Forbes), “Provocative” (NYT), “Firestorm!” (BusinessWeek), “Accurate description of the technological world...” (CNN Money), “...and of today’s tech landscape” (WSJ), Steve Ballmer, CEO of tech-giant Microsoft, predictably called the article a “hogwash!”

A famed letter from John Seeley Brown (former Chief Scientist, Xerox) and John Hagel III to HBR had this epitaph of a warning, “Businesses have overestimated the strategic value of IT. They have significantly overspent on technology in the quest for business value. IT-driven initiatives rarely produce expected returns...” And for those companies believing in being at the forefront of innovating new technology, I present PwC’s most recent Annual Global CEO Survey 2009, which shows that ‘technological innovation’ does not feature even in the top five factors for CEOs as a “critical driver of long-term success” (The most important factor was “Access to, and retention of, key talent”). Even when it comes to ‘Immediate threats’ that are driving CEOs’ priorities, ‘technological disruptions’ are ranked at a lowly #13; second from last! ‘Terrorism’, ‘Climate Change’, ‘Inadequacy of natural resources’ and other such factors are ranked higher in importance by CEOs. From the IBM Global CEO Study 2006 to the peerless thesis titled Economic and Technical Drivers of Technology (March 2006) by Dr. P. Yin (HBS) and Dr. Timothy F. Bresnahan (Stanford), from the superlative Economist Intelligence Unit 2007 report to McKinsey’s classic 2007 report (The Next Frontiers in IT Strategy), study after study has now proven that investments in technology have not only left a humungous majority of CEOs completely unconvinced about their effectiveness but are also atrociously useless in many cases.

So what do you do when on one side you have all the research in the world screaming away to you to not invest in a new cellphone, and on the other side you have a pressure cooked wife shouting at you to invest thousands in the latest thingamajig?... You buy the cellphone! Period!!!

STEVE BALLMER SAYS IT’S UTTER HOGWASH!

BEASTUS MAXIMUS OR DON JUAN DE MARCO?

No man ever gets a potbelly. No one! And born gymnasts like me, never in ten lifetimes. You might get a little plump here and there, but a potbelly? Bah! Thus it was, when – with much irritation after being hounded for over a month by my wife who libelously accused me of having procured a potbelly – I landed at the neighbourhood gym (which looked more like a fancy den for bully boys, one-third my age, trying to show off their hormone pumped muscles).

Trudging in contemptuously, while ogling at the plethora of mile-long machines lined up on both sides, I was straightaway introduced by my teenage nephew, who frequented the gym, to two brawny thickset six-footers, and asked to choose the trainer I would desire to be trained under. And why would I ‘desire’ one trainer over the other? Their differing training styles were put forward for my consumption. While one hooligan roughneck (Beastus Maximus is what I call him) was purported to be the toughest monster-trainer west of Cambodia, who could savagely whip your ten generations blood-dry till you got into shape, the other surprisingly had a gentler and suaver style of training, allowing you to lavishly train according to your ‘desires’ and needs, without pushing too hard.

Not surprisingly, Mr. Don Juan predictably was the more admired trainer with a bigger following. But that brought me to an interesting question. Despite the likability – or dislikability – index, who would be in reality more effective in getting people into shape – would it be bullboy barbarian who could machine wrench your guts out; or would it be the caring inveigler who’ll give you enough space to set up a farmhouse?

I decided to check out the metaphor in global corporations – have hard taskmasters been less successful universally than soft taskmasters? My research gave results to the contrary. The list of Fortune’s 2009 Best 100 Places To Work For (which contains names of 100 corporations which employees love the most globally) had only 5 names from the world’s top 100 and best performing corporations. That is, 95% of the world’s 100 largest companies – including Exxon- Mobil (the most profi table corporation in the world), Walmart, Chevron, Hewlett-Packard, GE, Berkshire Hathaway – are actually not the best places to work!! More shocking is the fact that the #1 company in the Best Places to Work ranking (a company called NetApp) did not even make it to the Fortune 500 list of the world’s largest corporations! The #2 and #3 do not even feature in the Fortune 1000 list!!!

For information, Fortune once noted that research shows that having or not having natural talent is “irrelevant to great success. The secret? Painful and demanding practice, and hard work...” Fortune also wrote about Warren Buffett, the world’s richest individual, that he was “not a born CEO or investor or chess grandmaster,” and that he achieved greatness “only through an enormous amount of hard work over many years. And not just any hard work, but of a particular type that’s demanding and painful.”

In other words, deep-rooted and long standing sustained sincerity works terrifically better than plain passion and myopic bursts of commitment.

Tiger Woods is a textbook example of what research proves. Because his father introduced him to golf at an extremely young age (when he was just 2 years old!) and encouraged him to “work hard,” Tiger had racked up at least 15 years of hard work by the time he became the youngest-ever winner of the US Amateur Championship, at the age of 18! Even today, after winning many world titles, he works as hard, devoting many hours a day to conditioning and practice, even remaking the same swing twice, because that is his formula to getting super better.

When Carly Fiorina left HP (of course, after halving HP’s shareholder value in her six year term), the tumultuous 2001 merger with Compaq appeared to be driving HP straight to the undertaker’s workshop. Enter Mark Hurd, who is described as a “peerless control freak and an unrepentant leftbrainer!” As Fortune confi rms, “Hurd quickly established himself as a stern taskmaster for accountability.” Ben Horowitz, who was CEO of Opsware, which HP bought in 2007 in a $1.7 billion deal, adds, “His weapon of choice is the voicemail... and he begins the barrage in the wee hours. If Hurd is down on someone’s work, he’ll complain openly, so everyone knows he’s displeased. It feels like the walls are closing in on you.” Hurd’s greatness comes from the fact that he’s unrelenting, unrepentant and ruthless in his employee destruction, reaching below various levels of employees to rebuke bad performers personally. HP today is the world’s largest IT corporation (Fortune #9) whose revenues of $118.36 billion surpass even that of IBM’s. Even in the face of recession (a time when desktop and laptop sales have been battered), HP’s stock price has jumped by an unbelievable 130% since 2008 to touch $46 as of date.

That brings us to a close associate of Mark Hurd, A. G. Lafley, who in July stepped down as the CEO of P&G, while retaining the seat of P&G’s Chairman. When Lafley took CEO charge on June 6, 2000, P&G was in a big mess. Over the next six months, matters worsened, with the stock losing 50% of its value and its Mcap falling by more than $50 billion. But Lafley did the unimaginable through his ‘Working It’ program, which ensured that every member of the P&G family was made to “actually go into shops to sell to consumers,” as the April 2008 book by Ram Charan and Lafley titled The Game Changer notes. This go-to-field program ensured that each and every employee was made to work hard and sweat it out for maximum productivity! By the time Lafley left office as the CEO, P&G’s Mcap had improved dramatically to $150.59 billion from the lowly $33.74 billion it touched in the first six months of his arrival – a rise of 346.28%! What about ‘unhappy’ employees? Lafley confesses, “The company has no right to be happy unless ‘the boss’ is happy.”

Mentioning Jack “Neutron Welch” as “a tough taskmaster” would be a cliche. But it’s still important to note that Jack was well renowned for his often most displeasing “handwritten notes on performance” to employees, throwing out even passionate people at will, if they didn’t have sustained sincere attitude towards work. When Jack retired, GE’s value had increased by an astonishing 2,729% to $410 billion!

In the 2009 Conference Board Review paper titled, Why Americans don’t trust CEOs, Jason Jennings, author of the best-seller Less Is More notes that “strong leaders should be: straighttalking, hard-charging, tough taskmasters...” Many say like AIG’s former boss Hank Greenberg, who built a $99 billion financial-services empire (before Martin Sullivan, his successor destroyed it) – BusinessWeek calls Hank “the impatient and prickly leader, who could yell at people even while cycling furiously on a stationary bike!”

For too long, we have been a nation purporting the myth that companies should protect employees, give them brilliant and amicable working environments. No more! It is time to call the ridiculous bluff and to realise that without being the worst taskmasters and slappingly demanding sustained sincerity from employees, we can never become world class and globally benchmarked!!!

But hey, all said and done, research could go to hell, what about my personal life – and the ever growing potbelly? I still had the Damocles’ predicament hanging on my head at the gym. Who could ensure my potbelly could be zapped away with sureshot guarantee? Was the ungodly taskmaster Beastus Maximus really a better choice as my trainer or was my hero going to be the genteel Don Juan de Marco? I was confused and undecided through the day, until dinner when I met my dad – who had sometime back rid himself of his potbelly almost unbelievably overnight. I asked him what choice would he have made in such a damning situation? “Kapalbhati,” came his lightening reply. Taken aback, I said, “Kapalbhati?!? What in crazy heavens is that?!” He coolly replied, “It’s a yogic breathing technique, kid.” I stammered back, “But how can a breathing technique help you to get rid of your potbelly overnight?” Dad smiled mystically, and said, “Suck the damned potbelly in boy, that’s what it teaches you!”

BEASTUS MAXIMUS OR DON JUAN DE MARCO?

ALL CONSUMERS ARE FOOLS!

Well, almost all! It was three years and three months ago when I had covered this concept passing a conclusive judgement on the intellectual incompetence of consumers around the world. And the wonder is, while releasing this iconic issue of 4Ps B&M that contains the exclusive ICMR survey of India’s 100 Most Valuable Brands, I realised that even after so many years, nothing has changed globally, and therefore I decided to bring to you the same editorial once again in toto! All consumers surely still remain fools! Seriously believe that, and you’ve got the most astoundingly rocking and smashingly successful marketing campaign! But don’t blame me, blame Dr. Daniel Kahneman of Princeton University, who received the Nobel Prize in Economics in 2002-03, for emphatically proving the above mentioned statement... His ‘Prospect Theory’ suggests that rather than undertaking decisions just based on ‘logical reasoning’ (namely, choosing the better product over the worse), humans also include a critical factor known as ‘intuition’, which is the main reason for consumers behaving irrationally and many a time even foolishly while purchasing products and services. Some years ago, even Dr. John Nash (of Nash Equilibrium fame) won the Nobel Prize for theorising a similar concept.

Most interestingly, the ‘Prospect Theory’ has its mirror image in the competitive strategy theory propounded by Dr. Michael Porter, where he postulates that all the global theories of competitive strategies and tactical warfare can be summarised into one electrifying word, ‘positioning’, and consecutively, into another word that is mind-bogglingly changing paradigms of marketing battles in global industries and consumer spaces. And that word is ‘perception’. Porter aggressively argues that consumers do not make decisions based on which product is better, but based on which product is “perceived” as better. Amusingly, across industries, more often than not, the product which is actually worse off in quality is the one which sells more, and many times, despite being priced higher.

And it’s been the same for quite a few years. For example, in 2006, the cell phone manufacturer that had the number one rank in quality in India was Sony Ericsson (IDC survey 2006); while the company which sold the most cell phones was Nokia (with a jaw dropping 79% market share, compared to a pathetic 5% of Sony Ericsson; the figures are 64% for Nokia and 6% for Sony Ericsson in June 2009), in spite of lagging behind Sony Ericsson in quality, and in spite of a majority 60% of their sales being in the costlier priced segments. Similarly in automobiles, Toyota has been consistently ranked as number one in quality, year after year (JD Power Surveys) and in 2009 was ranked the third Most Admired Corporation globally by Fortune. But still, despite being ranked relatively way below Toyota in quality, despite not even featuring in Fortune’s Top 50 Most Admired Corporations list, despite being bankrupt, the company that has consistently been the world’s largest passenger car manufacturer for years is General Motors (August 2009 global market share: GM 18.9%, Toyota 17.5%). And if speed & technological excellence were the factors of quality, then while Ferrari has won six of the past nine years’ F-1 Grand Prix Championship, its parent Fiat’s market share globally is 3.6% only. The ‘Judgement of Paris’ wine tasting competition in 1976, covered by TIME magazine’s George Taber, which was held again in May 2006 in London, proved that California wines tasted better than French, and by miles. Guess which sells more? But obviously, the French.

The strategy these global leaders use is ‘perception’! Play on consumers’ irrationality, and one can easily change their perception about eating cancer causing burgers, drinking liver destroying alcohol, consuming pesticide infested cold drinks, munching on fungal infected and worm strewn chocolates, smoking life destroying cigarettes, doing dope etc. etc. etc.; the list is never ending and extends even to football. In the history of FIFA World Cup Finals since 1930, only three times has a team that had the best quality player (that is, the player who won the Golden Boot award for scoring the most goals) gone ahead to win the tournament! For the sake of it, guess who is the most successful footballer of all times scoring the most goals in the history of international football. Obviously, the “perceived” answer is Pele, right? Wrong! The man is Daei Ali of Iran (109 goals). With 77 goals, Pele is not even second in the list (Ferenc Puskas from Hungary is, with 84 goals)! So are all consumers fools? Like I mentioned, I know of at least two people who’ve got Nobel Prizes proving just that! And none of them is a consumer like you or me!

ALL CONSUMERS ARE FOOLS!

YOU’RE A CLASSIC FAILURE, BOY!

Flying is something that I simply hate. The symptoms are always the same. My heartbeat and BP shoot up the moment the aircraft starts taxiing for a takeoff, I break into a sweat, yet my hands turn ice cold. Thus it was when last week, with great trepidation, I entered an unavoidable flight down south. It was with pleasant surprise that I noticed that my co-passenger was none other than my favourite professor from my b-school days; the wizard used to teach us astounding leadership case studies, but I liked him more because he was the easiest to irritate amongst the lot and we used to take full advantage of it. Initial greetings aside, the fleeting scowl on his face was a giveaway that he remembered me too well. Attempting to rekindle old relationships thereon, I mischievously told him how I remembered his classes even now, and he smilingly nodded back, knowing very well I didn’t mean it at all. Thereon, we kept exchanging random statements... till the point that I got this crazy devilish urge to vex him and fibbed up a make-believe grouse that despite trying very hard, I had still not been able to achieve some of the visionary things that I had been aiming to achieve by this age. He looked at me, and surprisingly said, “That’s pretty good, I say!” I was foxed by his reply. Looking at my confusion, he said, “Let me tell you a story...” And that’s how the story began...

He was born at an underprivileged medical center. Even as a baby, life was anything but sweet for him. His parents divorced within three years of his birth. Although his mother remarried, she unfortunately married a man who was known to be jobless, and who got into the habit of coming home drunk every night – in fact, during a drunk-driving incident, the man had both his legs amputated and died soon after. As a young lad, struggling to keep up with social questions about his multiracial heritage, he became addicted to alcohol, marijuana and cocaine during his teenage years, which he later said was his “greatest moral failure.” He also became an uncontrollable chain smoker who couldn’t quit smoking despite trying too many times. He even lost his mother to ovarian cancer in 1995, much before he had anything signify cant to achieve. But failures are what taught this man the beautiful attitude of sincerity. That belief is what led Barack Obama to win the Illinois senator seat in 1997; that belief is what led him to convince a totally opposed state assembly to pass a bill that forced police to videotape all interrogations to reduce torture and deaths in custody, especially of blacks; that belief is what led him to run the Presidential elections in 2008 despite being trounced devastatingly in the 2000 Congressional elections and despite being told a few years back by his media consultant that he stood very little chance as his name sounded too similar to Osama Bin Laden.

If Obama had an underprivileged childhood, Steve Jobs went through worse. When he was born, his mother was an unwed graduate student who put him up immediately for adoption as she did not wish to rear him. Ironically, Steve wasn’t even the first choice of his adoptive parents as they had actually wanted a girl. Steve’s ‘new’ mother was just a high school pass-out, and his father wasn’t even that. Later on in life, Steve Jobs did join college, but dropped out within six months as he couldn’t see the value in it. But despite dropping out, Jobs continued dropping into classes that interested him. He would sleep on the floor of his friends’ rooms and returned Coke bottles to earn 5 cents per bottle to buy food. Every Sunday night, he would walk seven miles across town to get a free meal at a Hare Krishna temple. The learning from that part of his life and those ‘dropout’ classes is what gave him the zeal to co-found Apple in 1976, market its Mac products too passionately, and make the cover of the TIME magazine by the age of 26. It’s common knowledge now how Steve Jobs was fired from his own company by Apple’s board of directors, a failure that drove him again to found Pixar and NeXT, two more iconic companies, before he was reinstated storybook style as Apple’s CEO! A pancreatic cancer patient (one of the most dangerous cancers with the lowest survival rates), Steve Jobs also had a liver transplant earlier this year. And he has already joined back for work! “Living every day as the last day of your life,” is the very statement Steve Jobs says has been driving his ambitions through all his failures since the age of 17.

From Milton Hershey of Hershey Chocolate Company (whose businesses went bankrupt three times before he finally made it big) to Henry Ford (who failed twice before Ford Motor Corporation was born) to Abraham Lincoln (who lost seven times in the Presidential elections before he finally made it), all successful people have been the biggest failures at one point or the other in their lifetimes.

My professor was almost done speaking and strangely justifying to me why when he kept reemphasizing that I was an utter failure, he actually meant good. Well, I seriously didn’t know how to take it. Before I could poke him further, the plane hit the biggest godforsaken air pocket I’ve ever experienced in my life and started rocking and rolling better than Elvis could ever have done in his dreams. And then, suddenly, the aircraft plunged into a dramatically sickening dive; and I did likewise into a crazy bloodcurdling banshee scream. With cups, and my whole life, streaking in front of me, I couldn’t help but astonishingly notice the professor calmly smiling away to glory. It looked totally ridiculous. Didn’t the professor realise we all were well on our way to Kingdom Come? Sniggering, he shouted to me through all the noise, “Live every day as the last day of your life!” It sounded insane and totally inappropriate. I shouted back, “Sir, if I don’t make it alive through this rotten flight, how the heavens do you think my failure to survive will ever make me hugely successful?” The prof shouted back through his guffaws, “Son, your ‘failure’ could result in somebody else’s success! Your sacrifice could very well help rewrite future safety rules to create the most successful airlines in safety standards...” If I had to understand what being a failure meant, that moment in time encompassed it all; a moment when I decided that if I were to escape the crazy air ride, I would never ever trouble any professor of mine, especially this one. Well, as is obvious, I escaped; but I have to confess that the talk did have some advantage at least. These days, whenever my sweetest wife accuses me during our classic championship bouts of being the biggest loser in life, she just can’t get it why my face starts glowing with pride. Last I heard she was growling at me that this was going to be the last day of my life... That’s the way we husbands live it all the time honey, that’s the way we all live it...

YOU’RE A CLASSIC FAILURE, BOY!

WHO’S A BETTER PRESIDENT? OBAMA OR BILL CLINTON?

I hate that first Friday of every quarter, when I have to meet three of my school friends for dinner. We’ve met almost regularly since the past twenty years (yes, that’s how long ago I passed out of school... somehow). But over years, as much uncivil, raucous and impressively fat my three loudmouthed friends have become, have I become more docile, quieter and thinner. We’re the oddest Hangover combination; and restaurants that have been graced by our benign presence in the past, shiver at hosting us again... I keep asking myself, why do I keep going? And here I was again with them, a couple of hours into another Friday’s dinner, caught in a completely dunce of an argument about who has been the better US president till date – Bill Clinton (their choice) or Obama (my choice)?

To cut them all to size, I broke down my argument intellectually, and told them that a brilliant President/ CEO (of a country or a company) as per global research needs to have five outstanding necessary characteristics and how Obama had all of them:

Outstanding Characteristic #1: Passion: In a classy 2005 HBS paper, Dr. Jonanthan Byrnes (who also teaches at MIT), after an exhaustive international research, identified “essential characteristics” of transformational leaders. The top one was “capacity for passion!” Describing it as the “fire in the belly,” Dr. Byrnes says exceptional leaders are simply “people who leave their footprints in their areas of passion!”

I told my friends how one look at Obama speaking either after his win or even, say, recently in Cairo, was enough to prove how passionate a person he is. My friends retorted how even Bill Clinton’s State of the Union address to massive crowds proved his passion. In fact, the US economy had the most positive feel because of his speeches only. Sensing a tied point, I moved on.

Outstanding Characteristic #2: Dynamism: I argued that simply passion is not enough, but dynamism, both mentally and physically, is also a complementary requirement. In a May 2009 HBR paper titled ‘Those Poor CEOs...,’ Melissa Raffoni proves how the top characteristic of “The best, most successful CEO” groups is that “they’re made up of... dynamic CEOs”. In the book ‘The Ghosn Factor: 24 Lessons from the World’s Most Dynamic CEO’, Miguel Rivas-Micoud shows that Carlos Ghosn – CEO of two companies (Japanese Nissan and European Renault) – travels 150,000 miles on an average annually, or 411 miles/day! He’s half a week in Japan and half in Europe, every week without fail.

And that, I argued, is Obama’s forte, what with his travelling to various continents – Africa, Europe, Asia – within the first year of his getting elected. But then, I had to accept, in the most authoritative study of ‘Presidential Travels’ since 1953, the US National Tax Payers’ Union proclaims Bill Clinton is America’s ‘Best Travelled President’. I had to get to the next point...

Outstanding Characteristic #3: Authoritative: Yale University’s Prof. Samuel Huntington’s paper Political Order in Changing Societies says, “Authoritarian regimes are more capable of rational, consistent, and responsible decision making...” Prof. John R. Oneal of the University of Alabama, shows that “(shareholders) rates of return have been greater under authoritarian regimes.”

There is no doubt that Obama is authoritarian! When Obama wishes things done, he passes executive orders! From appointing different genders/ races in his cabinet to threatening truant countries despite opening up talks with them, Obama means business. Could Clinton ever do that? My friends remind me that not only did Clinton appoint Madeline Albright, the first woman secretary of the state in US history, but also actually declared war on Iraq (on 16th December 1998, as it refused to allow UN inspectors to inspect its various chemical plants). Hmm, they had a point... and I didn’t want to lose! So I gave them my best point.

Outstanding Characteristic #4: Driven by gut feel and emotions: 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!

I showed how Obama doesn’t just go by numbers, but emotionally decides on the cuff too. His response against the police to the recent arrest of a Harvard professor proves it and he’s loved the world over for it. My friends corrected me that on one hand, Obama is not loved that much in Asia, and on the other, he looks completely non-emotional and military-like as compared to, say, Bill Clinton, who was and is loved like mad the world over – even in countries at complete war with US – and was one of the few presidents who cried when he got elected, and never felt ashamed of it. I was losing the battle.

Outstanding Characteristic #5: Multi-tasking: I rambled off how a dynamic CEO has to be a master multi-tasker! And none the better than Obama, who not only manages to host dinners, sign executive orders, travel, give speeches, but also manages to meet up school kids, replies to many emails himself, and most importantly, regularly exercises and keeps a fit body. Could Bill Clinton ever manage to do anything else while signing his executive orders? At this point, I saw my friends breaking up into uncontrollable laughter, giving each other high-fivers and almost toppling over. Before I could ask them the reason, one of them managed a few words through the howling episode, and said, “Dude, you’ve never heard of Ms. Lewinsky, have you?”

Damn it!!! I should have known they’d bring it up! Couldn’t the world look beyond personal indiscretions? Damn their laughs! Damn the Lewinsky factor!! I had had it with the dinner... It was useless arguing with this bunch, ever! And as usual, the whole restaurant was staring at us, what with the three garbling giants lying on the floor guffawing their guts off. It was a wonder they didn’t choke on something, given the tones they’d stuffed in during the dinner... Geez, I’m sure you all must be wondering why in heavens do I keep going back to having dinner with the Tyrannosaurus bunch. Hmm, I know, it’s a paradox, I keep asking that myself. I’ve known them for thirty years of my life now; and over the years, they’ve kind of become very close to me. I know that they look like aliens, they behave like aliens, but they really mean no harm and come in peace. Yeah, I hate them (sigh...), but I love them too...for in their life, there’re not many people they have as friends, except me... Guys, they ain’t heavy, they’re my brothers...

WHO’S A BETTER PRESIDENT? OBAMA OR BILL CLINTON?

THE FIVE [HR] HABITS OF HIGHLY LOUSY CEOs©®

The last time I wrote my trademark ‘Lousy CEO’ dummies guide almost a year and a half back, I was strangely inundated with requests for a reprisal from my handful of‘ friends’. Sensing how my ‘loving ones’ were simply trying to stoke a similarity between my habits and those lousy CEO habits I’d written about (I have to admit, there does sometimes seem to be a remarkably frightening similarity...), I’d chosen to give their caring requests a sweet by. But as many bridges have already been blown on the river Kwai, I decided to finally present the second in the inimitable ‘Highly Lousy CEO©®’ series, focusing on the world’s worst CEOs and their equally (dis)regarded HR habits!

Lousy Habit #1: Believing old is the new gold!: Lousy CEOs passionately believe that the older they get, the better they become. Outstanding CEOs don’t, and realize that with age, they will lose their effectiveness! The Spencer Stuart CEO Survey report (November 2008, ‘Route to the Top’) shows how not only the median age of S&P 500 CEOs recorded in 2008 was lower than those recorded in the past six years, but also that in the past 28 years, the percentage of CEOs in the list who are either 49 years or below has increased by a smashing 29%! Compared to 53% of CEOs who were aged 60 years or above in 1980 in the S&P 100, today only 23% are.

Lousy Habit #2: Never say die...till you’re dead!: Lousy CEOs are infatuated with the hypothesis that they personally cannot ever be replaced. Outstanding CEOs commit themselves to succession planning. A remarkable 2009 Booz Allen report statistically proves how the count of planned successions (as a percentage of total successions) has increased over the past years. HBS wrote in 2006 (In Search of Excellence: In CEO Succession) how “merely announcing who your next CEO will be, can move (up) the market value of your company by 15% or more...”

Lousy Habit #3: Always recruit an outsider for a CEO!: Even if a lousy CEO buys the succession planning argument, he would almost always choose an external candidate over an internal candidate as his replacement. Outstanding CEOs always choose internal candidates. The 2009 report from Booz Allen titled Stability in the Storm proves – after evaluating 2,500 leading global companies – how even during times of downturn, 76% MNCs rely on internal CEO candidates to steer the company to safety. They state in another report (The Perils of Good Governance), “The outsider who comes in to whip a company into shape is most likely to get a thrashing.”

Lousy Habit #4: To hell with loyalty!: Lousy CEOs believe that if they don’t keep jumping jobs every few years, they’ll be perceived as being out of fashion. Outstanding CEOs almost never leave their companies during a lifetime. In a research I quote often, Forbes proves how a mind numbing 81% CEOs of America’s top 100 corporations have never changed their jobs (or have changed at best only one) throughout their lives! A monumentally similar 75% CEOs of leading non-US corporations have spent more than 35 years or more with the same company they lead.

Lousy Habit #5: Multi-tasking is for sissies; specialization is the future! The Institute for Innovation and Improvement profiled the legendary Bill Gates and reported that “Gates is the original multi-tasking man...” In fact, the ambidextrous 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.” Multi-taskers today are not only more educated than non-multi-taskers (78% more), but also are better paid (in general, a whopping 200% more) as they lead to more productivity (Dr.Gibbs in a Chicago Graduate School of Business co-authored paper). Lousy CEOs specialize; excellent CEOs multi-task!

With these words, I end this ‘lousy’ editorial! Man, these guys have started giving me too much varied work... Phew, I need a new focused job! But how the hell will they ever fi nd anybody who can do my job? Who cares... Hey, what’s this lousy slip doing on my table... and why’s it coloured a silly pink?...

THE FIVE [HR] HABITS OF HIGHLY LOUSY CEOs©®

THE DUMMIES GUIDE TO GLOBALIZATION!

It was almost as if I was waiting for that day. The cacophonic kids of my block are one intemperate, raucous and uncivil bunch belonging to the we’ve-just-now-entered-double digit- age variety. But I somehow kind of really like the cheeky brat lot of fifth and sixth graders. Thus it was, when one day while returning from work, I chanced upon the truants discussing how that day, one of their teachers at school had told them how globalization had worked for... I froze in my tracks, and didn’t even let them finish the statement when I literally jumped into them! Like I said, it was almost as if all my pent-up emotions were just waiting for that that moment to happen, as for ages, I had known ‘the’ answer!

Well, my first question is, is globalization really necessary for companies? This one’s actually a no-brainer. The noted neo-IT 2006 study titled ‘Globalization and the Impact on Shareholder Value and Revenues’, which used the Fortune 500 and S&P 500 companies as their research base, dramatically proved how companies that globalize “create more value for shareholders than companies that don’t globalize!” The year 2006 Accenture report, ‘Expanding Markets: Innovation and Globalization’ added that “the best performers [globally] were 83% globalized, while the average performers were only 18% globalized,” – which brings us to my second question.

Is India globalized? One of the most outstanding reports released by AT Kearney and Carnegie Endowment titled, The Globalization Index 2007, after analytically ranking countries around the world on multitudes of parameters like political engagement, FDI, technology, personal contact and economic integration, puts India at a lowly rank of ‘second from last’ (ahead of just Iran!). So much for our claims of being globalised! Jordan, Estonia, Tanzania, Senegal, Nigeria, Kenya, Botswana, Uganda, Ghana and many more are ranked above India. In 2002, the same report (Globalisation Index), based on the same parameters, had ranked India seventh from last! In other words, with each passing year, we have actually regressed when it comes to going global.

This brings up my third question – how many recognized, valued globalised product/service brands does India have? The answer is not two or one, but zero. Most recently, MilwardBrown released its much awaited Most Valuable Global Brands 2009 rankings. Out of ten Asian brands which fought their way into the rankings, 6 names were from Japan and 4 were from China! Zero from India. A similar tale is repeated in the most respected Interbrand/BusinessWeek’s Survey of top brands for 2008, where amongst 8 Asian brands, none are of Indian origin! What a shame!

Bringing us to my fourth and last question – isn’t India supposed to be the top globalised country when it comes to technology adoption? As per the 2008 report by World Economic Forum, titled, The Global Information Technology Report 2008, India is ranked a lowly 50 on ‘readiness to adopt technology’, much behind countries like Barbadoas, Slovak Republic, Latvia, Tunisia, Chile, Lithuania, Estonia and others. The February 2009 report by Nokia-Siemens, titled Connectivity Report 2009, proves how India Inc. stands battered at the 6th last position on the global rankings in terms of technology adoption by companies.

In straight terms, India stands shamefully last on almost all parameters of globalization... I was out of breath when I stopped bleating to the fi ve foot gang on the wretched global performance of India. A few moments of silence passed, when I realised that they were all staring at me, predictably stunned. I knew I had made a path breaking impact... till one of them spoke, “Mama [they call me that; it means Uncle, colloquially], guess you’re working too much. Not that we understood even a word of what you said, but all I had said was that our sports teacher told us today how globalization has worked for Indian wrestlers, as they get desi Indian food outside the country too... Mama, chill down...” Food?! Wrestlers?!? What was I thinking!! While slinking away totally embarrassed, I got my fi nal learning on the topic – globalization never works, not even with Indian kids!

THE DUMMIES GUIDE TO GLOBALIZATION!

CHOOSE FAST! ONE FRIEND OR MANY FRIENDS?

The argument dates back to a dinner I was having at a restaurant last week with three of my Austin Power school friends (yes, we all have a combined IQ that just about beats a tubelight’s... when it’s switched off), who were complaining rancidly that whenever we ate out, I always ordered the same old dish time and again. “Man, why’re you so against ordering different dishes? Look at the wide range we’ve ordered,” they all argued. When I tried to throw them off by mumbling something complicated about how core is better than diversified, they all pounced on me clearly highly irritated, and the grouchiest one of them threw me a choker, “If you’re so much in love with the stupid concept of sticking to your so-called ‘core’ dish, choose dude, which friend amongst us do you want? And choose fast...”

Cornered, my life flashed in front of me... Alright, not my life, but at least a few research reports I had read up a few days back on whether focusing on core businesses is more profitable for companies or having diversified streams of operations. Prof. Gert Bruche of The Berlin School of Economics destroyed the happiness of the core lovers when he proved in his working paper titled, Corporate Strategy, Relatedness and Diversification, that diversify ed companies “display a better performance” than single business companies. Another sparkling report by an erstwhile core proponent, McKinsey & Co, titled, Beyond focus: Diversifying for growth, proves how over a period of a decade, the market value CAGR of diversified companies stood 126% higher than of focused companies. There’s more. The report further clarifies how on one hand, while “the focused group tallied an average annual excess Total Returns to Shareholders of 8%,” the “diversified group notched up 13% annual excess TRS and higher median EPS growth…”

Then follows the pumped-up and charged to the core, ‘anticore’ study by Profs. A. M. Pandya & N. V. Rao of Northeastern Illinois University titled, Diversification and Firm Performance: An empirical evaluation, which proves how, “Diversified firms show better performance compared to undiversified firms on both risk and return dimensions. Diversification can improve debt capacity, reduce the chances of bankruptcy by going into new product/ markets, and improve asset deployment and profitability. Diversified firms pool unsystematic risk and reduce the variability of operating cash flow…” Even the iconic Professor Michael E. Porter of Harvard Business School argues in his almost revolutionary book, Competitive Advantage: Creating and Sustaining Superior Performance, “Resource sharing and competence transfers enable the ‘diversified firm’ either to reduce overall operating costs in one or more of its divisions, and/or to better differentiate the products of one or more divisions resulting in a price premium.”

The argument against core focus entities doesn’t change, even when we talk about the Fortune #1 company ExxonMobil. In his paper titled, Risking Shareholder Value, well-acclaimed consultant Mark Mansley of Claros Consulting, while analyzing the oil giant, proclaims and proves definitively, “ExxonMobil has the potential to transform the company into a total energy business, increasing global market share, through [vertical] diversification!” Another sparkling paper titled, Can Diversification Create Value?, by Prof. Tomas Jandik of Sam Walton College of Business, University of Arkansas and A. K. Makhija, Fisher College of Business, Ohio University, proves how for diversified firms, “this ‘failure’ to focus has been rewarded with higher firm values. Diversification can create value by opening up new investment opportunities...” The most celebrated Professor Belen Villalonga of Harvard Business School proves in his paper titled, Diversification: Discount or Premium? that diversify ed firms “trade at a significant average premium relative to comparable portfolios of single business firms.” Slapping worshippers of single business philosophy harder, he finally sums it all in one short line, “I find diversification as a premium!” Further good news to shareholders of diversifying firms comes from the Boston Consulting Group which, while mocking all praises about ‘core competence’, proves in its report titled, Managing for Value: How The World’s Top Diversified Companies Produce Superior Shareholder Returns, how during the years 1996-2005, not only did the majority of diversified companies resoundingly beat the stock market average by hugely significant margins, but also that a majority of the core focused corporations (almost 60% of them) were not even able to beat the average shareholder returns provided by diversified companies. The typical nail in the core coffin is the conclusive remark that, “There is no statistical correlation between ‘focus’ and shareholder value. The more businesses a company has, the greater the flexibility it has to reinvent itself and sustain growth.”

Even demergers ostensibly attempted by companies to focus on core businesses have ended up destroying shareholder value. BCG in its report titled, Conglomerates Report 2002: Breakups Are Not The Only Solution, it proves statistically how 70% of such break-ups to focus on lesser number of businesses in the past ten years, either “destroyed” or “did not create value”! Contrary to narrowing down multibusiness focus, diversifying mergers in the past 55 years have continued to deliver superior returns as compared to single-business deals, as proven in the landmark paper by Professor Mehmet Engin Akbulut and John G. Matsusaka, Marshall School of Business, University of Southern California, a report that analysed 3,667 mergers in the past 55 years.

But research be damned! With many highly annoyed restaurant guests starting to stare, I still had three massively slighted friends who were spewing fi re in front of me ready to put me on the stake, asking me to choose just one of them, and that too during a dinner where I was supposed to foot the huge bill. Cornered, I did the most intelligent thing – I apologized to my friends and accepted my mistake that diversification was better than core. With all the three gluttons guffawing away to glory in the most atrocious manner at their victory, I did the next most intelligent thing. I loudly asked the waiter to get four ‘diversified’ bills instead of one ‘core’ bill. I paid up my quarter part of the bill, wished my friends a loving goodnight, got up and walked away home... to my sweetest ‘core’ wife... Well, that sets me thinking, would one core wife be better or many diversified wives?... Hmm, not in this life honey, not in this life... Sigh...

CHOOSE FAST! ONE FRIEND OR MANY FRIENDS?

Keep the damned remote back in the next five seconds!

Is First Movers’ Advantage really a blinder or a blunder for the Einsteins of business?

.He’s the grouchiest uncle with the most terrifying frown I’ve known since childhood. He’s over sixty, talks to nobody and nobody is encouraged to talk to him. Anger is his middle name and fables have been told by my aunt and my mum about the times Godzilla has blasted men out of this universe. And unfortunately, the first Saturday of every month, I have to escort my mum to uncle’s house for an evening family gettogether. It’s a ritual that has no escaping, try as hard as I have [‘family honour at stake, son’, I’ve been irritatingly told]. So through the two hours while everybody meets up and indulges in blackboard nail scratching polite conversation, I slip away to watch the only television in the household kept in the study; but most unfortunately, with my uncle, who holds the remote like a revolver, and ensures that almost every time, I get to see this most boring astrology channel bleating paeans after paeans of painful discourses.

Throughout all of it, T-Rex never talks; and I don’t talk to him. In fact, I don’t remember the last time he spoke a word. The same scene gets repeated month after month... “Boss, be the first mover in making conversation with your uncle!! Believe me, the results would be fantastic!” My eloquent investment banker friend was pretty convincing in his incisive analysis of my predicament, “Look dude, global research proves that first movers have succeeded beyond imagination in history. And don’t forget the time in college when everybody knew you were a sissy while all your first moving friends got the most beautiful damsels? Why don’t you at least try and be the first mover in breaking the ice with your Unc? Invite him out for dinner. Anything! It’ll surely work!”

Perhaps the biggest claim to fame across the world for biting the bullet goes to Dr. Richard Schmalensee, Dean, MIT Sloan School of Management, who in an exemplary discourse in May 2006 (in which he amusingly quoted, “I have the disadvantage of having actually studied the first mover’s advantage...”) proved not only how first movers were at a major disadvantage, but also that “there were plenty of industries where the first movers got killed!” This criticism was resoundingly supported by well-acclaimed global researchers David Montgomery (Stanford University) and Marvin Lieberman (University of California), who, in their outstanding paper titled First Mover Advantages... stated that “The ability to ‘free ride’ on first-mover investments and resolution of technological and market uncertainty” comes as an advantage to Second- Movers! Putting a nail on the first movers’ coffin is the research by Richard B. McKenzie of University of California, who showed how failure rates across traditional industries for first moving pioneers was an elephantine 71%; first movers also had a pathetic average market share of 6%.

Talking more about numerical conclusions, a well referred research by professors Markus Christen (INSEAD) and William Boulding (Duke University) reads thus, “We found that pioneers in consumer goods had an ROI of 3.78% lower than later entrants. And the ROI of first movers was 4.24% lower than followers in the industrial goods sector. The bottomline result: Pioneers were substantially less profitable than followers over the long run, controlling for all other factors that could account for performance differences.”

Dorde Kalicanin, faculty of Economics, University of Belgrade, while outlining the myth of first movers’ advantage, notes in his paper titled A Question Of Strategy: To be a Pioneer or a Follower, “Historically, the advantages of being a pioneer have been promoted to a much greater extent than the risks... It is logical that risks associated in a completely new product are greater than those associated with incremental product changes.”

Professors Vladmir Smirnov and Andrew Wait, faculties of economics, University of Sydney, also devastated the supposed advantages associated with first movers. Their report titled, Second-movers advantage in a market entry game, conclusively puts forward the fact that each player “prefers to be a follower rather than a leader in the market, perhaps because they can free ride on the other party’s investment... The second entrant into a new market often does better than the first firm that entered. If a firm could commit to being the second entrant it would be better-off.”

Another award-winning research titled First-Mover (Dis)Advantages by the previously mentioned Montgomery (Stanford University) and Lieberman (University of California) proves emphatically that “Pioneers often miss the best opportunities, which are obscured by technological and market uncertainties. In effect, early entrants may acquire the ‘wrong’ resources, which prove to be of limited value as the market evolves.”

The most dramatic paper by Rhee (Hong Kong University), Palma (Universite de Cergy, France) and Thisse (ENPC, France) titled First-Mover Disadvantage... supported the fact that the follower “has an informational advantage not only because it directly observes market conditions, but because it makes inferences about market conditions based on the first-mover’s quantity choice. Thus, informational advantage enables the follower to attain higher market share and profits.”

Another sparkling paper by Lieberman titled, Did First-Mover Advantage Survive the Dot-Com Crash?, statistically proves how, “benefits of early entry appear much less pronounced when firm survival is used as the performance measure.” This fact was also vindicated by Min (California State University), Robinson and Kalwani (Purdue University) through their paper titled, Market Pioneer and Early Follower Survival Risks... which statistically proves how, “When the pioneer starts a new market with a really new product, it can be a major challenge just to survive... Overall, these results indicate that in markets started by a really new product, the first to market is often the first to fail.”

It strangely seemed too quiet in my uncle’s study as the channel bleated on, with Groucho Marx (my uncle) and I, super-silently watching the same stupid channel on the same stupid television. But my mind was working overtime. Strangely, though almost none of the above mentioned research supported the first movers concept, I was torn back to my friend’s advice. I couldn’t help thinking that perhaps being a first mover does actually help in relationships. Well, like my friend had mentioned, wasn’t college time the most painful for me just because I always was the second mover? Moving first and fast had to work! I didn’t want to be the loser ever again! I had to do it!! It was now or never!!!

Pumped up and charged to the core, I decided to crush the Orwellian worm of silence this time. In a superflash, I grabbed the remote from my uncle’s hand, switched off the TV in one smashingly swift move, threw the remote to one corner of the room, and looked my uncle straight in the eye, and blurted out maniacally, “Unc, let’s do something new; let’s go out for dinner...” Seconds passed by like eons, but a deafening silence prevailed... I could hear my heart beating at 200 beats per second and the blood rushing in and out of my liver... For the first time in my life, I could hear sweat slowly dripping down from my face, drop by drop... I could even hear someone breathe, perhaps me... Like I said, the silence was deafening...till my uncle spoke to me for the first time in my recorded history, “Keep the damned remote back and switch on the goddamned TV in the next five seconds!”

I did both the things in much lesser time than he had requested. For the next hour, we continued watching the astrology programme in silence... The frog eyed saffron haired presenter was braying away his prediction for my zodiac sign that it’s going to be the happiest day of my life... Last I heard, my investment banking friend – trying to out beat the market by being the first mover – had been wiped out clean in the stock market crash!!! And these days, Godzilla has strangely started visiting our house. Crap! What an ending!!!

Keep the damned remote back in the next five seconds!

Let’s not bring good ol’ Barack into this!

Recession tests companies to the hilt, but following some basic principles can help

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 ‘Barack Obama 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, 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 $1trillion, 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 counter-intuitive 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 stand up 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 them. 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 & Darrel Rigby, noted consultants of the globally renowned consulting firm, Bain & Company, had warned a few years back through their path breaking paper (Strategy For The Re-cession) 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 & 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 that was supported fanatically by McKinsey & Co in their quite readable paper 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 supermodel, 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, new super- fashionable leaves to wear, provides him a top quality animal bone razor to shave his beard, shows him her utopian teakwood bathroom! The CEO’s over the moon! Freshened up, he comes out of the bathroom to see her lying down on her 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 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!

Let’s not bring good ol’ Barack into this!

A story about the 2Cs and the 2Ps!

These are slowdown times, and both my driver and my cook think I’m the most atrocious employer that could ever have been, recession or no recession. Their opinion does not matter to me though, as I think that both of them are crooks and the grubbiest liabilities acquired generations ago by my dad and forced down my throat without my consent. I was mulling over how to use the slowdown as an excuse to get rid of the tormenting two, till one day, I noticed a non-descript book left on my study table by my father, with a deliberate note to a chapter titled ‘A story about the 2Cs and 2Ps’. Curious, I opened the chapter... and that is where my story begins.

Charles Coffin had a strange name and a stranger background. For more than twenty long years, working in his uncle’s shoe company with irascible employees – much similar to my own – Coffin mastered the art of bringing out the best in his worst employees. In 1883, he financed a struggling electrician’s company with his savings, and helped convert Thomson-Houston Electric Company into a mammoth enterprise. Jim Collins writes that Coffin “created a system of genius that did not depend on him – he created the idea of systematic management development.” Coffin practiced communication as a religion to transform mediocre performing employees into fantastically valuable ones. My 2C hero Charles Coffin is now considered by Fortune as ‘The Greatest CEO Of All Times’! He was the first President of General Electric! Let me move on to Paul Pierce (or 2Ps) now. On a fatal night in September 2000, Pierce, a brilliant 23-year-old Boston basketball player (drafted to the NBA bench), was repeatedly stabbed by hoodlums. Doctors didn’t believe that the man will pull through, but he did. Only thing, Pierce was crippled of nearly all faculties. Eight years later, lowly ranked Boston Celtics (who had never won the NBA championship in 22 years), played the NBA Finals against the supreme Los Angeles Lakers (the second highest winners ever in NBA history, featuring the legendary Kobe Bryant and coach Kareem Abdul-Jabbar). The game ends with shocked silence. Boston Celtics have thrashed LA Lakers by 131-92, the largest margin ever in a championship game. The captain of Boston Celtics is an unknown Paul Pierce, who is also named the Most Valuable Player of the NBA Finals. And all because of the one value he believed in, which electrifyingly converted his non-believing team mates into fanatical followers, outstanding team players and exceptional achievers... the value of communication!

Effective leaders communicate thoroughly, exhaustively and most regularly to their employees to retain them during slowdown. Ineffective ones, don’t! BCG’s report Creating People Advantage In Times Of Crisis says that ‘clear communication’ during slowdown is the trademark of an outstanding leader. Business Week’s 2008 report Recession Strategy documents that “communication is the key” to retain employees. Clearly, if there’s one strategy you need to implement authoritatively to get the bedazzling best out of your employees, it’s putting into place a highly structured process of communication – a fact that I seemed to have lost touch with completely. “So what are you going to do?” my wife asked me with a sarcastic snigger after hearing the story. My moment of truth had arrived. It was now or never. I decided to swallow my pride and to finally ‘communicate’ with the two creeps, I called my ‘employees’. And I was pretty straightforward too. I called them both to my room and passionately asked them to leave their jobs... with immediate effect!

P.S.: All this happened a fortnight ago. Just for information, my dad called them both back. They’re still working for us and strangely, now even my parents don’t seem to be communicating with me... Geez, I need a new life!

A story about the 2Cs and the 2Ps!

HOW IN #@%# HEAVENS DO YOU MANAGE HER?!?

The wife, that is! My cousin, married for two years, seemed totally flustered when he stormed into my office. “She drives me nuts,” he screamed, “and tries to dictate everything. I hate it! What the hell do I do man?” All this while, I had my malevolent love-guru yogi smile resplendently plastered on my face (see above). Twirling a pen, I calmly asked him, “Tell me, who pays for everything in the house?” “Of course me,” came the provoked answer. At that very moment, with a satisfied chuckle, I revealed the Bible of manhood to my man, “Then it’s very simple my friend. Go and tell her the golden rule of management. The one who pays is the one who rules. No questions about it, not in family, not in business! One company, one hero! Period!”

I hope wives the world over realise that this actually holds true globally. All current talk about having a CEO who is different from the owner/Chairman is actually balderdash of the highest order. The research is unquestionable. The classic paper titled Chairman and CEO – One Job or Two? by McKinsey’s Paul Coombes and Northwestern’s Simon C.Y. Wong proves how combining the two positions “empowers a chief executive to act decisively...” Nearly 80% of S&P 500 companies combine the two roles in one person (as per a McKinsey study) – a proportion that has barely changed in the past 15 years. The brilliantly well referred study (...The Separation of CEO and Chairman [positions]...) by Brickley (Rochester), Coles (Arizona) and Jarrell (Rochester) affirms how “Empirical evidence provides preliminary support for the hypothesis that the costs of separation [of the roles] are larger than the benefits for most firms.” Of course, Spencer-Stuart masterfully circumstantiates in its 2006 paper titled Board Governance that “splitting the roles of Chairman and CEO does not improve... the performance of the company. There is no evidence of economic gain...”

The splendid Christian & Timbers study, Rethinking the CEO-Chairman Split, shows how “stockholder returns were nearly 5% lower in European companies that implemented the split,” when compared with companies that hadn’t, and how in US, “returns were 4% lower in companies with a separate Chairman and CEO.” Booz Allen’s 2004 report titled The World’s Most Prominent Temp Workers nails it down that “separation of the roles of Chairman and CEO generally reduces returns to investors.” The final nail is driven in by Dr. M. Useem, Director of Wharton’s Center for Leadership & Change Management, who authoritatively states how “research has shown that the performance of US companies in which the Chairman and CEO positions are held by different people is no better than that of firms in which those posts are held by the same person.” From Michael Dell (Chairman, CEO, Dell) to Steve Jobs (Chairman, CEO, Apple), from Warren Buffet (Chairman, CEO, Berkshire) to Osamu Suzuki (Chairman, CEO, Suzuki), from L. N. Mittal (Chairman, CEO, Arcelor Mittal) to Mukesh Ambani (Chairman, MD, RIL), owners of outstanding corporations the world over have only one man running the show, themselves!! Two hours after I had gloatingly packed off my ‘Chairman/CEO’ cousin – who left with newfound confidence to settle scores with his upstart wife – I received a mysterious text message from him. It cryptically read, “Thanks for your advice. I gave it off to her nicely; took your name too. She’s cool. I get to decide from now on what to eat, what to purchase, which channels to see... and where to stay. P.S: My wife conveyed your ‘conclusive’ research to her best friend – your wife – who suggested to me that you avoid returning home (I’m put up tonight at a hotel near the crossing; food’s cheap too).”

HOW IN #@%# HEAVENS DO YOU MANAGE HER?!?

VISION VAMPIRING! ...SANS THE BLOODY TRAVAILS

“We don’t like their sound, and guitar music is on the way out” – Deccan Recording Company, rejecting the Beatles, 1962

Nothing is more critical and more elusive than the vision of the top management. Guys at the Deccan Recording Company are not the only ones who lost a huge opportunity for lack of vision (Beatles went on to become the most legendary rock & pop band ever), it’s rumoured that Elvis – after his first live performance – was advised by his producer to become a truck driver. So much for the producer’s vision!? In the cat-eat-cat world of contemporary business, Vision Vampiring as a philosophy is about looking into the best that the future can ‘NOT’ offer and ensuring that the organisation has a burning desire to vie for that seemingly unbelievable and unachievable objective. But to inculcate Vision Vampiring in your firm, the first step would be to understand the Vision Annihilation Theology...

Vision annihilation theology

Annihilation! Because ‘vision’ should necessarily annihilate and takeover an organisation’s senses and functions at all identifiable levels! Theology... Because it requires an ocean of spirituality and mysticism to grasp the wonder that is encompassed by ‘vision’! Vision is not something that can be calculated using a formula, instead it needs to be determined with an amazing sense of future-thought.

Vision Vampiring therefore is all about ensuring that the Vision dream of a firm is developed and spread to every link in the organisation using compelling transactions, akin to how vampires spread their clan. Vision Vampires are the individuals who ensure that the Vision dream is developed and spread across the organisation. All individuals bitten by Vision Vampires become the new Vision Vampires, who in turn spread the Vision to others; creating more Vision Vampires. Firms need to ensure that Vision Vampiring Groups (VVG) are developed at all identifiable organisational levels, with dedicated personnel focused on the Vision job. Walloping vision-ridicule-entrapment (where managers refuse to think beyond previously set boundaries and get entrapped due to fear of ridicule) is the first step for any discernible vision development at multiple organisational levels. VVGs have to be blasted with the message of not fearing ridicule while developing Vision, else the concept of Vision gets thwarted at the very outset.

Vision Vampiring is the future foresight that provides annihilating inspiration to a firm’s stakeholders; it is the ability to be clairvoyant with compelling reason, and spread this futuristic compulsion and attitude among necessary people. It must be backed by this obsessive pang for achievement that has the capability to be called a revolution. So effectively, Vision Vampiring is where the basis of any corporate planning starts. And ends. And starts again… It, in fact, is why any organisation demands to be the absolute leader. It is indeed Vision Vampiring, which creates targets that seem unachievable; and also creates structures and people who believe in achieving those seemingly unimaginable targets... Obsessively, compulsively, futuristically!

Vision-strangulation

Critics argue that once defined, each employee of the organisation should become enmeshed in this Vision concept. But the Vision Annihilation Theology demolishes this idea. The Vision-Strangulation concept says that as we move down the levels of management, the principle and spirit of Vision is perfectly strangulated and killed because employees at lower levels get enmeshed in their job responsibilities and work pressures, instead of getting enmeshed in Vision. This occurs because stakeholders like lower level managers and employees get totally engrossed and stressed out in achieving their short to medium term objectives. Also because more often than not, the magnanimous Corporate-level Vision does not relate to the everyday job of employees. The more one moves to lower levels in the organisation, the more the top-level Vision Statement has to be refined to include perspectives of the lower levels. A sales officer in any organisation, irrespective of the company’s Vision to be world’s number one, would keep worrying about his own monthly targets. A recruitment executive would be more worried about planning the next recruitment requirement that might be expected within the organisation and so on. For example, the Vision of Microsoft is ‘Empowering people through great software – any time, any place and on any device’. However, the Business Head of Microsoft’s Xbox business would obviously be worried about empowering people less through software and more through Xbox! This exemplifies how work pressures at functional levels succeed in strangulating orientation towards the overall organisational Vision.

Clearly, if Vision-Strangulation has to be effectively whipped, then there can be no single Vision that can be applied to the complete organisation. The demand of Vision Annihilation Theology is that for each identifiable and link level in the organisation, one should develop a separate Vision. So instead of attempting to force the Corporate Vision down the throats of junior stakeholders and employees, employees should be instead provided a terrific mix of top level Vision philosophy and expected best-level achievements at their own management (or functional) level. This is where VVGs at each level include link representatives from other levels who develop a relevantly different spin of what the organisation Vision is all about (quite similar to what Microsoft’s Advanced Technology Group does; or GE’s Work-Out programme at different levels). So a sales officer could be roped into the spirit of the Corporate Vision – let’s say of being the world’s number one – by ensuring he understands the Corporate Vision in principal; and is just as aware about the stupendous results expected out of him and his team in objective terms. Ditto with other levels and functions. This is the process of Sub-Vision development. However, all these sub-Visions have to be linearly aligned with each other, and most importantly with the top-level Corporate Vision.

Vision-intervention-exercises

The compelling transactions that VVGs use could range from standard workshops & meetings, to specific intervention exercises attempting to recreate and regenerate vision across the organisation. But these intervention exercises need to be formally designed, planned & implemented. The firm’s CEO (and his core team) should accept the role of being the key Vision Propagator and ensure that individual Vision Vampires & VVGs are developed at various levels. But there are issues to be handled deftly while propagating ‘Walloping Vision-Ridicule-Entrapment’. Vision has to be defined in concrete terms at the top. The top-level Vision Statement should act as a benchmark for progress. This top-level Vision could be defined using a combination of quantitative and qualitative statements. Correspondingly, Vision Vampiring needs structures and people for its success in adoption. More importantly, it is about how fervently the concept has been adopted. Some organisations feel proud that their Vision is created by their bottom level employees. And some feel proud that their Vision has been developed and approved by customers. Vision Vampiring has to ‘soar’ from top to bottom, and from inside to outside. Vision should not be created from bottom to up. Vision should not be developed by outsiders (unless the organisation is Enron where the corporation’s vision smells of totally illegal, immoral & unethical endeavours). Moreover, Vision should preferably not come out of just one person’s thought processes (Rupert Murdoch is one of the better known exceptions to this theory), instead it should be something that is well-thought about by a responsible top manager. Other levels of management and employees should feel extremely related with the developed Vision statement.

Glorious Vision Statements are worth trash if they’ve been made without reckoning the current & future capability and competence advancement agenda of the organisation. Stanford’s Vision of being the Harvard of the west was believably backed up by its agendas toward development of capabilities and competencies. Further, the world’s best Vision Statement cannot get the corporation anywhere unless it is backed up by sincere strategic plans and implementation controls. Initially, Apple failed & Microsoft won because of just this: Sky-high Vision; Ground-level Flop! (Later, Apple realised this; and it served the Cupertino giant well.)

Oh! And needless to say, Vision Vampiring is always the ‘continuous’ process of looking into the future. So the trick, my friend, is to regularly revisit & ReVision! Remember the dynamic nature of Vision Annihilation Theology?!

VISION VAMPIRING! ...SANS THE BLOODY TRAVAILS